34 slides from Teck Resources Limited Class A's earnings presentation, Feb 22, 2024
Slide 1: Fourth Quarter 2023 Conference Call
Fourth Quarter 2023 Conference Call February 22, 2024 Global Metals and Mining Conference
Slide 2: Caution Regarding Forward-Looking Statements
Caution Regarding Forward-Looking Statements Both these slides and the accompanying presentation contain certain forward- looking information and forward- looking statements as defined inapplicable securities laws (collectively referred to as forward-looking statements). These forward-looking statem
Slide 3: Jonathan Price
Jonathan Price President and Chief Executive Officer Global Metals and Mining Conference
Slide 4: Strong Performance Across Our Business
Strong Performance Across Our Business Returning cash to shareholders, advancing QB ramp-up & record quarterly copper production Q4 2023 Significant shareholder returns and strengthening of the balance sheet Gross profit Adjusted Adjusted diluted Dividends before D&A* EBITDA* EPS* • Paid $515 millio
Slide 5: 2023 Highlights
2023 Highlights Advancing our value creation strategy Focus on excellence Unlock the value Balance growth Sustainability in operations of industry leading and cash returns leadership and projects copper growth to shareholders • Delivered adjusted EBITDA • Announced a transformational • Returned sign
Slide 6: QB Production Ramp-Up On Track
QB Production Ramp-Up On Track Operational and Project Update Outlook and Guidance • Fourth quarter focused on reliability and consistency of production, • Unchanged capital cost guidance of US$8.6–$8.8B; no capitalized multiple periods of operating at or above throughput capacity ramp-up costs expe
Slide 7: Crystal Prystai
Crystal Prystai Senior Vice President and Chief Financial Officer Global Metals and Mining Conference
Slide 8: Financial Performance Q4 2023
Financial Performance Q4 2023 Profitability1 ($M) Controllable Non-Controllable 630 Adjusted EBITDA* 3 $1,703 Adjusted318 9 11 EBITDA* (212) (41) (30) - $1,333458 407 Adjustments 332 548 Depreciation & Amortization 384 54 Net Finance Expense 23 Profit before Tax 594 694 Adjusted EBITDA Volumes Opex
Slide 9: Copper Business Unit
Copper Business Unit Record quarterly copper production Q4 2023 Performance Q4 2023 Highlights Realized Production Sales Revenue Net Cash Gross Profit Gross Profit • Higher copper prices vs. Q4 2022 before Depreciation Price Unit Cost* and Amortization Margin • Record quarterly copper production and
Slide 10: Zinc Business Unit
Zinc Business Unit Higher profit driven by strong production, despite lower prices Q4 2023 Performance Q4 2023 Highlights Realized Production Sales Revenue Net Cash Gross Profit Gross Profit • Zinc prices down year-over-year Concentrate | Refined Concentrate | Refined before Depreciation Price Unit
Slide 11: Steelmaking Coal Business Unit
Steelmaking Coal Business Unit Strong production and sales volumes leading to increased profitability Q4 2023 Performance Q4 2023 Highlights Realized Price Production Sales Revenue Unit Costs* Gross Profit Gross Profit • Higher production and sales volumes vs. Q4 2022 US$ | C$ US$ | C$ before Deprec
Slide 12: Disciplined Capital Allocation Framework
Disciplined Capital Allocation Framework Commitment to return 30-100% of available cash flow to shareholders* Balancing growth with cash returns to shareholders while maintaining a strong balance sheet Sustaining Base Supplemental Cash Flow Capital Dividend Shareholder Distributions including stripp
Slide 13: Meaningful Capital Spending Decrease Expected in 2024
Meaningful Capital Spending Decrease Expected in 2024 Capital Investments Profile1 ($M) 5.4 Reduction of ~$1.2 billion2 in 2024 5.1 3.0 • QB2 development capital significantly lower 4.7 2.1 as project nears completion 2.6 ~$3.6-4.4 • Sustaining capital increases marginally 3.6 ‒ Completing KIVCET bo
Slide 14: Strong Balance Sheet and Shareholder Returns
