Jastrzebska Spólka Weglowa (JSW) Investor presentation summary

Market environment and challenges

• Coking coal and coke prices declined sharply, with a 48% drop in premium coal and 57% in Chinese coke from 2022 to 2025, driven by falling EU steel production and increased global competition.

• Production volumes fell due to extraordinary events at mines, with output below the 14 million ton potential and significant losses from fires and accidents.

• Rising fixed costs, labor expenses, and lower capacity utilization led to a persistent increase in unit mining costs, peaking at 805 PLN/t in 2024.

• Liquidity pressures intensified due to high capital expenditures and non-recurring costs, including employee awards and windfall taxes.

• Access to new debt financing is limited by operational, financial, and regulatory risks, as well as decarbonization and ESG requirements.

Restructuring and Remedy Program

• Major restructuring measures included workforce reduction mechanisms, amendments to mining laws, and securing loans and grants to maintain liquidity.

• The Remedy Program aims to rebuild cash position, stabilize production, improve cost flexibility, enforce investment discipline, and achieve sustainable development.

• Key business areas targeted include mining and costs, investments and energy, procurement, HR, coke, trading, subsidiaries, and finance, with 58 initiatives defined.

• Production is to be stabilized with a focus on high-quality coking coal, reducing steam coal, and improving operational efficiency and employee engagement.

• Cost flexibility measures target a reduction in mining cash cost (MCC) from 738 PLN/t in 2025 to 559 PLN/t by 2035, and coke conversion cost (CCC) from 347 PLN/t to 227 PLN/t.

Investment, sustainability, and results

• Capital expenditures are being optimized, with a focus on strategic projects in coal and coke segments, and a reduction in overall spending over the long term.

• Sustainability priorities include a 30% reduction in carbon footprint by 2030 (vs. 2018) and net zero by 2050, with investments in methane emissions reduction and energy generation.

• Restructuring has delivered tangible results: improved liquidity, payroll savings, reduced mining and conversion costs, and increased active longwalls.

• The group remains the EU's only coking coal producer, supplying over a quarter of EU demand, with a 30-50 year mining horizon and strong customer relationships.

• Own reserves and processing capacity ensure resilience and independence for the EU steel industry, with coking coal essential for primary steel production.