ACL Investor Presentation - February , 2011

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1

ACL – Investor Presentation

Onne van der WeijdeNew Delhi , February 10 2011



2

Content

Indian Economy

Indian Cement Industry

Cement Sector Outlook

Ambuja Cements Limiteda. Vision, Mission and Philosophy

b. Asset Footprint

c. ACL – Growth Story

d. Long Term Strategy / Competitive Edge

e. Financial Performance

f. Cost Drivers

g. Expansion Projects

h. Shareholding

Corporate Social ResponsibilityConclusion



3

Indian Economy

India is growing at about 8+% and Government targets a GDP growth of 9+%. HighGDP growth would translate into double-digit cement demand growth annually.

Favourable Demographics - India will contribute significantly to the world incrementalWorking Age Population between 2010 to 2020, leading to higher disposable income.

Empowered Rural India - Rural masses, expanding Consumer class. The rural Indianeconomy is showing impressive growth in consumption, with a number of factorssupporting this growth. These factors include increasing incomes due to goodmonsoons and Government initiatives and schemes like, (National Rural EmploymentGuarantee Scheme) employment opportunities in infrastructure and industry projects

across the country and; emphasis on local employability.

Rising Saving Rate - Bulk of India’s savings come from households rather thancorporate, makes it a stable source of funds for Infrastructure Creation.

A Stable Government at the Centre with Strong focus on growth andinfrastructure development - Infrastructure Investment will be doubled in 12th Plan @US$ 1 trillion (9.5% of GDP).

India at the cusp of take-off into an exponential growth phase with GDP per

capita crossing the ~$1000 threshold



4

GDP Growth likely to sustain at over 8%

GDP growth is likely to be driven by Services and Industry

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

CY06 CY07 CY08 CY09

Primary Industry Services GDP

17 17 16 15

28 29 28 28

54 55 56 57

0

20

40

60

80

100

120

CY06 CY07 CY08 CY09

Primary Industry Services

CY06 CY07 CY08 CY09

Primary 3.8 5.4 1.3 0.9

Share % 17.3 16.6 15.7 14.8

Industry 11.9 11.0 5.3 6.4

Share % 28.5 28.9 28.3 28.4

Mfg 13.5 12.2 5.2 6.8

Const 11.4 11.0 6.2 7.0

Services 10.8 10.1 10.4 8.5

Share % 54.3 54.5 56.0 56.8

GDP 9.8 9.5 7.4 6.7

GDP: Growth Trend and Composition Trend in growth

Composition of GDP

Source: Ministry of Statistics and Programme Implementation (MOSPI)



5

Content

Indian Economy




b. Asset Footprints



e. Financial Performancef. Cost Drivers


h. Shareholding

Corporate Social Responsibility

Conclusion



6

Indian Cement Industry – At a Glance – CY 2010

Cement Capacity

295 Mio tons

Clinker Production

159.26 Mio Tons

Cement Production207.39 Mio Tons

Y-o-Y Growth

7.2%

5.7%

5.8%

13.5%

Cement Dispatches

206.26 Mio Tons

*7.5 - 8%GDP at factor Costover $1.2 trillion

Source: CMA, Research Reports & Ministry of Statistics & Programme Implementation*Estimate



7


Capacity Growth - Transition from Control to Decontrol

Installed Capacity of the Industry has reached approximately 270 Mio tons by September 2010

Double digit capacity growth in 5 year cycle after 30 years

11.1%

7.4%6.6%

7.2%6.7%

10.3%

0.0%

3.0%

6.0%

9.0%

12.0%

1979-80 to 1984-85 1984-85 to 1989-90 1989-90 to 1994-95

1994-95 to 1999-00 1999-00 to 2004-05 2004-05 to 2009-10

* Growth based on Installed Capacity at the end of year

*

Source: CMA and Research Reports



8

Limestone Density and Various Capacity Clusters

C u r r e n t C l i n k e r

S t a t e R e s e r v e s % C a p a c i t y ( m i l . t .)

K a rn a ta k a 5 1 ,8 8 6 3 0 % 1 2 .0

A n d h ra P ra d e s h 3 5 ,1 7 9 2 0 % 3 3 .0

G u ja ra t 2 0 ,0 1 2 1 1 % 1 5 .0

R a ja s th a n 1 9 ,4 8 6 1 1 % 3 0 .0M e g h a la y a 1 6 ,0 5 4 9 % 1 .5

C h h a t t is g a rh 9 ,0 3 8 5 % 1 1 .0

M a d h y a P ra d e s h 5 ,9 2 1 3 % 2 0 .0

H im ac h a l P ra d e s h 4 ,7 6 2 3 % 7 .0

A l l In d ia 1 7 5 ,3 4 5 1 0 0 % 1 4 5 . 0

L i m e S t o n e R e s e r v e s e ( m i l .t .)

