Notore Chemical Industries Plc

Investor & Analyst Presentation

Half-Year ended March 2019

Champion of the African Green RevolutionMay 2019

Page #

1 Operating Environment 3

2 Key Performance Highlights 6

3 Corporate Strategy & Outlook 11

A Appendix 17

Outline

2

1. Operating Environment

4

§ The agriculture sector remains key to providing food security to the over 7bn people across the globe

- Total fertilizer nutrient demand was estimated at 184.02million tonnes in 2015 and is estimated to grow at 1.9% per annum between2015 and 2020, to reach an estimated 201.66million tonnes by the end of 2020

- The demand for Nitrogen, Phosphate and Potash is estimated to grow annually by 1.5%, 2.2% and 2.4% respectively for theindividual nutrients from 2015 to 2020

§ In 2016, Sub-Saharan Africa (SSA) consumed an estimated 3.7million tonnes of fertilizer nutrients, with South Africa, Ethiopia, Nigeriaand Kenya being the main consumers of fertilizer within the region, accounting for over 50% of fertilizer consumption

§ Africa is expected to have the highest growth rate in fertilizer demand in the medium term, given the large expanse of arable land andgreat agricultural growth potential in the decade to come

§ More specifically, it is estimated that the demand for fertilizers in SSA would rise ~8% annually by 2021, with Nigeria and Ethiopiacontributing 28% and 18% respectively of regional demand growth

Global Demand for Fertilizer Nutrients African Demand for Fertilizer Nutrients

110 112 114 115 117 119

41 42 43 44 45 46 33 33 34 35 36 37

2015 2016E 2017E 2018E 2019E 2020ENitrogen Potash Phosphate

In million tonnes

3.6 3.6 3.8 4.0 4.1 4.3

1.4 1.5 1.5 1.6 1.6 1.70.6 0.7 0.7 0.8 0.8 0.9

2015 2016E 2017E 2018E 2019E 2020ENitrogen Potash Phosphate

In million tonnes

Global market demand for fertilizer

5

Local market demand for fertilizer

Key Statistics

5.5kg/ha(2)

Fertilizer consumption (kg/hectare of arable land)

34m hectaresof arable land (37.3% of land area)

Fertilizer usage across Nigeria

Agriculture as a % of Nigeria’s GDP

Fertilizer Demand in Nigeria (3)

Fertilizer Consumption in Nigeria (4)

§ Agriculture accounts for 20% ofNigeria’s GDP and statistics shows howfar the sector has declined over the last50 years, as Nigeria ramped up itsreliance on oil exports.

- Crop production accounts for thelargest contribution to Nigeria’sagriculture GDP, delivering anaverage of 88% between 2012 and2017.

§ Due to low production of fertilizerswithin the country and high prices ofimported fertilizers, the annualapplication amount of fertilizer inNigeria is well below the Sub SaharanAfrican average of c. 16.2kg/ha.(1)

§ The FG continues to make efforts toincrease both the supply and demandfor fertilizers, through provision ofsubsidies, grants, loans, amongstothers.

- More recently, through theimplementation of the PresidentialFertilizer Initiative(PFI) program in2017, in partnership with theFertilizer Producers and SuppliersAssociation of Nigeria, fertilizerblends have become available allyear round

Proportion of plots using some fertilizer

<10>10 and <25 >25 and <50 >50 and <75

>75

Metric Tonnes (millions)

0%

15%

30%

45%

60%

1967 1977 1987 1997 2007 2017

1.21

0.87

0.62

0.96

1.56

2013 2014 2015 2016 2017

0

5

10

15

20

2002 2004 2006 2008 2010 2012 2014 2016

Kg/hectare of arable land

(1), (2) & (3) - Sources: world bank development indicator 2016; (4) – Source: AfricaFertilizer.Org

2. Key Performance Highlights

2 Gas Supply§ Gas is the major feed stock in the production of urea fertilizer. It accounts for 95% of

the inputs

§ Notore has enjoyed uninterrupted supply of gas to its facilities since March 2016when it signed a 20 Year Gas Supply and Purchase Agreement with ErotonExploration and Production Company Limited

3

Financing Cost§ Finance cost dampens Notore’s current profitability because of the current plant

capacity utilization. Post TAM, Notore will increase its revenues to N50billion,consequently, its earnings before interest and tax (“EBIT”) will sufficientlyaccommodate its finance cost and yield robust net income

1

Operations – Plant Reliability§ Our plant achieved a capacity utilization of 49% of its production design capacity,

