Kghm Polska Miedz S.a. · GPW:KGH

Kghm Polska Miedz — BofA Securities 2020 Metals, Mining and Steel Conference

84 slides from Kghm Polska Miedz's conference presentation, May 14, 2020

1. Slide 1: Layers of possibilities

   Layers of possibilities KGHM Group Investor Presentation BofA Securities 2020 Metals, Mining and Steel Conference 12th - 14th May 2020

2. 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

3. Slide 3: Representatives

   Representatives KGHM Polska Miedź S.A. Marcin Chludziński Radosław Stach Paweł Gruza CEO, President Vice President Vice President of the Management Board of the Management Board (Production) of the Management Board (Foreign Assets) Janusz Krystosiak Stephen Marks Director, Manager, Investor Relation

4. Slide 4: Agenda

   Agenda 1. Key information about 2. Sustainable development 3. The KGHM Group the KGHM Group of the KGHM Group vs the sector 4. Production and financial 5. Advancement of 6. Additional slides, results of the KGHM Group the Group’s Strategy Q&A 3

5. Slide 5: Actions by the KGHM Group during the COVID-19 pandemic

   We care, możliwości Pokłady we act, we protect Actions by the KGHM Group during the COVID-19 pandemic Selected internal procedures for protection and prevention  An informational campaign is underway  Procedures were introduced complying  Body temperature measurement was using the company’s exist

6. Slide 6: Actions by the KGHM Group during the COVID-19 pandemic

   We care, możliwości Pokłady we act, we protect The company NITROERG produces The companies KGHM ZANAM and disinfectants. This liquid has already Mercus Logistyka are engaged in been provided to more than a producing protective masks for the thousand Polish hospitals, medical Voivodeship of Lower Sil

7. Slide 7: Actions by the KGHM Group during the COVID-19 pandemic

   We care, możliwości Pokłady we act, we protect Miedziowe Centrum Zdrowia, a health services company in the KGHM Group, opened a special telephone hotline to provide medical advice through its clinics in several towns in the region. This is aimed at helping patients with consultations as respects pre

8. Slide 8: Key information about the KGHM Group

   Key information about the KGHM Group

9. Slide 9: KGHM Group in brief

   KGHM Group in brief One of the world’s largest producers of copper and 702 thousand tonnes A diversified portfolio of silver with nearly 60 years of of payable copper production assets at various stages of experience in mining and by the KGHM Group in 2019, develop-ment located in metallurgy (11% hi

10. Slide 10: KGHM: a top ten copper producer and a leading Polish exporter

    KGHM: a top ten copper producer and a leading Polish exporter The Group has a global reach and plays a significant role on the global copper and silver markets Eighth Cu Second Ag largest largest copper silver producer producer Other KGHM Group products:  Molybdenum  Platinum  Copper  Lead  Rhe

11. Slide 11: KGHM among the biggest copper and silver producers

    KGHM among the biggest copper and silver producers1) Mined Copper production 2018 2) Silver production 2019 3) 1 771 1 610 1 440 1 417 1 344 996 1 105 805 892 671 674 633 567 631 521 625 498 556 476 [kt] 523 [kmt] 1) KGHM results as reported in its consolidated financial statement 2018 for copper &

12. Slide 12: A proud history of mining and metallurgy

    A proud history of mining and metallurgy Discovery of the copper deposit brought about a fundamental change in the region’s economy thanks to the growth of KGHM Polska Miedź S.A. As a result of M&A activities, capped by the acquisition of Quadra FNX, KGHM became a truly global copper producer aimed

13. Slide 13: Core production assets in Poland – stable output and earnings

    Core production assets in Poland – stable output and earnings Underground copper mines, fully integrated production Polkowice-Sieroszowice Mine Legnica Smelter and Refinery 36 years LOM LME grade A-registered cathodes  Copper production in 2019 (payable): Capacity of ~120 kt electrolytic Cu/year 1)

14. Slide 14: Key international assets

    Key international assets Existing operations and growth potential from projects Producing assets Potential growth projects Sierra Gorda (55% stake), Chile Sierra Gorda Oxide, Chile 24 years LOM 2019 production stats: 11 years LOM  Open-pit mine  Cu production  The project aims at processing the o

