Ciech S.A. — Management Reports 2022

May 18, 2022

Corporate Strategy 2022-2024

Warsaw, May 18 th 2022

Our Vision: We are future-proof and modern chemical holding, that generates value for its stakeholders

Future-proof business

Soda: transform around four pillars: improving cost advantage, delivering energy transformation, strengthening strategic capabilities and maximizing Sobic value Salt: priority on Stassfurt production ramp-up and volume commercialization Agro: expand innovative product offering to enable long-term growth Other: further optimize to assure resilient cashflow generation

H&S: Clear goal and commitment to reduce accident frequency by 30% Innovation: Foster innovation to deliver clear value for customers HR: strengthen performance culture and attract talents Organization: Reflect strategic pillars in organization structure

Clients: Sustainable product offering with innovation assuring long term value for customers Employees: Safe and engaging work environment Investors: Build an asset that produces stable dividend Stakeholders: Clear value defined

In this strategy we put safety first to become industry leader and fully commit to reduce accident frequency by 30% until 2024 "

D. Jakubowicz

"

M. Skowron

J. Romanowski

CEO of Ciech COO of Ciech CFO of Ciech

3

Financial targets for this Strategy

mPLN, 2019-2024

Stabilized business and streamlined organization in place

Focus on cash generation and build-up of dividend capacity

No large CAPEX development projects on the horizon

Energy transformation financed in a partnership model²

M&As considered only if bringing unique strategic opportunity

1. Assumes no or limited CAPEX

Cumulated FCFE 2022-2024

580-680mPLN

1. Assuming debt roll over and gradual deleveraging thanks to EBITDA expansion

EBITDA(N) in 2024

870-930mPLN

Cash Conversion in 2024

~30-35%

Point of departure for this Strategy

• Solid financials and resilient balance sheet
• Restructured and streamlined organization
• Promising pipeline of smart M&A options
• Challenging and uncertain environment

2021

• Corporate culture change ongoing, talents being acquired

Point of arrival for this Strategy

• Future-proof businesses ready to meet requirements of the changing business environment
• Modern chemical holding with all required capabilities
• Clear and optimized value for all the stakeholders
• Stable asset generating predictable dividend yield

#1 Point of departure

Build future-proof business

#2 Point of arrival

Develop as a modern chemical company

Optimize value for stakeholders

Where are we now? (I/II)

Business Units

• 2nd largest Soda producer in Europe
• Growing CO² cost and high energy prices
• Increased competition threat from Turkish producer
• Operational transformation as a key lever
• Large and fast-growing Crop Protection player in PL
• Owner of innovative BGT product
• Growth via savvy portfolio management and geographical expansion

  • 1 merchant producer in Europe

  • Growth due to eco trends and greater silicate admixture into tires
  • New production capacity under commercialization

Where are we now? (II/II)

Support Functions

• H&S policies, standards and rules in place
• H&S dashboards, KPIs and goals implemented

• H&S communication and training activities rolled-out

• Standardized CAPEX planning and reporting

• Improved access to managerial data

• Tight control on project approvals

• Purchasing strategies and clear process prepared

• Introduced standardized SLA conditions
• Local teams divided in sourcing & back-office units

We carefully analyze M&As opportunities to enhance capabilities and allow leaping growth

Key considerations for M&A

• Business must relate to one of the core businesses
• Transaction must bring long term strategic benefits not just scale growth
• Target should be a healthy asset on a stand-alone basis
• Out of the pipeline only one closing considered (possibly in 2022)
• Targeting medium to large businesses on developed markets (focus on European and North American assets)
• Fitting into the strategy of building future dividend generating asset

With or without M&A - either way Ciech's goal is to generate dividend for investors

We start in highly volatile and uncertain environment

Develop as a modern chemical company

Optimize value for stakeholders

Build future-proof businesses

Resilient SODA business

SALT ramp up

AGRO on growth trajectory

Leap forward with smart M&A

Develop as a modern chemical company

Strengthen health and safety as a core corporate value

Performance based, engaging modern corporate culture

Innovations paving the way to the future

Optimize value for stakeholders

Assured Client satisfaction

Accelerated ESG transformation

Optimized cashflow and shareholders' value creation

Develop as a modern chemical company

Optimize value for stakeholders

Diversified portfolio requires individual strategic approach to each of the businesses

Build future-proof business

Commercialize new production capacity

SALT, SILICATES SODA, FOAMS, PACKAGING AGRO Supporting Functions

Continue business optimization to further improve cash flow profile

Maintain strong growth in the long-term

Building up strategic business capabilities

Soda business with a window of opportunity to improve competitive positioning

Build future-proof business

3.0 mt of difference in net import from China between '21 and '22

Net import shift in China

• Lower production capacity and increased demand to increase net import of soda ash in China
• Shift on the scale of half of the European market

Reduced competition in Europe

• China will attract volume from key soda ash exporting destinations
• Shift will reduce competitive pressure in Europe

• Focus on operational transformation (e.g., reduce consumables consumption, implement innovative processes, speed-up energy transformation)
• Develop business capabilities and product portfolio to strengthen competitive advantage
• Get ready for the next cyclical downturn

