17 slides from Teck Resources Limited Class A's earnings presentation, Apr 26, 2016
Slide 1: First Quarter 2016 Results
First Quarter 2016 Results April 26, 2016
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: Executing on Near-Term Priorities
Executing on Near-Term Priorities • All operations cash flow positive after sustaining capital and capitalized stripping, except Pend Oreille • Cost management continues to deliver • $1B of cash funding remaining to complete Fort Hills1 • Strong financial position, with >$5B in liquidity2 3 1. Teck’
Slide 4: Quarterly Results
Quarterly Results Q1 2016 Results Revenue $ 1.7 Billion Gross profit $ 464 Million (before depreciation & amortization) EBITDA $ 517 Million Profit $ 94 Million (attributable to shareholders) Adjusted Profit* $18 Million (attributable to shareholders) $0.03/share 4 * Non-GAAP financial measure. See
Slide 5: Q1 2016 Operational Highlights
Q1 2016 Operational Highlights Steelmaking Coal1,3 Production Q1 2016 Change To Q1 2015 Unit Cost of Sales Steelmaking coal (Mt) 6.6 ▼ 0.2 down US$11/t Copper (kt) 82 ▲1 Total Cash Unit Costs Zinc in concentrate4 (kt) 175 ▲9 down US$12/t Zinc – refined (kt) 79 ▲4 Coal Total Cash Unit Costs1 Copper T
Slide 6: Steelmaking Coal Quarterly Results
Steelmaking Coal Quarterly Results Sales (Mt) Realized Price (C$/tonne) Revenue (C$M) 0.3 20% 23% 128 865 6.8 6.5 102 665 Q1 2015 Q1 2016 Q1 2015 Q1 2016 Q1 2015 Q1 2016 Production (Mt) Unit Cost of Sales1 (C$/tonne) Gross Profit2 (C$M) 0.2 8% Total 85 78 6.8 6.6 295 46% Transport 36 34 Inventory 0
Slide 7: Steelmaking Coal Market Update
Steelmaking Coal Market Update Coal Price Assessments 125 120 115 • Higher price assessments 110 105 100 • Demand improving 95 $ / tonne 90 85 80 • Closures continue 75 70 65 60 • Supply curtailment 55 announcements in China Quarterly Contract Settlement Argus FOB Australia TSI Premium HCC FOB Austr
Slide 8: Copper Quarterly Results
Copper Quarterly Results Sales (kt) Realized Price (US$/lb) Revenue (C$M) 8% 10 21% 2.67 523 81 479 71 2.11 Q1 2015 Q1 2016 Q1 2015 Q1 2016 Q1 2015 Q1 2016 Production (kt) C1 Unit Costs1 (US$/lb) Gross Profit2 (C$M) xx% 14% 1 1.53 81 82 16% 210 180 1.29 Q1 2015 Q1 2016 Q1 2015 Q1 2016 Q1 2015 Q1 201
Slide 9: Copper Market Perspective
Copper Market Perspective Historic Disruptions 7-9% Per Year 2016 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 YTD • Currently a slight oversupply in a 0 ~20 Mt market -200 4.9% • Additional ~2% disruption could -400 Thousand tonnes balance market -600 • Post-2016, new supply minimal -800
Slide 10: Zinc Quarterly Results
Zinc Quarterly Results Zinc Sales (kt) Zinc Realized Price (US$/lb) Revenue (C$M) Conc1 Refined 23% 13% 20 5 140 635 78 0.97 554 120 73 0.75 Q1 2015 Q1 2016 Q1 2015 Q1 2016 Q1 2015 Q1 2016 Q1 2015 Q1 2016 Zinc Production (kt) Lead Production (kt) Gross Profit2 (C$M) Conc1 Refined Conc1 Refined 30% 1
Slide 11: Zinc Market Poised for Change
Zinc Market Poised for Change Daily Zinc Prices & Stocks 250¢ 1,800 1,600 200¢ 1,400 • Mine closures tightening thousand tonnes 1,200 150¢ 1,000 US¢/lb concentrate supply 100¢ 800 600 50¢ 400 200 0¢ 0 • Growing demand expected to 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Slide 12: Fort Hills Project Status & Progress
Fort Hills Project Status & Progress Construction >55% complete $1B project capital remaining1 12 Source: Suncor. Extraction & tailings buildings, Q1 2016. 1. Teck’s share of sanction capital.
Slide 13: Cash Flow
Cash Flow Cash Changes in Q1 2016 $298 2500 $373 $215 $1,887 $159 2000 $97 $22 $16 $1,485 $ Millions 1500 1000 500 0 Cash - start of Cash flow from PP&E, incl. Fort Debt interest & Capitalized Effect of FX Proceeds from Expenditures on Cash - end of quarter operations & Hills principal stripping cha
Slide 14: Quarterly Pricing Adjustments
Quarterly Pricing Adjustments • Positive pricing adjustments Simplified Pricing Adjustment Model of $27M in Q1 2016 100 Q1 2012 • Driven by quarterly change Pre-tax Settlement Adjustment (C$M) 50 Q1 2016 in key commodity prices Q3 2012 Q2 2014 Q3 2013 Q2 2011 0 Q4 2012 Q4 2013 Q1 2013 Q4 2011 Quarte
Slide 15: Strong Balance Sheet & Liquidity
Strong Balance Sheet & Liquidity $3,000 Liquidity of >$5B, including unused US$3B line of credit1 $2,750 $2,500 • No debt due until 2017 $2,250 − Weighted average maturity ~14 years $2,000 − Weighted average coupon (interest rate) ~4.8% $1,750 − Average maturity <US$600M US$M $1,500 • Debt to debt-p
Slide 16: Near-Term Priorities
Near-Term Priorities • Keep operations cash flow positive • Fund 2016 portion of Fort Hills from internal sources • Maintain a strong financial position 16
Slide 17: First Quarter 2016 Results
First Quarter 2016 Results April 26, 2016