Gielda Papierów Wartosciowych w Warszawie S.A. (GPW) Earnings Call Transcript & Summary

Ladies and gentlemen. It's 11:00 in Warsaw; 10:00 in London; New York City, everybody is still asleep. A wholehearted welcome to our general meeting. Let me start with a picture that I like very much I've recently seen online. Namely the main protagonist of that cartoon says, "Good thing it's not snowing today. It will be awful to remove the snow in such a heat." That's why you're all welcome. Based on Article 409(1) of the CCC and 11(1) of the rules of procedure of Warsaw Stock Exchange, I'd like to open the session of the Annual General Meeting convocated by the Board of Directors for June 21, 11:00 at our company office in 4 Ksiazeca Street in Warsaw. We informed you about this by way of the current report, 11 -- #11. And by report 13, we informed you that by -- at the request of a shareholder, the agenda has been expanded. I can tell you with a lot of conviction that today, we have the strongest team. The entire Management Board and the Supervisory Board are present. At the annual meeting, Mr. Jakub Modrzejewski, Deputy Chair, is present. The corporate deal -- the Chair of the Corporate Deal; the Head of the Audit Committee; Mr. Paszke; the Head of the Strategic Committee is also with us, and he is also Audit Committee member. And by video conference, Mr. Dominik Kaczmarski, the Chair of the Council is with us. Member of the Remuneration Nominations Committee; [ Mr. Balabanow ] is also with us, member of the Strategic Committee; and Professor Adam Szyszka, who's the Supervisory Board member and member of the Strategy Committee. I wish to thank all the members of the Supervisory Board for turning up. It's also my great pleasure to welcome the representatives of the Financial Supervisory Commission headed by [ Mr. Mikusinski ] and [ Ms. Carolina Zamilska ], I can see you at the back, humbly, but thank you very much for your presence. I'd also like to thank -- I mean welcome all the shareholders, their representatives and representatives of the media. As always, the course of this session is being streamed via the Internet to an unlimited circle of people and naturally have an option to restrict the dissemination of your image. If that's the case, please make an objection. And we have a new thing, a technological novelty representative -- well, one representative will be participating on a distant basis. So the pandemic has contributed to it. And things that don't work under other jurisdictions work here, and we're happy to be able to test those technological solutions. Before we pass on to the -- to item 2 of the agenda, item 2 was the opening, I'd like to ask the representative of the company organizing the voting to explain the intricacies or actually the simplicity of the system.

Good morning, ladies and gentlemen. Let me remind you how to use the tablets you've all been equipped in. As you've signed up the attendance list, you have 2 buttons, Your Data and Documents. As you press on Your Data, you can verify your data, the data of the represented, of the shareholders you represent. As you press on Your Document, you have access to all the documents published on the company's website connected with today's session. You can review them at any moment. As regards the voting, the moment the chair of the meeting enacts the voting, you'll see the buttons, yes, no, abstain and split, if someone wishes to vote differently on each pack -- on each share. If you want to cast a uniform vote, you just press on the decision button. On the next screen, you'll see the reiteration of your decision and then the button Confirm. If that's the case, you use the word -- the button Confirm to cast your vote. I hope you're very well aware of the technology and you have no problems. Should any technical problems appear, we are all -- we are at your disposal in the room throughout the session. Thank you very much.

Thank you very much for your explanation and your declaration to support us. For any questions, maybe you might have any questions now on the voting procedure and the operation of the tablets? I don't see any questions. So may I suggest that we, or you actually, pass on to item 2, which is the election of the chairperson of the general meeting. So I'd like to ask the shareholders or the representatives to submit any candidacies for the chair of the general meeting. Any candidacies?

Good morning. [ Philip Mirowski ], representative of the Minister of State Assets. I'd like to submit the candidacy of [ Counsel Krasinski ].

Thank you very much. Do you agree to serve as a candidate, Counsel?

Yes.