Build-up of cost advantage

Energy transformation

Strengthening strategic capabilities

Maximizing value from SOBIC products

Build-up of cost advantage • Implement heat recovery systems to reduce steam consumption

• Balance process parameters to reduce demand for steam
• Improve infrastructure to enable real-time control over electricity consumption
• Increase the number of operating turbines with operational back-up to reduce external purchase of electric energy

Reduced raw material consumption

• Work with strategic partners to improve product parameters that could reduce overall raw material consumption
• Renovate boilers to increase coal burning efficiency
• Test substitutes to expensive raw materials
• Strengthen Lean mindset
• Implement additional management techniques to increase production efficiency (focus on 5S, Gemba)
• Leverage current knowledge on APC in the Group to automate operational decision making

Operational excellence and APC

Energy efficiency

Energy transformation

CO² emissions (2019=100%)

1. Alternative solutions

0%

Other

2040

Strengthening strategic capabilities

decisions making

Maximizing value from SOBIC products Develop new product offering to increase reach on regional markets

Intensify marketing and increase sales focus to increase penetration in current segments

Directly reach end-users for high margin specialized Soda applications

Expand globally for high margin products with low importance of geo rent

Boost operations to increase value for customers

Stassfurt plant ramp-up roadmap

Build future-proof business

Stassfurt project

1. Set-up	2. Commercialization	3. Full steam ahead
2019	2022 2023	2024+
• Plant core set-up	• Build-up of a sales org. and client pipeline	• Full potential utilization
• Operational excellence in progress	• Entry into Food Grade and Pharma segments	• Optimization of production costs
• Confection lines under finalization	• Production rate ~350-400kt – Fully unlock capacity	via Lean Manufacturing
• Full fixed costs caried	– Food grade and pharma confection set-up
	• Improve customer service (e.g., logistics) to balance value for money

Assuring long term growth

Build future-proof business

Key market trends

High EU regulatory pressure to reduce pesticide usage

Growing pressure to optimize crop protection usage via new technologies

Stable market value, growing in developing countries

CIECH's Strategy

Commercialize Halvetic
Work on novel product formulations
Selective approach to AI's - low regulatory risk
In EU focus on countries with "catch-up" potential
Use Halvetic to establish non-EU presence

Expand offering in digital services based on partnerships

Build future-proof business 26

Clear benefit for the clients: reduces Active Ingredient input by 50%

• Lowers health hazard
• Minimizes environmental impact
• Lowers risk of Active Ingredient overdose

Maintained efficacy for growers

• Same product dosing and usage parameters
• Reliability in all water hardness and abiotic stress situations
• Well-know mode of action
• Increases operator ease of use of the ready-made product (includes ammonium sulphate and adjuvants)

Attractive financial performance for CIECH

• Lower business risk vs. R&D products as substituting existing market
• Reduces registration costs as based on existing Active Ingredients

Key risks around BGT

• Difficulty to shift farmers' behavior from high-load to low concentration products in main glyphosate markets (Brazil, Australia)
• Building farmers' awareness of the efficacy of the product
• Regulatory challenges

• Improve product formulations
• Test sustainable product formulations
• Optimize production planning and reduce waste via advance analytics
• Optimize maintenance cost and time with Industry 4.0 solutions

Innovations and excellence Fully leverage current assets Steering towards growing niches

• Finalize commercialization of the new furnace
• Run operational excellence program

• Develop additional products to drive margin and competitive differentiation

• Develop new segments to diversify from the current mature business

• Modernize production lines to develop cost advantage

Optimize value for stakeholders

Strategic ambitions of support functions

We put safety first in this strategy and fully commit to ambitious targets

Develop as a modern chemical company

We have defined clear direction for our R&D projects based on customer needs

We build innovations on three pillars

Develop as a modern chemical company

Our vision and strategic priorities are to be reflected in the Group organization and governance

Develop as a modern chemical company

We have clear value proposition for client and investors

This Strategy commits to our ESG goals which define our promise to the broader stakeholder group

For further details please refer to our ESG strategy https://ciechgroup.com/esg/

Disclaimer

This elaboration has been prepared solely for information purposes; it contains only summary information and estimations, does not purport to contain all the information in scope falling within this document or to be exhaustive, nor is it intended to be the sole basis for any analysis or evaluation. CIECH S.A. does not make any assurances (express or implied) as to the information presented in this elaboration, and you should not rely on any information contained in this document, including the forecasts, estimates and opinions contained herein.

The recipient agrees and acknowledges that this presentation is not intended to form the basis of any investment decision by the recipient and does not constitute financial investment, or any advice. CIECH S.A. does not accept any responsibility for any errors, omissions or irregularities contained herein. The sources of information used herein are considered by CIECH S.A. credible and accurate, however, there is no guarantee that they are comprehensive and fully reflect the facts and it must be assumed that the information contained in this presentation may be subject to change, material change not excluding.

This elaboration does not constitute an advertisement, or any offer of securities in public trading. This elaboration may contain forward looking statements that constitute an investment risk or a source of uncertainty and may significantly differ from the actual results. CIECH S.A. is not liable for the effects of any decision taken based on this elaboration. Such responsibility lies solely with the user of this elaboration.

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