1500MTPD, during the 6 Month period under review, averaging 734MTPD

§ The Turn-around Maintenance (“TAM”) program of the plant which will restore it toits design production capacity of 1,500mtpd will be completed by Q1 2020

Key themes impacting our business

7

-16 % decrease

Change +/-

Key performance indicators review

12.69

3.05 4.63

7.56

-1.94

15.17

3.76

0.67

4.69

-4.47

Revenues (N'b) Gross profit (N'b) Operating Profit (N'b) EBITDA (N'b) PBT (N'b)

6M March 2019 6M March 2018

-16.37% -19.01% 587.6% 61.28%

121,915 MT Urea Sold

145,191 MT Urea Sold

Notes:

§ Revenue was impacted by 16.03% decline in urea sold due to production of 122,150 MT urea during the period under review

compared to 142,952 MT during the 6 Month period ended March 2018

§ Reduction in Gross profit reflects the impact of the drop in revenues; cost of sales margin variation was quite negligent at 80bps

§ Operating Profit & EBITDA improved significantly due to recognition of asset revaluation gains valued at approximately N4.76billion. In

addition, operating costs were managed effectively as they decreased by 0.82% from N3.20billion to N3.17billion in H1, 2019

8

6M 2019 FY Income Statement

Financial Year October 2018 – March 2019 October 2017 – March 2018

Period 6 Months 6 Months

Production Figures – 6 Month Design Capacity 250,000 MT 250,000 MT

Urea Produced 122,150 MT 142,952 MT

Urea Sold 121,915 MT 145,191 MT

Income Statement Naira’million Naira’million

Revenue 12,685 15,168

Cost of Sales (9,637) (11,405)

Gross Profit 3,048 3,764

Operating Expenses (3,173) (3,199)

Other Income 4,758 109

Operating Profit 4,633 674

Finance Income 19 3

Finance Cost (6,595) (5,147)

Net Finance Cost (6,575) (5,144)

Profit / (Loss) Before Tax (1,942) (4,470)

EBITDA 7,564 4,690

EBITDA Margin 43.4% 30.7%

9

Balance sheet as at end March 2019 and end September 2018

Financial Year March 2019 September 2018

Period Naira’millions Naira’millions

Non Current Assets 142,099 140,212

Current Assets 16,495 12,626

Total Assets 158,594 152,838

Non Current Liabilities 79,657 83,020

Current Liabilities 32,170 21,110

Total Liabilities 111,827 104,130

Equity 46,768 48,708

Equity & Liabilities 158,594 152,838

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3. Corporate Strategy & Outlook

Driving strategy through IRIODE theme

Increase capacity

2019: 2000MTPD NPK

2023: 2645MTPD Urea

2023: 5000MTPD Methanol

Export to international market Continuously nurturing our

relationships with global trade partners to ensure markets for

export of our products

Increase efficiency Optimize:

1. Plant reliability 2. Gas usage

3. Energy consumption

Occupy the domestic spaceDeepen our distribution network and develop more crop specific

fertilizers in conjunction with established agriculture research

institutions

Develop the regional market Develop hubs in West Africa and Sahel Africa to drive adoption of best farming practices and agro

inputs

Reduce cost 1. Secure best financing terms

2. Procurement efficiencies3. Tax efficiency through Free

Zone Status4. Economies of scale

IRIODE

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Strengthening our agricultural extension services network

Africa’s estimated annual

food import bill was $35

billion in 2017 and it is

expected to rise to $110

billion by 2025

Possible Solutions to Increasing Africa’s Self Sufficiency in Food

Provision of Quality Agro Inputs

Educating Farmers on Best farming

Practices

Creating Markets for Quality Outputs

Notore’s Intervention

§ Large-scale dissemination of farm inputs such asfertilizer and improved seeds

§ Establishment of more farm demonstration plotsand video viewing centres in Nigerian farmingcommunities to educate farmers on best farmingpractices for increased yields

Promotion of Farm Input Utilization

1 2 3

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Value creation and revenue diversification

H1 2019 FY

H2 2019 FY

§ Finalised activities onthe installation of a2000MTPD NPKblending plant

§ Approved technologyfor a 5000MTPDmethanol plant

§ Reached advancedstage of negotiationwith third parties toaccommodate themwithin the Notore FreeZone – The Free Zoneoffers significant taxincentives to operatorswithin it

Diversification of Revenue from Urea

H1 2020 FY

§ Conclude the TAMprogram and attain1500MTPD productiontarget on a consistentbasis

§ This will increaserevenues by 80% andmove EBITDA marginsto between 45 - 50%range

Attain 1500MTPD urea Production

§ Post TAM, there will beadditional 34 MWpower which will beavailable for sale

Attain Power Generating Capacity of

59MW

H2 2020 FY

§ Develop the proposedindustrial complex intoa gas hub and anintegrated logisticsservice provider.

