25 slides from Teck Resources Limited Class A's earnings presentation, Feb 13, 2014
Slide 1: Fourth Quarter 2013 Investor Conference Call & Webcast
Fourth Quarter 2013 Investor Conference Call & Webcast February 13, 2014
Slide 2: Forward Looking Information
Forward Looking Information Both these slides and the accompanying oral presentation contain certain forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and forward-looking information within the meaning of the Securities Act (Ontario).
Slide 3: Speakers
Q4 2013 Investor Conference Call Speakers Don Lindsay President & CEO Ron Millos SVP Finance & CFO 3
Slide 4: 2013 Results Highlights
2013 Results Highlights • Solid operational performance - Met or exceeded production targets - Record coal sales - Record annual throughput at four mines • Exceeded the goals of our Cost Reduction Program - >$380M of annual ongoing annual potential cost savings identified and ~$360 million implement
Slide 5: 2013 Results Overview
2013 Results Overview Diversified, Resourceful, Sustainable Revenues $ 9.4 Billion Gross profit $ 3.7 Billion (before depreciation & amortization) Profit $ 961 Million (attributable to shareholders) Adjusted profit* $ 1.0 Billion (attributable to shareholders) $1.74/share EBITDA $ 3.2 Billion 5 * No
Slide 6: Met or Exceeded Guidance…Again
2013 Results Met or Exceeded Guidance…Again 2013 2013 Guidance Actual Steelmaking Coal Record Coal production 24.5–25.5 Mt 25.6 Mt coal sales Coal site costs $51-58 /t $51 /t Cost reduction >10% Copper Copper production 340–360 kt 364 kt Second highest copper production year Zinc Record annual
Slide 7: Highlights
Q4 2013 Results Highlights • Record quarterly copper production of 105,000 tonnes • Benefiting from strengthening of the US dollar, relative to the Canadian dollar • Announced with partners development of the Fort Hills oil sands project • Announced $0.45 dividend per share, which was paid on Januar
Slide 8: Overview
Q4 2013 Results Overview Revenues $ 2.4 Billion Gross profit $ 875 Million (before depreciation & amortization) Profit $ 232 Million (attributable to shareholders) Adjusted profit* $ 227 Million (attributable to shareholders) $0.40/share EBITDA $ 766 Million 8 * Non-GAAP financial measure. See ‘Use
Slide 9: Steelmaking Coal
Q4 2013 Results Steelmaking Coal Q4 Q4 Q3 2013 2012 2013 Production (Mt) 6.7 6.4 6.7 Sales (Mt) 6.5 6.4 7.6 Average realized price (US$/t) 142 159 139 Average realized price (C$/t) 149 157 144 Site costs (C$/t) 55 49 50 Transportation costs (C$/t) 39 41 38 Financial Results Revenue (C$ Million) 963
Slide 10: Steelmaking Coal Update
Q4 2013 Results Steelmaking Coal Update Rolling Four-Quarter Coal Production (Mt) Quintette 27 Coal production of • If market conditions are favourable, can 25.6 Mt in 2014 proceed with reopening with production 25 possible within 14 months of a decision Elk Valley 23 • Brownfields growth target ach
Slide 11: Copper
Q4 2013 Results Copper Q4 Q4 Q3 2013 2012 2013 Copper in Concentrate Production (kt) 88 88 77 Sales (kt) 83 90 80 Copper in Cathode Production (kt) 17 15 14 Sales (kt) 16 16 15 Moly in Concentrate Production (M lbs) 2.2 3.0 1.7 Sales (M lbs) 2.2 3.6 1.9 Financial Results Revenue (C$ Million) 762 895
Slide 12: Copper Update
Q4 2013 Results Copper Update Rolling Four-Quarter Copper Production (kt) • Strong throughput at Highland Valley 380 • Set new records at Antamina, including quarterly copper production • Quebrada Blanca production up 13% 340 - Restructuring plan very successful in lowering the operating cost struct
