Cement Sector Update

Equity Research
Table of Contents
Cement Industry in 2016 .......................................................................................................................................................... 2
Cement demand to pick up ................................................................................................................................... 2
Growth on Infrastructure Push ............................................................................................................................. 3
Attention to shift towards optimising capacity utilisation level ............................................................................. 3
Robust Domestic Sales, Exports, set to take centre stage ...................................................................................... 4
Renewed calls for concrete road technology by major cement producers ............................................................. 4
Dangote Cement Plc ................................................................................................................................................................. 5
Stronger push for volume sales expected in 2016 ................................................................................................. 5
Margins to remain resilient................................................................................................................................... 5
FY16 valuations revised downwards on lower cement prices ............................................................................... 6
FY15 Review ........................................................................................................................................................ 7
Lafarge Africa Plc...................................................................................................................................................................... 9
Unification, Rationalisation and Growth ............................................................................................................... 9
A comprehensive roll-out plan for 2016 ................................................................................................................ 9
Consolidated group valuation incites a BUY rating .............................................................................................. 10
FY15 Review ...................................................................................................................................................... 11

Page | 1

Cement Sector Update

Equity Research

Cement Industry in 2016

Analyst:
Damilola Lawal*
Damilola.Lawal@cardinalstone.com

Cemen t demand to pick up

According to Dangote Cement Plc (Nigerias biggest cement producer with a market share of
c.62%), Nigeria's cement industry offers robust growth opportunities in the long term with a
forecast 10% annual increase in demand as the economic environment improves. The
government, particularly at the federal level, is likely to be a major driver of cement demand in
2016 as shown by the proposed 2016 budget of N6 trillion which is the countrys most
ambitious since 1999. In our view, the expected CAPEX on infrastructural development (N1.5
trillion) should boost construction activity, if adequately implemented. Cement which
constitutes about 7% to 15% of concrete - (a mixture of cement and other aggregates), is a key
material in construction; thus an increase in construction activities naturally means a rise in
demand for cement as well. A large chunk of the activity recorded in the building and
construction sector in 2015 could be attributable to the private sector (individual home
builders) given that government activities were modest because of elections.
Figure 1: Drivers of cement demand
2015
Infrastructure
(Government)
Private
Construction

Individual Home
Builders

2016

Comments
Uptick in FGN construction activity
hinged on the 2016 Appropriation
Bill.
With a correlation factor of 96%,
private sector construction activity to
take a cue from FGN spending on
infrastructure
Likely to remain stagnant due to
lower
discretionary
consumer
spending

We foresee a more aggressive roll-out of building and construction projects from the private
sector in 2016 which will have positive implications for cement demand. Much of the
uncertainty that characterised 2015 appear to have dissipated with the smooth transition of
power, appointment of cabinet members and some clarity in economic direction despite the
stagnancy in articulating an effective exchange rate policy. A trend analysis using private sector
expenditure and construction output data for the last three years shows that demand for
building and construction has been driven more by the private sector with a correlation factor
of 91%. In a similar vein, there is strong correlation between private and government
expenditure (correlation factor of 96% over the last three years). In summary, an uptick in
government expenditure is likely to affect private expenditure cum spend on building and
construction activities.

Page | 2

Cement Sector Update

Equity Research
Growth on Infras tructur e Push
2015 was a sluggish year for Nigerias cement industry amidst slowing economic growth. Lower
commodity prices as well as political uncertainty curtailed government spending on capital
projects. Amidst the economic slowdown and weakening purchasing power, the private sector
also cancelled or delayed commencing many construction projects. Total cement sales rose by
2.5% YoY to 21.5 million tonnes in 2015. President Muhammadu Buhari seems to be living up to
his pledge to boost economic growth by increasing government spending on infrastructure.
Partly underscoring this commitment, the 2016 appropriation bill allocates N1.5 trillion towards
capital projects in 2016; the highest since 2009 (in absolute value) to be apportioned to CAPEX
and 30% of the total budget (Last 5-year average: 21%). Unsurprisingly, the Ministry of Works,
Power and Housing received the highest CAPEX allocation (N423.0 billion). Another N242.5
billion was earmarked for special projects under capital allocation. These include the FGN
Special Intervention Programme (N200.0 billion); Federal Initiative for the North East (N12.0
billion), payment of Local Contractors Debt (N25.5 billion) and Refunds to state governments
for federal road projects (N5.0 billion). The bulk of this allocation will directly or indirectly
improve construction activities.

