Teck Resources Limited Class A · TSX:TECK.A
Teck Resources Limited Class A — Q2 2022 Earnings Presentation
41 slides from Teck Resources Limited Class A's earnings presentation, Jul 27, 2022
Slide 1: Second Quarter 2022 Results
Second Quarter 2022 Results July 27, 2022 Global Metals and Mining Conference 1 1
Slide 2: Caution Regarding Forward-Looking Statements
Caution Regarding Forward-Looking Statements Both these slides and the accompanying oral presentation contain certain forward-looking information and forward-looking statements as defined in applicable securities laws (collectively referred to as forward-looking statements). These statements relate
Slide 3: Global Metals and Mining Conference
Global Metals and Mining Conference 3
Slide 4: Q2 2022 Highlights
Q2 2022 Highlights Record profitability • Record adjusted profit attributable to shareholders >5x higher than Q2 2021 at $1.8B, and profit attributable to shareholders of $1.7B • Record adjusted EBITDA >3x higher than Q2 2021 at $3.3B, and record profit before taxes of $2.7B QB2 achieving key milest
Slide 5: Fourth Consecutive Quarter of Record Profitability
Fourth Consecutive Quarter of Record Profitability Strong gross profit across business units ($M) Record adjusted EBITDA ($M) Gross profit (loss) Q2 2022 Q2 2021 Q2 2021 Q2 2022 Copper $ 450 $ 429 $3,290 Zinc 156 61 Steelmaking coal 2,536 233 Energy 146 (34) $989 Total gross profit $ 3,288 $ 689 ...
Slide 6: Operations Overview
Operations Overview Global Metals and Mining Conference 6
Slide 7: Copper Business Unit
Copper Business Unit Q2 2022 operating overview Q2 2021 Q2 2022 76 EBITDA 72 72 66 534 4.39 4.28 89 27 Includes $251M in negative pricing adjustments EBITDA 210 1.37 1.54 418 109 D&A Net Finance 39 Expense 62 Profit before Tax Production Sales Realized Copper Price Net Cash Unit Costs Profitability
Slide 8: Zinc Business Unit
Zinc Business Unit Q2 2022 operating overview Includes $27M Q2 2021 Q2 2022 in positive pricing adjustments EBITDA 140 143 236 1.79 38 D&A 10 Net Finance 1.32 Expense 64 70 69 67 56 EBITDA 0.61 188 Profit before Tax 40 78 0.44 35 11 32 Refined Concentrate Refined Concentrate Realized Zinc Price Net
Slide 9: Steelmaking Coal Business Unit
Steelmaking Coal Business Unit Q2 2022 operating overview Includes $73M in negative pricing adjustments EBITDA Q2 2021 Q2 2022 2,740 453 270 D&A 6.4 6.2 6.3 22 Net Finance Expense 5.3 141 2,448 Profit before Tax 144 106 46 Transportation EBITDA 42 Adjusted Site 435 95 Cash Cost 224 64 of Sales 20 19
Slide 10: Energy Business Unit
Energy Business Unit Q2 2022 operating overview Q2 2021 Q2 2022 98 4.1 EBITDA 3.1 174 35 D&A 57 50 Net Finance 2.2 7 Expense 1.6 37 EBITDA 132 Profit before Tax 22 -22 6 -50 Production Sales Blended Bitumen Price Adjusted Operating Costs Profitability (Mbbls) (Mbbls) Realized (US$/bbl) ($/bbl) ($M)
Slide 11: Executing our Copper Growth Strategy Through QB2
Executing our Copper Growth Strategy Through QB2 Delivering to key milestones as we drive towards first copper Focus remains on completion of key facilities for first copper from Line 1 late this year • Completed construction of the 220 kV transmission system • Continuing sequential energization of
Slide 12: QB2 Photo Tour
QB2 Photo Tour QB2 Port Offshore Main jetty construction Global Metals and Mining Conference May 2022 12