Slide 13: Copper Update – HVC MOP Project
Q4 2013 Results Copper Update – HVC MOP Project First Concentrate Production In New Flotation Plant 13
Slide 14: Zinc
Q4 2013 Results Zinc Q4 Q4 Q3 2013 2012 2013 Zinc in Concentrate Production (kt) 158 157 156 Sales (kt) 166 207 191 Refined Zinc Production (kt) 69 67 77 Sales (kt) 73 67 78 Lead in Concentrate Production (kt) 25 26 23 Sales (kt) 40 50 60 Refined Lead Production (kt) 21 24 24 Sales (kt) 22 23 23 Fin
Slide 15: Energy: Fort Hills Update
Q4 2013 Results Energy Fort Hills Update • $298M spending in 2013, including earn-in commitments • Fully-escalated capital investment: ~$2.94B over four years (2014-2017), including remaining earn-in of $240M - Estimated spending in 2014: $850M, based on Suncor’s planned project spending of $3.16B 1
Slide 16: Speakers
Q4 2013 Investor Conference Call Speakers Don Lindsay President & CEO Ron Millos SVP Finance & CFO 16
Slide 17: Cash Changes
Q4 2013 Results Cash Changes $ Millions Cash Flow From Operations 636 Working capital changes 133 Purchase of property, plant, & equipment (541) Capitalized production stripping costs (185) Financial investments & other assets (47) Proceeds from sale of investments & other assets 498 Repayment of de
Slide 18: Pricing Adjustments
Q4 2013 Results Pricing Adjustments Quarterly Change In Commodity Prices vs. Settlement Adjustment Quarterly change in commodity prices drive settlement pricing adjustments 100 • Copper: $0.04 Q1 2012 • Zinc: $0.08 Pre-tax Settlement Adjustment ($ millions) • Cumulative change: $0.12 Q3 2012 50 Pric
Slide 19: Strong Balance Sheet
Q4 2013 Results Strong Balance Sheet* Investment Grade Credit Rating of Mid-BBB (Stable Outlook) $3,000 US$300M of notes due to end of 2016 ~US$2.6B • Weighted Average Maturity 15.5 years $2,000 • Weighted Average Interest (Coupon) Rate 4.8% • Annual Interest (Coupon) Payments US$346M US$M • Note Ma
Slide 20: Production & Site Cost Guidance
2014 Outlook Production & Site Cost Guidance Guidance Steelmaking Coal Coal production 26-27 Mt Coal site costs C$55-60 /t Coal transportation costs C$38-42 /t Coal costs – combined* US$84-92 /t Copper Copper production 320–340 kt Copper cash unit costs (net of by-product credits) US$1.70-1.90 /lb Z
Slide 21: Capex Guidance
2014 Outlook Capex Guidance Major New Mine Capitalized ($M) Sustaining Enhancement Development* Stripping Total Copper 235 100 120 255 710 Coal 215 70 25 415 725 Zinc 150 - 15 30 195 Energy - - 955 - 955 Corporate 20 - - - 20 Total 620 170 1,115 700 2,605 21
Slide 22: Leverage to Strong Commodities
2014 Outlook Leverage to Strong Commodities Production Guidance 2014 (Mid-Pt) Change Profit ∆ EBITDA ∆1 • Coal 26.5 Mt US$1/tonne $19 M / $1 ∆ $29 M / $1 ∆ • Copper 330 kt US$0.01/lb $5 M / $.01 ∆ $7 M / $.01 ∆ • Zinc2 855 kt US$0.01/lb $7 M / $.01 ∆ $10 M / $.01 ∆ • $C/$US C$0.01 $40 M / $.01 ∆ $62
Slide 23: Speakers
Q4 2013 Investor Conference Call Speakers Don Lindsay President & CEO Ron Millos SVP Finance & CFO 23
Slide 24: Summary
Summary Exceeded annual production targets Coal production capacity increasing Continued progress on cost reduction Prudent capital allocation to best risk/reward projects Maintained dividend 24
Slide 25: Fourth Quarter 2013 Investor Conference Call & Webcast
Fourth Quarter 2013 Investor Conference Call & Webcast February 13, 2014