Attention to sh ift to wards op timising ca pacity u tilisation level

The cement industry witnessed huge capacity expansion of 26.7 million tonne post FY10.
Nigeria has emerged as the continents indisputable giant, with total capacity of 40.7 million
tonnes annually, around one quarter of Sub Saharan Africas cement production capacity. This
enabled Nigeria to eclipse the regions historical leader, South Africa, which produces 19 million
tonnes annually. Hoping to ride on the construction boom in the country and backed by
government support and higher retail prices compared to neighbouring West African countries
such as Ghana and Benin Republic, cement manufacturers saw the incentive to increase their
installed capacities. This huge expansion distorted the demand-supply dynamics of the
industry. The Nigerian cement industry has commissioned 26.7 million tonnes of new capacities
in the last six (6) years, of which 14.7 million tonnes (55%) were in the last three (3) years. We
expect the pace of capacity addition to slow or even grind to a halt once the already announced
capacities by local manufacturers come on stream. Attention will then focus on improving the
utilisation level which was an average of 54% in 2015, on the back of fresh demand for housing,
urban and infrastructure development.

Page | 3

Cement Sector Update

Equity Research
Robust Domes tic Sales , Exports, set to take cen tre stage
The rapid expansion of production capacity across the country has led to a sharp drop in
cement imports. Nigeria, which as recently as 2010 was importing c.6 million tonnes worth of
cement each year, has seen imports slump to less than 1 million tonnes in 2015. This reflects
the steady tightening of the Nigerias import regime, where the federal government phased out
licences to import cement and encouraged investment in local production. With supply
exceeding demand in Nigeria, major cement producers are exploring new markets, particularly
in West and Central Africa given their closer proximity to Nigeria. West Africa is of particular
focus for Dangote Cement given that the group will benefit from duty free trade within the
Economic Community of West African States (ECOWAS). About 0.7 million tonnes were
exported to Ghana this year and plans are afoot to expand this program and even extend their
reach to Togo, Cameroun, Ivory Coast, Liberia, Mali and Niger. The lack of limestone in these
countries limits cement production and defines Dangote Cements export strategy to these
regions. Not to be left out, Lafarge Africa at its last management presentation to analysts
announced plans to open a grinding facility in neighbouring Ghana.

Renewed ca lls for concrete road technology by major cemen t produc e rs

With supply ahead of demand in the cement industry, the major producers may have found
succor in the existing infrastructural gap in the country as a means of achieving optimal
utilisation of the commodity. Hence, there are renewed calls to push for the adoption of
cement and concrete in road construction. In our view, there is no better time to embrace the
option of using cement and concrete for roads in the country. This will align with the federal
governments Buy Naija to Grow the Naira drive given that cement is made using more
locally sourced content (limestone), compared to asphalt whose major raw material
component Bitumen is imported due to the inefficient state of local refineries. Whilst initial
construction costs for concrete roads may be higher, they are cheaper in the long term due to
the lower maintenance costs and considerably longer life span (27 years vs. 17 years for asphalt
roads). Lafarge recently constructed a road in Aba using concrete and is receiving significant
interest, support and commitment from the federal government and state governments
looking to expand massively on this approach.

Page | 4

Cement Sector Update

Dangote Cement Plc

Equity Research

Dangote Cement Plc

Stronger push for volume sal es expect ed in 201 6
Based on feedback from management, we understand that the strong volume recovery that

HOLD

TP: N190.42

underpinned Q415 performance (during which cement sales were up by 36.3%) continued into
the first two months of 2016 with cement volumes up by 46% YoY and 60% YoY for the months

Company Information

of January and February respectively. Alluding to the twin impact of lower prices and a

Address

1 Alfred Rewane, Lagos

Website

www.dangcem.com

MD

Onne van der Wejide

FYE

December

supportive government budget (that allocates N1.5 trillion to capital projects), management is
seeing improved and believes that 16 million tonnes by FY16 is achievable (compared with 13
million tonnes in 2015). However, we do not think that the strong volume growth seen in Q116

NSE Sector

Industrial Goods

may be replicated in subsequent quarters. Last years price slash took the market by surprise
and competitors in our view were slow to react. We believe this time around, competitors will
be more proactive in countering any measures by the group to grab market share. In addition,
given the delays in the passage of the 2016 appropriation bill, we believe that the impact of

Ownership Structure
Dangote Industries Ltd
Others

90.9%
9.1%

higher budgetary spend on capital expenditure would only begin to trickle in the latter part of
2016. Consequently, we forecast shipment from Nigeria to reach 15.3 million tonnes in 2016.

