28 slides from Teck Resources Limited Class A's earnings presentation, Feb 7, 2013
Slide 1: Fourth Quarter 2012 Investor Conference Call and Webcast
Fourth Quarter 2012 Investor Conference Call and Webcast February 7, 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: Forward Looking Information
Forward Looking Information The foregoing list of assumptions is not exhaustive. Events or circumstances could cause actual results to differ materially. Factors that may cause actual results to vary include, but are not limited to: adverse developments in business and economic conditions in the pri
Slide 4: Speakers
Q4 Investor Conference Call Speakers Don Lindsay President & CEO Ron Millos SVP Finance & CFO 4
Slide 5: 2012 Results
2012 Results Record Annual Copper Production Revenues $ 10,343 million Gross Profit $ 4,017 million (before depreciation & amortization) Profit $ 811 million (attributable to shareholders) EBITDA $ 2,819 million 5
Slide 6: 2012 Guidance Achieved
2012 Guidance Achieved 2012 2012 Production / Costs Achieved Guidance Actual Coal 24.5 – 25.5Mt 24.7Mt Coal site costs $72 – 78/t $72/t Copper 350 – 375kt 373kt Zinc in Concentrate 580-610kt 598kt Refined Zinc 280 – 290kt 284kt 6
Slide 7: Q4 2012 Highlights
Q4 2012 Highlights • Record quarterly copper production • Completed final high-yield note redemption • 12.5% increase in dividend • Purchased for cancellation 3.8 million Class B shares Subsequent to quarter-end: • Recognized as one of the Global 100 Most Sustainable Companies for 2013 7
Slide 8: Q4 2012 Results
Q4 2012 Results Increasing volumes, strong cash flow Revenues $ 2,730 Million Gross Profit $ 961 million (before depreciation & amortization) Profit $ 145 million (attributable to shareholders) Adjusted Profit $ 354 million (attributable to shareholders) EBITDA $ 527 million 8
Slide 9: Adjusted Profit
Adjusted Profit ($ millions, net of taxes) Q4 ’12 Q4 ’11 Q3 ’12 Profit attributable to $ 145 $ 637 $ 180 Shareholders as reported Asset sale gains 4 (1) (22) Foreign exchange (gains) losses (1) (14) 2 Derivative (gains) losses (3) (61) (48) Collective agreement charge 11 29 9 Financing items 259 – 1
Slide 10: Coal
Coal Q4 Q4 Q3 Coal - Mt 2012 2011 2012 Production 6.4 6.7 6.3 Sales 6.4 5.5 5.5 Average Realized Price (US$/t) 159 253 193 (C$/t) 157 259 194 Site Costs (C$/t) 62 65 77 Transportation Costs (C$/t) 41 33 37 Financial Results C$ millions Revenue 1,010 1,434 1,077 Gross Profit 347 891 445 (before depre
Slide 11: Coal Update
Coal Update • Plant upgrades and mining fleet additions are complete; operating capacity now approximately 27Mtpa • Strong demand continues to come from China • Q1 benchmark price for premium coal settled at US$165/t • Q1 coal sales contracted 6.0 Mt at US$159/t; includes carryover tonnes • Quintett
Slide 12: Neptune & Westshore Update
Neptune & Westshore Update • New Neptune stacker reclaimer remains on schedule ‒ 12.5 Mtpa nominal throughput capacity anticipated spring 2013 ‒ Two phase development to expand to 18.5 Mtpa • Westshore incident not expected to materially impact production ‒ Berth in-service mid-Q1 ‒ Continue to use
Slide 13: Copper
Copper Q4 Q4 Q3 2012 2011 2012 Copper in Concentrate (kt) Production 88 69 84 Sales 89 72 81 Copper Cathode (kt) Production 15 20 15 Sales 16 19 15 Moly in Concentrate (M lbs) Production 3.0 3.9 3.4 Sales 3.6 4.0 3.0 Financial Results C$ millions Revenue 913 778 763 Gross Profit 430 339 362 (before
Slide 14: Copper Update
Copper Update • Record quarterly and annual Rolling 4-Quarter Contained in copper production Concentrate & Cathode 380 • Antamina production +28%: Record copper ‒ Q4 average ~128 ktpd ore, up 22%, production copper production 122kt 340 • Highland Valley: ‒ Production up 37% YoY from kt higher grades
Slide 15: HVC Mill Optimization Update