15. Slide 15: Sierra Gorda

    Sierra Gorda Sierra Gorda is an open pit copper and molybdenum mine located in Chile’s Antofagasta region in the Atacama desert. Sierra Gorda is a Joint Venture of:  KGHM Polska Miedź S.A. – 55% share  Sumitomo Metal Mining – 31.5% share  Sumitomo Corporation – 13.5% share Schedule of Sierra Gord

16. Slide 16: Sustainable development of the KGHM Group

    Sustainable development of the KGHM Group

17. Slide 17: Copper - a strategic material for a carbon neutral and circular economy

    Copper production: Pokłady możliwości emissions and impact on climate transformation Arguments for using copper as a carbon-neutral metal Copper - a strategic material for a carbon neutral and circular economy in Europe 0.4% CIRCULAR ECONOMY ENERGY TRANSITION -75% AND DIGITISATION A circular metal C

18. Slide 18: Sustainable development of the raw materials industry

    Sustainable Pokłady development of the raw materials industry możliwości 09 – a global challenge of the modern world INNOVATION, INDUSTRY, INFRASTRUCTURE 08 ECONOMIC GROWTH AND DECENT WORK KGHM as a signatory of Agenda 2030 operates on the basis of the 07 CLEAN AND AVAILABLE ENERGY principles of sus

19. Slide 19: Sustainable value chain

    Sustainable Pokłady value chain możliwości Responsible Supply Chain Policy of the KGHM Group Logistics Responsible Supply Chain Policy Extraction Commerce of the KGHM Group Rational deposits management Reduction of emissions, Commerce based - Intelligent production making logistics structures on Fai

20. Slide 20: Ethical Standards

    Ethical Standards Pokłady możliwości KGHM Polska Miedź S.A. We follow We avoid the principle of We take responsibility conflicts “Zero tolerance for the quality of our of interests for corruption”. products and services We care about the We care about security of information our Company’s property a

21. Slide 21: People and the Environment as a strategic area in the KGHM Group

    People and the Environment as a strategic area in the KGHM Group Strategy for 2019 – 2023 LTIFR and TRIR ratios1) TRIR ratio in KGHM INTERNATIONAL LTD. People and the Environment LTIFR ratio in KGHM Polska Miedź S.A. 10 18.6 Decrease over 20.0 15.4 the last 10 years  Main target – growth based on t

22. Slide 22: Emissions by the divisions of KGHM Polska Miedź S.A.

    Emissions by the divisions of KGHM Polska Miedź S.A. SO2 and dust emissions1) SO2 emissions by KGHM Polska Miedź S.A. Dust emissions by KGHM Polska Miedź S.A. [t/year] [t/year] 80 000 –81% Reduction of SO emissions over the last 10 years 2 12 000 –83% Reduction of dust emissions over the last 10 yea

23. Slide 23: Emissions by the divisions of KGHM Polska Miedź S.A.

    Emissions by the divisions of KGHM Polska Miedź S.A. Lead and copper emissions Lead emissions by KGHM Polska Miedź S.A. Copper emissions by KGHM Polska Miedź S.A. [kt] [kt] 4 3.5 3.5 3 –30% Reduction of lead emissions –71% Reduction of copper emissions 3 2.5 over the last 10 years over the last 10 y

24. Slide 24: Pro-ecological investments and environmental fees

    Pro-ecological investments and environmental fees KGHM Group spent in 2019 by KGHM [incl. the largest expenses of over Over 229 PLN 44 million incurred on replacing on investments to the absorption and drying towers of the protect the natural sulphuric acid plant at the Legnica Copper million PLN en

25. Slide 25: Pro-ecological investments and environmental fees

    Pro-ecological investments and environmental fees KGHM INTERNATIONAL Activities carried out by the entities of the KGHM INTERNATIONAL Group in 2019 related to environmental protection PLN 28 million PLN 1 million Robinson Mine (USA) Sudbury Basin (Canada) including PLN 3 million due to environmental

26. Slide 26: Energy development program

    Energy development program Renewable energy Optimisation and R&D of Competence sources development of gas alternative building development fired units options  Photovoltaic  Power production  Waste heat utilisation  Adjusting company - 200 ha of own lands increase in existing from metallurgy and

