Numbers
The Numbers
Figures converted from Polish złoty at historical FX rates — see data/company.json.fx_rates. Ratios, margins, and multiples are unitless and unchanged.
KGHM is one of the most cyclical large-caps in European materials, and the past twelve months have been a textbook cycle: shares have nearly tripled from a $30 trough in early 2025 to ~$82 today on a copper-price tailwind and a snap-back from 2023's operating loss. That rally has pushed valuation to the top of its 20-year range — EV/EBITDA at 9.6x is the highest reading since 2020 and roughly 1.9× the 20-year median of 5.2x — while the underlying business still doesn't generate free cash. The single number to watch: free cash flow, which has been negative in four of the last five years as capex ($1.4–1.6 bn/yr) eats every dollar of operating cash. Until that gap closes, the rerating rests entirely on copper.
Snapshot
Share price ($)
Market cap ($ M)
Revenue FY25 ($ M)
ROE FY25
Net Debt / EBITDA
200 million shares outstanding, no buybacks, no FY25 dividend. Revenue trades at 1.5× sales (current) vs a 20-year median of ~0.9×.
Quality scorecard — is this well-run and durable?
The cash-conversion line is the most important row. KGHM has reported $3.4 bn of cumulative net income in 2021–2025 but generated negative ~$0.7 bn of cumulative free cash flow over the same window. Reported earnings tell a profitability story the cash flow statement does not back up.
Revenue & earnings power — 20 years
Revenue has more than doubled over twenty years, but the margin line tells the real story. The 2011 spike (60% operating margin) was a once-in-a-generation copper move; the structural operating margin has settled into the low teens, with two negative years (2015 inventory and impairment writedowns; 2023 cost spike against weakening prices). The 2025 print is a recovery, not a return to prior peaks.
Quarterly direction — last 12 quarters
Q4 2025 was the strongest revenue quarter in two years ($2.92 bn, +14% YoY), and net income for that single quarter alone was ~$0.74 bn — 73% of full-year FY25 net income. The recovery is real, but the Q4 print was meaningfully boosted by a late-cycle copper spike that re-priced inventory and hedge book, not by a step-up in volumes or efficiency.
Cash generation — are the earnings real?
Operating cash flow has been stable in absolute terms ($0.9–1.5 bn/yr) — the issue is the right-hand chart. Capex has scaled up to $1.4–1.5 bn since 2023 (vs ~$0.8 bn historically) and routinely exceeds OpCF. FY2024 and FY2025 each printed roughly negative $0.3–0.4 bn of free cash flow despite strong reported earnings. Trailing-5-year FCF/NI is negative 5% — earnings simply do not convert.
Capital allocation — what's been done with the cash
The 2018–2020 stretch of zero dividends was the previous dividend pause; FY2025 has been cut back to zero again. There are no buybacks in any year on record. Effectively all "returned" capital over the last seven years has gone to debt repayment to keep leverage from blowing out as the capex cycle ramped.
Balance sheet — flexibility shrinking
Net debt at $1.5 bn and 0.73× EBITDA is the most benign reading since 2014 if you accept normalized EBITDA as the denominator. The 2023 spike to 4.5× shows what one bad year can do — when EBITDA collapses to ~$170 M (as it did in 2023), the same nominal debt load becomes balance-sheet stress. Current ratio at 1.10 is below the 20-year median (1.62) and offers thin working-capital cover.
Valuation — current vs 20-year history (the critical chart)
EV/EBITDA now
▲ 5.20 20-yr median
P/E now
▲ 7.8 20-yr median
P/B now
▲ 1.03 20-yr median
Every traditional KGHM valuation lens reads expensive. EV/EBITDA at 9.6× is roughly 1.85× the 20-year median, P/E at 15.2× is 2× median, P/B at 1.71× is 1.66× median. The only times KGHM has traded richer were 2017–2020 — a stretch of weak earnings that compressed the denominator. The 2023 EV/EBITDA print of 41× was a similar denominator artifact (EBITDA collapsed to near zero). Today's reading is the first time the multiple is high and EBITDA is also high — a classic late-cycle setup.
Peer comparison — KGHM against pure-play copper miners
KGHM has the lowest EBITDA margin of any peer in this group (17.4% vs ANTO 59% / SCCO 59% / FCX 34%). The structural reason is well known: KGHM is a vertically-integrated mining-plus-smelting-plus-refining operation, while the comparators are largely pure-play upstream miners. Smelting and refining are low-margin tolling activities, and they dilute the group margin by half. The market correctly applies a P/E discount (15× vs ANTO/FCX at 33×) — but EV/EBITDA at 9.6× is only modestly below ANTO and FCX (9.9× and 10.4×). On the multiple investors actually trade copper names on, KGHM is no longer cheap relative to higher-quality peers.
Fair value — bear / base / bull
Current price ~$82 sits roughly at the midpoint between base and bull. The asymmetry is unfavourable: ~30% downside to a multiple-reversion bear case versus ~20% upside to a continued-copper-rally bull. To justify above-base outcomes the buyer needs either copper to stay structurally elevated or KGHM specifically to close its FCF deficit — and the FY25 result (capex $1.5 bn, FCF –$0.4 bn, dividend 0) shows the company has not yet pivoted to harvest mode.
Bottom line
The numbers confirm that KGHM is fundamentally a leveraged bet on copper, not a quality compounder: 20-year operating margins average 17%, ROE swings from –25% to +58%, and free cash flow has rounded to zero across the full cycle. The numbers contradict any narrative that 2025's 200%+ rally is supported by underlying capital efficiency — earnings have recovered, but FCF has not, and capital allocation since 2018 has been entirely about keeping leverage in check rather than returning cash. Watch in 2026: (1) whether quarterly capex finally comes off its ~$0.4 bn/qtr run-rate, (2) the FY26 dividend decision (the cleanest signal management thinks the cycle has peaked), and (3) the EV/EBITDA multiple — at 9.6× there is no margin of safety left for any softness in the LME copper price.