Shareholders and their role
We consider active dialogue with stakeholders, among whom shareholders play a special role, to be an element critical to the effective operation of the KGHM Group. As a global company operating on three continents, we treat equal access of all participants in international capital markets to information as our priority.
KGHM Polska Miedź S.A. was listed on the Warsaw Stock Exchange (WSE) for the first time in July 1997. The Company’s shares are traded on the primary market in the continuous trading system and are a component of the WIG, WIG20 and WIG30 indices. The Company’s shares are also included in the WIG-GÓRNICTWO, WIGdiv and WIG-Poland indices.
As at December 31, 2016, the share capital of KGHM Polska Miedź S.A., in accordance with the entry in the National Court Register, amounted to PLN 2bn and was divided into 200,000,000 series A shares, having a nominal value of PLN 10 each. All shares are bearer shares. Each share carries one vote at the General Meeting. The Company has not issued any preference shares.
In 2016, the shares of KGHM Polska Miedź S.A. were once again amongst the selected group of companies listed on the Warsaw Stock Exchange which comprise the RESPECT Index (for more details, see section 6).
Change in KGHM Polska Miedź S.A.’s share price versus the WIG20, FTSE 350 Mining and Copper Miners ETF indices in 2016
Source: Bloomberg, 03/29/2017; data standardized as at 01/04/2016.
In 2016, the price of KGHM Polska Miedź S.A. shares was affected primarily by fast changes in commodity prices and the appreciation of the American dollar against the Polish zloty. In the first ten months of 2016, the price of our shares increased by approx. 12%, which was mainly due to the fast growth of silver prices (more than 28%). In the same period, the prices of copper and the exchange rate of the American dollar changed by approx. 2.5% and slightly more than 1%, respectively. The price of KGHM Polska Miedź S.A. shares increased rapidly in the last two months of 2016 by more than 30% in relation to the price recorded as at the end of October 2016. In that period, the growing prices of copper (an increase of almost 14%) and the exchange rate of the American dollar against the Polish zloty (an increase of almost 6%) had the biggest effect on the share price. At the same time, there was an adjustment of the market price of silver.
Throughout 2016, the price of KGHM Polska Miedź S.A. shares increased by 45.66% from PLN 63.49 (as at December 30, 2015) to PLN 92.48 as at the end of 2016. In the same period, the WIG index increased by 11.4%, WIG20 – by 4.8%, and WIG30 – by 8.1%.
As at the end of 2016, the Company’s capitalization reached a level of PLN 18.5bn, and the average trading volume per session in 2016 amounted to 1,102,494 shares. The price of KGHM Polska Miedź S.A. shares in 2016 varied from PLN 51.22 (January 20) to
PLN 97.95 (December 8).
|Key data concerning the Company’s share price at the Warsaw Stock Exchange (WSE)|
|Symbol: KGHISIN: PLKGHM000017||unit||2016||2015|
|Number of shares||millions of shares||200||200|
|Company’s capitalization at the end of the year||PLN bn||18.5||12.7|
|Average trading volume per session||sztuk||1,102,494||948,323|
|Change of share price compared to last price of previous year||%||+45.66||-41.67|
|Maximum closing price in the year||PLN||97.95||131.00|
|Minimum closing price in the year||PLN||51,22||59,07|
|Closing price on last day of trading in the year||PLN||92.48||63.49|
The KGHM Group follows a policy of continuous and transparent communication with investors and analysts. Our dialogue with investors is based on the following tools: current and periodical reports submitted via the official reporting system (ESPI), our webpage, mobile application, direct meetings and participation of the Company’s representatives in conferences of investors, road shows, meetings with analysts and fund managers (see the summary of IR activities below).
Primary tools for dialogue with the investment market in 2016
- Approx. 30 meetings with investors
- 4 conferences held to discuss the results after the publication of the Company’s and the Group’s financial statements
- More than 90 analytical reports published in 2016
- 14 Polish and 7 foreign analysts
- 1 financial institution changed the nature of analytical coverage for KGHM from regional to sector
- Documents published
- 47 current reports
- 5 financial statements
- Integrated Annual Report
- Documentation aimed at adjusting the Company to the new capital market regulations (MAR) was prepared and approved.
- Secure information disclosure mechanisms were implemented – the Disclosure Committee was set up as part of the Company’s organizational structure to provide capital market participants with complete, clear and reliable information in a timely manner.
Dialogue with investors and stock exchange analysts
- Direct meetings held in the Company’s head office and representative office on an as needed basis
- Continuous electronic and telephone communication (responses to questions asked by the market)
- General Shareholders’ Meeting
- Institutional Investor’s Day
- Monitoring of the Company’s shareholder structure; study of perception of KGHM among participants in the capital market
- Online questionnaire for investors on the quality of the Company’s communication with investors
Interactive communication tools
- Webpage dedicated to investors from the capital market containing key information, documents and analytical tools
- KGHM IR mobile application
- Newsletter distributed to subscribers registered on the webpage
- Online broadcasts of conferences held to discuss the results and General Shareholders’ Meetings
Publication of the financial results of KGHM Polska Miedź S.A. is accompanied by a conference, which is open to all stakeholders and broadcast live online in Polish and English.* Conference calls and video conferences organized in response to the stakeholders’ needs are another form of communication between the Company and the market.
