Teck Resources Limited Class A · TSX:TECK.A
Teck Resources Limited Class A — Q3 2021 Earnings Presentation
36 slides from Teck Resources Limited Class A's earnings presentation, Oct 27, 2021
Slide 1: Third Quarter 2021 Results
Third Quarter 2021 Results October 27, 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: Record Adjusted EBITDA and Record Adjusted Profit in Q3 2021
Record Adjusted EBITDA1 and Record Adjusted Profit1 in Q3 2021 Extremely favourable commodity price environment, particularly for steelmaking coal Solid operational performance; annual guidance unchanged Advanced priority projects: • QB2 surpassed 2/3 completion • Neptune demonstrated capability to
Slide 4: Financial Overview for Q3 2021
Financial Overview for Q3 2021 ($ million, except per share data) Q3 2021 Q3 2020 Revenues $ 3,970 $ 2,291 Gross profit 1,662 291 Gross profit before depreciation and amortization1 2,093 703 Adjusted EBITDA1 2,096 638 Profit attributable to shareholders 816 61 Adjusted profit attributable to shareho
Slide 5: Business Unit Performance in Q3 2021
Business Unit Performance in Q3 2021 % Change vs. Q3 2020 Copper Zinc Steelmaking Coal Energy Production 71 kt 145 kt conc 6.0 Mt 1.9 Mbbl +4% (9%) +18% +27% 73 kt refined (4%) Sales 76 kt 188 kt conc 5.9 Mt 2.2 Mbbl +10% (7%) +16% +10% 72 kt refined (6%) Average realized prices US$4.28/lb US$1.36/l
Slide 6: Copper Business Unit
Copper Business Unit Q3 2021 Copper EBITDA1 ($M) • 95% increase in EBITDA1 vs. Q3 2020, supported $212 million increase in Q3 2021 vs. Q3 2020 Non-controllable $216M Controllable ($4M) by an average realized price of US$4.28/lb and Cash $385M Non-Cash ($169M) All Cash copper production of 71 kt, in
Slide 7: QB2 is Delivering to Key Milestones and Positioning for Start-Up
QB2 is Delivering to Key Milestones and Positioning for Start-Up World class COVID-19 protocols deliver results • Surpassed 2/3 completion • Vaccinations, COVID-19 protocols and testing key enablers • Continued ramp-up of construction workforce Focus on delivering to key milestones • Critical path t
Slide 8: QB2 Port Onshore Area
QB2 Port Onshore Area Concentrate storage, filter plant, and pump station (background) and desalination plant (foreground) July 2021
Slide 9: QB2 Concentrator
QB2 Concentrator Steel erection for grinding building (background) and pebble crusher (foreground) September 2021
Slide 10: QB2 Tailings Management Facility
QB2 Tailings Management Facility Starter dam and upstream pond liner October 2021
Slide 11: Zinc Business Unit
Zinc Business Unit Q3 2021 Zinc EBITDA1 ($M) • EBITDA1 increase of 24% vs. Q3 2020, primarily $66 million increase in Q3 2021 vs. Q3 2020 Non-controllable $144M Controllable ($78M) due to higher zinc prices, partly offset by higher Cash $161M Non-Cash ($17M) All Cash 600 royalty costs related to pro
Slide 12: Steelmaking Coal Business Unit
Steelmaking Coal Business Unit Q3 2021 Steelmaking Coal EBITDA1 ($M) • EBITDA1 increased ~15 times vs. Q3 2020, $1,170 million increase in Q3 2021 vs. Q3 2020 Non-controllable $1,150M Controllable $20M primarily due to significantly higher steelmaking Cash $980M Non-Cash $170M All Cash 1,600 coal pr
Slide 13: Steelmaking Coal Supply Chain Transformation
Steelmaking Coal Supply Chain Transformation Neptune upgrade in site-wide ramp up phase • Ramp up in Q3 2021 • Equipment performing according to, or exceeding, plan • Starting to see the benefit of lower port costs, with a higher percentage of sales volumes loaded at Neptune • In Q3 2021: ‒ Throughp
Slide 14: Energy Business Unit
Energy Business Unit Q3 2021 Energy EBITDA1 ($M) • Results improved from Q3 2020, primarily $27 million increase in Q3 2021 vs. Q3 2020 Non-controllable $44M Controllable ($17M) due to higher Western Canadian Select prices Cash $50M Non-Cash All Cash • This was partially offset by higher unit operat
Slide 15: Record Adjusted Profit of $1.0 Billion
Record Adjusted Profit of $1.0 Billion ($ million, except per share data) Q3 2021 Q3 2020 Profit (loss) attributable to shareholders $ 816 $ 61 Add (deduct): COVID-19 costs - 64 QB2 variable consideration to IMSA and ENAMI 97 - Environmental costs 49 27 Inventory write-downs (reversals) - 11 Share-b
Slide 16: Cash Flow
Cash Flow Cash Changes in Q3 2021 ($M) 2000 1,480 (1,038) 1500 1000 337 (360) (172) (40) 27 (146) 91 (120) 500 312 (27) 12 34 390 0 Cash - start Cash flow from PP&E Capitalized Expenditures on Proceeds from Proceeds from debt Revolving credit Repayment of debt QB2 advances from Interest and finance
Slide 17: Strong Financial Position
Strong Financial Position Balance Sheet • Rated investment grade by all four agencies • No significant note maturities prior to 20301 Liquidity • C$5.4 billion2 of liquidity available • Converted our US$4 billion committed credit facility into a Sustainability-Linked facility in support of Teck’s su
Slide 18: Capital Allocation Framework
