47 slides from Teck Resources Limited Class A's earnings presentation, Feb 18, 2021
Slide 1: Fourth Quarter 2020 Results
Fourth Quarter 2020 Results February 18, 2021
Slide 2: Caution Regarding Forward-Looking Statements
Caution Regarding Forward-Looking Statements Both these slides and the accompanying oral presentation certain forward-looking information and forward-looking statements as defined in applicable securities laws (collectively referred to as forward-looking statements). These statements relate to futur
Slide 3: 2020 Highlights
2020 Highlights One of the most challenging years • Generated strongest financial results of the year in Q4 2020 • Achieved our target of 40% overall completion of QB2 • Performed in line with plan at our operations in H2 2020, despite COVID-19 challenges • Steelmaking coal adjusted site cash cost o
Slide 4: Financial Overview
Financial Overview Q4 2020 2020 Revenue $ 2.6 billion $ 8.9 billion Gross profit before depreciation and amortization1 $ 911 million $ 2.8 billion Gross profit $ 505 million $ 1.3 billion Adjusted EBITDA1 $ 839 million $ 2.6 billion Profit (loss) attributable to shareholders $ (464) million $ (864)
Slide 5: Key Updates: QB2
Key Updates: QB2 Executing on our copper growth strategy Achieved overall progress target of 40% completion at year end 2020 • Construction continued to ramp up through Q4 2020, and work is progressing well across the project • Strict COVID-19 protocols in place and continuously enhanced to protect
Slide 6: QB2 Concentrator
QB2 Concentrator Aerial view of grinding lines: line 1 SAG and ball mills in place, line 2 concrete complete January 2021
Slide 7: QB2 Tailings Management Facility
QB2 Tailings Management Facility Continuing to raise starter dam, underflow drains completed December 2020
Slide 8: QB2 Pipeline
QB2 Pipeline Lowering in the first column of 48-inch pipe for water pipeline December 2020
Slide 9: QB2 Port Offshore
QB2 Port Offshore Aerial view of ongoing pile driving for jetty January 2021
Slide 10: QB2 Infrastructure
QB2 Infrastructure Remote Integrated Operations Center in Santiago January 2021
Slide 11: Key Updates: Operational Resilience In the Face of a Global Pandemic
Key Updates: Operational Resilience In the Face of a Global Pandemic Operations performed in line with plan Our Safest Year on Record in 2020 in H2 2020 and without significant Significant reduction in incident frequency in 2020 impacts to our 2021 operating plans Stringent COVID-19 prevention proto
Slide 12: Key Updates: Steelmaking Coal Business
Key Updates: Steelmaking Coal Business Increasing margins, not volumes • Completed construction of the Elkview Strong coal fundamentals underpinned saturated rock fill in Q4 2020, on schedule by global economic recovery and below budget Steelmaking Coal Prices2 (US$/t) Since January 1, 2011, the FOB
Slide 13: Key Updates: Steelmaking Coal Business
Key Updates: Steelmaking Coal Business Neptune facility upgrade is in the final stage of construction • Achieved 90% overall completion at end of January 2021 • All major equipment has been installed • Significant new facilities have been placed into operation and are performing to plan • Costs expe
Slide 14: Key Updates: Sustainability Leadership
Key Updates: Sustainability Leadership • Named to the 2021 Top ranked diversified metals mining company Global 100 Most Sustainable Corporations list • Top-ranked mining company 2020 World & North American Indices Bloomberg • Named to the 2021 • On the index for 11 Gender-Equality Index “A” rating s
Slide 15: Copper Business Unit
Copper Business Unit Q4 2020 Copper EBITDA1 ($M) • Strong Q4 2020, supported by higher copper $299M increase in Q4 2020 vs. Q4 2019 prices Non-controllable $199M Controllable $100M Cash $143M Non-Cash $56M All Cash • Lower mill throughput at Highland Valley 600 due to harder than expected ores 53 12
Slide 16: Zinc Business Unit
Zinc Business Unit Q4 2020 Zinc EBITDA1 ($M) • Red Dog zinc sales of 149 kt, in line with guidance $12M increase in Q4 2020 vs. Q4 2019 • Higher zinc production at Red Dog due to higher 300 Non-controllable $40M Controllable ($28M) Cash $44M Non-Cash ($4M) All Cash mill throughput and improved recov
Slide 17: Steelmaking Coal Business Unit
Steelmaking Coal Business Unit Q4 2020 Steelmaking Coal EBITDA1 ($M) • Sales were 6.1 Mt, near the high end of guidance ($159M) decrease in Q4 2020 vs. Q4 2019 • Average realized price reflects increased sales Non-controllable ($192M) Controllable $33M 400 Cash ($216M) Non-Cash $24M All Cash to Chin
Slide 18: Energy Business Unit
Energy Business Unit Q4 2020 Energy EBITDA1 ($M) • Realized prices and operating results $1,731M increase in Q4 2020 vs. Q4 2019 significantly impacted by a material decline Non-controllable $1,756M Controllable ($25M) Cash ($17M) Non-Cash $1,773M All Cash in benchmark oil prices and the decision to
