Teck Resources Limited Class A · TSX:TECK.A
Teck Resources Limited Class A — Q4 2021 Earnings Presentation
46 slides from Teck Resources Limited Class A's earnings presentation, Feb 24, 2022
Slide 1: Fourth Quarter 2021 Results
Fourth Quarter 2021 Results February 24, 2022
Slide 2: Caution Regarding Forward-Looking Statements
Caution Regarding Forward-Looking Statements Both these slides and the accompanying oral presentation contain certain forward-looking information and forward-looking statements as defined in applicable securities laws (collectively referred to as forward-looking statements). These statements relate
Slide 3: Caution Regarding Forward-Looking Statements
Caution Regarding Forward-Looking Statements utilities, or adverse weather conditions; and that there are no material unanticipated variations in the cost of energy or supplies. Our sustainability goals are based on a number of additional assumptions, including regarding the availability and effecti
Slide 4: Q4 2021 Highlights
Q4 2021 Highlights Record Financial Performance • Record adjusted EBITDA of $2.5B, >3x higher than Q4 2020 in Q4 2021 • Record profit before taxes of $2.2B • Adjusted diluted EPS of $2.54; unadjusted diluted EPS of $2.74 Operational Resilience • Steelmaking coal supply chain resiliency demonstrated
Slide 5: Record Quarterly and Annual Profitability
Record Quarterly and Annual Profitability Financial Highlights ($M) Cash Returns to Shareholders ($M) Q4 2021 2021 Increase in Dividends Gross Profit • Base annual dividend increased to $0.50 per share, from $0.20 per share in 2021 Copper $ 442 $ 1,741 Total • Declared a dividend of $0.625 per share
Slide 6: Operations Overview
Operations Overview Global Metals and Mining Conference 6
Slide 7: Copper Business Unit
Copper Business Unit Q4 2021 operating overview Q4 2020 Q4 2021 EBITDA 78 80 801 4.46 72 71 94 D&A 3.42 EBITDA 30 Finance Expense 489 102 1.52 29 1.27 677 Profit before Tax 358 Production Sales Realized Copper Price Net Cash Unit Costs Profitability (kt) (kt) (US$/lb) (US$/lb) ($M) Q4 2021 Looking F
Slide 8: Zinc Business Unit
Zinc Business Unit Q4 2021 operating overview Q4 2020 Q4 2021 EBITDA 290 146 149 140 68 D&A 125 EBITDA Finance Expense 12 161 80 80 68 70 70 1.52 1.20 210 Profit before Tax 11 0.44 0.22 80 Refined Concentrate Refined Concentrate Realized Zinc Price Net Cash Unit Costs Profitability Production (kt) S
Slide 9: Steelmaking Business Unit
Steelmaking Business Unit Q4 2021 operating overview Q4 2020 Q4 2021 EBITDA 1,704 213 D&A 23 Finance Expense 72 6.0 6.3 6.1 58 5.1 49 1468 Profit before Tax 40 EBITDA 118 212 13 -107 Production Sales Adjusted Site Cash Cost Transportation Costs Profitability (Mt) (Mt) of Sales ($/t) ($/t) ($M) Q4 20
Slide 10: Energy Business Unit
Energy Business Unit Q4 2021 operating overview Q4 2020 Q4 2021 EBITDA EBITDA 3.0 71 -642 -10 22 29 D&A 2.6 7 7 Finance Expense 2.3 51 -46 Profit before Tax 2.0 36 31 -671 Production Sales Blended Bitumen Price Adjusted Operating Costs Profitability (Mbbls) (Mbbls) Realized ($/bbl) ($/bbl) ($M) Q4 2
Slide 11: Executing our Copper Growth Strategy Through QB2
Executing our Copper Growth Strategy Through QB2 Reached 77% completion and delivering to key milestones Focus on completion of key systems for first production in H2 2022 • Water supply pipeline >90% welded • Tailings starter dam >85% constructed • Port area electrical substations energized • Desal
Slide 12: QB2 Photo Tour
QB2 Photo Tour QB2 Mine Area Commissioning of the mine electrical loop Global Metals and Mining Conference January 2022 12
Slide 13: QB2 Photo Tour
QB2 Photo Tour QB2 Mine Area Commissioning electric shovels Global Metals and Mining Conference January 2022 13
Slide 14: QB2 Photo Tour
QB2 Photo Tour QB2 Concentrator Area Ore stacker structure and stockpile dome erection Global Metals and Mining Conference January 2022 14
Slide 15: QB2 Photo Tour
