27 slides from Teck Resources Limited Class A's earnings presentation, Apr 19, 2011
Slide 1: First Quarter 2011 Investor Conference Call and Webcast
First Quarter 2011 Investor Conference Call and Webcast April 19, 2011
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: Forward Looking Information
Forward Looking Information These forward-looking statements involve numerous assumptions, risks and uncertainties and actual results may vary materially. These statements are based on a number of assumptions, including, but not limited to, assumptions regarding general business and economic conditi
Slide 4: Speakers
Q1 Investor Conference Call Speakers D Don Li Lindsay d P President id t & CEO Ron Millos SVP Finance & CFO 4
Slide 5: Q1 Highlights
Q1 Highlights Revenues up 25%, Gross Profit* up 30% Revenues $ 2,366 million Gross Profit $ 1,113 million (before depreciation & amortization) Profit $ 461 million (attributable to shareholders) EBITDA $ 1,034 million *before depreciation & amortization 5
Slide 6: Q1 2011 Profit
Q1 2011 Profit Earnings per Share (C$) 1.00 Adjusted Profit $0.76 0.75 Q1 2011 Q1 2010 +124% 0.50 Profit ($millions) $450 $198 $0 34 $0.34 0.25 EPS - Basic $0.76 $0.34 Dil t d Diluted $0 76 $0.76 $0 33 $0.33 0.00 Q1 2011 Q1 2010 6
Slide 7: Q1 2011 Highlights
Q1 2011 Highlights Strong Business Fundamentals • Q2 Premium hard coking coal benchmark price US$330/tonne • $1.0 billion cash balance after dividends & capex • Net debt: $3.7 billion, Net debt to net-debt-plus- equity under 19% • Four-year port service agreement • New labour agreement at Elkview (A
Slide 8: Adjusted Profit
Adjusted Profit ($ millions, net of taxes) Q1 ’11 Q1 ’10 Q4 '10 Profit attributable to $ 461 $ 896 $ 325 Shareholders as reported Asset Sales & Other (8) (639) (2) F/X (gains) losses on net debt (7) (50) (25) Derivative (gains) losses 4 (32) (86) Financing items & Impairment charges – 23 289 Tax Ite
Slide 9: Q1 Guidance
Q1 Guidance Revised guidance met or exceeded Red Dog zinc & lead sales: 90 kt vs. 101kt Q1 2011 coall sales: l 4 4.6 6 tto 4 4.9 9 Mt vs. 5.0 5 0 Mt Coal pricing: US$206/t to $211/t vs. $207/t Coal costs: C$77-80/t Q1 site & C$30-34/t 2010 tpt $110/t Copper production: down ~15 kt for year
Slide 10: Coal
Coal Q1 Q1 Q4 Coal - Mt 2011 2010 2010 Production 4.4 5.7 6.0 Sales 5.0 5.3 6.0 Average Price (US$/t) 207 140 200 (C$/t) 206 150 204 Site Costs (C$/t) 76 60 54 Transportation Costs (C$/t) $ 34 30 35 Financial Results C$ millions Revenue 1,019 790 1,215 Gross Profit 477 316 681 (before depreciation a
Slide 11: Coal – Rail Challenges
Coal – Rail Challenges Severe winter weather inherent in Q1 11
Slide 12: Coal – Realized Price
Coal – Realized Price 350 Teck Realized Price Realized Price vs. Benchmark Q2 Guidance Range g 300 • Q2 premium products: US$330/t Benchmark Price • 90% hard coking coal on average 250 • Carry-over coal from Q1: S$ / tonne 200 – 1.4 Mt carry-over of which about 1 1.2 2 Mt to be sold in Q2 150 – ~0.2
Slide 13: Coal – Equipment
Coal – Equipment Growing Coal Production • Expanding mine fleet New Additions to Truck Fleet By Quarter Cumulative – 3 shovels (delivered) 8 40 – 37 trucks 7 35 6 30 • Expanding plant capacities 5 25 – Greenhills plant – Q3 4 20 – Elkview plant – Q4 3 15 2 10 • Increasing workforce 1 5 – Additional
Slide 14: Copper
