Kghm Polska Miedz S.a. · GPW:KGH
Kghm Polska Miedz — Kghm Polska Miedz Sa Ord — Q3 2024 Earnings Presentation
45 slides from Kghm Polska Miedz's earnings presentation, Nov 15, 2024
Slide 1: Layers of possibilities: Results of the KGHM Group for Q3 and 9M 2024
Layers of possibilities Results of the KGHM Group for the third quarter and first 9 months of 2024 Lubin, 15 November 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. Sustainable development – commitments and initiatives of KGHM Polska Miedź S.A. 2. Key issues and execution of main targets 3. Production results of the KGHM Group by segment 4. Advancement of development initiatives 5. Financial results of the KGHM Group 4
Slide 5: Sustainable development – commitments and initiatives of KGHM
Sustainable development – commitments and initiatives of KGHM Polska Miedź S.A.
Slide 6: Actions by KGHM's employee volunteers
Actions by KGHM’s employee volunteers 98 actions involving volunteers Number of volunteer projects 789 employee volunteers took part in actions 217 98 3 454 hours dedicated to advancing 9M 2023 9M 2024 volunteer projects 6
Slide 7: 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% Climate neutrality 2030 versus the base year 202
Slide 8: By 2030 the increase in share of RES will lead to a substantial reduction in 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): 9M 2024: Own generation sources, including RES, covered 19.93% of KGHM Polska Miedź S.A.’s total power needs. Natural Mar
Slide 9: Energy Development Program, including RES: major events in 9M 2024
Energy Development Program, including RES| major events in the first 9 months of 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 ▪ On 10 October 2023, KGHM became the owner of the first ▪ Prelim
Slide 10: Key issues and execution of main targets
Key issues and execution of main targets
Slide 11: Macroeconomic environment: commodities and currencies prices
Macroeconomic environment Commodities and currencies prices Copper prices in Q3 2024 ranged between 8 820 and 9 860 USD/t. [USD/t] Price (USD/t) Annual av. or YTD (USD/t) [PLN/t] After the record-breaking copper price rally in May, short-term Source: Bloomberg, KGHM Polska Miedź S.A. 11 000 Price (P
Slide 12: Precious metals prices
Precious metals prices Throughout 2024, gold prices recorded successive historical records, resulting from rising geopolitical tensions, uncertainty about the impact of the US presidential elections and the end of the monetary tightening cycle. In Q3 2024 silver prices followed, with some delay, the
Slide 13: Copper market foundations depend on China's economic situation
Despite attempts to stimulate the Chinese economy through various forms of stimulus packages, GDP growth in 2024 will probably be lower than announced Copper market foundations still depend on China's economic situation The real estate market in China has been immersed in the Copper inventories in S
Slide 14: Deterioration in industrial sentiment in the world's largest economies
The third quarter of 2024 brought a deterioration in industrial sentiment in the world's largest economies ▪ In most countries around the world, sentiment indicators of industrial managers have fallen below the 50th level that separates expected expansion from shrinking the economy. Since the beginn
Slide 15: IMF World Economic Outlook - October 2024
Pokłady IFW Worldmożliwości Economic Outlook - October 2024 Forecasts (F) real GDP growth – International Monetary Fund - World Economic Outlook Update October 2024 in comparison to July 2024. 15 Chile October 2024 in comparison to July 2024
Slide 16: Advancement of key strategic performance indicators after 9M 2024
Advancement of key strategic performance indicators after the first 9 months of 2024 Strategic measure of success Base year 2020 9M 2024 (strategic KPI) Goal 2030 Domestic approx. 560 kt Approx. 600 thousand tonnes of electrolytic copper copper production of electrolytic copper (including production
Slide 17: Summation of the first 9 months of 2024 in the KGHM Group
Summation of the first 9 months of 2024 in the KGHM Group Main macroeconomic factors and aspects of the Group compared to 9M 2023 Macroeconomic environment1) Operating results Indicators +6% no change no change in extraction of ore, dry weight +16% Copper price in Copper price Higher CAPEX execution
Slide 18: Basic measures of the results in 9M 2024
Pokłady możliwości Summation of the first 9 months of 2024 in the KGHM Group and KGHM Polska Miedź S.A. Basic measures of the results in 9M 2024 KGHM Group KGHM Polska Miedź S.A. PLN 26 139 mn PLN 22 261 mn Revenues Revenues PLN 6 186 mn PLN 3 402 mn Adjusted EBITDA Adjusted EBITDA PLN 1 314 mn PLN
Slide 19: Payable copper production by the KGHM Group
Key production indicators 9M 2024 544 Payable copper production +3% 9M/9M by the KGHM Group [kt] higher by 3% (9M/9M) ▪ KGHM Polska Miedź Production slightly lower than in the Payable copper production Payable copper production -5% 9M/9M prior year – the small decrease was KGHM Polska Miedź S.A. [kt
Slide 20: Metals production
Metals production KGHM Group ▪ Slightly lower copper production by KGHM Polska Silver production Miedź S.A. due to execution of the adopted Payable copper production [t] production plan for 2024 -11% 9M/9M [kt] ▪ Higher copper production by KGHM INTERNATIONAL LTD. thanks to significant +3% 9M/9M 1 0
Slide 21: Production results of the KGHM Group by segment
Production results of the KGHM Group by segment
Slide 22: Production results
Production results KGHM Polska Miedź S.A. Ore extraction Production of copper +0.3% 9M/9M Electrolytic copper -0.7% 9M/9M Metallic silver -10.8% 9M/9M No change 9M/9M in concentrate [kt] production [kt] production [t] [mn t dry weight] 444 441 23.3 23.3 157 1 080 303.2 304.1 157 From 963 purchased 5
Slide 23: Production results: Sierra Gorda S.C.M.