So not only do we have a candidacy, but it's also approved. Do we have any other counter-candidacies? I don't see any. That being the case, I'd like to submit the voting. To vote, it's on the personal matters, so it's going to be by secret ballot. Let me read it out. The resolution 2 for the Annual General Meeting of the Warsaw Stock Exchange company dated 21st of June 2020, concerning the election of the chairperson of the general meeting. Pursuant to Article 407(1) of the Commercial Companies Code and Article 12(1) of the company's Articles of Association, general meeting of the company resolves as follows: where Paragraph 1, the general meeting of the company elects as -- Mr. -- [ Dr. Krasinski ] as Chairperson of the general meeting held on June 21, 2020. The Paragraph 2, the resolution shall come to force on the date of its adoption. So please cast your votes by secret ballot by using the technology presented just a moment ago. [Voting]

Thank you very much. As you can see on the screen, let me just read it, a total of 37,727,025 (sic) [ 39,727,025 ] valid votes have been cast of 25,003,555 shares, representing almost 60% of the share capital. And Mr. Counsel, the burden of heading the meeting goes to you. Congratulations, and over to you, sir.

Good morning, ladies and gentlemen. Welcome to all the shareholders, Mr. CEO, Board members and Supervisory Board members, the notary public who will be drafting today's minutes. Thank you for the election, and let's pass on to following the agenda of today's general meeting of the company. Can we have the attendance list with the information? Is it up to date? We have a remote participant. Okay. Ladies and gentlemen, let me just indicate that the verification of the entitlement to take part in the general meeting was done as you entered the room as well as remotely, that's why I subscribed to the attendance list. Formally, I'd like to assert that today's general meeting has been convened formally and in line with the general provisions of the law and the company's Articles of Association by the publication of the company's website as well as current reports number 11 of 24th of May 2021 and 13/2021 dated June -- sorry, May 21 based on the shareholder -- the State Treasury. Today, we have a participation of [ 143 ] shareholders holding 25,003,555 shares, representing 59.57%. That's almost 70% of the shareholders. And I conclude that today, based on -- pursuant to Article 408(1) of the Commercial Companies Code, I conclude that the general meeting has been convened correctly and is capable of adopting resolutions. On technical matters, let me just mention that some shareholders, at this moment, it's 1 shareholder, a financial institution, is participating in our voting session by remote communications. And the general meeting is being streamed on a real-time basis on your tablets. You also have information on personal data processing of the participants of today's general meeting. Given the information on the epidemic situation and the sanitary regime, please observe the generally defined rules as well as those defined as you entered this plenary session room. Given that the resolutions have been published and they are still available, they won't be read out. Given that some of the shareholder -- some of the resolutions require that they be complemented by the individual names, they won't -- they have to be complemented as we go. I can see there's a request. Is it a formal request?

[ Philip Mirowski ]. Good morning again, representative of the Minister of State Assets. I'd like to submit to you the letter subscribed by Minister Sasin of candidate, [ Ms. Flakewitz ], along with her bio and the representations to be a candidate to the Stock Exchange Council.

Yes, I confirm having received the document electronically signed. On formal grounds, I request that the representative of the company should approach me and please verify it for the purposes of our procedure. Thank you very much. Okay. As a company shareholder, I suggest that all the votes be taken by secret ballot, no matter the nature, and that the voting should not only have a formal but also material matter. If someone doesn't feel comfortable, you can spread out. We have plenty of room for the purposes of comfort of voting by secret ballot. On technical grounds, all the technicalities are passed. So I'm passing on to item 4 of the agenda. And I indicate that the draft of the same resolution has been defined by the current report and also complemented as defined under the mode [indiscernible]. Because I can't see any further questions, so I order the vote on resolution #2. And could you please cast your vote? The technical remark taking into account the fact that one of our participants is voting remotely and also part of the proxies represents a bigger number of shareholders who are not voting in the same way. That is why the vote lasts a bit longer. So the vote is open at the moment when I read the number of the draft resolution. And to avoid all the doubts, I will also read what the draft refers to. [Voting]

So has everyone cast their votes? I close the vote. And could you please show me the results of the secret votes -- secret ballots? Ladies and gentlemen, the resolution has been adopted unanimously with 39,727,025 votes for yes. There were no votes against, no abstentions. So we adopted the agenda unanimously. Now we will follow the agenda after its formal adoption. I move to the next point. So I will combine points #5 to 9 plus 14 because these points refer to the consideration of particular documents which were properly published and you have the [indiscernible] documentation. And of course, there is a link between these documents. Therefore, moving to point #5, in the same time, we are discussing now points from 5 to 9 plus point 14 on the agenda. So because there are no remarks at the points from 5 to 9 and point #14, these points, I understand, that were consumed, and I move to point #10, and I order the vote on resolution #3. And this draft refers to concerns review and approval of the report of the Management Board on the activity of the company and the group in 2020. [Voting]

