Kghm Polska Miedz S.a. · GPW:KGH
Kghm Polska Miedz — Kghm Polska Miedz Sa Ord — Q1 2024 Earnings Presentation
44 slides from Kghm Polska Miedz's earnings presentation, May 16, 2024
Slide 1: Results of the KGHM Group for the first quarter of 2024
Layers of possibilities Results of the KGHM Group for the first quarter of 2024 Lubin, 16 May 2024
Slide 2: Cautionary Statement
Cautionary Statement This presentation was prepared by KGHM Polska Miedź S.A. (KGHM). The presentation is strictly of an informational nature and should not be construed as containing investment advice. The users of this presentation are solely responsible for their own analysis and assessment of th
Slide 3: Intellectual Property Rights
Intellectual Property Rights All rights reserved. All content on this presentation of the KGHM are protected by copyright and other protective laws. The presentation and the trademarks, service marks and logos on the presentation are owned by or licensed to KGHM, and are subject to copyright, tradem
Slide 4: Agenda
Agenda 1. Strategy of the KGHM Polska Miedź S.A. Group 2. Sustainable development – commitments and initiatives of KGHM Polska Miedź S.A. 3. Key issues and execution of main targets 4. Financial results of the KGHM Group 5. Production results of the KGHM Group by segment 6. Advancement of developmen
Slide 5: Strategy of the Group
Strategy of the KGHM Polska Miedź S.A. Group
Slide 6: Key action in individual areas of the Strategy in Q1 2024
Key action in individual areas of the Strategy in Q1 2024 FLEXIBILITY ECOLOGY, SAFETY AND SUSTAINABLE DEVELOPMENT • Continuation of the Strategic Program Hybrid Legnica Smelter and Refinery, aimed at ensuring flexibility for the metallurgy industry by allowing the management of larger • The balance
Slide 7: Advancement of key strategic performance indicators in Q1 2024
Advancement of key strategic performance indicators in Q1 2024 Strategic measure of success Base year 2020 Q1 2024 Goal 2030 (strategic KPI) Approx. 600 thousand tonnes of electrolytic copper (including production Domestic approx. 560 kt based on a higher amount of purchased materials and copper fro
Slide 8: Sustainable development – commitments and initiatives
Sustainable development – commitments and initiatives of KGHM Polska Miedź S.A.
Slide 9: Actions by KGHM's employee volunteers in Q1 2024
Actions by KGHM’s employee volunteers in Q1 2024 36 actions involving volunteers 213 employee volunteers took part in actions 526 Number of volunteer projects 46 36 hours dedicated to advancing volunteer projects Q1 2023 Q1 2024 9
Slide 10: Climate neutrality by 2050
Climate neutrality by 2050 Achieving climate neutrality by 2050 is the overriding goal of the Climate Policy of KGHM Polska Miedź S.A. Intermediate goal – the reduction of total Scope 1 and Scope 2 emissions by 2030 by 30%1) Emissions reduction by 30% 2030 versus the base year 2020 2050 Climate neut
Slide 11: By 2030 the increase in share of RES will reduce CO2 emissions
By 2030 the increase in share of RES will lead to a substantial reduction in CO2 emissions Share of power source in supplies to KGHM Polska Miedź S.A. 2020 – base year (2.9 TWh): Q1 2024: Own generation sources, including RES, covered 23.93% of KGHM Polska Miedź S.A.’s total power needs. Natural Mar
Slide 12: Key issues and execution of main targets
Key issues and execution of main targets
Slide 13: Macroeconomic environment: commodities and currencies prices
Macroeconomic environment Commodities and currencies prices Copper prices in Q1 2024 ranged between 8 085 and 8 973 Price (USD/t) Annual av. or YTD (USD/t) [USD/t] [PLN/t] USD/t, remaining to mid-March in a sideways trend, with a 11 000 Price (PLN/t) Annual av. or YTD (PLN/t) 55 000 slower-than-expe
Slide 14: Precious metals prices in Q1 2024
Precious metals prices in Q1 2024 Precious metals remain under pressure from expectations related to Fed decisions and fears surrounding geopolitical tensions At the start of 2024 the combination of geopolitical risk and The rise in precious metals prices has not yet instigated a more expectations o
Slide 15: Purchasing managers' sentiment remains low in the eurozone
Purchasing managers’ sentiment remains low in the eurozone. In the USA and China, PMI indices returned in March to above 50. ▪ PMI indices rose in the USA and China in March 2024, breaking the 50 level which marks the border between expected economic slowdown and growth. ▪ In the eurozone, purchasin