Production results Sierra Gorda S.C.M.1) Payable copper production -4% 9M/9M Silver production +6% 9M/9M [kt] [t] 16.6 17.6 5.5 5.7 ▪ The volume of precious 59.7 metals production 57.1 Q3 2023 Q3 2024 9M 2023 9M 2024 derived from the content of these metals TPM production -5% 9M/9M in mined ore [koz
Slide 24: Production results: KGHM INTERNATIONAL LTD.
Production results KGHM INTERNATIONAL LTD. Payable copper production +89% 9M/9M Silver production -64% 9M/9M [kt] [t] ▪ Silver: lower production by the 2.2 Sudbury Basin due to lower 45.5 0.8 silver content in ore and a lower 0.7 0.1 volume of ore extraction 24.1 16.1 Q3 2023 Q3 2024 9M 2023 9M 2024
Slide 25: Advancement of development initiatives
Advancement of development initiatives
Slide 26: A rationale and responsible investment program
A rationale and responsible investment program Capital expenditures by KGHM Polska Miedź S.A. in the first 9 months of 2024 CAPEX execution in the first 9 months of 2024, incl. borrowings by area by category Mining Replacement Metallurgy Maintaining mine production Other activities Development (incl
Slide 27: CAPEX execution in key investments
CAPEX execution in key investments Outfitting of the mines Deposit Access Program 1) excluding Leasing per IFRS 16, plus borrowing costs and R&D ▪ Conveyor belts – work continued on ruction and extension of ▪ 30.1 km kilometres of corridors were excavated. Outfitting of the conveyor belts (30 convey
Slide 28: Role of shafts in maintaining output in Poland
Role of shafts in maintaining output in Poland Deposit access program in KGHM’s concessioned areas Share of production from GGP in total production in Poland +16% 9M/9M Ore extraction dry weight from GGP [kt] 4 706 +2% Q3/Q2 4 070 1 570 1 595 19.5% 20.3% 16.9% 19.9% Q2 2024 Q3 2024 9M 2023 9M 2024 G
Slide 29: Financial results of the Group
Financial results of the Group
Slide 30: Key financial indicators of the KGHM Group
Key financial indicators of the KGHM Group 9M 2024 Group adjusted EBITDA1) Group adjusted EBITDA1) [mn PLN] [mn PLN] Adjusted EBITDA of the KGHM Group +44% 9M/9M 1 978 6 186 Higher adjusted EBITDA compared to the 73 first 9 months of 2023 mainly in respect of 515 1 200 KGHM INTERNATIONAL LTD. and, t
Slide 31: Group sales revenue
Group sales revenue 9M 2024 Revenues from contracts with Revenues from contracts with +2% 9M/9M customers customers [mn PLN] [mn PLN] +1 501 +25 25 648 26 139 25 648 +414 +36 26 139 1 532 1 491 1 687 2 346 -1 485 22 470 22 261 Revenues for Change in sales Change in prices Change in Adjustments of Ot
Slide 32: Expenses by nature
Expenses by nature Lower expenses by nature compared to the first KGHM Group 9 months of 2023 mainly due to lower costs of consumption of technological materials and fuels, Expenses by nature energy factors and purchased metal-bearing [mn PLN] materials 25 366 -3% 9M/9M 6* 24 492 11 174 Impairments/
Slide 33: C1 unit cost
C1 unit cost 1) KGHM Group C1 – KGHM Group C1 – KGHM Polska Miedź S.A. [USD/lb] [USD/lb] ▪ KGHM Polska Miedź S.A. – an increase in C1 by +2% 9M/9M -6% 9M/9M 3.01 3.08 2% mainly due to a weaker USD versus the PLN incl. the (-6%) and a higher minerals extraction tax 2.94 minerals extraction chargé by
Slide 34: Financial results
Financial results KGHM Group Profit/loss for the period [mn PLN] 1 314 Consolidated profit in the first 9 months of 2024 An increase in KGHM Group profit, mainly due to an increase in EBITDA in KGHM INTERNATIONAL LTD. and to a lesser degree in KGHM Polska Miedź [mn PLN] S.A. +1 853 - 762 1 314 - 215