Stock Data

Volumes from non-Nigerian operations increased by 411% to 5.6 million tonnes in 2015.The

Bloomberg Ticker:

newer and relatively more efficient plants enabled the group to produce higher grades of

Market Price (N)

167.80

cement at lower cost which are then sold at the same price as lower-quality products in the

Shares Outs (Mn)

8,520

Market cap (NTn)

1,430

market. As such the group was able to capture significant market share notwithstanding that

DANGCEM.NL

surplus cement capacity exists in these countries. The non-Nigerian operations look set to
continue their positive trajectory especially with the addition of new production lines in

Price
Performance

DANGCEM

Tanzania and Congo as well as a continued ramp-up of capacity utilisation in the other non-

12-month (%)

8.5

Nigeria operations. We expect unit volumes from the non-Nigerian businesses to reach 8.0

QTD (%)

(1.3)

million tonnes bringing our combined volume estimate for 2016 to 23.3 million tonnes.

YTD (%)

(1.3)

Figure 2: Overall Industry Volumes vs. DANGCEM Volumes (million tonnes)

Overall Industry Volumes
25.0

21.1

Dangote Cement Volumes

13.3

DANGCEM

1.5
1

20.0
15.0

NGSE ASI

23.7

21.5

21.0

12M Price History

12.9

13.3

15.3

0.5

10.0
5.0
-

Sources: NSE

2013A

2014A

2015A

2016E
Sources: DANGCEM Annual Report

Page | 5

Cement Sector Update

Dangote Cement Plc

Equity Research

Margins to r emain re sil ient

The Group has completed its coal back-up project which replaces the three times (3X) more
expensive low pour fuel oil (LPFO), suggesting significant savings on energy cost with the
substitution given current concerns about reliable gas supply. Overall, across 2015, Obajanas
fuel usage was 90.6% gas and 4.6% coal, with just 4.8% use of LPFO during the year, compared
with 24% LPFO in 2014 whilst at Ibese, gas utilisation was 79% (2014: 89%) with the rest
supplied by coal. Given current concerns about gas supply on the back of frequent
vandalisation, gas utilization rate is likely to drop but the coal back-up project and LPFO should
make up for any shortfalls in gas supply. In line with FY15 performance, we expect OPEX
pressures to persist in 2016 and forecast a 14.9% rise in operating expenses. Specifically, sharp
increases in distribution and administrative expenses should continue, reflecting the ramp up of
logistics and administrative capabilities to support maiden market penetration outside Nigeria.
Overall, we expect gross and operating margins to drop to 58.7% and 41.9% from 59.0% and
42.3% in FY15 respectively.
FY16 va luations revis ed downwards on lo w er cement pri ces
Our revised overall volume growth forecast of 24% translates to revenue growth of 13% to
N555.4 billion (2015: N491.7 billion). On other fronts, after adjusting for our expectations for
input and operating expenses as the business ramps up its investments across the group, a
slightly narrower tax rate hinged on its tax exemptions, we revise our FY16 PAT forecast to
N202.0 billion (2015: N181.3 billion). Our target price is cut to N190.42, HOLD (Previous:
N192.53, BUY), as we have increased our equity risk premium. We find Dangcem slightly
expensive on a relative valuation basis, given our estimated 2016 P/E of 14.6x relative to 10.0x
for Bloomberg EMEA peers.

