33 slides from Teck Resources Limited Class A's earnings presentation, Apr 25, 2024
Slide 1: First Quarter 2024 Conference Call
First Quarter 2024 Conference Call April 25, 2024 Global Metals and Mining Conference
Slide 2: Caution Regarding Forward-Looking Statements
Caution Regarding Forward-Looking Statements Both these slides and the accompanying presentation contain certain forward- looking information and forward- looking statements as defined inapplicable securities laws (collectively referred to as forward-looking statements). These forward-looking statem
Slide 3: Jonathan Price
Jonathan Price President and Chief Executive Officer Global Metals and Mining Conference
Slide 4: Q1 2024 Highlights
Q1 2024 Highlights • Completed all major construction at QB, with the first shipment of concentrate from the completed port facility • Closed the minority sale of our steelmaking coal business and received US$1.3 billion in cash from Nippon Steel • Achieved strong operational and financial performan
Slide 5: Q1 2024 Financial Highlights
Q1 2024 Financial Highlights Q1 2024 Gross profit Adjusted Adjusted diluted earnings per before D&A* EBITDA* share from continuing operations* $1.9B $1.7B $0.75 Gross profit Profit from continuing operations before taxes Diluted EPS from continuing operations Continued cash returns to shareholders $
Slide 6: Completed All Major Construction at QB
Completed All Major Construction at QB Demobilization substantially advanced and ramp-up continuing Outlook and Guidance Q1 2024 Performance Complete port construction by end of Q1 2024 Successfully loaded our first vessel of QB concentrate Achieved using the shiploader Ramp-up molybdenum plant in Q
Slide 7: Crystal Prystai
Crystal Prystai Senior Vice President and Chief Financial Officer Global Metals and Mining Conference
Slide 8: Financial Performance Q1 2024
Financial Performance Q1 2024 Profitability ($M) Profit from Continuing Net Finance Expense D&A Adjustments Operations before Tax Controllable Non-Controllable Adjusted EBITDA* 125 $1,972 Adjusted 20 EBITDA* 423 $1,693 (195) (50) (9) 30 91 (170) 630 1,856 231 741 (337) Global Metals and Mining Confe
Slide 9: Copper Business Unit
Copper Business Unit Strong quarterly copper production as QB Operations continued to ramp up Q1 2024 Performance Q1 2024 Highlights vs. Q1 2023 Realized Production Sales Revenue Net Cash Gross Profit Gross Profit • Higher production reflects QB’s ramp-up and Price Unit Cost* before Depreciation and
Slide 10: Zinc Business Unit
Zinc Business Unit Significant decline in zinc prices; strong quarterly production at Red Dog Q1 2024 Performance Q1 2024 Highlights vs. Q1 2023 Realized Production Sales Revenue Net Cash Gross Profit Gross Profit • Results reflect significantly lower zinc prices and Price Concentrate | Refined Conc
Slide 11: Steelmaking Coal Business Unit (EVR)
Steelmaking Coal Business Unit (EVR) Strong performance despite significant weather impacts in January Q1 2024 Performance Q1 2024 Highlights vs. Q1 2023 Realized Price Production Sales Revenue Unit Costs* Gross Profit Gross Profit • Sales within our guidance of 5.9-6.3 Mt US$ | C$ US$ | C$ before D
Slide 12: Disciplined Capital Allocation Framework
Disciplined Capital Allocation Framework Commitment to return 30-100% of available cash flow to shareholders* Balancing growth with cash returns to shareholders while maintaining a strong balance sheet Sustaining Base Supplemental Cash Flow Capital Dividend Shareholder Distributions including stripp
Slide 13: Considerations for Use of Transaction Proceeds
Considerations for Use of Transaction Proceeds Ensures Teck is well-positioned to unlock the full potential of our base metals business Maintain investment grade credit metrics through the cycle – targeting net debt to adjusted EBITDA* of 1.0x net debt to Reduce EBITDA* gross debt of to 1.0x maintai
Slide 14: Strong Balance Sheet and Shareholder Returns
Strong Balance Sheet and Shareholder Returns Strong balance sheet Balancing growth with shareholder returns Liquidity1 Cash Position1 Share Buybacks $7.1B $1.6B • Board authorized up to $500 million share buyback in February 2024, of which $80 million was completed in Q1 2024 Dividends • Paid quarte
Slide 15: Jonathan Price
Jonathan Price President and Chief Executive Officer Global Metals and Mining Conference
Slide 16: Strong Copper Market Fundamentals
Strong Copper Market Fundamentals In the short term, concentrate tightness is moving to metals Annual Production Losses1 (Mt) • 2023 global mine production below market expectations by >2.0 Mt Actual Production Annualized Loss Lost Production • Net mine growth in last 5 years ~1.2 Mt vs. guidance of
Slide 17: Zinc Market Turns on Mine Closures