HVC Mill Optimization Update • Mill optimization project progressing on schedule • Completion expected end of 2013 • Steel structure in place as well as major equipment • Detailed engineering over 88% complete • Ore grades expected to return to average reserve grade in 2013 15
Slide 16: Zinc
Zinc Q4 Q4 Q3 Zinc in Concentrate (kt) 2012 2011 2012 Production 157 150 145 Sales 207 209 157 Refined Zinc (kt) Production 67 75 74 Sales 67 75 75 Lead in Concentrate (kt) Production 26 22 22 Sales 50 32 46 Refined Lead (kt) Production 24 22 21 Sales 23 21 22 Financial Results C$ millions Revenue 8
Slide 17: Speakers
Q4 Investor Conference Call Speakers Don Lindsay President & CEO Ron Millos SVP Finance & CFO 17
Slide 18: Q4 2012 – Cash Changes
Q4 2012 – Cash Changes $Millions Cash Flow from Operations* 722 Working Capital Changes 74 Capital Expenditures and Investments (661) Debt Issuance, principal and interest payments (715) Purchase & cancellation of Class B shares (123) Distributions to non-controlling interests, FX & Other 40 Cash &
Slide 19: Final Pricing Adjustments
Final Pricing Adjustments Pricing Outstanding at Outstanding at Adjustment (C$ M) September 30, 2012 December 31, 2012 Before Tax Copper 169 M lbs $3.74 US$/lb 179 M lbs $3.59 US$/lb -$35 Million Zinc 184 M lbs $0.95 US$/lb 143 M lbs $0.93 US$/lb -$2 Million Other (moly, silver, lead, etc.) $17 Mill
Slide 20: Commodity Price and Settlement Adjustments
Commodity Price and Settlement Adjustments Quarterly Price Change vs. Settlement Adjustment 250 • Commodity price change 200 drives settlement adjustment Pre-tax Settlement Adjustment ($ millions) 150 100 Q1 2012 • Q4 vs. Q3: 50 Q3 2012 ‒ Lower copper and zinc 0 Q2 2011 Q4 201 prices Q4 2012 Q1 2011
Slide 21: High Yield Note Redemption Completed / Debt Maturity Profile
High Yield Note Redemption Completed Debt Maturity Profile $3,000 • Only US$325M due to end of 2016 Dec 31, 2012 • Weighted Average Maturity 16.5 years • Weighted Average Interest (Coupon) Rate 4.8% $2,000 • Annual Interest (Coupon) Payments US$346M US$M • Note roll-overs average US$600M $1,000 $0 I
Slide 22: 2013 Guidance
2013 Guidance Production Coal (27 Mt capacity) 24 – 25 M tonnes Coal site costs $71 – 77/ tonne Copper 340 – 360 k tonnes Zinc in Concentrate 560 – 590 k tonnes Refined Zinc 280 – 290 k tonnes 22
Slide 23: 2013 Capex Guidance
2013 Capex Guidance Major Sustaining & Other Development Sustaining Total Enhancement Copper 265 360 625 Coal 265 80 345 Zinc 195 20 215 Corporate 20 20 $745 $460 $1,205 New Mine Major Project Spending Development Quintette 120 QB Phase II 450 Fort Hills & Frontier 400 Relincho 70 Other early stage
Slide 24: Leverage to Strong Commodities
Leverage to Strong Commodities 2012 EBITDA $2.8Bn 2012 Avg EBITDA ∆ • Coal US $193/t $25 M / $1 ∆ • Copper US $3.61/lb $7 M / $.01 ∆ • Zinc US $0.88/lb $11 M / $.01 ∆ • $C/$US $1.00 $70 M / $.01 ∆ Volume and cost changes from 2012 need to be taken into account in estimates of EBITDA for 2013 24
Slide 25: Speakers
Q4 Investor Conference Call Speakers Ron Millos SVP Finance & CFO Don Lindsay President & CEO 25
Slide 26: Project Developments
Project Developments • Quintette Coal Mine Permit approval expected H1 2013 • QB Phase 2 SEIA re-file expected end of Q2 2013 • Relincho Copper Mine Feasibility study Q4 2013 • Neptune Terminal Expansion Feasibility study to 18.5 Mtpa completed Q4 2012 • Fort Hills Phase I Project sanction decision
Slide 27: Summary
Summary Well positioned during economic uncertainty No change in long-term outlook Near-term expansions on track Coal production adjusting to market demand Prudent capital spend program 27
Slide 28: Fourth Quarter 2012 Investor Conference Call and Webcast
Fourth Quarter 2012 Investor Conference Call and Webcast February 7, 2013