18 slides from Teck Resources Limited Class A's earnings presentation, Apr 21, 2015
Slide 1: First Quarter 2015 Results
First Quarter 2015 Results April 21, 2015
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: Focus on Cost Management & Operational Performance
Focus on Cost Management & Operational Performance • Ongoing focus on cost management & operational performance • Weak commodity price environment • Strong US dollar & low oil prices provide benefits • Positive cash flows after sustaining capex at all operations • Solid financial position 3
Slide 4: Quarterly Results
Quarterly Results Q1 2015 Results Revenue $ 2.0 Billion Gross profit $ 685 Million (before depreciation & amortization) EBITDA $ 546 Million Profit $ 68 Million (attributable to shareholders) Adjusted profit* (attributable to shareholders) of $64M, or $0.11/share 4 * Non-GAAP financial measure. See
Slide 5: Q1 2015 Operational Highlights
Q1 2015 Operational Highlights To Production Q1 2015 Q1 2014 • Record first quarter coal sales Coal (Mt) 6.8 ▲ 0.1 and production Copper (kt) 81 ▼4 • Mined and refined zinc Zinc in concentrate (kt)2 166 ▲3 production also up Zinc – refined (kt) 75 ▲ 13 • Pend Oreille moving towards full production
Slide 6: Steelmaking Coal Quarterly Results
Steelmaking Coal Quarterly Results Sales (Mt) Realized Price (C$/tonne) Revenue (C$M) 143 880 865 6.8 6.2 128 Q1 2014 Q1 2015 Q1 2014 Q1 2015 Q1 2014 Q1 2015 Production (Mt) Unit Costs (C$/tonne) Gross Profit1 (C$M) 0.1 Mt 95 flat 6.8 85 294 295 6.7 Inventory 5 0 Transport 38 36 Site 52 49 Q1 2014 Q
Slide 7: Copper Quarterly Results
Copper Quarterly Results Sales (kt) Realized Price (US$/lb) Revenue (C$M) 3.25 652 83 2.67 523 71 Q1 2014 Q1 2015 Q1 2014 Q1 2015 Q1 2014 Q1 2015 Production (kt) Total Cash Unit Costs1 (US$/lb) Gross Profit2 (C$M) 318 1.62 1.53 85 81 210 Q1 2014 Q1 2015 Q1 2014 Q1 2015 Q1 2014 Q1 2015 Total cash uni
Slide 8: Zinc Quarterly Results
Zinc Quarterly Results Zinc Sales (kt) Zinc Realized Price (US$/lb) Revenue (C$M) Conc1 Refined 635 1 kt 0.97 139 140 73 0.91 551 62 Q1 2014 Q1 2015 Q1 2014 Q1 2015 Q1 2014 Q1 2015 Q1 2014 Q1 2015 Zinc Production (kt) Lead Production (kt) Gross Profit2 (C$M) Conc1 Refined Conc Refined 179 75 32 flat
Slide 9: Base Metal Stocks Low on Days Consumption
Base Metal Stocks Low on Days Consumption 345¢ LME COPPER Prices 400 LME COPPER Stocks 325¢ Thousands 2014 300 305¢ Stocks have risen 160,225t or 90.5% in 2015 Copper 285¢ 2015 200 Reported Stocks 265¢ 2013 332.1¢ US/lb 2014 311.2¢ US/lb 10 days of 100 Stocks fell 189,400t 245¢ 2015 264.9¢ US/lb con
Slide 10: Fort Hills Project Update
Fort Hills Project Update • Project substantially on Primary Separation Cells & Flotation Columns schedule − Engineering >75% complete − Construction progressing to plan, with current workforce of ~3,000 • Logistics solutions contracted − Diluent & diluted bitumen pipeline capacity contracted with E
Slide 11: Fort Hills Dedicated Storage
Fort Hills Dedicated Storage Dedicated Storage Tank at Gibson Terminal in Hardisty, AB Inbound Pipeline Teck Pipe & Tank 1 Battle River Station (ENB) 11 1. Planned connection to TransCanada Energy East is via modification of existing Keystone connection.
Slide 12: Cash Flow
Cash Flow Cash Changes in Q1 2015 3000 2500 +$372 ($371) $2,029 ($166) 2000 ($192) ($259) $1,567 $ Millions +$154 1500 1000 500 0 Cash - start of Cash flow from PP&E, incl. Fort Capitalized Debt interest & Dividends paid FX, distributions to Cash - quarter end quarter operations & Hills stripping pr
Slide 13: Pricing Adjustments
Pricing Adjustments Outstanding at Outstanding at March 31, 2015 December 31, 2014 Pounds (M) US$/lb Pounds (M) US$/lb Copper 214 2.73 208 2.86 Zinc 93 0.94 117 0.99 • Negative pricing adjustments Simplified Pricing Adjustment Model of $44M in Q1 2015 Pre-tax Settlement Adjustment (C$M) • Driven by
Slide 14: Strong Balance Sheet & Liquidity
Strong Balance Sheet & Liquidity Liquidity of >C$5B, including unused US$3B line of credit Investment Grade Rating $3,000 • Debt-to-debt-plus-equity of 33% • US$300M of notes due to end of 2016 • Weighted average maturity ~14 years $2,000 • Weighted average coupon (interest rate) 4.8% US$M • Average
Slide 15: Investment Grade Credit Rating
Investment Grade Credit Rating Teck’s 10-Year Bond Spreads 500 Teck 3.75% 02/23 400 300 bps 200 Jan 30th: S&P rating BBB- stable outlook 100 October 1, 2014 April 17, 2015 0 Ten year bond spreads tightened following stable outlook 15
Slide 16: Dividend Reflects Current Markets
Dividend Reflects Current Markets Change in Product Prices and Business Unit Margins since Q4 2012 10% US$ prices down by average of 24% • Since dividend set in Q4 2012 0% - Prices down 24% US dollar terms -10% -20% - Margins down 25% -30% -40% • Margins fund capex, debt, overhead -50% -60% and taxe
Slide 17: Near-Term Priorities
Near-Term Priorities • Focusing on cost reductions • Optimizing operating performance • Maintaining a strong financial position 17
Slide 18: First Quarter 2015 Results
First Quarter 2015 Results April 21, 2015