Capital Allocation Framework Shareholder distributions of 30-100% of Available Cash Flow1 SUSTAINING SUPPLEMENTAL BASE CAPITAL SHAREHOLDER DIVIDEND (including stripping) DISTRIBUTIONS CASH FLOW FROM OPERATIONS after interest and finance Plus at Least 30% charges, lease payments Available Cash Flow1
Slide 19: Teck is Poised for Growth
Teck is Poised for Growth Providing essential metals and minerals for a low-carbon world Right Opportunities • Strong demand for our metals and minerals, led by growth and decarbonization Right Assets • Industry leading copper growth, strengthening existing high-quality, low carbon assets Right Appr
Slide 20: Appendix
Appendix Teck
Slide 21: Other Operating Income (Expense)
Other Operating Income (Expense) Simplified Settlement Pricing Adjustment Model Simplified Compensation Expense Model (Pre-tax settlement pricing adjustment in C$M) (Pre-tax share-based compensation income / expense in C$M) Quarterly Quarterly Outstanding at Outstanding at Pricing Quarterly Compensa
Slide 22: Endnotes
Endnotes Slide 3: Record Quarterly Adjusted EBITDA and Record Adjusted Profit In Q3 2021 1. Adjusted EBITDA and adjusted profit are a non-GAAP financial measures. See “Non-GAAP Financial Measures” slides and “Use of Non-GAAP Financial Measures” section of the Q3 2021 news release for further informa
Slide 23: Non-GAAP Financial Measures
Non-GAAP Financial Measures
Slide 24: 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 25: Non-GAAP Financial Measures
Non-GAAP Financial Measures Cash margins for by-products – Cash margins for by-products is revenue from by- and co-products, less any associated cost of sales of the by and co-product. In addition, for our copper operations, by-product cost of sales also includes cost recoveries associated with our
Slide 26: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of Profit (Loss) and Adjusted Profit 26
Slide 27: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of Basic Earnings (Loss) Per Share to Adjusted Basic Earnings (Loss) Per Share and Reconciliation of Diluted Earnings (Loss) Per Share to Adjusted Diluted Earnings Per Share 27
Slide 28: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of Net Debt to Adjusted EBITDA Ratio We include net debt measures as we believe they provide readers with information that allows them to assess our credit capacity and the ability to meet our short and long-term financial obligations, as well as providing
Slide 29: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of EBITDA and Adjusted EBITDA Reconciliation of EBITDA by Business Unit Three months ended September 30, 2021 Steelmaking (CAD$ in millions) Copper Zinc Coal Energy Corporate Total Profit (loss) before tax $ 296 $ 246 $ 1,009 $ (37) $ (159) $ 1,354 Net fina
Slide 30: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of Gross Profit Before Depreciation and Amortization and Reconciliation of Gross Profit (Loss) Margins Before Depreciation 30
Slide 31: Copper Unit Cost Reconciliation
Non-GAAP Financial Measures Copper Unit Cost Reconciliation 1. Average period exchange rates are used to convert to US$ per pound equivalent. We include unit cost information as it is frequently requested by investors and investment analysts who use it to assess our cost structure and margins and co
Slide 32: Zinc Unit Cost Reconciliation (Mining Operations)
Non-GAAP Financial Measures Zinc Unit Cost Reconciliation (Mining Operations) 1. Red Dog mining operations. 2. Average period exchange rates are used to convert to US$ per tonne equivalent. We include unit cost information as it is frequently requested by investors and investment analysts who use it
Slide 33: Steelmaking Coal Unit Cost Reconciliation
Non-GAAP Financial Measures Steelmaking Coal Unit Cost Reconciliation 1. Average period exchange rates are used to convert to US$ per tonne equivalent. We include unit cost information as it is frequently requested by investors and investment analysts who use it to assess our cost structure and marg
Slide 34: Energy Operating Netback, Bitumen & Blended Bitumen Price Realized Reconciliations
Non-GAAP Financial Measures Energy Operating Netback, Bitumen & Blended Bitumen Price Realized Reconciliations and Adjusted Operating Costs and Adjusted Operating Costs1 1. Calculated per unit amounts may differ due to rounding. 2. Bitumen price realized represents the realized petroleum revenue (bl
Slide 35: Energy Operating Netback, Bitumen & Blended Bitumen Price Realized Reconciliations
Non-GAAP Financial Measures Energy Operating Netback, Bitumen & Blended Bitumen Price Realized Reconciliations and Adjusted Operating Costs and Adjusted Operating Costs1 3. Reflects adjustments for costs not directly attributed to the production of Fort Hills bitumen, including transportation for no
Slide 36: Third Quarter 2021 Results
Third Quarter 2021 Results October 27, 2021