27. Slide 27: First photovoltaic projects

    First photovoltaic projects Design phase Pre-design phase Głogów PV1) 1. HMG Lubin 4 MW Głogów Copper 3. Wierzba I Smelter and Refinery Start of production Legnica Wrocław 16 MWp2) at the willow3) plantation Q3 2021 PV 2. Piaskownia Obora 4. Wierzba II 5 MW in the reclamation 50 MWp at the area of t

28. Slide 28: ESG - a new dimension of sustainable development

    ESG - a new dimension of sustainable development in the field of reporting environmental, social and corporate activities Protection of human rights, operating with respect for the natural environment, responsible supply chain management and transparency in relations with stakeholders are crucial to

29. Slide 29: The KGHM Group vs the sector

    The KGHM Group vs the sector Macroeconomic environment

30. Slide 30: Macroeconomic environment

    Macroeconomic environment Commodities and currencies prices The outbreak of the COVID-19 pandemic caused a fall Price (USD/t) Annual av. (USD/t) in commodities prices and weakening of the PLN 8 000 Price (PLN/t) Annual av. (PLN/t) 28 000 7 500 26 000  The outbreak of the epidemic in China, which is

31. Slide 31: Copper market in relative balance. Global economy puts on the brake.

    Pokłady możliwości Copper market in relative balance. Global economy puts on the brake. Copper stocks have risen in recent weeks but remain in the Global PMI indicates a strong slowdown in the global economy range of recent years PMI range over last 3 years Average (last 3 years) Latest PMI manufact

32. Slide 32: Copper market balance – pre-pandemic outlook

    Copper market balance – pre-pandemic outlook The balance expected to turn into deficit in the medium term, with a potentially larger gap in 5-10 years Copper mining and potential mining projects Copper market balance [kt] Market balance (lhs) [USD/t] [kt] Możliwe Possibleprojekty projects Prawdopodo

33. Slide 33: Record high level of uncertainty in the global economy

    Record high Pokłady level of uncertainty in the global economy możliwości In the second half of the year, the financial markets were ruled The VIX index, illustrating uncertainty in the markets in response to by the trade conflict and Fed policy the COVID-19 threat, exceeded the level of 2011 in Mar

34. Slide 34: Production and financial results of the KGHM Group

    Production and financial results of the KGHM Group Part I: 5 years data

35. Slide 35: Key production data – 5 years

    Key production data – 5 years KGHM Polska Miedź S.A. Ore extraction Production of copper Production of Metallic silver [mn t dry weight] in concentrate electrolytic copper production [kt] [kt] [t] 574 566 536 426 424 419 522 502 1 400 401 1 283 31.6 32.0 31.2 30.3 29.9 399 1 191 1 218 1 189 2015 201

36. Slide 36: Key production data – 5 years (Sierra Gorda)

    Key production data – 5 years (since production start) Sierra Gorda1) Payable copper production Silver production [kt] [t] 7.7 14.1 14.0 14.5 14.6 2015 2016 2017 20182 2018 59.5 51.5 53.4 53.3 TPM2) production 46.3 [koz t] 28.0 23.2 31.2 12.8 22.9 2015 2016 2017 2018 2019 Molybdenum production [mn l

37. Slide 37: Key production data – 5 years (KGHM International)

    Key production data – 5 years KGHM International Payable copper production Silver production [kt] [t] 1.6 2.4 1.6 1.7 1.6 2015 2016 2017 2018 2019 97.6 TPM production 89.8 81.0 [koz t] 78.8 76.5 95.3 92.1 74.0 67.6 85.2 2015 2016 2017 2018 2019 Molybdenum production [mn lbs] 1.0 0.9 0.8 0.7 0.6 2015

38. Slide 38: Sales revenue and net profit – 5 years

    Sales revenue and net profit – 5 years KGHM Group Revenues Net profit [mn PLN] [mn PLN] 22 723 20 008 20 358 20 526 19 156 1 658 1 525 1 421 1 202 * 1 225 * 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 * Net profit of 2015 and 2016 excluding impact of impairment of non-current assets, loans and

