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Golden Lime 2019 H1 Update: Navigating Challenging Market Conditions

This presentation provides updates on Golden Lime's financial performance, growth strategy, and response to market challenges. It includes key financial indicators, growth potential, and dividend policy.

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Golden Lime 2019 H1 Update: Navigating Challenging Market Conditions

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  1. Golden Lime 2019 H1 Update: Navigating Challenging Market Conditions SET Opportunity Day H1 2019 Bangkok, August 27th 2019

  2. Disclaimer This presentation contains “forward-looking” statements of Golden Lime Public Company Limited (the “Company”) that relate to future events, which are, by their nature, subject to significant risks and uncertainties. All statements, other than statements of historical fact contained herein, including, without limitation, those regarding the future financial position and results of operations, strategy, plans, objectives, goals and targets, future developments in the markets where the Company participates or is seeking to participate and any statements preceded by, followed by or that include the words “target”, “believe”, “expect”, “aim”, “intend”, “will”, “may”, “anticipate”, “would”, “plan”, “could”, “should, “predict”, “project”, “estimate”, “foresee”, “forecast”, “seek” or similar words or expressions are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company’s control that could cause the actual results, performance or achievements of the Company to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements are based on numerous assumptions regarding the Company’s present and future business strategies and the environment in which the Company will operate in the future and are not a guarantee of future performance. Such forward-looking statements speak only as at the date of this presentation, and the Company does not undertake any duty or obligation to supplement, amend, update or revise any such statements. The Company does not make any representation, warranty or prediction that the results anticipated by such forward-looking statements will be achieved. For an further enquiries please contact Investor Relations: Phone: +66 (0) 2017 7461 – 3 Email: irsutha@goldenlime.co.th

  3. Purpose Of The Presentation • Golden Lime Full Year H1 2019 Financial Update • Golden Lime Navigating Challenging Market Conditions • Golden Lime’s Growth Strategy Update Source : Golden Lime quarterly SET reporting

  4. Golden Lime Key Value DriversA Good Opportunity For Growth In Stable Diversified Markets • Golden Lime Backed By Key Strategic Investors • Carmeuse with 160 years of experience in the lime business globally who bring expertise and knowledge of the latest engineering and processes • GP Group with150 years of experience of doing business in Thailand and Asia • Demonstrated Growth Potential Over The Last Year • Greenfield investment in a new kiln has come online successfully with product sold into the market • Acquisition of Saraburi Quicklime was successfully integrated with further potential in M&A • Financial Results Are In An Upward Trend Despite Recent Challenges • Key financial indicators (EBITDA, Net Income, ROE, ROA) are in an upward trend • We see this trend continuing unless there is a continuing macro impact • Dividend Policy Provides Regular Cashflow • Historically Golden Lime has paid out a healthy dividend • Regular quarterly dividends in 2019 with a significant increase over 2018 to be maintained results dependent • Opportunity For Growth In The Near Term • Promising opportunities in export markets, in Thailand and through new products and markets

  5. Golden Lime 2019 H1 Key FinancialsRevenue, EBITDA and Net Income Consolidated Including Saraburi Quicklime • Golden Lime – Total revenues • In million THB • Golden Lime – EBITDA • In million THB • Revenue decreased slightly by 4% yr-on-yr due to weak markets particularly steel and sugar • EBITDA also decreased as along with the market impact there were some unexpected one-shot expenses therefore a reduction of 19% yr-onyr • Net income was impacted by the lower EBITDA and higher financing costs down 67% yr-on-yr 246 1,121 1,082 230 221 208 942 919 857 179 172 805 • Golden Lime – Net Income • In million THB 128 101 96 85 71 68

  6. Golden Lime 2019 H1 Key FinancialsROA (Return on Assets) And ROE (Return on Equity) • ROA (Return on Assets) was down given the weaker than expected net income • ROE (Return on Equity) was also down due to the lower net income • We expect H2 to normalize in terms of net income and for the positive trends to resume • Golden Lime – Return on Assets • In million THB • Golden Lime – Return on Equity • In million THB

