Lafarge Africa Plc N131.65 Billion Rights Issue Facts Behind the - PowerPoint PPT Presentation

Lafarge Africa Plc N131.65 Billion Rights Issue Facts Behind the Offer November 30, 2017 Lekki-Ikoyi Bridge, Lagos Nigeria

Disclaimer The information in this presentation is given in confidence and may not be reproduced or redistributed to any other persons This document has been prepared solely for use at the Facts Behind the Offer held in connection with the Lafarge Africa PLC (“Lafarge Africa” or the “Company”) Rights Issue Programme. The information contained in this document has not been independently verified and no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein. The information set out herein may be subject to updating, revision, verification and amendment and such information may change materially. Chapel Hill Denham Advisory Limited (“Chapel Hill”), Standard Chartered Capital & Advisory Nigeria Limited (“Standard and Chartered”), are not under any obligation to update the information contained in this presentation and any opinions expressed in it are subject to change without notice. Chapel Hill, Standard Chartered or any of their respective affiliates, advisers or representatives shall not have any liability whatsoever (in negligence or otherwise) for any loss whatsoever arising from any use of this document or its contents, or otherwise in connection with this presentation Any decision to purchase or subscribe for securities in connection with the Right Issuance should be made solely on the basis of your own investigations with respect to Lafarge Africa and the Rights Issuance None of the professional parties herein stated nor any of their representatives make any representation or warranty, expressed or implied, as to the accuracy or completeness of any information contained in this document Only those particular representation and warranties, if any, which may be made in a definitive written agreement, when, as and if executed, and subject to such limitation and restrictions as may be specified therein, will have any legal effect Any market analysis and estimates presented in this document represent the subjective views of Chapel Hill, and Standard Chartered or the source reference if any 2

Outline Section Page 1. Company Overview 5 2. Nigerian Cement Industry Overview 11 3. Financial Overview 15 4. Business Outlook 21 5. Transaction Summary 24 6. Appendix 28 3

Company Overview

Snapshot of Lafarge Africa LISTING INFORMATION OPERATIONS ► Listed on The Nigerian Stock Exchange in 1979 ► 9 th largest company on The NSE by market 3 COUNTRIES capitalisation 9th (NIGERIA, SOUTH AFRICA, GHANA) ► Market capitalization of N307 billion 1 PRODUCTS PRODUCTION INFORMATION ► Cement 6 14.1 MTPA 2 ► Ready-Mix CEMENT TOTAL ► Aggregates PLANTS 21 CAPACITY ► Fly Ash QUARRIES SELECT AWARDS REVENUE CONTRIBUTION (FY’16) ► Most innovative in manufacturing (2017, 30% 70% 2016), BusinessDay ► Best Company in Stakeholder Engagement NIGERIA SOUTH and Most Outstanding Company of the AFRICA Decade (2016), SERA ► Best Company in Sustainability Reporting (2015), SERA N16.9bn N503bn N220bn 24.7% N3.15 6.8% Revenue Revenue CAGR PAT Earnings per Total assets Return on equity (FY’16) (FY’12 – FY’16 ) (FY’16) share (FY’16) (FY’16) (FY’16) Sources: Lafarge Africa, NSE, Bloomberg 1. As at 20 October 2017 6 2. Excludes aggregates, RMC, Fly Ash

Lafarge Africa – Key Milestones  Commissioned  West African  Second factory  Lafarge SA  West African  Commissioning of  Increased stake in additional 2.5mmt Portland Cement opened in becomes majority Portland Cement Ewekoro II plant in UNICEM from 35% plant in Mfamosing, Company Limited Sagamu,Ogun shareholder in Company Plc Ogun State, taking to 50% through is established State. Combined WAPCO through changes name the total capacity to the acquisition of Cross River State capacity now take over of Blue to Lafarge 4.5 MTpa 15% stake from  To conclude N25 1.5 MTpa Circle Industries Cement WAPCO Flour Mills  ‘ N11.8 billion billion Commercial Plc UK Nigeria Plc paper Issuance bond issued  Completed Ashaka Mandatory Tender Offer to Minority Shareholder increasing stake from 58.6% to 82.5% 1959 1960 1978 1979 2001 2003 2008 2009 2011 2014 2015 2016 2017  First factory  West African  Modern state of the  Commencement  Lafarge Africa  Completed commissioned in Portland Cement art plant of Lakatabu is formed through a acquisition of Ewekoro, Ogun listed on the Nigerian (1.1 MTpa) replaces Expansion Project in consolidation of UNICEM equity Lafarge S.A.’s state. 200,000 Tpa Stock Exchange old plant in Ewekoro, Ewekoro, Ogun State  Concludes N60 later increased to Ogun State assets in Nigeria billion bond issuance 600,000 Tpa and South Africa 6