In 2016, we organized the Institutional Investor’s Day in cooperation with DM PKO BP. The event attracted great interest from fund managers. Investors had an opportunity to visit the KGHM Polska Miedź S.A. Branches and take part in meetings with management.
* Video recordings of the conference are available on the Company’s website (www.kghm.com) under ‘Investors’.
In the past year, we launched a free mobile application “KGHM IR”* dedicated to the investors in KGHM Polska Miedź S.A. It is an interactive tool designed to help the user better understand the changes in the Company’s prices on the Warsaw Stock Exchange. The application provides all the most important information for investors – both online and offline – through a download option. The application guarantees access to newly-published press releases, current reports, financial statements and presentations of results. It also contains statistics of KGHM share listings at the WSE. There is also an option of notifying the users about newly-published content. The KGHM IR application is currently available in English only. It can be downloaded free to mobile devices through Google Play or App Store.
In 2016, the analytical reports about KGHM Polska Miedź S.A. were developed by fourteen sell-side analysts from Poland and seven from other countries.
The list of financial institutions that issue recommendations and publish reports about the shares of KGHM Polska Miedź S.A.
|Based in Poland|
|Deutsche Bank||Erste Group||PKO Dom Maklerski|
|DM mBank||Pekao Investment Banking||DM BZ WBK|
|JP Morgan||Vestor Dom Maklerski||IPOPEMA Securities|
|Trigon Dom Maklerski||DM BOŚ||Société Générale|
|DM Banku Handlowego||Haitong Bank|
|Bank of America Merrill Lynch||UBS||Morgan Stanley|
|Raiffeisen||Goldman Sachs||VTB Capital|
|BMO||WOOD & Company||Eva Dimensions|
In accordance with resolution no. 6/2016 of the Annual General Meeting of KGHM Polska Miedź S.A. of June 28, 2016 on the distribution of the profit of KGHM Polska Miedź S.A. for the financial year 2015, the amount of PLN 300M was appropriated for the payment of dividend (PLN 1.50 per share). The date of gaining dividend rights was determined to be July 15, 2016, and payment of dividend was planned in two instalments of PLN 0.75 per share on August 18 and November 17, 2016.
* The KGHM IR application is currently available in English only. It can be downloaded free to mobile devices through Google Play or App Store.
|Dividend paid in the financial year from prior year profit Dividend rate*||PLN M||300||800||1,000|
* Dividend per share paid in a given financial year divided by the last share price in the financial year
The recommendation to pay the dividend was based on the KGHM Polska Miedź S.A. Dividend Policy, which was adopted by the Company’s Management Board on January 26, 2015. The Dividend Policy is one of the tools aimed at ensuring the balance between the amount of dividends paid and the opportunities for effective investment of the funds generated by the Company.
The Dividend Policy assumes that the Management Board will recommend allocation of up to one-third of the net profit of KGHM Polska Miedź S.A. for the previous financial year as a dividend, taking into account the current and anticipated financial situation of the Company and the Group. In particular, in making its recommendation the Management Board will take into account the Company’s anticipated capital requirements for implementing its development program and a safe debt level for the Group.
The final decision regarding the amount of dividends to be paid is made by the General Meeting of KGHM Polska Miedź S.A.
Information about the Company’s ownership structure and issued shares
The shareholders which as at December 31, 2016 held shares carrying 5% or more of the total number of votes at the General Meeting of KGHM Polska Miedź S.A. were the State Treasury and Nationale Nederlanden Open-Ended Pension Fund (OFE).
|Shareholder||Number of shares/votes||% of the share capital/ total number of votes|
|The State Treasury*||63,589,900||31.79 proc.|
|Nationale Nederlanden OFE**||10,104,354||5.05 proc.|
|Other shareholders||126,305,746||63.16 proc.|
* Based on the notification of January 12, 2010 received by the Company
** Based on the notification of August 18, 2016 received by the Company
Other shareholders, whose total ownership of the share capital and share in the total number of votes amounts to 63.16%, are mainly institutional investors, both domestic and international.
The geographic distribution of the Company’s shareholder structure is presented below. The data is based on research into the Company’s shareholder structure performed in 2016.
Geographic structure of KGHM Polska Miedź S.A. shareholders
The Company does not hold any treasury shares.
The Company’s Management Board does not know of any agreements which could result in future changes in the proportion of shares held by the existing shareholders.
In accordance with the knowledge of KGHM Polska Miedź S.A., as at December 31, 2016 none of the Management Board members held any shares of KGHM Polska Miedź S.A. or any share options.
KGHM Polska Miedź S.A. shares owned by Supervisory Board Members of KGHM Polska Miedź S.A. as at December 31, 2016
|Name||Position/function||Number of shares as at December 31, 2016||nominal value of shares (PLN)|
|Józef Czyczerski||Supervisory Board Member||10||100|
|Leszek Hajdacki||Supervisory Board Member||1||10|
In accordance with the knowledge of KGHM Polska Miedź S.A., the other Supervisory Board members did not hold any shares of KGHM Polska Miedź S.A. or any share options as at that date.
According to the Company’s knowledge, as at December 31, 2016 the Management Board and the Supervisory Board members did not hold any shares in the related entities of KGHM Polska Miedź S.A.
The Company did not have an employee share program in place in 2016.