Slide 35: Cash flow
Cash flow KGHM Group [mn PLN] +3 433 1 729 + 512 1 112 - 300 - 154 - 60 -4 048 Cash as at Net cash generated Net cash used in Proceeds Dividend paid Interest paid Other Cash as at 1 January 2024 from investing from/repayments of 30 September 2024 operating activities activities borrowings and debt i
Slide 36: Net debt of the KGHM Group
Net debt of the KGHM Group As at the end of Q3 2024 Main factors affecting net debt in 2024 Net debt / adjusted EBITDA1) 1.4 Increases in debt 1.2 1.0 0.7 0.9 ▪ Cash expenditures on property, plant and equipment (PLN 4 233 mn) 30-09-2023 31-12-2023 31-03-2024 30-06-2024 30-09-2024 ▪ The minerals ext
Slide 37: Operating results
Operating results KGHM Group Change in adjusted EBITDA1) +44% 9M/9M Adjusted EBITDA [mn PLN] [mn PLN] +25 6 186 +1 594 +19 6 186 333 4 308 +240 4 308 1 322 314 1 297 1 129 9M 2023 KGHM Polska KGHM Sierra Other segments 9M 2024 Miedź S.A. INTERNATIONAL Gorda 3 402 LTD. 3 162 -465 An increase in adjus
Slide 38: Revenues and EBITDA in Q3 2024
Revenues and EBITDA in Q3 2024 KGHM Group and operating segments Revenues from contracts with Adjusted EBITDA [mn PLN] customers [mn PLN] 1 978 8 659 7 891 73 489 Higher adjusted EBITDA compared to 461 985 515 Q3 2023 by PLN 778 million, mainly in 470 1 200 respect of KGHM INTERNATIONAL LTD., 83 460
Slide 39: The financial situation of the KGHM Group remains stable and safe
The financial situation of the KGHM Group remains stable and safe 2024 Budget Total unit production cost of electrolytic copper from own concentrate 31.4 36.0 of KGHM Polska Miedź S.A.1) [k PLN/t] 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 110% Investments Capital expenditures 2 299 4 100 KGHM Pols
Slide 40: Sales revenue
Sales revenue KGHM Polska Miedź S.A. Lower revenues from contracts with customers Revenues from contracts with customers [mn PLN] by PLN 209 million (-1%) in the first 9 months of 2024 versus -1% 9M/9M the comparable period of 2023, mainly due to a less 22 470 22 261 favourable exchange rate and low
Slide 41: Expenses by nature
Expenses by nature KGHM Polska Miedź S.A. Lower expenses by nature compared to the first 9 months of 2023 mainly due to lower Expenses by nature costs of consumption of electricity and natural gas [mn PLN] 20 491 19 799 -3% 9M/9M 9 368 Minerals extraction tax 2 797 2 869 Impairments/ reversals of im
Slide 42: 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 +8% 9M/9M -31% 9M/9M ▪ Higher EBITDA compared to 9M 2023 by PLN 240 million, despite 3 402 1 737 3 162 a less favourable USD/PLN 1 204 exchange rate and lo
Slide 43: Profit for the period
Profit for the period KGHM Polska Miedź S.A. Profit for the period [mn PLN] +240 1 737 +110 1 204 -780 -103 Profit for Change in adjusted Change in fair value of Income tax Other Profit for 9M 2023 EBITDA financial assets 9M 2024 measured at fair value through profit or loss 43
Slide 44: Market risk management
Market risk management Hedged position on the copper, silver, currency and interest rate markets (as at 30 September 2024) Pozycja Hedgedzabezpieczająca position – open as- at otwarta 30 Junena2024 30.06.2024 At the end of the third quarter of 2024 the Parent Copper Pozycja Hedgedzabezpieczająca wdr
Slide 45: 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
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