39. Slide 39: EBITDA and EBITDA margin – 5 years

    EBITDA and EBITDA margin – 5 years KGHM Group EBITDA by segments 1) EBITDA margin 2) [mn PLN] [%] KGHM Polska Miedź S.A. KGHM INTERNATIONAL Sierra Gorda (55%) Others 5 753 4 972 5 229 26 4 710 4 666 23 23 22 21 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 1) Sum of segments; adjusted EBITDA = E

40. Slide 40: Net debt and net debt/EBITDA ratio – 5 years

    Net debt and net debt/EBITDA ratio – 5 years KGHM Group Net debt Net debt/adjusted EBITDA [mn PLN] [ratio] 7 262 7 000 6 891 6 554 6 577 1.6 1.6 1.5 1.4 1.3 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 39

41. Slide 41: Basic items of the consolidated financial statements

    Basic items of the consolidated financial statements KGHM Group KGHM Group – consolidated data 2015 2016 2017 2018 2019 Sales revenue [mn PLN] 20 008 19 156 20 358 20 526 22 723 Profit/(loss) for the period [mn PLN] -5 009 -4 449 1 525 1 658 1 421 Total assets [mn PLN] 36 764 33 442 34 122 37 237 39

42. Slide 42: Production and financial results: Part II: FY 2019

    Production and financial results of the KGHM Group Part II: FY 2019

43. Slide 43: Summation of 2019 in the KGHM Group

    Summation of 2019 in the KGHM Group Main events and factors affecting the results of the Group1) Macroeconomic environment Production and C1 cost Financial results -8% +11% +11% Lower copper price Higher copper production Higher revenues: PLN 22 723 million +3% +18% +5% Higher silver price Higher si

44. Slide 44: Metals production

    Metals production KGHM Group  Production of electrolytic Payable copper production Silver production [t] +18% Y/Y copper exceeded the target [kt] 1 205 1 417 set for KGHM Polska Miedź +11% Y/Y due to improved availability 702 of production equipment, 634 2018 2019 incl. the proper functioning 60 53

45. Slide 45: Production results

    Production results KGHM Polska Miedź S.A. Ore extraction Production of copper Electrolytic copper Metallic silver [mn t dry weight] in concentrate [kt] production [kt] production [t] –1.3% Y/Y –0.5% Y/Y +13% Y/Y +18% Y/Y 566 30.3 29.9 401 399 502 From purchased metal-bearing 1 400 147 materials 1 18

46. Slide 46: Change in inventories

    Change in inventories KGHM Polska Miedź S.A. Inventories of copper in concentrate at the smelters amount of Cu [t] –19% Q4/Q3 34 248 29 946  A further decrease in the level of inventories due to the better 24 277 availability of equipment and the proper functioning of the copper concentrate roastin

47. Slide 47: Production results – Sierra Gorda

    Production results Sierra Gorda1) Payable copper production Silver production +1% Y/Y [kt] [t] +12% Y/Y 14.5 14.6  Higher copper, silver 59.5 4.1 3.7 and gold production 53.3 due to higher Q4 2018 Q4 2019 2018 2019 extraction by the Sierra Gorda mine TPM production 15.1 15.1 [koz t] +34% Y/Y  Lowe

48. Slide 48: Production results – KGHM International

    Production results KGHM INTERNATIONAL Payable copper production Silver production +50% Y/Y [kt] [t]  The silver production 2.4 target was exceeded in 1.6 the Sudbury Basin due -3% Y/Y 0.5 0.6 to a change in the region 78.8 76.5 being mined (a change Q4 2018 Q4 2019 2018 2019 in the nature of the Mc

49. Slide 49: Sales revenue

    Sales revenue KGHM Group Revenues from contracts with customers Revenues from contracts with customers [mn PLN] [mn PLN] +11% Y/Y 22 723 22 723 20 526 +1 343 +1 203 +387 20 526 1 956 1 913 3 084 -736 2 856 Revenues Change in sales Change in prices Change in Others Revenues 2018 volumes of basic of b