Area Legend Color

Reserves Tonnes/Km2

lgdXArCol1 0 to 5000lgdXArCol 5001 to 25000

lgdXArCol 25001 to 50000lgdXArCol 50001 to 100000

lgdXArCol 100001 to 2000000

Source: Government of India

Area Legend Color

Reserves Tonnes/Km2

lgdXArCol1 < 5,000 lgdXArCol 5,001 to 25,000 lgdXArCol 25,001 to 50,000 lgdXArCol 50,001 to 100,000

lgdXArCol > 100,000



Indian Cement Industry – A Local & Regional Industry

CAGR – 9.5%

Growth (%)

CAGR – 10.5%

CAGR – 10.4%CAGR – 9.6%

CAGR – 10.3%

*Figures are CY basis

CAGR – 10.1%

Growth (%)

Growth (%) Growth (%)

Growth (%)

Growth (%)

6 14 10 7 10 8

Source: CMA, Research Reports, ACL Market Study

North

2629

32 3438

41

0

10

20

30

40

50

2005 2006 2007 2008 2009 2010

South

3843 48 54 56 60

0

20

40

60

80

2005 2006 2007 2008 2009 2010

15 15 11 11 4 7

East

22 24 25 2732

36

0

10

20

30

40

2005 2006 2007 2008 2009 2010

15 5 5 9 19 13

Central

20 22 23 2530

33

0

10

20

30

40

2005 2006 2007 2008 2009 2010

-2 11 4 9 20 10

West

25 28 31 34 3641

0

10

20

30

40

50

2005 2006 2007 2008 2009 2010

5 10 13 8 7 14

All India

131 146 160 174193 212

0

50

100

150

200

250

2005 2006 2007 2008 2009 2010

8 11 9 9 11 10



10

Price Trends

All India Price Map (Retail Prices*)

* Price realization to cement producer is lower by Rs. 20~25/- per bag

Jun’10 Dec’10



11

Cement – Growth Drivers

Low per capita consumption at 176 kg reflects potential for futuregrowth.

Rising housing affordability due to Increasing income level.

Individual Housing Builders (IHB) segment - the major contributorof demand.

As per 11th Five Year Plan (2008-12), 74 Million housing unitsrequired.

Agricultural growth to boost rural demand.

Infrastructure Investment for 11th plan is pegged at US$500 bn(7.6% of projected GDP growth), while for the 12th plan itprojected to be US$1 trillion (9.5% of GDP).

On the back of the above factors cement demand is expected to

grow double digits for the next five years.

Housing & Infrastructure Development are the major growthdrivers for Cement Demand



12


India second largest cement market in the World.

Low per capita consumption at 176 kg reflects potential for future growth.

Healthy CAGR of 10% over the last 5 years (2005-2010) and a CAGR of 8%over the last 20 yrs (1990-2010)

Domestic cement consumption grew by 10% in CY09 and continued inthe same pace also in CY 10* despite a prolonged monsoon season.

Cement demand expected to grow in double-digit in the next five years onthe back of housing and infrastructure development.

The top 5 groups are having a market share of 53%, the rest of the marketis quite fragmented.

Prices expected to remain under pressure in the short-term due to over-supply situation, but in the long-term expected to remain stable.

Cost pressure would continue, on account of surging energy prices andinflationary pressures.

Good cement demand, coupled with a potential over supply and increasingcost pressures, makes the industry outlook more challenging

*including non-CMA producers data



All India Capacity Utilization

132010 onwards demand is estimated to grow by 10%

Source: CMA and Research Reports

Increased capacity expansion in 2010-2011, utilization rate is expected to remainlow in the near term, would gradually improve with the growth of the industry.Pressures are likely to be felt across all regions, the south and west could remainweaker as compared to the other regions.