Slide 13: QB2 Photo Tour
QB2 Photo Tour QB2 Port Onshore Desalination plant (foreground) and seawater pre-treatment works (background) Global Metals and Mining Conference June 2022 13
Slide 14: QB2 Photo Tour
QB2 Photo Tour QB2 Mine Area Truck shop transferred to operations Global Metals and Mining Conference July 2022 14
Slide 15: QB2 Photo Tour
QB2 Photo Tour QB2 Power Gas insulated switchgear at electrical substation for Pump Station 3 Global Metals and Mining Conference July 2022 15
Slide 16: QB2 Photo Tour
QB2 Photo Tour QB2 Pipelines Pump Station Number 5 and power transmission lines Global Metals and Mining Conference May 2022 16
Slide 17: QB2 Photo Tour
QB2 Photo Tour QB2 Concentrator Area Ore stacker structure and stockpile dome assembly Global Metals and Mining Conference May 2022 17
Slide 18: QB2 Photo Tour
QB2 Photo Tour QB2 Concentrator Area Grinding building and flotation area Global Metals and Mining Conference May 2022 18
Slide 19: QB2 Photo Tour
QB2 Photo Tour QB2 Concentrator Area SAG Mill liner installation Global Metals and Mining Conference May 2022 19
Slide 20: QB2 Photo Tour
QB2 Photo Tour QB2 Tailings Management Facility Tailings launder Global Metals and Mining Conference May 2022 20
Slide 21: QB2 Photo Tour
QB2 Photo Tour QB2 Tailings Management Facility Starter dam Global Metals and Mining Conference June 2022 21
Slide 22: Financial Overview
Financial Overview Global Metals and Mining Conference 22
Slide 23: Commodity Price Performance
Commodity Price Performance Recession fears outweigh low inventories and reduced production Relative Performance since April 20211 Q2 2021 Q2 2022 Commodity Price Performance Q2 2022 Q1 2022 QoQ Change Q2 2021 YoY Change Steelmaking coal – Realized (US$/tonne) 453 357 27% 144 215% Western Canadian S
Slide 24: Record Financial Performance
Record Financial Performance Profitability ($M) Profit before Tax Net Finance Expense D&A Adjustments Non-controllable Controllable Adjusted Continued inflationary 2,663 (185) 193 (376) EBITDA cost pressures 151 (101) $3,290 (44) 129 • 14% increase in 452 operating costs from LY • ~50% due to diesel
Slide 25: Significant Cash Flow from Operations
Significant Cash Flow from Operations Key Cash Changes in Q2 2022 ($M) 226 (1,091) 2,921 (927) (572) (255) (111) (67) 113 2,702 2,465 Opening cash Cash flow from QB2 advances PP&E Redemption, Purchase and Capitalized Interest and net Dividends paid Other Closing cash position operations from SMM/SC
Slide 26: Strong Financial Position
Strong Financial Position Strong Balance Sheet Returns to Shareholders and Debt Repaid in Q2 2022 Liquidity1 Net Debt to Adjusted EBITDA2 Credit Rating1 Dividends Share Buybacks Debt Repayment $8.4B 0.4x Investment grade $67M $572M US$650M Debt Maturity Ladder2 (US$M) Returns to Shareholders and Deb
Slide 27: Capital Investments
Capital Investments Capital Investments Profile ($M) QB2 (100%) Growth Capitalized Stripping Sustaining Changes to 2022 guidance • QB2 capex increased ~$200M to $2.7B-2.9B 2,700 to (was $2.5B-$2.7B) 2,900 2,580 • Steelmaking coal sustaining capex guidance reduced by $100M 1,643 1,220 Expect a reduct
Slide 28: Summary
Summary Global Metals and Mining Conference 28
Slide 29: Robust Long-Term Outlook for our Key Commodities
