KGHM in the capital market

KGHM Polska Miedź S.A. debuted on the Warsaw Stock Exchange (WSE) in July 1997. The Company’s shares are traded on the primary market of the WSE in the continuous trading system and are a component of the WIG, WIG20 and WIG30 main indices as well as the WIG – ESG index published since 3 September 2019, comprising listed companies which adhere to the principles of corporate social responsibility.

The strategic management of investor relations fosters the attainment of long-term benefits. Active communication and the confidence of and good relations with the market support and create KGHM’s value. The main role of the investor relations team in KGHM is to address the needs of investors who want to have access to our financial results, up-to-date information on our operations and the strategy being implemented, or the Company’s impact in terms of ESG reporting. Both investing in the achievement of our investor relations plan and the regular reporting of non-financial data are vital to us.

Janusz Krystosiak

Investor Relations Department Director

KGHM Polska Miedź S.A. is also included in the WIG-Mining sector index, which experienced mostly an upward trend last year. KGHM Polska Miedź S.A. is also among companies included in the prestigious FTSE4Good Index Series. FTSE4Good Index Series is part of the group of ethical investment indicators, reflecting criteria of corporate social responsibility and ESG risk management.

The year 2020 was significantly different compared to prior years. As a result of the outbreak of the COVID-19 pandemic, investor activity on the capital market was associated with uncertainty and substantial volatility in investor sentiment. By year’s end the WIG index had fallen versus the previous year by 1.4%. During this same period the WIG20 and WIG30 indices recorded declines respectively by 7.7% and 6.5%. In contrast the London-based FTSE 350 mining index – comprised of companies from the mining sector listed on the London Stock Exchange – rose by 13.9%.

On 12 March 2020, the share price of KGHM Polska Miedź S.A. reached its minimum closing price for the year of PLN 49.40, while on 10 December 2020 the Company’s shares reached their maximum closing price for the year of PLN 189.35 marking a large, 91% increase compared to the share price at the start of the year, which at the close of trading on 30 December 2020 amounted to PLN 183. During the same period the price of copper – the Company’s main product – recorded an increase of nearly 26%, alongside a decrease in the average USD/PLN exchange rate by 1%.

Key share price data of KGHM Polska Miedź S.A. on the Warsaw Stock Exchange in 2019-2020 is presented in the following table:

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Key share price data of the Company on the Warsaw Stock Exchange

Ticker: KGH, ISIN: PLKGHM000017	J.m.	2020	2019
Number of shares issued	million	200	200
Market capitalisation of the Company at year’s end	PLN billion	36.6	19.1
Average trading volume per session	units	720,721	575,209
Turnover value	PLN million	18,784	13,180
Change in share price from the end of the prior year	%	91.5	7.5
Highest closing price during the year	PLN	189.35	112.00
Lowest closing price during the year	PLN	49.40	73.76
Closing price from the last day of trading in the year	PLN	183.00	95.58

Source: KGHM, WSE Statistic Bulletin for 2019 and 2020, Bloomberg

Profit allocation

Pursuant to Resolution 7/2020 of the Ordinary General Meeting of KGHM Polska Miedź S.A. of 19 June 2020 regarding the allocation of profit for financial year 2019, the entire profit for the period was transferred to the Company’s share capital.

Investor relations

The investor relations team maintains an on-going dialogue with the capital market pursuant to its policy of ensuring a transparent company and adherence to the Best Practices of the Warsaw Stock Exchange. For KGHM Polska Miedź S.A., as a global company operating on four continents, it is a priority to ensure equal access to information to all participants of global capital markets. KGHM Polska Miedź S.A.’s actions are aimed at maintaining regular communication and transparent dialogue with analysts, institutional and individual investors as well as at ensuring conformity with our regulatory legal obligations. The Company fulfils its disclosure obligations by publishing current and periodic reports via the official reporting system (ESPI).

2020 was another year of intense activities by KGHM Polska Miedź S.A. in terms of communicating with investors. During the COVID-19 pandemic, the Company successfully engaged in actions aimed at maintaining relations with investors using a virtual, online format.