Slide 16: IMF World Economic Outlook - April 2024
Pokłady IMF Worldmożliwości Economic Outlook - April 2024 Forecasts (F) of real GDP growth – International Monetary Fund - World Economic Outlook – Update in April 2024 compared to January 2024 16
Slide 17: Summation of Q1 2024 in the KGHM Group
Summation of Q1 2024 in the KGHM Group Main macroeconomic factors and aspects of the Group compared to Q1 2023 Macroeconomic environment1) Operating results Indicators no change -5% -14% in extraction of ore, dry weight in KGHM Polska Miedź S.A. +2% Copper price Copper price Higher CAPEX execution i
Slide 18: Basic measures of the results in Q1 2024
Pokłady możliwości Summation of Q1 2024 in the KGHM Group and KGHM Polska Miedź S.A. Basic measures of the results in Q1 2024 KGHM Group KGHM Polska Miedź S.A. PLN 8 315 mn PLN 7 279 mn Revenues Revenues PLN 1 551 mn PLN 896 mn Adjusted EBITDA Adjusted EBITDA PLN 424 mn PLN 387 mn Profit for the per
Slide 19: Financial results of the Group
Financial results of the Group
Slide 20: Key financial indicators of the KGHM Group
Key financial indicators of the KGHM Group Q1 2024 Group adjusted EBITDA2) Group revenues [mn PLN] [mn PLN] -13% Q1/Q1 Adjusted EBITDA of the KGHM Group -14% Q1/Q1 9 585 1 551 8 315 Lower adjusted EBITDA compared to Q1 2023 in respect of KGHM Polska Miedź S.A. and Sierra Gorda S.C.M. 1 802 1 551 Q1
Slide 21: Group sales revenue
Group sales revenue Q1 2024 Revenues from contracts with -13% Q1/Q1 Revenues from contracts with customers customers [mn PLN] [mn PLN] 9 585 +10 8 315 +95 -258 -365 9 585 -752 504 711 8 315 511 525 Revenues for Q1 Change in sales Change in prices Change in Adjustment of Other Revenues for 8 370 2023
Slide 22: Expenses by nature
Expenses by nature KGHM Group Lower expenses by nature compared to Q1 2023 mainly due to a lower minerals extraction tax Expenses by nature charge, costs of purchased metal-bearing [mln PLN] materials, and energy and natural gas 9 119 Impairments/reversals of impairments 199 Minerals extraction tax
Slide 23: C1 unit cost
C1 unit cost 1) KGHM Group C1 – KGHM Group C1 – KGHM Polska Miedź S.A. [USD/lb] [USD/lb] -2% Q1/Q1 -6% Q1/Q1 3.08 3.01 incl. the 3.00 minerals ▪ KGHM Polska Miedź S.A. – a decrease in C1 by extraction 2.81 tax 2% mainly due to a lower minerals extraction tax charge and higher production of copper in
Slide 24: Financial results
Financial results KGHM Group Profit/loss for the period [mn PLN] 424 Consolidated profit in Q1 2024 An increase in Group profit, mainly due to exchange differences and lower taxation [mn PLN] + 336 + 70 - 40 424 - 34 - 36 164 - 33 -3 Profit for Q1 2023 Change in Profit/loss on Exchange Provisions cr
Slide 25: Cash flow
Cash flow KGHM Group [mn PLN] + 86 1 729 + 509 826 - 66 - 14 -1 418 Cash as at Net cash generated Net cash used in Proceeds Interest paid Other Cash as at 1 January 2024 from operating investing activities from/repayments 31 March 2024 activities of borrowings 25
Slide 26: Net debt of the KGHM Group
Net debt of the KGHM Group As at the end of Q1 2024 Main factors affecting net debt in 2024 Net debt / adjusted EBITDA 1.2 1.5 Increases in debt 0.9 0.9 1.1 ▪ Cash expenditures on property, plant and equipment (PLN 1 392 mn) 31-03-2023 30-06-2023 30-09-2023 31-12-2023 31-03-2024 ▪ The minerals extra
Slide 27: Operating results
Operating results KGHM Group Change in adjusted EBITDA1) -14% Q1/Q1 Adjusted EBITDA [mn PLN] [mn PLN] 1 802 1 802 +416 11 +65 1 551 550 1 551 -218 76 -514 332 247 1 410 Q1 2023 KGHM Polska KGHM Sierra Other segments Q1 2024 896 Miedź S.A. INTERNATIONAL Gorda and consolidation LTD. adjustments -169 A
Slide 28: Sales revenue
Sales revenue KGHM Polska Miedź S.A. Lower revenues from contracts with customers Revenues from contracts with customers [mn PLN] by PLN 1 091 million (-13%) in Q1 2024 compared to -13% Q1/Q1 the prior year due to less favourable macroeconomic conditions 8 370 702 7 279 Other 1 221 547 1 018 Silver
Slide 29: Expenses by nature
Expenses by nature KGHM Polska Miedź S.A. Lower expenses by nature compared to the first quarter of 2023 mainly due to a lower minerals Expenses by nature extraction tax charge and lower costs of purchased metal- [mn PLN] bearing materials, electricity and natural gas 7 323 Minerals extraction tax 6
Slide 30: EBITDA and profit for the period