Lafarge Africa: Operations Cement Operations Ready Mix LSAH • South West • • • • • Region South West South East North East North Central South Africa • South East • Lagos • Sagamu • • • • Locations Calabar Gombe Abuja Johannesburg • Ewekoro • Port-Harcourt • • • • • Capacity (Mtpa) 4.5 5.0 1.0 n/a 3.6 • Cement • Elephant • Main products / Ready Mix • • • • Supaset Unicem Ashaka Ready Mix • Aggregate Service • PowerMax • Fly ash Revenue • • • • • contribution 39.3% 19.7% 7.8% 2.8% 30.4% (FY’16) Main site picture Nigeria operations South Africa operations 9

Lafarge Africa: Products and Innovative Solutions The Company has a wide range of cement solutions designed to meet all building and construction needs from small projects like individual home buildings to major construction projects  Lafarge’s cement brands some of Nigeria’s preferred cement of all time  Over 55 years with impeccable pedigree  Annual Nigerian Industrial Standards Certificate for product quality from the Standards Organisation of Nigeria for over two decades Brand range Cement All Lafarge Readymix Nigeria products are durable and of a consistently high quality to provide excellent structural performance with strong support towards environmental friendly applications and green building  Lafarge Africa’s commitment to innovation Ready mix  Mixed to project specifications and delivered to site  Services all sectors of the local industry Aggregates, generally consisting of crushed stone, gravel, and sand, are mainly used in the construction of roads, rail track beds, the manufacturing of concrete, concrete products, and asphalt Aggregates  Lafarge works with strategic partners in the country to ensure aggregate supply are consistent and conform to BS-EN 12620 Fly ash is an extremely fine powder consisting of spherical particles less than 50 microns in size Fly ash  Fly ash is one of the construction industry's most commonly used pozzolans   National Assembly Complex Abuja, ABTI American University, Yola Select   Third Mainland Bridge, Lagos Tinapa Business and Leisure Resort, Akwa Ibom construction   Cocoa House, Ibadan Shoprite Mall, Enugu projects 10

Nigerian Cement Industry Overview

Nigeria as a key investment destination Favourable Demography and Economic Reforms continue to position One of Africa’s largest Agriculture, Nigeria as a key economies Household 22.97% investment destination spending US$457bn 1 expected to Services, grow by 53.73% Demography to drive Nigeria’s 2016 GDP US$26bn household demand from 2015 – Economic recovery  Urbanization and middle class Industries, expected in 2017, following 2020  Young population 23.31% 2016 recession; c.1% growth expected in 2017 A diversified economy with large growth scope for industrials Support from key policy reforms: 11 600% Rural : urban mix Middle class  ERGP expected to shift from households expected Nigeria’s middle class  Fiscal discipline 52:48 in 2015 to to grow from 4.1mn growth from 2000 to  World Bank Housing Finance Cities with population 48:52 in 2021 to 11.7mn by 2030 2014 Development Program over 1 million people c.187mn 18 years Median age in Nigeria 77% Improving Financial Stability  Improved currency liquidity Nigeria’s population of population  Successful Eurobond and under US$2,178 Diaspora Bond issuances 35 years  I&E Window for foreign GDP Per Capita portfolio investors 2.5%  Recovery of Stock Exchange Population growth to reach 212mn by 2021 Sources: World Bank, EIU, AFDB Economic Outlook, National Bureau of Statistics, Standard Bank Research, McKinsey & Company, International Monetary Fund 1 World Bank – Constant 2010 US$ 10

Macro-economics at a glance Strong fundamental in the Strong improvement in Recovery expected in Long Run 2018-2019 2017 • • • Population growth at Exit from recession but In 2018-2019, recovery is +2,6%p.a. (+5% for urban) mainly from Oil and Agric expected with real GDP sector. Construction and growth bouncing back • Nominal GDP at +5% p.a. Manufacturing still lagging • (assumption oil price from IMF anticipate +1,9% in • 45-71$/bbl) Stabilization of FX rate but 2018 and 2019 strong Naira liquidity • • Major housing gap (still World Bank forecast +2,5% squeeze growing) • Infrastructure gap (roads, power, rail, … ) ’ GDP growth and oil prices 11 ’ ’