Slide 19: Profit and Adjusted Profit
Profit and Adjusted Profit Q4 2020 2020 Profit (loss) attributable to shareholders $ (464) million $ (864) million Add (deduct): Asset impairments 438 million 912 million COVID-19 costs - 233 million Environmental costs 201 million 210 million Inventory write-downs 15 million 91 million Share-based
Slide 20: Cash Flow
Cash Flow Cash Changes in Q4 2020 ($M) 1000 594 (930) 800 174 (39) (64) 600 540 (30) (26) 3 450 403 400 200 (120) (55) 0 -200 Cash - start Cash flow PP&E Capitalized Expenditures Proceeds Redemption Revolving Repayment Interest and Dividends Other Cash - end of quarter from stripping on from debt or
Slide 21: Strong Financial Position
Strong Financial Position Balance Sheet No significant note maturities prior to 2030 • Rated investment grade by all four agencies Note Maturity Profile as at December 31, 2020 (C$M) Liquidity 1,000 • C$6.5 billion of liquidity available1 500 • US$5.0 billion of committed revolving credit facilities
Slide 22: Industry Leading Copper Growth In Attractive Jurisdictions
Industry Leading Copper Growth In Attractive Jurisdictions WoodMac: Consolidated Copper Production Growth1 WoodMac: Teck’s Consolidated Copper Production4 Teck2 vs. Peers3 2021E-2023E By Jurisdiction 2023E 120% 102% 100% Peru 80% Canada 156 kt Canada 60% Chile 40% Chile Peru 227 kt 21% 86 kt 20% 11%
Slide 23: Prudent Green Metals Growth Strategy
Prudent Green Metals Growth Strategy Accelerate growth in copper Maximize cash flows from operations to fund copper growth Canada 156 kt Strengthen Chile existing high-quality assets through RACE21TM Peru 227 kt 86 kt Discipline in capital allocation Leadership in sustainability 23
Slide 24: Poised for Growth
Poised for Growth Right Right Right Right Opportunities Assets Approach Team Strong demand for Industry leading Highest standards Our people deliver our metals and copper growth, of sustainability in the optimal mix of minerals, led by strengthening everything we do, industry leading growth and exis
Slide 25: Appendix
Appendix Teck
Slide 26: Other Operating Income (Expense)
Other Operating Income (Expense) Simplified Settlement Pricing Adjustment Model Simplified Compensation Expense Model (Pre-tax settlement pricing adjustment in C$M) (Pre-tax share based compensation income / expense in C$M) Outstanding at Outstanding at Quarterly December 31, 2020 September 30, 2020
Slide 27: Endnotes
Endnotes Slide 3: 2020 Highlights 1. Steelmaking coal unit costs are reported in Canadian dollars per tonne. Non-GAAP financial measures. See “Non-GAAP Financial Measures” slides and “Use of Non-GAAP Financial Measures” section of the Q4 2020 news release for further information. 2. As at December 3
Slide 28: Endnotes
Endnotes Slide 18: Energy Business Unit 1. EBITDA is a non-GAAP financial measure. See “Non-GAAP Financial Measures” slides and “Use of Non-GAAP Financial Measures” section of the Q4 2020 news release for further information. 2. We include 21.3% of production from Fort Hills, representing our propor
Slide 29: Non-GAAP Financial Measures
Non-GAAP Financial Measures
Slide 30: Non-GAAP Financial Measures
Non-GAAP Financial Measures Our financial results are prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board. This document refers to a number of Non-GAAP Financial Measures which are not measures recognized under IFRS
Slide 31: Non-GAAP Financial Measures
Non-GAAP Financial Measures Net cash unit costs – Net cash unit costs of principal product, after deducting co-product and by-product margins, are also a common industry measure. By deducting the co- and by-product margin per unit of the principal product, the margin for the mine on a per unit basis
Slide 32: Reconciliation of Profit (Loss) and Adjusted Profit
Non-GAAP Financial Measures Reconciliation of Profit (Loss) and Adjusted Profit Three months ended Three months ended Year ended Year ended (C$ in millions) December 31, 2020 December 31, 2019 December 31, 2020 December 31, 2019 Profit (loss) attributable to shareholders $ (464) $ (1,835) $ (864) $
Slide 33: Reconciliation of Basic Earnings (Loss) Per Share to Adjusted Basic Earnings (Loss) Per Share
Non-GAAP Financial Measures Reconciliation of Basic Earnings (Loss) Per Share to Adjusted Basic Earnings (Loss) Per Share Three months ended Three months ended Year ended Year ended (Per share amounts) December 31, 2020 December 31, 2019 December 31, 2020 December 31, 2019 Basic earnings (loss) per
Slide 34: Reconciliation of Diluted Earnings (Loss) Per Share to Adjusted Diluted Earnings Per Share