195 212 233 256 283 312259295 322 345 358 375

75 72 72 74 79 83

0

100

200

300

400

500

2009 2010 2011 2012 2013 2014

20

40

60

80

100

Total Demand Installed Capacity Installed Capacity Utilization

195 212 233 256 283 312227262 291 320 342 358

86 81 80 80 83 87

0

100

200

300

400

500

2009 2010 2011 2012 2013 2014

20

4060

80

100

Total Demand Supply Potential Utilization



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Content

Indian Economy




b. Asset Footprints




f. Cost Drivers


h. Shareholding




15

Ambuja Cements Limited (ACL)Vision & Mission / Philosophy

GIVE A MAN ORDERS and he will do the task

reasonably well. But let him set his owntargets, give him freedom and authority andhis task becomes a personal mission:



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Content

Indian Economy




b. Asset Footprint

c. ACL- Growth Story



f. Cost Drivers


h. Shareholding




ACL Asset Footprint

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New Delhi

Mumbai

Kolkata

Chennai

Kodinar

Rabriyawas

Bhatinda

Ropar

Darlaghat

Roorkee

Bhatapara

MCW

Panvel

Cochin

Sankrail

Farakka

Magdalla

Dadri

Terminal 4

Grinding Unit 8

Integrated Unit 5

North: 10.4 Mio Tons

West : 10.3 Mio Tons

East : 4.3 Mio Tons

Nalagarh

Captive Power Plant 9

Total Capacity = 25 Mio Tons



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Content

Indian Economy




b. Asset Footprints





h. Shareholding


Conclusion



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ACL – Growth Story

Capacity built up from 0.7 Mio Tons in 1986 to25 Mio Tons - CAGR of 16.8% through organic and inorganicgrowth.

2006 – Founder promoters sold part of their holding in ACL infavor of Holcim.

ACL had many first to its credit

Pioneers in sea transportation.Brand - Ambuja perceived as a Market Leader

ACL is a Holcim Group company since May 2006

A Market Capitalization of over USD 4 Bn



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Content

Indian Economy




b. Asset Footprints





h. Shareholding


Conclusion



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ACL – Long Term Strategy / Competitive Edge Premium Brand – “AMBUJA CEMENT”

Premium Value Delivery to Customers

Extensive & loyal distribution network -Over 7000 dealers and 25,000retailers

Provides access to growing Individual Housing Builders Markets.

Hub & Spoke Strategy – Logistics advantage coupled catering fresh cementto the consumer

Benefits of catering fresh cement to the markets

Sea Transportation – Cement Terminals

Cost Efficient means of transportation and ability to cater to the vast coastalregion, ~14% despatches via Sea mode thru 8 specially designed vessels

Captive Power Plants (410 MW)

Lower Cost, Consistent & Regular supply of Power, ~80% captive use

High proportion of blended cement

Lower production cost, reduction in CO2 emissions

Strong presence in growing stable markets of North, West and East

Reduce volatility in Earning

Use of Alternative Fuel & Raw Materials (AFR)

Conservation of non renewable resources, reduces pollution and cost



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Content

Indian Economy




b. Asset Footprints





h. Shareholding


Conclusion



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Financial Performance

Exchange Rate Rs. 45.63 from RBI

7.99

13.78

12180

18030

21220

70770

Rs Mn

2009

264

391

461

1536

US $ Mn

277

364

428

1620

US $ Mn

8.26

13.39

12636

16619

19510

73902

Rs Mn

20102008

Rs Mn US $ Mn

Sales 62350 1354

EBITDA 19540 424

PBT 16617 361

PAT 14020 304

Cash EPS (Rs.) 12.62

EPS (Rs.)* 7.41

Source: Company’s Annual Report

*Excluding extraordinary income



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Recent Q4 Financial PerformanceRs. Mio

Source: Company’s Financials (standalone)

Qtr4 results derived

-2628-2025EBITDA Margin (%)

4%12636121847%25812410PAT

-32%39835849-34%102156Tax

-8%1661918033-32%26843970PBT

117%487224210%20967Interest

-7%1563816745-33%24493640PBIT

30%3872297026%1086860Depreciation

-20%12031512-7%379408Other Income

-1%1951019720-21%35354500Operating EBITDA

19%13735115300%37703780Others

20%1610113470976%4079379Freight Outwards

19%169731423036%44613270Power & Fuel

26%34372730-1%775780Employee Cost

-38%59639640-31%14762130Raw Materials22%12731046-3%389400Other Op. Income

4%73902707691%1788517710Net Sales

6%19.9718.84%5.014.8Sales Volume

change20102009changeDec-10Dec-09

Twelve MonthsQuarter endedParticulars



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Financial Ratios

2129966Net Cash fromOperating Activities

20092008Rs. Cr.

35Gearing %

ROE (%)

27* 20

Dividend % 110 120

EBITDA Margin (%) 31 30

ROACE (%) 34* 27

Dividend Payout Ratio% 24 30

* : Includes extra ordinary income

Source: Company’s Financials

2010

23

1

26

31

130

1874

18



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Content

Indian Economy




b. Asset Footprints





h. Shareholding


Conclusion



27

Increasing Cost of Imported Coal : The Cost of Imported Coalhas increased over 40% y-o-y basis. The lack of logisticsinfrastructure at port, limits economical movement ofimported coals to hinterland.