Robust Long-Term Outlook for our Key Commodities Growing demand driven by decarbonization Every 1MW of installed wind turbine capacity requires 9.6t copper for offshore 3.5t copper for onshore1 0.5t zinc2 35-50t steelmaking coal3 A 13MW offshore wind turbine requires approximately 125t copper 7t zin
Slide 30: Driving Long-Term Sustainable Shareholder Value
Driving Long-Term Sustainable Shareholder Value Industry leading Rebalance portfolio copper growth of high-quality assets Long-term to low-carbon metals sustainable shareholder value Balance growth Leadership and cash returns in ESG and to shareholders operational excellence Global Metals and Mining
Slide 31: Appendix
Appendix Global Metals and Mining Conference 31
Slide 32: Production Guidance
Production Guidance Production (000’s tonnes except as noted) Previous Current Previous 3-Year Current 3-Year 2021 Actual 2022 Guidance 2022 Guidance1 Guidance (2023-2025) Guidance1 (2023-2025) Copper2,3,4 Highland Valley 130.8 127-133 127-133 130-160 130-160 Antamina 100.2 91-96 91-96 90-95 90-95 C
Slide 33: Sales and Unit Cost Guidance
Sales and Unit Cost Guidance Sales Unit Costs Q2 2022 Q3 2022 Previous Current Actual Guidance1 2021 Actual 2022 Guidance 2022 Guidance1 Zinc in concentrate Copper2 (US$/lb) Red Dog (kt) 56 215-240 Total cash unit costs 1.80 1.85-1.95 1.93-2.03 Steelmaking coal (Mt) 6.3 5.8-6.2 Net cash unit costs 1
Slide 34: Capital Expenditures Guidance
Capital Expenditures Guidance Teck’s share in C$ millions, except as noted Sustaining and Growth Capital Sustaining and Growth Capital (cont.) Previous 2022 Current 2022 Previous 2022 Current 2022 2021 Actual Guidance Guidance1 2021 Actual Guidance Guidance1 Sustaining Total sustaining and growth $
Slide 35: Water Treatment Guidance
Water Treatment Guidance Steelmaking Coal Capital Expenditures and Operating Costs Related to Water Treatment 3-Year Long-Term 2021 Previous 2022 Current 2022 Guidance1 Guidance1,3 (C$ millions, unless otherwise noted) Actual Guidance Guidance1 (2022-2024) (C$/tonne) Capital Expenditures Sustaining
Slide 36: Sensitivities
Sensitivities Sensitivity of our Annualized Profit Attributable to Shareholders and EBITDA1 Estimated Effect of Change on Estimated Effect 2022 Mid-Range Profit Attributable to Shareholders3 on EBITDA3 Production Estimates2 Changes ($ in millions) ($ in millions) US$ exchange C$0.01 $ 80 $ 122 Coppe
Slide 37: Settlement Pricing Adjustments
Settlement Pricing Adjustments Simplified Settlement Pricing Adjustment Model (Pre-tax settlement pricing adjustment in C$M) 300 Quarterly Outstanding at Outstanding at Pricing 230 June 30, 2022 March 31, 2022 Adjustments 160 Mlbs US$/lb Mlbs US$/lb C$M 90 Copper 174 $ 3.75 191 $ 4.71 $ (204) Zinc 1
Slide 38: Non-GAAP Financial Measures and Ratios
Non-GAAP Financial Measures and Ratios Global Metals and Mining Conference 38
Slide 39: Endnotes
Endnotes Slide 23: Commodity Price Performance Slide 35: Water Treatment Guidance 1. Source: Factset, Argus, Bloomberg. Weekly data as at July 21, 2022. 1. As at July 26, 2022. See Teck’s Q2 2022 press release for further details. 2. The 2022 portion is included in 2022 guidance. See Teck’s Q2 2022
Slide 40: 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 41: Second Quarter 2022 Results
Second Quarter 2022 Results July 27, 2022 Global Metals and Mining Conference 1 1