Ciech S.A.

Share Issue/Capital Change • Apr 2, 2020

With reference to currentreports No. 07/2018 of 27 April 2018 and No. 19/2017 of 23 November2017, the Management Board of CIECH S.A. with its registered office inWarsaw (the “Issuer”), informs that on 02.04.2020, as partof a significant investment, involving the construction of an evaporatedsalt production plant in Stassfurt, Germany (the “Investment”),a subsidiary of the Issuer – CIECH Salz Deutschland GmbH (“CSD”)signed an agreement with Adamietz Sp. z o.o. with its registered officein Strzelce Opolskie, for the execution of design, construction andassembly works aimed at constructing the facilities composing theInvestment (the “Agreement”). The total value of theAgreement is EUR 44,100,000. CSD is a special purpose vehicle and awholly-owned subsidiary of the Issuer, which took over the salt businessin Germany from CIECH Soda Deutschland GmbH & Co.KG.

The Agreement provides for the execution of alldesign work (including detailed designs), as well as construction andassembly, which, in accordance with laws and good construction practiceshould be performed and are required for the construction of fullyfunctional facilities enabling production. The Agreement also providesfor optimisation, the purpose of which is a reduction in the value ofthe work.

In the opinion of the Management Board of the Issuer,the spread of the SARS-CoV-19 coronavirus, causing a disease calledCOVID-19, may pose the potential risk of disruption in the timelyimplementation of the Investment due to possible difficulties or limitedavailability of contractors, possible delays in the supply of materialsand equipment and acts of public administration authorities in terms ofissuing decisions in administrative procedures, in particular, to closethe Polish border for Poles working in Germany. In order to mitigatethis potential risk, the Agreement grants both parties the right tosuspend its performance, in whole or in part, as a result of eventsrelated to the COVID-19 pandemic, preventing the performance of theAgreement, in whole or in part, which can be neither predicted norprevented (the “Force Majeure”). The Agreement stipulatesthat such suspension of implementation of the Agreement, if any, due toForce Majeure may not exceed 11 months in total.

The remaining terms and conditions of the Agreementdo not deviate from those commonly applied in business for this type ofagreement.

The estimated production capacity of the plant, whichshould operate as of 1 January 2021, is approximately 450 thousand tonsof salt per annum. The effects of the implemented Investment will have asignificant impact on the consolidated financial results of the CIECHGroup and may generate approx. EUR 25 million EBITDA per year.

At the same time, the Issuer informs that CSD hasreceived the vast majority of binding bid offers related to theperformance of other tasks under the implemented Investment. As a resultof the bid process, and taking into account the remuneration arisingfrom these offers and concluded contracts (including the Agreement), theIssuer is forced to correct the estimates relating to the value of theInvestment published in November 2017 (Current Report No. 19/2017) andApril 2018 (Current Report No. 07/2018). The preliminary estimates, asat the date of publication of this report, amount to approximately EUR140 million. The increase in costs is mainly due to a higher amount ofremuneration for the construction and assembly work, as compared to theassumptions of the Issuer, and an increase in the costs of materialsnecessary for the implementation of the Investment. The Issuer assumesthat the costs of the Investment could be reduced in the course ofnegotiating other contracts and implementing the Agreement.

Legal basis: Article 17.1 of the Regulation of theEuropean Parliament and of the Council (EU) No. 596/2014 of 16 April2014 on Market Abuse (the Market Abuse Regulation) and repealingDirective 2003/6/EC of the European Parliament and of the Council andCommission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OfficialJournal of the European Union L No. 173, p. 1).