So I would like to ask you whether any one of you wanted to vote and still is in the process of vote. I can't see any remarks. So I close the vote. And could you please show me the result of the vote? So we had 39,668,530 votes for yes; there were no votes against; abstention, 58,591. That is why I would like to confirm that this resolution has been adopted. Now I move to point #11, and I order the vote on resolution #4, considering review and approval of the financial statements of the company for the year ended 31st of December 2020. With your permission, I would like to present very shortly the financial result of GPW SA. So the particular -- so we annul this vote and we will resume it after the summary of the result of the GPW. And I would like to give the floor to Mr. President.

Ladies and gentlemen, of course, financial statements were published on the company's website. But I would like to present to you, in accordance with the good practice of the Nordics companies, the basic parameters of the previous year. Last year was very good for the capital growth of GPW, especially for GPW, because we had big differences in prices for different exchange houses in generating high turnover and also the policy of interest rates was also favorable, which were lowered to very low level, unexpected low level. That is why we had the redirection of the savings of the individual investors from placements and the bank accounts to the capital market, which resulted in a very high turnover on the shares market and financial instruments market at the GPW. That is why the revenues of the GPW were on the record level, PLN 256 million sales revenues, PLN 256.1 million. And the operating costs 133 -- PLN 136 million; EBITDA, PLN 138.7 million. And the net profit on the level of PLN 168.7 million. So that was the record year for GPW over the 30 years' history. And then the profitability ratios were on a very high level, much higher than in 2019, EBITDA, 54.2%; operating profit margin, 44.9%; net profit margin, 65.9%; and our ROE ratio, 32.8%. And as for the capital growth consisting of a few companies, the sales revenues were PLN 403.8 million; operating expenses, PLN 208.5 million; and EBITDA, PLN 224.6 million; and net profit, PLN 151.4 million, and it was also on one of the best levels in the entire our history of the capital group of GPW. And then profitability ratios were on a very decent level. EBITDA, 55.7%; operating profit margin, 46.1%; net profit margin, 36.4%; and our ROE ratio 14.6%. So the structure of the revenues last year. So the commodities market, 35.7%. In their company's revenues, information service 12.7%. And financial market saw 50.7%. And the consolidated results of the financial situation of the GPW Group and the financial statement here, there is increase of assets, mainly thanks to the increase of the most liquid assets for PLN 716.2 million. It means the increase by [ PLN 101.8 million ]. Therefore, the Management Board proposed to the general meeting of shareholders the payout of the dividend. That motion was accepted by the Supervisory Board. And the proposal is, we proposed a dividend payout PLN 140 million (sic) [ PLN 104 million ], PLN 2.5 per 1 share and this is 37% of the consolidated profit of GPW Group for 2020.

Thank you very much indeed, Mr. President, for your presentation. So the stock exchange sets the highest standards, not only through its organizations of the standards to the capital market. So here, we have, I think, one of the motions. We have a question, Mr. President, from the shareholder who is connected remotely. And the question, sorry, was withdrawn. So we are in point #11 of the agenda, and I order the vote. Could you please cast your vote on resolution #4 concerning review and approval of the financial statements of the company for the year ended 31st December 2020? [Voting]

Has everyone cast their votes? I close the vote. Could you please show me the result of the vote? So we had 39,668,534 votes for yes; there were no votes against; 58,491 were abstentions. So therefore, I would like to confirm that this resolution has been adopted. At this point, moving to point #12, I order the vote on resolution #5 regarding the review and approval of the financial statements of the capital group -- of the group for the year ended 31st December 2020. [Voting]

Has everyone cast their votes? I close the vote. And could you please give me the result of the vote? So we had 39,668,534 votes for yes. There were no votes again. And abstentions, 58,491. Therefore, I would like to confirm that this resolution has been adopted. Now I move to point #13 on the agenda. The point was summarized by Mr. President. And I order the vote on the draft of the resolution #6 concerning distribution of the company's profit for 2020. [Voting]