EBITDA and profit for the period KGHM Polska Miedź S.A. EBITDA and profit for the Adjusted EBITDA Profit for the period [mn PLN] [mn PLN] period -36% Q1/Q1 -20% Q1/Q1 ▪ EBITDA lower compared to 2022 by PLN 514 milion, mainly due to 1 410 less favourable macroeconomic 896 conditions 482 387 ▪ Lower o
Slide 31: Profit for the period
Profit for the period KGHM Polska Miedź S.A. Profit for the period [mn PLN] 482 +164 387 +140 +595 +146 -41 -8 -1 091 Profit for Decrease in Decrease in cost Change in fair Impact of A lower balance Other Decrease in Profit for Q1 2023 revenues of sales, selling value of financial exchange of provis
Slide 32: Market risk management
Market risk management Hedged position on the copper, silver and currency markets (as at 31 March 2024) At the end of Q1 2024 the Parent Entity recorded a result on derivatives* and hedges in the amount of USD/PLN [mn USD] PLN 145 million: − +PLN 160 mn adjusted revenues from contracts with customer
Slide 33: Production results of the KGHM Group by segment
Production results of the KGHM Group by segment
Slide 34: Payable copper production by the KGHM Group
Key production indicators Q1 2024 179 Payable copper production +2% Q1/Q1 by the KGHM Group [kt] higher by 2% (Q1/Q1) ▪ KGHM Polska Miedź Payable copper production Payable copper production -11% Q1/Q1 production slightly lower than in the KGHM Polska Miedź S.A. [kt] Sierra Gorda1) [kt] prior year –
Slide 35: Metals production
Metals production KGHM Group Payable copper production Silver production ▪ Lower copper production by KGHM [t] -17% Q1/Q1 [kt] Polska Miedź S.A. from own copper- 381 316 bearing charges due to execution of the +2% Q1/Q1 adopted production plan for 2024 176 179 ▪ Higher copper production by KGHM INTE
Slide 36: Production result
Production result KGHM Polska Miedź S.A. Ore extraction -/- Q1/Q1 Production of copper +2.0% Q1/Q1 Electrolytic copper -2.0% Q1/Q1 Metallic silver -17.3% Q1/Q1 [mn t dry weight] in concentrate [kt] production [kt] production [t] 149 146 7.9 7.9 51 50 From 375 102.5 310 100.5 purchased 50.3 51.0 meta
Slide 37: Production results: Sierra Gorda S.C.M.
Production results Sierra Gorda S.C.M.1) Payable copper production -10% Q1/Q1 Silver production +9% Q1/Q1 [kt] [t] 5.3 5.8 ▪ The volume of precious metals production 18.9 Q1 2023 Q1 2024 derived from the 17.0 content of these metals TPM production -13% Q1/Q1 in mined ore [koz t] ▪ The decrease in 7.
Slide 38: Production results: KGHM INTERNATIONAL LTD.
Production results KGHM INTERNATIONAL LTD. Payable copper production +100% Q1/Q1 Silver production -43% Q1/Q1 [kt] [t] 0.7 ▪ Lower silver production by 0.4 the Sudbury Basin due to lower silver content in ore 16.0 7.6 Q1 2023 Q1 2024 ▪ Higher gold production by the Robinson mine (higher TPM producti
Slide 39: Advancement of development initiatives
Advancement of development initiatives
Slide 40: A rationale and responsible investment program
A rationale and responsible investment program Capital expenditures by KGHM Polska Miedź S.A. in Q1 2024 CAPEX execution in Q1 2024, incl. borrowings by area by category Mining Replacement Metallurgy Maintaining mine production Other activities Development (incl. R&D) Leasing IFRS 16 Adaptation proj
Slide 41: CAPEX execution in key investments
CAPEX execution in key investments Outfitting of the mines Deposit Access Program Conveyor belt transport – construction and extension of Outfitting of the conveyor belts (Rudna mine - Outfitting of G-12 W-160 L-2: ▪ GG-1 shaft – Work continues on the final facilities required to mines Adaptation Co
Slide 42: Role of Deep Głogów (GGP) in maintaining output in Poland
Role of Deep Głogów (GGP) in maintaining output in Poland Deposit access program in KGHM’s concessioned areas Share of production from GGP in total production Active concessions and in Poland future potential Ore extraction dry weight from GGP [kt] +11% Q1/Q4 +15% Q1/Q1 1 391 1 540 1 340 1 540 19.4%
Slide 43: Energy Development Program, including RES | major events in Q1 2024
Energy Development Program, including RES| major events in Q1 2024 Ensuring energy security in KGHM M&A Development of wind energy ▪ The Natural Gas-Steam (CCGT) blocks of the Head Office ensured energy security for the Core ▪ On 12 September 2023 a preliminary contingent agreement was ▪ A siting an
Slide 44: Thank you
Thank you Follow us on social media: Investor Relations Department https://kghm.com/en/investors ir@kghm.com +48 76 74 78 280
Kghm Polska Miedz Sa Ord — Q1 2024 Earnings Presentation on 6ix