50. Slide 50: Sales revenue

    Sales revenue KGHM Polska Miedź S.A. Higher revenues from sales by PLN 1 926 million (+12%) in FY2019 Sales revenue compared to FY2018 due to: [mn PLN]  higher sales volumes (copper by 8% and silver by 14%) +12% Y/Y  a more favourable USD/PLN exchange rate (+6%) and silver (+3%) 17 683 15 757 alon

51. Slide 51: Stable and safe financial situation of the KGHM Group

    Stable and safe financial situation of the KGHM Group 2019E target Total unit production cost of electrolytic copper from own concentrate KGHM Polska Miedź S.A.1) ≤20.0 [k PLN/t] 18.0 Investments Capital expenditures 2 475 2 516 KGHM Polska Miedź S.A.2) [mn PLN] Equity investments 485 1 074 0% 10% 2

52. Slide 52: C1 unit cost

    C1 unit cost1) KGHM Group C1 – Group C1 – KGHM Polska Miedź S.A.  The decrease in C1 cost in KGHM [USD/lb] [USD/lb] Polska Miedź S.A. was mainly due to 1.85 -6% Y/Y 1.74 including the minerals extraction a weakening of the PLN vs the USD 0.54 0.47 tax by 6% and a lower MET -6% Y/Y 1.31 1.27  The 1

53. Slide 53: Expenses by nature

    Expenses by nature KGHM Polska Miedź S.A.  Expenses by nature were higher by PLN 1 263 million (9%), mainly due to higher consumption of purchased metal-bearing Expenses by nature materials by PLN 738 million (a higher amount by 29 kt Cu at [mn PLN] +9% Y/Y 14 896 a similar purchase price) Minerals

54. Slide 54: Operating results

    Operating results KGHM Group Change in adjusted EBITDA1) Adjusted EBITDA [mn PLN] +5% Y/Y [mln PLN] 4 972 +203 +27 +40 5 229 5 229 4 972 241 201 660 633 -13 722 709 3 416 3 619 2018 KGHM KGHM Sierra Other 2019 Polska Miedź S.A. INTERNATIONAL Gorda 2018 2019  Higher adjusted EBITDA of the Group (+PL

55. Slide 55: Financial results: 1 421 million PLN

    Financial results KGHM Group 1 421 million PLN Profit for the period [mn PLN] consolidated net profit in FY2019 -14% Y/Y The decrease in net profit by the Group by PLN 237 million (-14%) was mainly due to:  a deterioration in the operating result  a lower result on involvement in joint ventures +2

56. Slide 56: EBITDA and profit for the period

    EBITDA and profit for the period KGHM Polska Miedź S.A. Higher standalone Adjusted EBITDA Profit for the period [mn PLN] [mn PLN] EBITDA with lower net +6% Y/Y profit -38% Y/Y 3 619 3 416  EBITDA higher by 6% than for 2018 2 025 due to a higher volume of copper sold and a more favourable 1 264 exch

57. Slide 57: Cash flow

    Cash flow KGHM Group +1 920 [mn PLN] -117 +2 000 +1 123 +2 122 -3 232 -439 957 1 016 -3 016 -239 -63 Cash as at Profit/loss Change in Pre-tax profit Other net Acquisition of Acquisition of Proceeds from Proceeds from/ Interest paid Other Cash as at 31 Dec 2018 before working capital adjustment by ca

58. Slide 58: Net debt of the KGHM Group

    Net debt of the KGHM Group As at the end of Q4 2019 Main factors affecting interest-bearing debt Net debt / adjusted EBITDA 1) Impact of change in IFRS 161) in the 12 months of 2019 1.6 1.5 (Increases in debt) 0.1  Cash expenditures on property, plant and equipment (PLN 3 233 mn) 1.4  The minerals

59. Slide 59: Production and financial results: Part III: Q1 2020

    Production and financial results of the KGHM Group Part III: Q1 2020

60. Slide 60: Metals production

    Metals production KGHM Group Payable copper production Silver production  Slightly lower production of electrolytic [t] +3% Q1/Q1 [kt] 325 copper by KGHM Polska Miedź S.A. due 335 to lower processing of own concentrate +1% Q1/Q1 and the build-up of anode inventories 173 174 due to the planned maint