Has everyone cast their votes? I close the vote, and I will read the result now. The resolution has been adopted unanimously. We had 39,727,025 votes for yes, there were no votes against and no abstentions. And at this point, I move to point #15 on the agenda now, which refers the opinion on the report considering remuneration of members of the Management Board and the Supervisory Board of Warsaw Stock Exchange. So I order the vote on resolution #7. And I would like to remind you that all the votes are held in secret ballot mode. [Voting]

Has everyone cast their votes? I close the vote, and I will read the result of this vote. So we had 33,619,919 votes for yes; against, 4,769,206; abstentions, 1,337,900. So therefore, I would like to confirm that this resolution has been adopted. I move now point #16, and this point refers a vote of discharge of duties to member of the Exchange Supervisory Board in 2020. So I would like to remind you about the restrictions [indiscernible] that result from Article [ 403 ] because of [ Article 412 ] of the Commercial Companies Code. It means limitations regarding the rights to vote regarding the vote of discharge. So the persons cannot vote on themselves in terms of discharging themselves of the duties performed. And this point, personal matters will be discussed. That is why we read the number of the resolution, the name and the surname so that you have no doubt which discharge is under vote. So I put under vote the draft resolution #8 regarding vote of discharge to Michal Balabanow for the performance of his duties as member of the Exchange Supervisory Board. [Voting]

Has everyone cast their votes? So I close the vote. And could you please give me the result of this vote? So we had the votes for yes, 37,853,588; against, 1,799,481; abstention, 73,956. Therefore, I would like to confirm that this resolution has been adopted. I order the vote on resolution #9 regarding the vote of discharge of Boguslaw Bartczak as a member of the Exchange Supervisory Board. [Voting]

Has everyone cast their votes? I close the vote. Could you please give me the result of this vote? I will read it. There are 37,853,588 votes for yes; against, 1,799,481; abstention, 73,956. So therefore, I would like to confirm that this resolution has been adopted. At this point, I order the vote on the draft resolution #10 regarding the vote of discharge to Krzysztof Jajuga regarding the performance of his duties as a member of the Exchange Supervisory Board. Cast your votes now. [Voting]

Has everyone cast their votes? I close the vote. Could you please give me the result of this vote? So we had 37,853,588 votes for yes; against, 1,799,481; abstentions, 73,956. Therefore, I would like to confirm that this resolution has been adopted. At this point, I order the vote on resolution #11 regarding a vote of discharge to Dominik Kaczmarski for the performance of his duties as a member of the Exchange Supervisory Board. [Voting]

Has everyone cast their votes? I close the vote, and I will read the result of this vote now. So there were 37,853,588 votes for yes; and against, 1,799,481; abstention, 73,956. Therefore, I would like to confirm that this resolution has been adopted. I order the vote on resolution #12, regarding the vote of discharge to Janusz Krawczyk for the performance of his duties as a member of the Exchange Supervisory Board. [Voting]

Has everyone cast their votes? I close the vote. Now I will read the result of this vote. So there were 37,853,588 votes for yes; against, 1,799,481; and abstention, 73,956. I would like to confirm that this resolution has been adopted. Now I move to -- and I move to resolution #13 and I order a vote on discharge of duties as a member of this Exchange Supervisory Board, Mr. Jakub Modrzejewski. [Voting]

Has everyone cast their votes? I close the vote, and I will read the result of this vote now. So there were 37,853,588 votes for yes; against, 1,799,481; abstention, 73,956. Therefore, I would like to confirm that this resolution has been adopted. I order the vote on the resolution #14 regarding a vote of discharge of Mr. Filip Paszke for the performance of his duties as a member of the Exchange Supervisory Board. Cast your votes now. [Voting]

Has everyone cast their votes? I close the vote. Could you please give me the result? I will read it. We had 37,853,588 votes for yes; against, 1,799,481; abstention 73,956. Therefore, I would like to confirm that this resolution has been adopted. I order the vote on resolution #15 regarding a vote discharge for Mr. Piotr Prazmo for the performance of his duties as a member of Exchange Supervisory Board. Cast your votes now. [Voting]