Page | 6

Cement Sector Update

Dangote Cement Plc

Equity Research

FY15 R eview
Africa gaining momentum - Dangote Cement Plc reported strong volume growth for FY15, up
by 35% YoY to 19 million tonnes. Cement volumes in Nigeria rose by 3.2% due to a sharp
recovery in the fourth quarter underpinned by the 18% price slash in September. The group
also reported strong performances across the Rest of Africa. Specifically, volumes from its
West & Central Africa operations and South & East Africa operation were up 592% YoY and
340% YoY to 2.1 million tonnes and 3.5 million tonnes respectively, thanks to the maiden
contributions from Senegal, Cameroon, Ethopia, Zambia and Tanzania which were augmented
by substantially better results in Ghana and South Africa. Group revenues came in at N491.7
billion up by 25.6% (2014: N391.6 billion).
Earnings rise by 13.7% YoY - Cost of sales and operating expenses increased by 41.3% YoY and
32.2% to N202.2 billion and N86.0 billion respectively. The bulk of these increases were
attributable to the commencement of operations outside Nigeria as well as marketing
initiatives aimed at increasing brand awareness and market recognition of the quality of the
groups 3X cement. The Group posted an operating profit of 207.8bn, 11.1% higher than the
187.1 billion generated in 2014, with all the regions (Nigerian and Non-Nigerian) achieving
profitability at operating level. With new plants ramping up throughout Africa, the operating
profit margin fell to 42.3% from 47.8% in 2014. Compounding the pressure was the 712.5% rise
in net finance charges which limited PBT growth to 2.0% with related margin at 38.3% (2014:
47.2%). However, a lower effective tax rate of 3.7% (vs. tax rate of 13.6% in the corresponding
period of 2014), raised earnings by 13.7% to N181.3 billion. According to management, lower
taxes reflect pioneer tax status on Ibese Line 3 & 4 and Obajana Line 4.

Page | 7

Cement Sector Update

Dangote Cement Plc

Equity Research

Financial Statements and Key Ratios

Income Statement
Revenue
Cost of Sales
Gross Profit
Distri. And Admin Expenses
EBITDA
Other Income
EBIT/Operating profit
Interest Expense/Income
Pre-tax earnings
Taxation
Profit after tax

Statement of Financial Position

Assets
Fixed assets
Intangible Assets
Investment in Associate
Deferred Taxation
Investments
Stocks
Trade and other receivables**
Cash and Bank Balances
Total Assets
Liabilities
Deferred tax liabilities
Financial liabilities
Long term provisions and other charges
Retirement benefits obligation
Deferred revenue
Other long-term liabilities
Trade and other payables**
Financial liabilities**
Other Current Liabilities
Total Liabilities
Capital and Reserves
Share capital
Share Premium
Retained Earnings
Other component of equity
Shareholders' funds
Total liabilities and equity

Key Ratios
Profitability
Gross Margin
EBITDA Margin
EBIT Margin
Pretax Profit Margin
Net Profit Margin
Valuation Multiples
P/E (x)
P/B (x)
Dividend Yield (%)

2014A

2015A

391,639
(143,058)
248,581
(65,088)
183,493
3,609
187,102
(2,413)
184,689
(25,187)
159,501

(N'Mn)
491,725
(201,808)
289,917
(86,046)
203,871
3,951
207,822
(19,528)
188,294
(6,971)
181,323

2016E

2017F

2014A

555,442
(218,634)
336,809
(98,869)
237,940
5,554
243,494
(28,551)
214,944
(12,897)
202,047

655,886
(261,434)
394,452
(116,748)
277,704
6,559
284,263
(18,471)
265,792
(15,948)
249,845