  7. Golden Lime 2019 Key FinancialsDividend: A Regular Cash Stream For Investors Golden Lime Dividend History • Since going public Golden Lime has paid a regular dividend on a bi-annual basis • 2018 the full pay-out was 0.27THB/share or 81mTHB total Future Plan For Dividends • Golden Lime will continue to pay out regular dividends • A board decision was taken to pay out quarterly and this is set to continue • 2019 H1 2019 dividend pay-out of 0.09THB/share or 27mTHB total is a significant improvement year-on-year and is set to continue in future quarters dependent on financial results • Golden Lime – EBITDA/Dividend • Golden Lime – Net Income/Dividend

  8. Golden Lime: A Driver Of The Improved Financial Results • Golden Lime Backed By Key Strategic Investors • Carmeuse with 160 years of experience in the lime business globally who bring expertise and knowledge of the latest engineering and processes • GP Group with150 years of experience of doing business in Thailand and Asia • Demonstrated Growth Potential Over The Last Year • Greenfield investment in a new kiln has come online successfully with product sold into the market • Acquisition of Saraburi Quicklime being successfully integrated with further benefits to come • Financial Results Are In An Upward Trend • Key financial indicators (EBITDA, Net Income, ROE, ROA) are rising • We see this trend continuing • Dividend Policy Provides Regular Cashflow • Historically Golden Lime has paid out a healthy dividend • This policy is set to continue and to become more regularized – quarterly dividends • Opportunity For Growth In The Near Term • Promising opportunities in export markets, in Thailand and through new products and markets

  9. Purpose Of The Presentation • Golden Lime Full Year H1 2019 Financial Update • Golden Lime Navigating Challenging Market Conditions • Golden Lime’s Growth Strategy Update Source : Golden Lime quarterly SET reporting

  10. Golden Lime H1 Result Drivers: Lower Volumes Impacted Heavily in Q2 Along With One-Shot Unplanned Costs

  11. Golden Lime H1 Result Drivers: Unplanned One Off Costs Impacted Q2 EBITDA By -10mTHB • A change in the regulatory environment regarding employee provisioning • Unexpected over-run in maintenance costs for the kiln refurbishment • Variable compensation (also not provisioned) 4mTHB 3mTHB 3mTHB Total non-recurrent impact of 10mTHB will not be carried into Q3 and rest of 2019

  12. Golden Lime H1 Result Drivers: Market Challenges Particularly in Steel Thai GDP growth was weaker than expected • Global growth forecast for 2019 is around 3.4% with fears of a recession (<2% growth) also gaining traction recently • The Thai economy has not been immune to the global slow-down with H1 recording a disappointing 2.6% growth vs 3.3% expected • However, H2 is expected to pick-up with the recently announced government stimulus impacting positively with expectations of around 3.4% growth in H2 Steel particularly hard hit in H1 • As it is closely linked to GDP steel was hard hit by the sluggish H1 growth • Along with the macro impact imported semi finished products in the form of billets were routed to Thailand due to trade barriers in other regions • This heavily impacted raw steel production which was down 30% yr-on-yr • Along with this some uncertainty around the take over of key steel assets remained in H1 which has since been resolved • We have seen a pick-up in the last month in steel which is positive for the rest of the year Overall impact of 10mTHB per month from lack of volumes in Q2 to produce and sell in H2 2019

  13. Golden Lime H2 Outlook: Market Remains Challenging - Action Plan To Improve EBITDA Being Executed 1 5 - 7mTHB per month additional EBITDA from new markets after ramp-up to produce and sell in H2 2019 • Low re-activity product for AAC market • Low Sulphur product for pulp & paper market • New export markets • Dolime for steel markets Costs: Maintenance reduced to critical projects and fuel cost to reduce • Majority of maintenance projects have been completed in H1 2019 therefore only critical projects in H2 • Fuel cost will reduce as lower priced fuel in stock is used in production in H2 2019 Divestments of non-core real estate assets • Land and buildings that are outside of the factory locations • Held for legacy reasons so actively divesting Maintain pricing discipline • Positive yr-on-yr impact of 9mTHB in Q2 • Maintain this positive impact in H2 as higher value products (Dolime) also impact to the upside 2 3 4