Has everyone cast their votes? I close the vote. Could you please give me the result? I will read it. There were 37,853,588 votes for yes; against, 1,799,481; abstention, 73,956. Therefore, I would like to confirm that this resolution has been adopted. At this point, I order the vote on resolution #16 regarding the vote of discharge for Mr. Eugeniusz Szumiejko for the performance of his duties as a member of the Exchange Supervisory Board. [Voting]

Has everyone cast their votes yet? I'm closing the voting session. Can we have the results, please? In favor of the resolution, we had 37,853,588 votes; against, 1,799,481 votes; and 73,956 abstentions. Given that, I conclude that the resolution has been adopted. I'm opening the voting session on resolution #17 on providing a vote of discharge of his duties to Mr. Adam Szyszka as a member of the Exchange Supervisory Board. [Voting]

Has everyone cast their votes? I'm closing the voting session. Can we have the results, please? In favor of the resolution, we had 37,853,588 votes; against 1,799,481 votes; and 73,956 abstentions. Given that, I conclude that the resolution has been adopted. Congratulations to all those who have been Supervisory Board members on getting a vote of discharge. Passing on to item 17, which will be on the vote of discharge of duties to members of the Exchange Management Board for 2020. I'm opening the voting session on resolution #18 concerning a vote of discharge. The principles are exactly the same as for the Supervisory Board. Resolution number -- draft resolution #18 is on the vote of discharge of duties as a member of the Exchange Management Board to Mr. Piotr Borowski. [Voting]

Has everyone cast their votes yet? I'm closing the voting session. Can we have the results, please? In favor of the resolution, 38,665,068 votes were cast; against, 988,000; and 73,956, abstentions. I conclude that the resolution has been adopted. Thank you very much. I'm opening the voting session on resolution #19 concerning the vote of discharge of duties as a member of the Exchange Management Board to Mr. Marek Dietl for the financial year 2020. I'm opening the voting session now, please cast your votes. [Voting]

Has everyone cast their votes yet? I'm closing the voting session. Can we have the results, please? Yes, if the remote shareholder has cast her vote, we want to have the results. In favor of the resolution, 38,665,069 votes were cast; against, 988,030; 73,956 abstentions. Given that, I conclude that the resolution has been adopted. Thank you very much. I'm opening the voting session on resolution #20 on giving a vote of discharge of duties to Mr. Jacek Fotek as a member of the Exchange Management Board for the financial year 2020. [Voting]

Has everyone been able to cast their votes yet? I'm closing the voting session. Can we have the results, please? In favor of the resolution, 38,665,069 votes have been cast; against, 988,000; and we had 73,956 abstentions. Given that, I conclude that the resolution has been adopted. I'm opening the voting session on resolution #21 on the vote of discharge of duties to Mr. Dariusz Kulakowski as a member of the Exchange Management Board for the financial year 2020. [Voting]

Has everyone cast their votes yet? I'm closing the voting session. Can we have the results, please? 38,655,069 votes have been cast in favor of the resolution; against, 988,000; and we had 73,956 abstentions. Given that, I conclude that the resolution has been adopted. I'm enacting the voting session on the vote of discharge of duties to Ms. Izabela Olszewska as a member of the Exchange Management Board for the financial year 2020. [Voting]

Has everyone been able to cast their votes? I'm closing the voting session. Can we have the results, please? 38,665,069 votes have been cast in favor of the resolution; against, 988,000; and we had 73,956 abstentions. Given that, I conclude that the resolution has been adopted. Thank you very much. Congratulations once again to the President and the Board members on being given a vote of discharge for the previous financial year. At this moment, I'm passing on to item 18 of the agenda, which is on the approval of the best practices for the Warsaw Stock Exchange-listed company in 2021. I'm opening the voting session on resolution 32 -- sorry, 23, on the approval of the best practices mentioned above. If the resolution is adopted, they will become effective as of the 1st of July 2021. [Voting]

Has everyone been able to cast their votes yet? I'm closing the voting session. Ladies and gentlemen, the resolution has been adopted unanimously. 39,727,025 votes have been cast in favor of the resolution; none, against; no abstentions. Congratulations to the Management Board and the Exchange Supervisory Board on the work, and I'm happy that the resolution has been adopted unanimously, which also defines the directions of the Polish equity markets development. Congratulations. Passing on to item 19 of the agenda, which is on the changes to the composition of the Exchange Supervisory Board. Let me remind you that a letter has been submitted to the company. I'm passing on to everyone that there are no formal objections or restrictions on this letter, which means that we shall be proceeding on this item. At this moment, the Supervisory Board is composed of 7 individuals. We have a submission concerning [ Ms. Izabela Flakewitz ] and we have -- there is a shareholder wishing to say something, [ Philip Mirowski ], plenipotentiary representative of the Minister of State Treasury Assets.