1,966
(718)
1,248
(327)
921
18
939
(12)
927
(126)
801

2014A

2015A

2016E

2017F

2014A

747,794
3,699
16,633
79,491
42,687
73,823
20,593
984,720

917,212
2,610
1,582
14,465
9,094
53,118
72,070
40,792
1,110,943

1,003,269
2,610
1,582
14,465
9,094
48,833
82,286
15,000
1,177,140

981,620
2,610
1,582
14,465
9,094
55,044
89,973
42,757
1,197,144

20,473
131,942
4,011
2,070
1,390
96,789
117,263
18,897
392,835

24,504
208,329
3,283
3,992
975
24,442
128,886
47,275
24,537
466,223

24,504
164,296
3,283
3,992
975
24,442
111,137
109,531
24,537
466,697

8,520
42,430
537,750
3,185
591,885
984,720

8,520
42,430
620,501
(26,731)
644,720
1,110,943

2014A

2015A

2016E

2017F

2,760
(1,087)
1,674
(491)
1,183
28
1,210
(142)
1,068
(64)
1,004

3,227
(1,286)
1,941
(574)
1,366
32
1,399
(91)
1,308
(78)
1,229

2015A

2016E

2017F

3,769
19
84
401
215
372
104
4,963

4,622
13
8
73
46
268
363
206
5,599

5,006
13
8
72
45
244
411
75
5,874

4,849
13
8
71
45
272
444
211
5,914

24,504
115,007
3,283
3,992
975
24,442
131,537
49,289
24,537
377,566

103
665
20
10
7
488
591
95
1,980

123
1,050
17
20
5
123
650
238
124
2,350

122
820
16
20
5
122
555
547
122
2,329

121
568
16
20
5
121
650
243
121
1,865

8,520
42,430
684,860
(25,367)
710,443
1,177,140

8,520
42,430
792,307
(23,680)
819,577
1,197,144

43
214
2,710
16
2,983
4,963

43
214
3,127
(135)
3,249
5,599

43
212
3,417
(127)
3,545
5,874

42
210
3,914
(117)
4,049
5,914

2015A

2016E

2017F

2014A

2015A

2016E

2017F

63.5%
46.9%
47.8%
47.2%
40.7%

59.0%
41.5%
42.3%
38.3%
36.9%

60.6%
42.8%
43.8%
38.7%
36.4%

60.1%
42.3%
43.3%
40.5%
38.1%

63.5%
46.9%
47.8%
47.2%
40.7%

59.0%
41.5%
42.3%
38.3%
36.9%

60.6%
42.8%
43.8%
38.7%
36.4%

60.1%
42.3%
43.3%
40.5%
38.1%

19.0
4.3
3.7%

15.4
5.5
4.9%

13.8
5.0
5.0%

11.2
4.3
6.5%

19.0
4.3
3.7%

15.4
5.5
4.9%

13.8
5.0
5.0%

11.2
4.3
6.5%

(US$'Mn)
2,468
(1,013)
1,455
(432)
1,023
20
1,043
(98)
945
(35)
910

Sources: DANGCEM Annual Report

Page | 8

Cement Sector Update

Lafarge Africa Plc

Equity Research

Lafarge Africa Plc

Unification, Rationali sation and G rowth
Lafarge Africa reported full consolidated results for the first time in FY15, which reflected the
BUY
TP: N104.64
combined result of Lafarge Wapco, Ashaka Cement, United Cement and Atlas in Nigeria and
South Africa. The integration and merger of Lafarge Holcim worldwide triggered in Nigeria the Company Information
opportunity to bring Ashaka Cement, United Cement, Atlas and WAPCO all under one roof with Address
27B Gerrard Road, Lagos
one single management team driving and optimising operations nationwide. Nigerian Cement Website
www.lafarge.com.ng
Holdings BV (NCH), an affiliate of Lafarge, acquired an additional 30% stake in UNICEM from MD
Michel Pucheros
Flourmills of Nigeria Plc, making the company a wholly-owned subsidiary of NCH. Lafarge and FYE
December
Holcim each own a 50% stake in NCH and with the merger of the two companies; NCH is fully
NSE Sector
Industrial Goods
owned by the combined LafargeHolcim Group. Management anticipates that it will extract
between N8 billion to N10 billion per year of annualised synergies 1) personnel costs to
Ownership Structure
reduce from rightsizing; 2) supplier rationalisation and contract consolidation; 3) significant
72.7%
savings on general and admin costs; and 4) optimising route to market. With the consolidation LafargeHolcim
27.3%
of Unicem also came obviously the debt that was taken on board to build the second 2.5 million Others
tonne line. A savings of N2 billion was generated by taking advantage of Lafarge Africas higher
credit rating to restructure the loan and in our view we expect the project to self-liquidate the Stock Data
Bloomberg Ticker:
WAPCO.NL
debt.
A comprehen sive rol l -out plan for 2 016

Market Price (N)

77.00

Shares Outs (Mn)

4,404

According to management, the group has shifted focus towards how it can be differentiated Market cap (NBn)
and how it can leverage the innovation that is available within the LafargeHolcim international
group. Based on management findings, securing a reliable supply concrete, aggregates and Price
cement in a timely manner is a major pain for contractors. To combat this, the Group is Performance
introducing a single integrated offer which allows them to provide international-quality 12-month (%)
concrete, aggregate and cement on time, to spec, which allows faster client quality, lower QTD (%)
hassle for construction projects, and at the end reduce lead times, thus minimizing the cost of YTD (%)
construction very dramatically. This strategy is already yielding fruit evidenced by the contract
with the Eko Atlantic project. The company also introduced a new product line - sulphate 12M Price History
resistant cement which allows concrete to survive in aggressive salt water environment. The
NGSE ASI
company is also exploring the option of mass housing and in the last two quarters has signed 1.5
agreements and partnerships with micro finance institutions and will build 1,500 homes this
1
year in partnership with government and developers in Abuja, Lagos and Delta State.
0.5