  14. Purpose Of The Presentation • Golden Lime Full Year H1 2019 Financial Update • Golden Lime Navigating Challenging Market Conditions • Golden Lime’s Growth Strategy Update Source : Golden Lime quarterly SET reporting

  15. Golden Lime’s Growth StrategyThree Key Drivers Of Golden Lime’s Mid-term Growth 1 Increase exports in Asia • Versus other major lime players in Thailand Golden Lime has a limited number of exports • Major growth in surrounding countries (Myanmar, Laos, Cambodia) will open up new markets, we have 90% market share in Cambodia and now we supply to the biggest AAC producer in Cambodia who will double capacity soon. • Potential for Taiwan market and also Sugar Industry in Indonesia to balance the cyclicality of Thailand production ( Sugar season of Indonesia from Apr – Sept, while Thailand from Dec – Apr ) • Due to Environmental restriction in China, there is an opportunity in Southern China • We started to export some quantity for hydrated lime to Australia Increase value provided on the domestic Thai market • Thailand has one of the lowest average lime and hydrate prices in the region due to commodity status of most of the products and relatively low level of customization and services • For logistical reasons the Thai market experiences little or no imports • A leading domestic market player like Golden Lime has room to improve the product value and total-cost-of-ownership via customized products and higher added value services in logistics & application • We provide value selling to customers which will enable us to get higher realisation Development of New Products and Markets • Leveraging on the technical know-how of Carmeuse there are a number of high value added products being developed • This along with South East Asian economies becoming more efficient, quality oriented, focusing on total value instead of only price, and environmentally conscious, is resulting in new markets opening up for more sophisticated producers like Golden Lime • New Development on products to replace imports to the steel industry and also product in construction applications 2 3

  16. : Core Market 1 : Export market with presence Growth Opportunity: Increased Export VolumeTaiwan & China Key Steel Markets In Asia and Indonesian Sugar Market (Counter Cyclical with Thailand) : Expansion focus near term : Markets out of current scope • Golden Lime’s core market of Thailand currently accounts for 90% of sales • With significant experience in steel a good opportunity exists to target one of Asia’s largest steel markets (22 million mt of steel production) • Detailed market study has been performed • Taiwan currently imports the same amount of lime as India so presents a considerable opportunity • New Potential Market in Guangdong • Indonesia is attractive given the size and also the sugar season is counter cyclical to the sugar season in Thailand and also Chemical application in Indonesia • New Potential market in Australia for Soil Stabilization Taiwan China Myanmar Laos Philippines Thailand Cambodia Vietnam Malaysia Indonesia

  17. : Markets with higher prices 2 : Markets with equal prices Growth Opportunity: Value Increase In ThailandThailand Value Increase Continues To Add Average Revenue : Core market Note: Price estimates based on internal market intelligence Afghanistan US$ 85-90 ↑ Iran Pakistan US$80-150↑ Saudi Arabia UAE US$80↑ Myanmar Philippines India Laos Oman Yemen US$60-95- Thailand Cambodia Vietnam US$60-120↑ US$75- Malaysia Sri Lanka Further value for customers has resulted in average revenue increased to $90 ↑ Indonesia US$60-95↑

  18. 3 Growth Opportunity: Power Plant MarketFlu Gas Treatment For Environmental Protection Special product Flu Gas Treatment in power plants and Waste to Energy incinerators • New potential in the Thai market as well as SE-Asia in late 2019/early 2020 • Municipal waste incineration is expected to grow 50% year on year from current very low level to the one seen in Japan/Singapore/Taiwan in 20 years • High end market replacing commodity products • Example of Taiwan market only 23.6 million people but there are 26 incinerator around Taiwan 8/27/2019

  19. 3 Growth Opportunity: Steel IndustryNew Source of MgO in Steel • Replace imported MgO source • Best value for money of any MgO input options • Low dust and easy to handle packaging • High supply security , domestic product in Thailand, low lead time 250km to plant 8/27/2019

  20. 3 Growth Opportunity: Construction Industry AAC : Aerated Autoclave Concrete • One of the highest Lime consumption industries • Good growth to replace traditional bricks • AAC Thai producers also expanding to panels and exporting to Asia and Australia • Golden Lime has developed lime to match the spec for this industry 8/27/2019

  21. Questions?

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