20 slides from Teck Resources Limited Class A's earnings presentation, Jul 25, 2013
Slide 1: Second Quarter 2013 Investor Conference Call and Webcast
Second Quarter 2013 Investor Conference Call and Webcast Teck.com July 25, 2013
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: Speakers
Q2 2013 Investor Conference Call Speakers Don Lindsay President & CEO Ron Millos SVP Finance & CFO 3
Slide 4: Q2 2013 Highlights
Q2 2013 Highlights • Exceeding initial goals for cost reduction program, with >$250 million ongoing annual potential savings identified • Reducing capital expenditures - including delaying Quintette reopening & slowing Quebrada Blanca Phase 2 • Purchased 5 million Class B shares - total of 10 millio
Slide 5: Results Overview
Q2 2013 Results Overview Revenues $ 2,152 million Gross profit $ 871 million (before depreciation & amortization) Profit $ 143 million (attributable to shareholders) Adjusted profit $ 197 million (attributable to shareholders) EBITDA $ 670 million 5
Slide 6: Adjusted Profit
Adjusted Profit ($ millions) Q2 ’13 Q2 ’12 Q1 ’13 Profit attributable to $ 143 $ 354 $ 319 shareholders as reported Asset sale losses (gains) 15 (19) 7 FX losses 18 13 4 Derivative losses (gains) 1 12 (2) Tax items 20 - – Collective agreement charges – 38 – Adjusted profit 197 398 328 Adjusted EPS $
Slide 7: Steelmaking Coal
Steelmaking Coal Q2 Q2 Q1 2013 2012 2013 Production (Mt) 6.0 5.7 6.2 Sales (Mt) 6.3 6.7 6.6 Average realized price (US$/t) 156 202 161 (C$/t) 159 203 162 Site costs (C$/t) 50 59 47 Transportation costs (C$/t) 39 37 36 Financial Results C$ millions Revenue 1,002 1,362 1,060 Gross profit (before depre
Slide 8: Steelmaking Coal Update
Steelmaking Coal Update Rolling 4-Quarter Coal Production Production Trend 27 Operating ~10% below ~27 Mtpa capacity • Production stabilized over last 1.5 years 25 Q3 2013 million tonnes 23 • Benchmark price for premium 21 coal agreed at US$145/t 19 • Expected realized price of approximately US$143/
Slide 9: Quintette & Neptune Update
Quintette & Neptune Update • Quintette coal mine reopening ‒ Delaying the final decision to place Quintette into production ‒ $650M capex deferred; mobile equipment deliveries diverted ‒ Commercial production could start in mid-2015 • Neptune Bulk Terminals’ new stacker reclaimer ‒ Installed on sche
Slide 10: Copper
Copper Q2 Q2 Q1 2013 2012 2013 Copper in Concentrate (kt) Production 70 72 69 Sales 69 67 71 Copper Cathode (kt) Production 15 18 14 Sales 18 18 11 Moly in Concentrate (M lbs) Production 2.0 3.2 2.4 Sales 1.8 3.3 2.5 Financial Results C$ millions Revenue 693 731 684 Gross Profit 338 368 351 (before
Slide 11: Copper Update
Copper Update Rolling 4-Quarter Contained in Concentrate & Cathode • Highland Valley copper production 380 Current rolling 4-quarter 14% higher YTD due to higher mill production: ~370kt throughput and better ore grades • Antamina ore throughput up due to 340 expansion completed in 1H 2012 • Quebrada
Slide 12: Highland Valley Mill Optimization
Highland Valley Mill Optimization • Project on schedule for completion by the end of 2013 • Construction 52% complete, with steel structure & major equipment in place Photo Date: July 3, 2013 • New pebble crusher to be connected during one-month partial shutdown in Q3 • Expected to increase throughp
Slide 13: Zinc
Zinc Q2 Q2 Q1 Zinc in Concentrate (kt) 2013 2012 2013 Production 161 149 147 Sales 97 79 124 Refined Zinc (kt) Production 70 69 74 Sales 70 69 73 Lead in Concentrate (kt) Production 25 24 23 Sales – – – Refined Lead (kt) Production 21 22 21 Sales 21 21 20 Financial Results C$ millions Revenue 455 46
Slide 14: Energy: Asset Exchange: Map of Leases
Energy Asset Exchange: Map of Leases • Frontier oil sands lease exchange with Shell Canada Energy ‒ Reduces lease boundary interface ‒ Strengthens economic recovery for both projects ‒ Has a net positive impact on project resources • Fort Hills Phase 1 ‒ Partners moving towards a sanction decision i
Slide 15: Speakers
Q2 2013 Investor Conference Call Speakers Don Lindsay President & CEO Ron Millos SVP Finance & CFO 15
Slide 16: Cash Changes
Q2 2013 Cash Changes $ Millions Cash Flow from Operations* 584 Working capital changes 106 Purchase of property, plant, & equipment (443) Capitalized production stripping costs (189) Expenditures on financial investments & other assets (111) Debt principal and interest payments (37) Purchase and can
Slide 17: Pricing Adjustments
Pricing Adjustments Quarterly Price Change vs. • Quarterly change in commodity Settlement Adjustment prices drive pricing adjustments • 40 cent per pound cumulative 100 Q1 2012 Pre-tax Settlement Adjustment ($ millions) decline in copper and zinc prices at end Q2 2013, compared with the Q3 2012 end
Slide 18: Speakers
Q2 2013 Investor Conference Call Speakers Don Lindsay President & CEO Ron Millos SVP Finance & CFO 18
Slide 19: Summary
Q2 2013 Summary Coal production matched to market demand Continuing to reduce costs Projects being deferred due to market conditions Strong dividend & continuing to buy back shares Remaining focused on shareholder value 19
Slide 20: Second Quarter 2013
Second Quarter 2013 Investor Conference Call and Webcast Teck.com July 25, 2013