61. Slide 61: Change in inventories

    Change in inventories KGHM Polska Miedź S.A. Inventories of copper in concentrate at the smelters amount of Cu [t] –39% Q1/Q4 29 946 24 277  A further decrease in the level of inventories due to execution 14 886 of production plans and the proper functioning of the copper concentrate roasting insta

62. Slide 62: Group sales revenue

    Group sales revenue Q1 2020 Revenues from contracts with customers Revenues from contracts with [mn PLN] customers -3% Q1/Q1 [mn PLN] 5 488 +179 5 299 +32 5 488 5 299 -58 496 -342 442 676 632 Revenues Change in sales Change in prices Change in Other Revenues Q1 2019 volumes of basic of basic product

63. Slide 63: C1 unit cost

    C1 unit cost1) KGHM Group C1 – Group C1 – KGHM Polska Miedź S.A.  The decrease in C1 cost in [USD/lb] [USD/lb] -10% Q1/Q1 including the minerals KGHM Polska Miedź S.A. was 1.76 1.58 extraction tax mainly due to a weakening of 0.53 0.40 -7% Q1/Q1 the PLN vs the USD by (3.6%), 1.24 1.18 higher silver

64. Slide 64: Operating results

    Operating results KGHM Group Change in adjusted EBITDA1) Adjusted EBITDA1) [mn PLN] -22% Q1/Q1 [mn PLN] 1 454 1 454 1 129 67 +6 218 1 129 -99 -118 -114 170 73 104 52 999 900 Q1 2019 KGHM KGHM Sierra Other Q1 2020 Polska Miedź S.A. INTERNATIONAL Gorda Q1 2019 Q1 2020  Lower adjusted EBITDA of the Gr

65. Slide 65: Financial results: PLN 690 million

    Financial results KGHM Group PLN 690 million Profit for the period [mn PLN] consolidated net profit for Q1 2020 +25% Q1/Q1 Group profit for the period higher by PLN 138 million (+25%) mainly due to favourable exchange differences + 412 + 47 690 552 - 53 - 38 + 11 + 52 + 14 - 189 - 118 A deterioratio

66. Slide 66: Cash flow

    Cash flow KGHM Group [mn PLN] +1 288 2 198 + 929 + 330 - 67 - 27 - 118 - 190 1 016 - 963 Cash as at Profit/loss before Exclusion of Income tax paid Change in Acquisition of Proceeds Interest paid and Other Cash as at 31 Dec 2019 income tax income and costs working capital property, plant from/repaym

67. Slide 67: Advancement of the KGHM Group's strategy

    Advancement of the KGHM Group’s strategy

68. Slide 68: 4 strategic directions for KGHM's development

    4 strategic Pokłady directions for KGHM’s development możliwości The review of the Strategy of KGHM Polska Miedź S.A. for 2019-2023 # 4E ELASTICITY, EFFICIENCY FLEXIBILITY ECOLOGY, SAFETY AND SUSTAINABLE E-INDUSTRY DEVELOPMENT 67

69. Slide 69: Strategic priorities

    Strategicmożliwości Pokłady priorities #1 Higher #2 Energy #3 International assets 2.0 #4 Long-term production independence financial strategy #5 Ecosystem #6 Technologies #7 New quality innovation of the future Safety and for KGHM development 68

70. Slide 70: Strategy in practice (1)

    Strategy możliwości Pokłady in practice Selected key operating initiatives (1) AREA MAIN TARGET SELECTED EFFECTIVENESS MEASURES Maintenance of cost-effective domestic and foreign production Level of production in Poland of Average yearly Yearly average of daily ore mined Cu in ore with an annual C1

71. Slide 71: Strategy in practice (2)

    Strategy możliwości Pokłady in practice Selected key operating initiatives (2) AREA MAIN TARGET SELECTED EFFECTIVENESS MEASURES Increase the efficiency of the KGHM Group through innovation Increase expenditures on Ensure that all of the innovation Level of funds for R&D and innovation and R&D work p

72. Slide 72: Strategy in practice (3)

    Strategy możliwości Pokłady in practice Selected key operating initiatives (3) AREA MAIN TARGET SELECTED EFFECTIVENESS MEASURES Implementation of systemic solutions aimed at increasing Ensure financial stability of Increase in the efficiency of Minimum level of achievement the KGHM Group’s the Polis