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Investor conferences in Poland and abroad	Company representatives actively meet with investors and analysts in Poland and abroad during conferences organised by brokers. In 2020, the Company took part in more than a dozen investor conferences and more than 100 meetings. In 2020 the Company additionally took part in the Finance and Investing Forum organised by the Individual Investors Society in Warsaw.
Results conferences	The Investor Relations Department organises meetings with the Management Board to discuss the financial results of the Company and the Group. In 2020, the publication of financial results was accompanied by a results conference for all stakeholders, with a live webcast in Polish and English and the possibility of asking questions by email. Video recordings of these conferences are available on the Company’s website, http://www.kghm.com, in the Investors section.
Capital Market Days	The Investor Relations Department regularly organises events for the capital market. This type of meeting is aimed at familiarising investors with the degree of advancement of the development strategy as well as with the current operating and financial situation of the KGHM Group and its individual assets. In 2020, because of the COVID-19 pandemic and concerns for the health and safety of its employees and investors, the Company decided to defer the organisation of an Analyst Day and an Individual Investor Day.
WallStreet 24 online conference	In 2020, KGHM Polska Miedź S.A. again took an active part in the WallStreet conference. The Company was a strategic partner of the 24th edition of the conference. The largest meeting of individual investors in Poland was carried out online, with participation of about 11,000 registered participants. Amongst the activities engaged in by KGHM was our participation in the online Your Investments Forum, where we took part in the EU Green Deal discussion. In terms of opportunities and threats facing KGHM, we participated in a debate on Poland’s economy in 2021 by leaders of Polish listed companies and gave an interview in the investor magazine Akcjonariusz. Individual investors also had a chance to meet with members of the KGHM Investor Relations team during a Shareholders Fair, in the form of an online chat.
Investor chats	The Company’s representatives are available to individual investors during on-line chats. These are organised on a regular basis, after the Company publishes its financial results. In 2020, four investor chats were held.
Upgrade of the IR section on the KGHM website	The Investor Relations Department has decided to modernize the Investors section on the KGHM corporate website. This involved not only a substantial technical update of the section, but also represented a fundamental change in way we present content. We simplified the organisation of thematical areas and made it easier to search for key operational and financial information. A new element is the Investor Handbook, where one may find information on how to purchase KGHM’s shares, answers to frequently asked questions, basic information about the Company, transcripts of quarterly chats with investors following results announcements and the latest investor presentation, as well as links to our IR Newsletter and investor events. Another new element, of particular importance, is a section devoted to ESG (Environmental, Social, Governance) issues.
ESG	In response to the expectations of stakeholders of the Company as well as to developmental trends and the growing global commitment to reporting questions involving environmental, social and governance issues, in 2020 the Company, in line with its Strategy, initiated a variety of actions aimed at enhancing our transparency in these areas and simplifying the process of seeking information connected with the non-financial reporting of KGHM Polska Miedź S.A. These actions included the Copper Mark initiative, activities related to maintaining our certification within the FTSE4Good Index Series and participation for the first time in the CDP climate survey. In 2020 KGHM provided responses to questionnaires or information requests involving ESG-related questions from, among others: CDP, FTSE Russell, MSCI, Acadian Asset Management, HSBC, Corporate Knights, WOOD & Co., Church of England and PKO BP Securities.
Quarterly IR Newsletter	The IR Newsletter summarises the most important quarterly events and is distributed to subscribers via email. The goal of the Newsletter is to assure its recipients with an accurate source of knowledge about KGHM and the global copper market and to facilitate analysis and assessment of the possibilities associated with investing in the Company’s shares. The commencement of publication of the IR Newsletter was met with appreciation by investors and other participants in the capital market. The project received commendation as an example of IR Best Practice during a webinar hosted by the Warsaw Stock Exchange, as well as by the Individual Investors Society.

In 2020, analytical reports on KGHM Polska Miedź S.A. were published by 8 sell-side analysts based in Poland and 9 based abroad.

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Brokerages which prepare reports on KGHM Polska Miedź S.A.