Non-GAAP Financial Measures Reconciliation of Diluted Earnings (Loss) Per Share to Adjusted Diluted Earnings Per Share Three months ended Three months ended Year ended Year ended (Per share amounts) December 31, 2020 December 31, 2019 December 31, 2020 December 31, 2019 Diluted earnings (loss) per s
Slide 35: Reconciliation of Net Debt to Adjusted EBITDA Ratio
Non-GAAP Financial Measures Reconciliation of Net Debt to Adjusted EBITDA Ratio Twelve months ended Twelve months ended (C$ in millions) December 31, 2019 December 31, 2020 Profit (loss) $ (588) $ (944) Finance expense net of finance income 218 268 Provision for (recovery of) income taxes 120 (192)
Slide 36: Reconciliation of Net Debt to Adjusted EBITDA Ratio - Continued
Non-GAAP Financial Measures Reconciliation of Net Debt to Adjusted EBITDA Ratio - Continued Twelve months ended Twelve months ended (C$ in millions) December 31, 2019 December 31, 2020 Total debt at period end (D) $ 4,834 (C) $ 6,947 Less: cash and cash equivalents at period end (1,026) (450) Net de
Slide 37: Reconciliation of EBITDA and Adjusted EBITDA
Non-GAAP Financial Measures Reconciliation of EBITDA and Adjusted EBITDA Three months ended Three months ended Year ended Year ended (C$ in millions) December 31, 2020 December 31, 2019 December 31, 2020 December 31, 2019 Profit (loss) $ (473) $ (1,855) $ (944) $ (588) Finance expense net of finance
Slide 38: Reconciliation of Gross Profit Before Depreciation and Amortization
Non-GAAP Financial Measures Reconciliation of Gross Profit Before Depreciation and Amortization Three months ended Three months ended Year ended Year ended (C$ in millions) December 31, 2020 December 31, 2019 December 31, 2020 December 31, 2019 Gross profit $ 505 $ 460 $ 1,333 $ 3,340 Depreciation a
Slide 39: Reconciliation of Gross Profit (Loss) Margins Before Depreciation
Non-GAAP Financial Measures Reconciliation of Gross Profit (Loss) Margins Before Depreciation Three months ended Three months ended Year ended Year ended (C$ in millions) December 31, 2020 December 31, 2019 December 31, 2020 December 31, 2019 Revenues Copper (A) $ 820 $ 592 $ 2,419 $ 2,469 Zinc (B)
Slide 40: Copper Unit Cost Reconciliation
Non-GAAP Financial Measures Copper Unit Cost Reconciliation Three months ended Three months ended Year ended Year ended (C$ in millions, except where noted) December 31, 2020 December 31, 2019 December 31, 2020 December 31, 2019 Revenue as reported $ 820 $ 592 $ 2,419 $ 2,469 By-product revenue (A)
Slide 41: Zinc Unit Cost Reconciliation (Mining Operations)
Non-GAAP Financial Measures Zinc Unit Cost Reconciliation (Mining Operations)1 Three months ended Three months ended Year ended Year ended (C$ in millions, except where noted) December 31, 2020 December 31, 2019 December 31, 2020 December 31, 2019 Revenue as reported $ 739 $ 745 $ 2,700 $ 2,968 Less
Slide 42: Zinc Unit Cost Reconciliation (Mining Operations) - Continued
Non-GAAP Financial Measures Zinc Unit Cost Reconciliation (Mining Operations)1 - Continued Three months ended Three months ended Year ended Year ended (C$ in millions, except where noted) December 31, 2020 December 31, 2019 December 31, 2020 December 31, 2019 Payable pounds sold (millions) (E) 281.7
Slide 43: Steelmaking Coal Unit Cost Reconciliation
Non-GAAP Financial Measures Steelmaking Coal Unit Cost Reconciliation Three months ended Three months ended Year ended Year ended (C$ in millions, except where noted) December 31, 2020 December 31, 2019 December 31, 2020 December 31, 2019 Cost of sales as reported $ 825 $ 864 $ 3,098 $ 3,410 Less: T
Slide 44: Energy Operating Netback, Bitumen & Blended Bitumen Price Realized Reconciliations
Non-GAAP Financial Measures Energy Operating Netback, Bitumen & Blended Bitumen Price Realized Reconciliations Three months ended Three months ended Year ended Year ended (C$ in millions, except where noted) December 31, 2020 December 31, 2019 December 31, 2020 December 31, 2019 Revenue as reported
Slide 45: Energy Operating Netback, Bitumen & Blended Bitumen Price Realized Reconciliations - Continued
Non-GAAP Financial Measures Energy Operating Netback, Bitumen & Blended Bitumen Price Realized Reconciliations - Continued Three months ended Three months ended Year ended Year ended (C$ in millions, except where noted) December 31, 2020 December 31, 2019 December 31, 2020 December 31, 2019 Per barr
Slide 46: Reconciliation of Free Cash Flow
Non-GAAP Financial Measures Reconciliation of Free Cash Flow (C$ in millions) 2003 to Q4 2020 Cash Flow from Operations $48,150 Debt interest and finance charges paid (5,820) Capital expenditures, including capitalized stripping costs (28,602) Payments to non-controlling interests (NCI) (649) Free C
Slide 47: Fourth Quarter 2020 Results
Fourth Quarter 2020 Results February 18, 2021