I'd like to submit 2 draft resolutions. One is on the removal of Mr. Jakub Modrzejewski and the appointment of [ Ms. Izabela Flakewitz ] as a Supervisory Board members. I'd like to present the bio of [ Ms. Flakewitz ]. She's an expert in the regulations of equity market regulations. She's a lawyer and a manager, graduated from the Warsaw University and she has Executive Masters of Business Administration in London and Warsaw, one of the first certified brokers. She has been connected with the equity markets since 2007. She is an experienced employee of the Board for Supervisory -- Financial Supervision Commission in 2017. And since 2018, she has been the Head of the Monitoring Committee of both entities. 2019, she is also a member of the WSE commodity markets and an author of a number of publications.

Ladies and gentlemen, we have a proposal of -- a request for a 10-minute break. Given that request, I'm adjourning this session. This session will be resumed at 12 p.m. sharp. [Break]

Ladies and gentlemen, since the time announced has come, please kindly take your seats. Let me remind you that we are at #19 of the agenda. Does the company providing us with assistance ready? Let's take our seats. So I'm formally resuming the session of the annual general meeting. We're at #19 of the agenda. Let me remind you that a letter has been submitted -- was submitted at the beginning of the session. It was verified by the company, and we have 2 draft resolutions. One of them is on removal of Mr. Jakub Modrzejewski from the composition of the Exchange Supervisory Board. And the other one is on the appointment of [ Ms. Izabela Flakewitz ] as a Supervisory Board member. That's where we are. Since there are no further submissions, I submit draft resolution to vote on the removal of the Supervisory Board member. Let me read it. Based on Article 385(1) and 13(1) of the company's Article of Association, the company resolves as -- the general meeting of the company resolves as follows: Mr. Jakub Modrzejewski is dismissed from the Exchange Supervisory Board. Paragraph 2 of the resolution shall come into force upon its adoption. I'm opening the voting session, please cast your votes now. [Voting]

Is there anyone who has wanted to cast their vote but they haven't? I'm closing the voting session. Can we have the results, please? 31,958,449 votes have been cast in favor of the resolution; against, 5,462,993; 2,305,306 abstentions. Given that, I conclude that the resolution has been adopted. Passing on to the next draft resolution. Let me also read it. That's draft resolution on the election or appointment of the member of the Exchange Supervisory Board pursuant to Article 385(1) of the Commercial Companies Code and Paragraph 13(1) of the company's Article of Association, the general meeting of the company, having assessed the candidate's fulfillment of the requirements referred to in Article 328 (sic) [ Articles 6 to 8 ] of the resolution (sic) [ regulation ] of the Minister of Finance, Funds and Regional Policy concerning requirements applicable to members of the Management Board and to the Supervisory Board of a company operating in regulated market and the terms of conditions and improving knowledge and competencies resolves as follows: Paragraph 1, [ Ms. Izabela Flakewitz ] is appointed to the Supervisory -- Exchange Supervisory Board. Paragraph #2, this resolution shall come into force upon its adoption. Please cast your votes now. [Voting]

Has everyone been able to cast their votes? I'm closing the voting session. Can we please have the results? 31,958,450 votes have been cast in favor of the resolution; against, 5,462,993; and 2,305,582 abstentions. Given that, I conclude that the resolution has been adopted. Ladies and gentlemen, I'm passing on to item 20 of the agenda. I conclude that the agenda has been exhausted. All the draft resolutions, all the resolutions have been adopted, no objections have been raised. Given that, I'm closing the session of the annual general meeting. Many thanks to the shareholders; the Management Board members; Supervisory Board members; technical staff; the notary public for holding this meeting in a streamlined way, given that one of the shareholders has been voting in a remote manner, which has not affected the flow of the session. Thank you very much, and have a nice afternoon.