Copper Q1 Q1 Q4 2011 2010 2010 Copper in Concentrate (kt) Production1 57 47 60 Sales1 56 43 55 Copper C C Cathode th d (kt) Production 18 25 25 Sales 17 28 26 Moly in Concentrate (M lbs) Production 1.9 2.1 2.7 Sales 2.4 1.9 2.3 Financial Results C$ millions Revenue 773 594 775 Gross Profit 469 368 4
Slide 15: Andacollo Expansion Study
Andacollo Expansion Study Feasibility Study Q4 2011 Carmen de Andacollo Concentrator • Plant thru-put to ~75 ktpd • Copper production to >100 tpa • Confirm added reserves • Water and permitting Grinding • SAG mill, ball mill, flotation & Flotation associated p plant / equipment q p 15
Slide 16: Antamina Expansion
Antamina Expansion • Ore throughput 38% to 130ktpd • Project 40% complete • Q1 2012 first additional ore 16
Slide 17: Zinc
Zinc Q1 Q1 Q4 Zinc in Concentrate ((kt)) 2011 2010 2010 Production 166 163 153 Sales 129 161 241 Refined Zinc (kt) Production P d ti 72 68 70 Sales 73 66 68 Lead in Concentrate (kt) Production 21 35 17 Sales – – 41 Refined Lead (kt) Production 23 22 13 Sales 20 18 13 Financial Results C$ millions Re
Slide 18: Energy
Energy • Fort Hills – Phase I bitumen production planned for 2016 • Frontier F ti and d Equinox E i – Regulatory application late 2011 • Lease 421 – Seismic program completed Q1 2011 • Wintering Hills Windfarm – On schedule, expected to be complete by the end of 2011 18
Slide 19: Speakers
Q1 Investor Conference Call Speakers D Li Don Lindsay d P id t & CEO President Ron Millos SVP Finance & CFO 19
Slide 20: Q1 2011 – Cash Changes
Q1 2011 – Cash Changes $Millions Cash Flow from Operations p 874 Working Capital Changes (120) Capital p Expenditures p / Investments ((244)) Debt principal and interest payments (101) Non-controlling o co t o g Interests te ests ((21)) Dividends (177) Exchange & Other 3 Cash & STI Increase 214 Cash
Slide 21: Final Pricing Adjustments
Final Pricing Adjustments Settlement Outstanding at Outstanding at Adjustment (C$ M) December 31, 2010 March 31, 2011 Before Tax* Copper 98 M lbs $4 39 US$/lb $4.39 128 M lbs $4 27 US$/lb $4.27 -$14 $14 Million Zinc 140 M lbs $1.11 US$/lb 116 M lbs $1.06 US$/lb -$2 Million Lead 2 M lbs $1.17 US$/lb
Slide 22: Q2 Guidance
Q2 Guidance Factors to consider • Red Dog zinc sales ~77 kt, lead ~0kt • Coal sales 5.5 to 6.0 Mt • Coal p pricing g US $280/t to $290/t • Coal costs ~C$63-67/t site, ~C$30-34/t tpt (annual) • Settlement adjustments 22
Slide 23: Speakers
Q2 Investor Conference Call Speakers R Mill Ron Millos SVP Finance Fi & CFO Don Lindsay President & CEO 23
Slide 24: Project Developments
Project Developments • Quintette Coal Mine ԟ Feasibility Study expected mid-2011 • Relincho Copper Mine ԟ Pre-feasibility P f ibilit study t d expected t d Q3 2011 • Quebrada Blanca Copper Concentrate ԟ Feasibility study expected early 2012 • Galore Creek Copper Mine ԟ Pre Pre-feasibility feasibilit
Slide 25: Summary
Summary Q1 Challenging quarter (as usual) Strong cash flow & increasing cash balance Coal Production increasing Copper Production increasing Development Projects advancing 25
Slide 26: Teck Coal - Leadership
Teck Coal - Leadership Ian Kilgour, Senior Vice President • 2007 – 2010 President and CEO of Antamina Strong background in coal • General Manager, Business Improvement and Optimization at BMA Coal • General Manager at BHP Goonyella Riverside coal mine 26
Slide 27: First Quarter 2011
First Quarter 2011 Investor Conference Call and Webcast April 19, 2011