73. Slide 73: Consistent advancement of the strategy

    Consistent advancement of the strategy Key areas – 4E  Rational management of the Company’s resources Adaptation of the operating  Optimisation of metallurgical production Elasticity/ model for the KGHM Group  Exploration projects in Poland Flexibility to market conditions  Optimisation of the i

74. Slide 74: A consistent and rational investment program

    A consistent and rational investment program Capital expenditures by KGHM Polska Miedź S.A. in 2019 and Q1 2020 CAPEX execution in Q1 2020 CAPEX execution in FY 2019 by area by category 2 516 mn PLN 2 481 mn PLN CAPEX budget target for 2019 CAPEX execution in 2019 Mining (77%) Metallurgy (21%) Repla

75. Slide 75: Additional slides

    POLSKA MLEDZ® es .. Mage : co aa as “sie Additional slides ~~" ~~

76. Slide 76: Reasons to invest in KGHM

    Reasons to invest in KGHM A leading player on the copper A reliable producer, and silver market in terms of mine A diversified portfolio of assets at a trusted business partner output and size of documented various stages of development to and a company committed to resources, in mining-friendly gua

77. Slide 77: Transparent Group structure

    Transparent Group structure General Shareholders Meeting Supervisory Board Management Board KGHM Polska Miedź S.A. (Lubin, Poland) (Listed on Warsaw Stock Exchange since 1997) KGHM International Ltd. Production Development Group of subsidiaries (Vancouver, Canada) Development divisions projects Oper

78. Slide 78: Committed to solid corporate governance

    Committed to solid corporate governance Independent directors on the board KGHM’s Corporate Governance is guided by international standards and follows best practices:  All members of KGHM’s Supervisory Board are appointed by Independent Directors 3 the General Shareholders Meeting Other Directors

79. Slide 79: Shareholder structure of KGHM Polska Miedź S.A.

    Shareholder structure of KGHM Polska Miedź S.A. Ownership structure Geographical ownership structure [% of shares] No. of Percentage Share in Shareholder shares/ of share total number votes capital of votes Rest of the Americas Polish State Treasury 63,589,900 31.79% 31.79% 0.4% Nationale-Nederlande

80. Slide 80: Share price performance

    Share price performance Basic quotes Strong correlation with copper and silver KGHM [change in %] Cu Ag WSE debut 10th July 1997 25 GPW ticker KGH Bloomberg/Reuters ticker KGH PW / KGH.WA 0 Share price [PLN] 59.82 -25 Capitalization [bn PLN] 11.96 -50 No. of shares 200 000 000 Share capital [PLN] 2

81. Slide 81: Market risk management

    Market risk management Hedged position on the copper market (as at 31 March 2020) Copper Position restructured in Q1 2020 In Q1 2020 KGHM Polska Miedź S.A. recorded a Hedged position – as at 31 March 2020 [tonnes] result on derivatives and hedges in the amount 99 000 of PLN 30.5 million, of which: 1

82. Slide 82: Market risk management

    Market risk management Hedged positions on the silver, currency and interest rate markets (as at 31 March 2020) Silver Hedged position as at 31 March 2020  As at 31 March 2020 the Parent [troy ounces] Entity held open Cross Currency 1 800 000 Interest Rate Swap (CIRS) 900 000 transactions in the no

83. Slide 83: CO2 emissions by KGHM Polska Miedź S.A.

    CO2 emissions by KGHM Polska Miedź S.A. ETS1) direct emissions + nonETS [kt CO2] 2 000 1 800 1 714 1 600 1 678 1 539 1 532 1 521 1 519 1 508 1 400 1 492 1 489 1 482 1 481 1 476 1 470 1 466 1 407 1 200 1 000 800 600 400 200 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

84. Slide 84: Thank you

    Follow us on Thank you social media: Investor Relations Departament kghm.com/en/investors ir@kghm.com +48 76 74 78 280

KGHM Polska Miedź — BofA Securities 2020 Metals, Mining and Steel Conference on 6ix