Domestic Linkage Coal materialization is declining includingthe quality of coal, increasing the cost of purchasing coalthrough open market purchases.

Distribution Cost a major cost for the Industry. Diesel prices

have increased substantially in the past eight years and isnow linked to the international crude prices.

Lack of Logistics Infrastructure in form of Wagon / RakesAvailability , increase the cost of distribution.

Inflationary pressure on Support Process Costs.

Increasing Cost Pressures’Major Portion of Cost linked to Energy Prices

Rising Costs a Concern



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Content

Indian Economy




b. Asset Footprints





h. Shareholding


Conclusion



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Capacity Expansion

Completed expansions :

Clinker line of 2.2 mio tons each at Rauri (HP) and Bhatapara(Chhattisgarh) commissioned in December 2009.

Grinding facilities of 1.5 mio tons each at Dadri (UP) and Nalagarh(HP) commissioned in March 2010.

The ramp up of the plants have been as per schedule.

Additional Expansions :

Grinding capacity of 1.0 mio tons at Bhatapara and 1.0 mio tons atMaratha, would be completed by Q1 2011.

With these expansions ACL’s installed capacity would be 27 miotons by Q1 2011.

The Company is evaluating projects for the next round ofcapacity expansion



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Content

Indian Economy




b. Asset Footprints





h. Shareholding


Conclusion



31

Our Shareholders

As on 31st December 2010

Holcim, 45.45

Founder family, 0.79Foreign Institutional

Investors, 27.71

Insurance Co's, Mutual

Funds & FinancialInstitions/Banks, 14.72

Public, 10.20 GDR, 1.13



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Content

Indian Economy



Ambuja Cements Limited

a. Vision, Mission and Philosophy

b. Asset Footprints





h. Shareholding


Conclusion



33

Ambuja Cement Foundation (ACF)

Livelihood Skill Based - ACF Sponsorsvocational training to unemployed youth

in trades like electric house wiring andmotor winding, refrigeration and air-conditioning, wielding and fabrication andradio and TV repairing. Young men whohave completed their training havestarted their own enterprises.

Women Development - Promoted over700 Self Help Group (SHGs) with 9,000members. Specific skills that the womenfelt the need for, are offered to them.The groups are engaged in a range ofincome generating activities based onagriculture produce, livestock rearing,tailoring and embroidery, foodprocessing and handicrafts.

ACL is committed towards Sustainability, both on environment and socialperformance. The Corporate Social Responsibility is carried out through ACF.



34

Ambuja Cement Foundation (ACF)

Changing cropping pattern from high

water intensive to less water intensive

and short duration crops.

Promotion of water efficient devices like

drip and sprinkler irrigation (Over 1841acre)

Promotion of horticulture crops (14800

acre), animal husbandry, vegetable

crops - Integrated farming.

Conservation and Management ofexisting sources of water like Ponds andBaudies ( Over 1200 MCFT waterharvested)

Constructing Water HarvestingStructures like Check-dams (200),Ponds deepened (420), Tanks andKhadins (8)



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Content

Indian Economy



Ambuja Cements Limited

a. Vision, Mission and Philosophy

b. Asset Footprints





h. Shareholding


Conclusion



36

Conclusion

Solid market position built within a period of time through organicgrowth and acquisitions.

Strong brand image and positioning built over a period of time in

the minds of the consumers. Pin-pointed positioning tied to substantial captive infrastructure to

cater to markets – both domestic and overseas.

High use of alternative raw materials in production of blended

cements. Capex plan - Both greenfield and brownfield projects are being

evaluated that would enhance company’s market share andmaintain its position in the industry.

Industry would go through a challenging period due to over-supplysituation - Ambuja is well poised and geared up to meet the challenges



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Disclaimer

Cautionary statement regarding forward-looking statements

This presentation may contain certain forward-looking statements relating to theGroup’s future business, development and economic performance.

Such statements may be subject to a number of risks, uncertainties and otherimportant factors, such as but not limited to (1) competitive pressures; (2)legislative and regulatory developments; (3) global, macroeconomic and politicaltrends; (4) fluctuations in currency exchange rates and general financial marketconditions; (5) delay or inability in obtaining approvals from authorities; (6)technical developments; (7) litigation; (8) adverse publicity and news coverage,

which could cause actual development and results to differ materially from thestatements made in this presentation. Ambuja assumes no obligation to updateor alter forward-looking statements whether as a result of new information,future events or otherwise.

ACL Investor Presentation - February , 2011

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