339

WAPCO
(4.8)
(20.5)
(20.5)

WAPCO

Sources: NSE

Page | 9

Cement Sector Update

Lafarge Africa Plc

Equity Research

Figure 3: Overall Industry Volumes vs. DANGCEM Volumes (million tonnes)

Overall Industry Volumes

Lafarge Africa Volumes

23.7

25.0
21.1

21.5

21.0

20.0
15.0
10.0
6.30

5.0

4.15

6.62

4.317

2013A

2014A

2015A

2016E

Sources: Lafarge Africa Annual Report

Consolidated g roup valuation inci tes a BUY rating

We expect ramp up in production volumes in Nigeria given the return to normalcy in operations
at ASHAKCEM and UNICEM as well as the overall positive outlook for the sector, particularly in
the North East given the federal governments rebuilding initiative. In our view, this to some
extent should mitigate the impact of lower cement pricing and as such we estimate WAPCOs
FY16 revenue at N274.8 billion, a 3% growth over FY15. Also, whilst we expect finance costs to
remain high amidst the groups current high leverage, we also expect the company to achieve
significant variable and fixed cost savings on the back of synergies from combined raw material
sourcing and a more tempered staff cost. Overall, we see the groups FY16 PAT at N33.0 billion
(FY15: N26.9 billion) and revise our target price to N104.64 (Previous: N99.05).

Page | 10

Cement Sector Update

Lafarge Africa Plc

Equity Research

FY15 R eview
Revenue supported by Nigerian operations - Lafarge Africa Plc reported its FY 2015 results,
which consolidates contribution from UNICEM. In the same vein, the company also restated its
FY 2014 financial statements. Consolidated FY15 revenue increased marginally by 2% YoY to
N267.2 billion given security challenges which disrupted production at ASHAKACEM, technical
challenges and flood at UNICEM, and the loss of market share following the cutback in cement
prices in Nigeria in Q4. Across the group, cement volumes were flat as the decline in the Nigeria
market (-1% YoY) was balanced by the increase in the South African market (+1% YoY). Ready
Mix Nigeria continues to wax stronger with revenue from that unit up by 29% YoY to N7.5
billion.
Margins contract on one-off expenses totalling N14.6 billion - Operating expenses surged
higher mostly relating to one-off restructuring costs associated with the consolidation of the
groups operations and FX losses in UNICEM. EBITDA margin contracted to 25.4% from 26.7% in
the prior period falling across four of the five operating structures of the group with the
exception of UNICEM. UNICEMs EBITDA margin rose by 9.5% to 35.4%. UNICEM comes in with
a strong EBITDA margin (buoyed by gas utilization) that hovered around 40% up until Q415
when the plant operation was disrupted by technical issues and floods. With the consolidation
of UNICEM also came obviously the debt that was taken to expand its installed capacity by 2.5
million tonnes. Therefore, net finance charges increased by 14% to N9.0 billion, whilst FY15
PAT dropped by 20% YoY to N27.0 billion.

Page | 11

Cement Sector Update

Lafarge Africa Plc

Equity Research

Financial Statements and Key Ratios

Income Statement
Revenue
Cost of Sales
Gross Profit
Distri. And Admin Expenses
EBITDA
Other Income
EBIT/Operating profit
Interest Expense/Income
Pre-tax earnings
Taxation
Profit after tax

Statement of Financial Position

Assets
Property, Plant and Equipment
Intangible Assets
Investment in Associates
Other Long Term Investments
Other Assets
Deferred Tax Asset
Restricted Cash
Non-Current Prepayment
Inventories
Trade and Other Receivables
Cash and Bank Balances
Total Assets
Liabilities
Borrowings
Retirement Benefits Obligation
Deferred Tax Liability
Provisions
Deferred Revenue
Other Long Term Liabilities
Trade and other payables**
Financial liabilities**
Other Current Liabilities
Total Liabilities
Capital and Reserves
Share Capital
Share Premium
Retained Earnings
Other component of equity
Shareholders' funds
Total liabilities and equity