QB2 Photo Tour QB2 Concentrator Area Grinding building siding installation Global Metals and Mining Conference February 2022 15
Slide 16: QB2 Photo Tour
QB2 Photo Tour QB2 Concentrator Area Tailings thickener equipment installation Global Metals and Mining Conference February 2022 16
Slide 17: QB2 Photo Tour
QB2 Photo Tour QB2 Tailings Management Facility Starter dam and upstream pond liner Global Metals and Mining Conference February 2022 17
Slide 18: QB2 Photo Tour
QB2 Photo Tour QB2 Port Offshore Main jetty construction Global Metals and Mining Conference December 2021 18
Slide 19: QB2 Photo Tour
QB2 Photo Tour QB2 Port Onshore Port area electrical substation energized Global Metals and Mining Conference January 2022 19
Slide 20: QB2 Photo Tour
QB2 Photo Tour QB2 Port Onshore Concentrate storage building erection Global Metals and Mining Conference January 2022 20
Slide 21: Financial Overview
Financial Overview Global Metals and Mining Conference 21
Slide 22: Strong Commodity Prices and Record Financial Performance
Strong Commodity Prices and Record Financial Performance Relative Performance since January 2021 Steelmaking Coal +328% WCS +139% Zinc +33% Copper +29% Global Metals and Mining Conference Jan 21 Feb 21 Mar 21 Apr 21 May 21 Jun 21 Jul 21 Aug 21 Sep 21 Oct 21 Nov 21 Dec 21 Jan 22 Feb 22 22
Slide 23: Quarterly Financial Performance
Quarterly Financial Performance Strong commodity prices more than offset inflationary pressures Profitability ($M) Profit before Tax Finance Expense D&A Non-controllable Controllable EBITDA 383 Total $2,665 812 (213) 404 597 (59) impairment in 2020 53 2,023 215 reversal In 2021 (117) (65) EBITDA $(9
Slide 24: Cash Flow from Operations Drives Our Strong Cash Position
Cash Flow from Operations Drives Our Strong Cash Position Key Cash Changes in Q4 2021 ($M) 125 (1,091) 427 2,098 (268) (186) (90) 22 1,427 390 Opening Cash Position Cash Flow from Proceeds from Debt QB2 Advances from PP&E Revolving Credit Capitalized Stripping Interest and Finance Other Closing Cash
Slide 25: Financial Strength
Financial Strength Record 2021 Profitability1 Track Record of Significant Cash Returns to Shareholders3 Adjusted EBITDA Adjusted EBITDA Margin Profit before Tax Total in the past 20 years: Dividends Share Buybacks $6.6B 49% $4.5B $6.9B $4.6B $2.3B Strong Balance Sheet2 Debt Maturity Ladder2 (US$M) L
Slide 26: Capital Allocation Framework
Capital Allocation Framework Capital Allocation Framework Calculation 2021A Sustaining Base Supplemental Cash Flow Capital Dividend Shareholder Distributions from Operations including stripping $0.20 per share minimum 30% available cash flow after interest and finance charges, lease payments and dis
Slide 27: Capital Allocation Framework
Capital Allocation Framework Capital Allocation Framework 2022+ Cash Flow Sustaining Base Supplemental from Operations Capital Dividend Shareholder Distributions after interest and finance charges, including stripping $0.50 per share minimum 30% available cash flow RETURNS lease payments and distrib
Slide 28: Capital Investments
Capital Investments Capital Investments Profile ($M) QB2 (100%) Growth Capitalized Stripping Sustaining Reduction of ~$2 billion driven by: • Significantly lower QB2 capex 2,200 • Decline in capitalized stripping 2,580 to 2,500 towards historical levels • Decline in sustaining capital from 1,643 202
Slide 29: Summary
Summary Global Metals and Mining Conference 29
Slide 30: 2022 is a Transformational Year
2022 is a Transformational Year • QB2 on track for startup in H2 2022 • Quebrada Blanca Mill Expansion (QBME) • Project Satellite ‒ Zafranal ‒ San Nicolás Global Metals and Mining Conference 30
Slide 31: Driving Long-Term Sustainable Shareholder Value
Driving Long-Term Sustainable Shareholder Value Industry leading Rebalance portfolio copper growth of high-quality assets Long-term to low-carbon metals sustainable shareholder value Balance growth Leadership and cash returns in ESG and to shareholders operational excellence Global Metals and Mining
