Regarding the incident at Grigeo Klaipėda

On 9 January 2020 a press conference was held at BNS news agency, during which G. Pangonis, President of AB Grigeo commented on events at AB Grigeo Klaipėda. During the conference, an explanation was given regarding the pre-trial investigation conducted by the Klaipėda District Prosecutor’s Office of Klaipėda County Prosecutor’s Office regarding the release of allegedly untreated sewage into the Curonian Lagoon by AB Grigeo Klaipėda. A press release was circulated during the conference, which we enclose to this release as a separate enclosure. From 7 January 2020, AB Grigeo Klaipėda production sewage has been diverted for treatment to AB Klaipėdos vanduo, and the factory continues to operate at full capacity.

Although this situation arose in a subsidiary of AB Grigeo, it may affect the sales of AB Grigeo. AB Grigeo felt the suspension of orders for hygiene paper products from some retail chains operating in Lithuania. We associate this drop in orders with the position of commercial enterprises on the events that took place in Klaipėda, declared in public domain. Over the recent days, we have not seen a drop in orders from retail chains of other countries. Sales of tissue paper products account for up to 40 % of the total sales of AB Grigeo Group.

In the opinion of the management of AB Grigeo, the environmental incident at AB Grigeo Klaipėda will have an impact on the performance results of the group, there is a possible decrease in sales volumes and profitability.

At this time, we are unable to evaluate the potential impact caused to our performance results due to the compensation of damages. As far as we are aware, the Environmental Protection Department is planning to carry out an inspection and investigation of AB Grigeo Klaipėda, which is intended to determine the amount of damage to the environment.

Enclosed

09-01-2020 press release.

Gintautas Pangonis

President of AB Grigeo

Attachment