Gross Margin
EBITDA Margin
EBIT Margin
Pretax Profit Margin
Net Profit Margin
Valuation Multiples
P/E (x)
P/B (x)
Dividend Yield (%)

2014A

2015A

260,810
(177,783)
83,028
(30,648)
52,380
(4,091)
48,289
(7,932)
40,357
(6,538)
33,819

(N'Mn)
267,234
(184,703)
82,531
(36,933)
45,598
(7,295)
38,303
(9,028)
29,275
(2,277)
26,998

2016E

2017F

2014A

274,820
(188,640)
86,181
(35,605)
50,575
1,200
51,775
(14,256)
37,520
(4,498)
33,022

310,558
(213,909)
96,649
(42,106)
54,543
1,200
55,743
(12,808)
42,935
(4,243)
38,692

1,309
(892)
417
(154)
263
(21)
242
(40)
203
(33)
170

2014A

2015A

2016E

2017F

2014A

331,257
2,197
43
8
1,587
295
2,098
6,248
31,545
20,339
20,330
415,947

(N'Mn)
364,397
1,549
27
6
546
448
2,188
9,975
33,027
24,356
16,493
453,012

378,817
1,549
27
6
546
448
2,188
9,975
30,922
22,463
15,433
462,373

392,773
1,549
27
6
546
448
2,188
9,975
35,077
25,657
29,836
498,080

116,002
8,979
34,173
3,125
2,368
67,463
5,134
3,122
240,367

142,943
1,496
33,385
3,160
2,134
4,355
76,847
5,345
7,196
276,861

129,329
1,496
33,385
3,160
2,134
4,355
67,608
6,807
16,579
264,853

2,202
173,998
87,206
(87,826)
175,580
415,947

2,277
186,420
100,993
(113,538)
176,152
453,012

2014A

2015A
(US$'Mn)
1,341
(927)
414
(185)
229
(37)
192
(45)
147
(11)
136

2015A

2016E

2017F

1,212
(832)
380
(157)
223
5
228
(63)
165
(20)
146

1,203
(829)
374
(163)
211
5
216
(50)
166
(16)
150

2016E

2017F

1,669
11
0
0
8
1
11
31
159
102
102
2,096

US$'Mn)
1,836
8
0
0
3
2
11
50
166
123
83
2,283

1,677
7
0
0
2
2
10
44
137
99
68
2,047

1,528
6
0
0
2
2
9
39
136
100
116
1,937

123,170
1,496
33,385
3,160
2,134
4,355
77,538
6,483
26,657
278,379

585
45
172
16
12
0
340
26
16
1,211

720
8
168
16
11
22
387
27
36
1,395

573
7
148
14
9
19
299
30
73
1,173

479
6
130
12
8
17
302
25
104
1,083

2,277
186,420
122,349
(113,526)
197,520
462,373

2,277
186,420
146,872
(115,868)
219,701
498,080

11
877
439
(443)
885
2,096

11
939
509
(572)
888
2,283

10
825
542
(503)
875
2,047

9
725
571
(451)
855
1,937

2015A

2016E

2017F

2014A

2015A

2016E

2017F

31.8%
20.1%
18.5%
15.5%
13.0%

30.9%
17.1%
14.3%
11.0%
10.1%

31.4%
18.4%
18.8%
13.7%
12.0%

31.1%
17.6%
17.9%
13.8%
12.5%

31.8%
20.1%
18.5%
15.5%
13.0%

30.9%
17.1%
14.3%
11.0%
10.1%

31.4%
18.4%
18.8%
13.7%
12.0%

31.1%
17.6%
17.9%
13.8%
12.5%

10.1
1.9
4.7%

13.0
2.0
3.9%

10.6
1.8
4.7%

9.1
1.6
5.5%

10.1
1.9
4.7%

13.0
2.0
3.9%

10.6
1.8
4.7%

9.1
1.6
5.5%

Sources: DANGCEM Annual Report

Page | 12

Cement Sector Update

Equity Research

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Page | 13

Cement Sector Update

Equity Research
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Disclosure

Dangote Cement Plc

Lafarge Africa Plc
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