§ The Brownfield locationoffers the following toprospective clients:

- Land– 560 hectares

- Reliable power

- Access to dedicated

jetty – for import

and export activities

- Access to gas

- 153 residential units

Optimization of the Free Zone Status

October 2018

September 2020

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§ Commission the2000MTPD NPKblending plant at theexisting Onne location

2000 MTPD NPK Blending Plant

§ Train II is aco-production plantwith 2,645MTPD ureaand 5,000MTPDmethanol capacity

§ Construction period isabout 3 years and it isexpected to commencein Q1, 2021

Commence FEED on Train II 2.6m MTPA

Plant

Projected financial outlook post TAM

Year FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025

Period 12 Months 12 Months 15 Months 12 Months 12 Months 12 Months

Production Figures

Ammonia (MTPA) 258,660 323,400 323,400 323,400 323,400 323,400

Urea (MTPA) 421,200 495,000 495,000 495,000 495,000 495,000

Income Statement Naira’billion Naira’billion Naira’billion Naira’billion Naira’billion Naira’billion

Revenue 48.82 57.20 57.20 57.20 57.20 57.20

Other Income - 3.67 4.10 4.57 5.00 5.47

EBITDA 24.88 33.41 33.77 34.25 34.67 35.14

Ratio

EBITDA Margin 51.0% 54.9% 55.1% 55.4% 55.7% 56.1%

Notes§ Other income accounts for revenues from sale of captive power and rental income from lease of available land to third parties

§ TAM program is expected to be completed by Q1, 2020, hence full year post TAM revenues will be achieved in 2021 FY

15

Fertilizer market outlook

§ Nigeria has about 34 million hectares of arable land (FAO, 2017) requiring a minimum of 7

million MT of NPK & urea fertilisers annually

§ Nigeria’s fertilizer consumption per hectare is approximately about 5.5kg compared to the

FAO global recommendation of 200kg, confirming that there is still latent demand

§ Fast growing cash crops segment with a minimum 1.2 million MT annual demand of crop

specialty fertilizer blends locally

§ Rising importation of fertilisers by neighbouring West African markets from Nigeria (estimated

at approximately 500,000 MT annually)

§ Global warming

• Flooding and desertification causing food shortage• Overall arable land mass declining

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A. Appendix

Snapshot of Nigerian agricultural space and opportunities

Land cultivated for cereal

14.3 million ha

Agricultural land

76.2million ha

Arable land

34million ha (42% harvested)

Cassava & tuber Land

7.2million ha

Irrigated land

259,000 ha

Tree-crop land

2.9million ha

Sources: FAO; world bank development indicator 2015; FEPSAN, FMARD records

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Nigerian apparent fertilizer consumption 2013 - 2017

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The table below provides information on the apparent consumption of fertilizer in Nigeria between 2013 – 2017,

according to AfricaFertilizer.Org:

Fertilizer Apparent Consumption = Production + Imports – Exports – Non Fertilizer Use

Fertilizer 2013 2014 2015 2016 2017

Urea 765,731 423,966 319,656 386,383 760,734

NPK 270,919 344,879 165,684 380,455 399,949

NP Compounds 87,988 68,535 47,986 115,845 96,984

Ammonium Sulphate 12,301 2,321 10,483 27,450 40,248

Other Phosphate Fertilizers 6 - 50,596 22,452 224,616

Other Fertilizers 77,014 34,517 23,492 26,779 42,285

Total (Metric Tonnes) 1,213,959 874,216 617,897 959,364 1,564,816

Growth n.a (28%) (29%) 55% 63%

Notore Urea Production 235,000 170,000 254,156 268,740 344,597

Industrialization through gas

One of the key objectives of Train II is the stimulation of the gas sector in the Niger-Delta through utilization ofsome of the abundant gas within the region that is untapped

Value added ProductsUrea and Methanol

Monetizing gas that would have been flared

Long term benefit of Train II Gas Utilization to the environment• Reduction of Greenhouse Gases• Reduction in carbon particulate formation

Methanol - serves as precursor for many commodity chemicals such as formaldehyde and acetic acid

• Yearly demand growth rate – 5%• Demand to remain strong in the next five years• Future distribution to African markets as they develop capacities for methanol utilization

Flared Gas in the Niger-Delta

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Contact Details

Seyi Odeinde

Head, Investors Relations

Phone: +234 908 741 8746

Email: investorrelations@notore.com

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Thank You