Zinc Market Turns on Mine Closures Mine closures are driving current concentrate tightness Drivers of 2024 Concentrate Deficit1 (kt) • Low zinc prices force mine closures starting last year 14,000 Mine supply 13,662 weakened 8% • Raw material shortages and weak economics impacting smelter 13,500 250
Slide 18: Continuing to Advance Near-Term Development Options
Continuing to Advance Near-Term Development Options Possible sanctioning in 2025 Near-Term Development Options Q1 2024 Update Targeted Upcoming Milestones Highland Valley Mine Life Extension Responded to information requests Progress engineering and design, project (Cu-Mo | Brownfield | British Colu
Slide 19: Our Priorities
Our Priorities Complete sale of steelmaking coal - minority stake sale to Nippon Steel complete; regulatory approvals underway on majority sale to Glencore Drive safe operational performance across the portfolio, ensuring we deliver on our market commitments Consistent performance of QB at design ca
Slide 20: Long-term Sustainable Shareholder Value Creation Strategy
Value Creation Strategy Capitalizing on strong demand in the transition to a low-carbon economy Focus on Unlock the value of excellence in industry leading operations and copper growth projects Long-term sustainable Balance growth Sustainability shareholder and cash returns to shareholders leadershi
Slide 21: Appendix
Appendix Global Metals and Mining Conference
Slide 22: Unrivalled Copper Growth Opportunities
Unrivalled Copper Growth Opportunities Multiple pathways to value creation Potential Annual CuEq Production Growth1 (kt; reporting basis; first 5 years average annual production by asset) Current Operating Assets Near-Term Development Options Investing Today For Longer-Term Growth Suite of options d
Slide 23: Copper Guidance
Copper Guidance Guidance includes Quebrada Blanca Production1,2 (kt) Net Cash Unit Costs*,1,3 (US$/lb) Copper in Concentrate 550-620 550-620 530-600 1.85-2.25 465-540 50-60 50-60 45-55 1.87 38-45 80-90 90-100 85-95 1.56 85-95 297 140-160 130-150 120-140 Carmen de Andacollo 112-125 40 Antamina (22.5%
Slide 24: Zinc Guidance
Zinc Guidance Production1,2 (kt) Red Dog Zinc in Concentrate Sales1 (kt) Net Cash Unit Costs*,1,3 (US$/lb) Zinc in Concentrate 644 565-630 555-615 104 Antamina (22.5%) 45-60 0.55-0.65 95-105 465-525 0.55 55-65 400-445 35-45 0.44 85 Red Dog 540 520-570 460-510 410-460 365-400 50-60 2023 2024E 2025E 2
Slide 25: Steelmaking Coal Guidance
Steelmaking Coal Guidance Sales and Production1 (Mt) Capital Expenditures1 (C$M) Sales Production 1,452 ~1,350-1,750 1,167 15 10.0 24.0-26.0 24.0-26.0 24.0-26.0 24.0-26.0 550 9.0 23.7 30 -750 8.0 7.0 5.9 6.0-6.4 649 6.0 5.0 Growth 617 800 4.0 Capitalized Stripping -1,000 3.0 778 2.0 520 1.0 Sustaini
Slide 26: Cost of Sales 2023
Cost of Sales 2023 Copper Steelmaking Coal Cost of Sales (C$) Operating Costs Cost of Sales (C$) Operating Costs D&A Labour 25% Labour 26% 20% Contractors & Consultants 17% Contractors & Consultants 17% D&A Operating Royalties Operating Supplies & Parts 15% 24% Costs Operating Supplies & Parts 14% 1
Slide 27: Sensitivities
Sensitivities Estimated Effect of Changes on our Annualized Profitability1 ($M) Estimated Effect on Profit Attributable Estimated Effect 2024 Mid-Range to Shareholders3 on EBITDA*, 3 Production Estimates2 Changes ($ in millions) ($ in millions) US$ exchange C$0.01 $ 54 $ 92 Copper (kt) 502.5 US$0.01
Slide 28: Settlement Pricing Adjustments
Settlement Pricing Adjustments Simplified Settlement Pricing Adjustment Model for Base Metals (Pre-tax settlement pricing adjustment in C$M) 300 Outstanding at Outstanding at Quarterly Pricing March 31, 2024 December 31, 2023 Adjustments 230 Mlbs | US$/lb Mlbs | US$/lb C$M 160 Copper 157 $ 4.00 127
Slide 29: Endnotes
Endnotes Slide 14: Strong Balance Sheet and Shareholder Returns Slide 24: Zinc Guidance 1. As at April 24, 2024. See Teck’s Q1 2024 press release for further details. 1. As at April 24, 2024. See Teck’s Q1 2024 press release for further details. 2. As at March 31, 2024. 2. We include 22.5% of produc
Slide 30: Non-GAAP Financial Measures and Ratios
Non-GAAP Financial Measures and Ratios Global Metals and Mining Conference
Slide 31: Non-GAAP Financial Measures and Ratios
Non-GAAP Financial Measures and Ratios Our financial results are prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board. This presentation includes reference to certain non-GAAP financial measures and non-GAAP ratios,
Slide 32: Reconciliation of Segmented EBITDA
Reconciliation of Segmented EBITDA Reconciliation between Segmented Profit and Segmented EBITDA ($M) Steelmaking 3 months ending March 31, 2024 Copper Zinc Coal Corporate Total Profit (loss) before taxes from continuing operations $M (183) 43 916 (35) 741 Net finance expense $M 312 16 35 (132) 231 D
Slide 33: First Quarter 2024 Conference Call
First Quarter 2024 Conference Call April 25, 2024 Global Metals and Mining Conference