Poland
Biuro Maklerskie mBanku	Dom Maklerski BOŚ	Santander Biuro Maklerskie
Dom Maklerski Banku Handlowego	Erste Group	IPOPEMA Securities
Biuro Maklerskie PKO BP	Trigon Dom Maklerski
Abroad
Bank of America Merrill Lynch	Raiffeisen	Goldman Sachs
Morgan Stanley	UBS	WOOD & Company
JP Morgan	EVA Dimensions	Global Mining Research

Awards and distinctions in 2020 for investor communication and capital market activities:

Best Investor Relations for individual investors – 3rd place for the KGHM IR Team as judged by individual investors, in a survey on IR quality by the magazine „Parkiet” and the Brokerages Council.

IR Excellence award – the Company won the maximum score in the prestigious IR Excellence Programme for its efforts on behalf of investors and its high standards of communication with them. The Company was also recognised for having sponsored the largest bond offer in 2019.

The Best Annual Report 2019 – in the contest organised by the Institute of Accounting and Taxes, KGHM Polska Miedź S.A. was awarded the title The Best of The Best.

Shareholder structure of KGHM Polska Miedź S.A

As at 31 December 2020 and as at the date of signing this report, the share capital of the Company was PLN 2,000 million and was divided into 200,000,000 series A shares, fully paid-up, with a par value of PLN 10 each. All of the shares are bearer shares. The Company has not issued preference shares. Each share represents one vote at the General Meeting. The Company does not hold any treasury shares.

In the years ended 31 December 2020 and 31 December 2019, there were no changes in share capital and the number of shares.

In 2020, there were no significant changes in the shareholding of KGHM Polska Miedź S.A. In 2019, the Company was informed that the PZU “Złota Jesień” Open-End Pension Fund had reduced its share in the total number of votes at the General Meeting of KGHM Polska Miedź S.A. to below 5%.

The Company’s shareholder structure as at 31 December 2020 and as at the date of signing this report, established on the basis of notifications received by the Company pursuant to art. 69 of the Act on public offerings and conditions governing the introduction of financial instruments to organised trading, and on public companies, was as follows:

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Shareholder structure as at 31 December 2020 and as at the date of signing this report

Shareholder	Number of shares/votes	% of share capital /total number of votes
State Treasury¹⁾	63,589,900	31.79%
Nationale-Nederlanden Otwarty Fundusz Emerytalny²⁾	10,104,354	5.05%
Aviva Otwarty Fundusz Emerytalny Aviva Santander³⁾	10,039,684	5.02%
Other shareholders	116,266,062	58.14%
Total	200,000,000	100.00%

¹⁾based on a notification of 12 January 2010 received by the Company.
²⁾ Nbased on a notification of 18 August 2016 received by the Company.
³⁾ based on a notification of 17 July 2018 received by the Company.

Other shareholders, whose combined interest in the share capital and in the total number of votes amounts to 58.14%, are mainly institutional investors, both international and domestic.

Below we present the geographic structure of KGHM Polska Miedź S.A.’s shareholders. The data is based on research into the Company’s shareholder structure performed in February 2021.

Source: CMi2i, February 2021

The Management Board of the Company is unaware of any agreements which could result in changes in the proportion of Company’s shares held by current shareholders and bondholders. The Management Board is also unaware of any agreements between bondholders, which could result in changes in the number of bonds held by them.

Based on the information held by KGHM Polska Miedź S.A., as at 31 December 2020 and at the date this report was signed, no Member of the Company’s Management Board held shares of KGHM Polska Miedź S.A. or rights to such shares.

Among the Company’s Supervisory Board Members, as at 31 December 2020 and as at the date of signing this report, only Józef Czyczerski held 10 shares of KGHM Polska Miedź S.A. with a total par value of PLN 100. According to information held by the Company, the remaining Members of the Company’s Supervisory Board held no shares of KGHM Polska Miedź S.A. or rights to such shares.

According to the Company’s knowledge, as at 31 December 2020 and as at the date of signing this report, the Management Board Members and the Supervisory Board Members did not hold any shares in the related entities of KGHM Polska Miedź S.A. The Company did not operate an employee stock ownership plan in 2020.

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