Letter of the President of the Management Board

We commenced year 2023 in a situation of high uncertainty as regard the world’s market situation. Clearly decreasing demand, which started in 2022, war in Ukraine, and potential shortages of power forced a cautious approach to forecasts.

That is why I am hugely satisfied to be able to share good news with you that the results generated in 2023 exceeded the initial assumptions and the development perspectives still remain positive.

With 20-30% drops in the prices of basic materials (aluminium and plastic granulates), sales revenue exceeded PLN 5.2 billion and was only 12% lower than the record level of 2022. Sales to our foreign customers in over 60 countries reached the value of PLN 2.6 billion, representing 51% of the Capital Group’s total revenue.

Year 2023 was a difficult one and we faced several challenges, mainly with regard to operation efficiency maintenance. In the environment of limited orders, pressure on margins, high inflation and expensive loans, the Capital Group generated high EBITDA of PLN 868 million and net profit of PLN 539 million. Stable financial standing allowed the Company to pay out a record dividend in the total amount of PLN 603 million, i.e. PLN 62.50 per share, while maintaining safe financial ratios.

Despite the slow-down, which we consider to be periodical, we have not stopped investing in development. The total expenditure of the Group on investment projects amounted to PLN 300 million in 2023. They referred mainly to the Extruded Products Segment and Aluminium Systems Segment. In compliance with the binding Strategy 2025, the production capacity of the Segments will be increased by roughly 25%. In 2023 we commissioned one of two profiles extrusion presses in Kęty and completed the construction of a hall of a new plant in Złotów. Both projects, which are most important from the point of view of the Group’s organic development, are planned to be completed in the middle of this year.

We have introduced a series of innovative products, including environmentally-friendly and sustainable-development-supporting architectural systems, or technologies contributing to the growth of circular economy. We have also implemented a series of actions in the area of social engagement and limitation of our impact on the environment. I am delighted to present to you the details of our activities in that area in the Non-financial Information Statement.

Summing up the year 2023, worth mentioning are the examples of our achievements. At the 27th Wall Street Conference organised by the Individual Investors Society, Grupa Kęty was awarded the title of the ‘Hero of the Capital Market’ in the category of dividend-paying WIG20 and mWIG40 companies. We took the third position in the main ranking of the 23rd edition of the ‘The Stock Exchange Company of the Year’, organised by the Puls Biznesu news portal, in the category of Investor Relations. Grupa Kęty counts among 38 most aware companies in the Corporate Climate Crisis Awareness Study run the Reporting Standards Foundation, the Association of Stock Issuers and Bureau Veritas. We were also honoured with the Silver CSR Leaf, an award by the Polityka weekly, Deloitte and Responsible Business Forum.

All our activities contribute to building the Group’s goodwill. Grupa KĘTY S.A. market capitalisation at the Warsaw Stock Exchange grew in 2023 from around PLN 4.7 billion to nearly PLN 7.2 billion, whereas the shares of Grupa KĘTY S.A. were included in the MSCI Poland (Small Cap) index in August 2023.

Sharing the good results with you, I would like to cordially thank all the Employees of the Capital Group for their engagement in this requiring year, and on the occasion of the 70th anniversary of Grupa KĘTY S.A. celebrated in 2023 I wish you satisfaction from work and further development opportunities.

I am also proud of continued help to our Ukrainian employees and their families as well as Ukrainian refugees.

I would also like to thank the Shareholders and the Supervisory Board for their trust and support, which helps us manage the Company in an efficient way.

The modern world poses huge challenges in front of us, including geopolitics, climate change, artificial intelligence and many others. We are going to effectively cope with them but at the same time we wish to avail of the opportunities that stem from the situation. According to experts, aluminium is a desired raw material on our way to climate neutrality, perfectly suited to the circular economy concept, which is going to play a key role in the leading sectors of economy. Therefore, with huge optimism, we have already been discussing strategic goals for the coming years. We aim to present to you the directions of the new strategy by the end of the year.