Slide 32: Appendix
Appendix Global Metals and Mining Conference 32
Slide 33: Production Guidance
Production Guidance Production (000’s tonnes except as noted) 2021 Actual 2022 Guidance1 3-Year Guidance1 (2023-2025) Copper2,3,4 Highland Valley 130.8 127-133 130-160 Antamina 100.2 91-96 90-95 Carmen de Andecollo 44.8 45-50 50-60 Quebrada Blanca6 11.5 10-11 245-300 Total copper 287.3 273-290 515-6
Slide 34: Sales and Unit Cost Guidance
Sales and Unit Cost Guidance Sales Unit Costs Q4 2021 Actual Q1 2022 Guidance1 2021 Actual 2022 Guidance1 Zinc in concentrate Copper2 (US$/lb) Total cash unit costs 1.80 1.85-1.95 Red Dog (kt) 140 130-150 Net cash unit costs 1.39 1.40-1.50 Steelmaking coal (Mt) 5.1 6.1-6.5 Zinc4 (US$/lb) Total cash
Slide 35: Capital Expenditures Guidance
Capital Expenditures Guidance Sustaining and Growth Capital (Teck’s share in C$ millions) QB2 Capital Expenditures (Teck’s share in C$ millions) 2021 2022 2021 2022 Actual Guidance1 Actual Guidance1 Sustaining QB2 capital expenditures $ 2,580 $ 2,200 - 2,500 Copper $ 184 $ 340 Total before SMM/SC co
Slide 36: Water Treatment Guidance
Water Treatment Guidance Steelmaking Coal Capital Expenditures and Operating Costs Related to Water Treatment1 Long-Term 2021 2022 3-Year Guidance Guidance3 (C$ millions, unless otherwise noted) Actual Guidance (2022-2024) (C$/tonne) Capital Expenditures Sustaining capital (water management and wate
Slide 37: Settlement Pricing Adjustments
Settlement Pricing Adjustments Simplified Settlement Pricing Adjustment Model (Pre-tax settlement pricing adjustment in C$M) 180 Quarterly 140 Outstanding at Outstanding at Pricing December 31, 2021 September 30, 2021 Adjustments 100 Mlbs US$/lb Mlbs US$/lb C$M 60 Copper 156 $ 4.42 122 $ 4.05 $ 42 2
Slide 38: Endnotes
Endnotes Slide 5: Record Quarterly and Annual Profitability Slide 35: Capital Expenditures Guidance 1. Assumes the new annual base dividend of $0.50 per share in 2022, the supplemental dividend of $0.50 per share to be paid 1. As at February 24, 2022. See Teck’s Q4 2021 press release for further det
Slide 39: Non-GAAP Financial Measures and Ratios
Non-GAAP Financial Measures and Ratios Global Metals and Mining Conference 39
Slide 40: Non-GAAP Financial Measures and Ratios
Non-GAAP Financial Measures and Ratios Our financial results are prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board. This presentation includes reference to certain non-GAAP financial measures and non-GAAP ratios,
Slide 41: Non-GAAP Financial Measures and Ratios
Non-GAAP Financial Measures and Ratios Adjusted operating costs – Adjusted operating costs for our energy business unit is defined as the costs of product as it leaves the mine, excluding depreciation and amortization charges, cost of diluent for blending to transport our bitumen by pipeline, cost o
Slide 42: Non-GAAP Financial Measures and Ratios
Non-GAAP Financial Measures and Ratios Reconciliation of Diluted Earnings per share To Adjusted Diluted Earnings per share Reconciliation of Net Debt to Adjusted EBITDA Ratio Global Metals and Mining Conference 42
Slide 43: Non-GAAP Financial Measures and Ratios
Non-GAAP Financial Measures and Ratios Reconciliation of EBITDA and Adjusted EBITDA Steelmaking Coal Unit Cost Reconciliation Global Metals and Mining Conference 43
Slide 44: Non-GAAP Financial Measures and Ratios
Non-GAAP Financial Measures and Ratios Zinc Unit Cost Reconciliation (Mining Operations1) Copper Unit Cost Reconciliation Global Metals and Mining Conference 44
Slide 45: Non-GAAP Financial Measures and Ratios
Non-GAAP Financial Measures and Ratios Energy Business Unit – Adjusted Operating Costs1 Global Metals and Mining Conference 45
Slide 46: Fourth Quarter 2021 Results
Fourth Quarter 2021 Results February 24, 2022