Strong Balance Sheet and Shareholder Returns Strong balance sheet Balancing growth with shareholder returns Liquidity1 Cash position1 Dividends $7.9B $2.5B • Paid $515 million in 2023 • Board approved payment of quarterly base dividend of $0.125 per share on March 28th Share Buybacks • $250 million
Slide 15: Considerations for Use of Transaction Proceeds
Considerations for Use of Transaction Proceeds Ensures Teck is well-positioned to unlock the full potential of our base metals business Maintain investment grade credit metrics through the cycle – targeting net debt to EBITDA* of 1.0x net debtopportunities Assess to EBITDA* ofto 1.0x reduce gross de
Slide 16: Jonathan Price
Jonathan Price President and Chief Executive Officer Global Metals and Mining Conference
Slide 17: Our Priorities
Our Priorities Complete sale of steelmaking coal – minority stake sale to Nippon Steel complete, regulatory approvals underway on majority sale to Glencore Drive safe operational performance across the portfolio, ensuring we deliver on our market commitments Consistent performance of QB at design ca
Slide 18: Disciplined Approach to Copper Growth
Disciplined Approach to Copper Growth Adapting our approach to project development • Undertaking a comprehensive review of the QB2 investment, utilizing third party expertise • Building capability and capacity through investment in our people and processes • Pausing sanctioning of development projec
Slide 19: Near-Term Development Options
Near-Term Development Options A balanced portfolio of greenfield and brownfield projects in well understood jurisdictions Highland Valley Mine Life Extension (Cu-Mo | Brownfield | British Columbia) Extending life of mine of Canada’s largest base metals mine Mine life extension of a highly productive
Slide 20: Commitment to Sustainability Leadership
Commitment to Sustainability Leadership Key Sustainability Achievements Key Goals and Recent Progress • Industry-leading sustainability assurance, with all Teck-operated base Climate Change metal operations awarded the Copper Mark or Zinc Mark Net zero Scope 1 & 2 emissions by 2050 - Highland Valley
Slide 21: Long-term Sustainable Shareholder Value Creation Strategy
Value Creation Strategy Capitalizing on strong demand in the transition to a low-carbon economy Focus on Unlock the value of excellence in industry leading operations and copper growth projects Long-term sustainable Balance growth Sustainability shareholder and cash returns to shareholders leadershi
Slide 22: Appendix
Appendix Global Metals and Mining Conference
Slide 23: Unrivalled Copper Growth Opportunities
Unrivalled Copper Growth Opportunities Multiple pathways to value creation Potential Annual CuEq Production Growth1 (kt; reporting basis; first 5 years average annual production by asset) Current Operating Assets Near-Term Development Options Investing Today For Longer-Term Growth Suite of options d
Slide 24: Copper Guidance
Copper Guidance Guidance includes Quebrada Blanca Production1,2 (kt) Net Cash Unit Costs*,1,3 (US$/lb) Copper in Concentrate 550-620 550-620 530-600 1.85-2.25 465-540 50-60 50-60 45-55 1.87 38-45 80-90 90-100 85-95 1.56 85-95 297 140-160 130-150 120-140 Carmen de Andacollo 112-125 40 Antamina (22.5%
Slide 25: Zinc Guidance
Zinc Guidance Production1,2 (kt) Red Dog Zinc in Concentrate Sales1 (kt) Net Cash Unit Costs*,1,3 (US$/lb) Zinc in Concentrate 644 565-630 555-615 104 Antamina (22.5%) 45-60 0.55-0.65 95-105 465-525 135 0.55 55-65 400-445 35-45 0.44 89 70-85 Red Dog 540 520-570 460-510 410-460 365-400 2023 2024E 202
Slide 26: Steelmaking Coal Guidance
Steelmaking Coal Guidance Sales and Production1 (Mt) Capital Expenditures1 ($M) Sales Production 1,452 ~1,350-1,750 1,167 15 10.0 24.0-26.0 24.0-26.0 24.0-26.0 24.0-26.0 550 9.0 23.7 30 -750 8.0 7.0 6.1 5.9-6.3 649 6.0 5.0 4.3 Growth 617 800 4.0 Capitalized Stripping -1,000 3.0 778 2.0 520 1.0 Susta
Slide 27: Cost of Sales 2023
Cost of Sales 2023 Copper Steelmaking Coal Cost of Sales (C$) Operating Costs Cost of Sales (C$) Operating Costs D&A Labour 25% Labour 26% 20% Contractors & Consultants 17% Contractors & Consultants 17% D&A Operating Royalties Operating Supplies & Parts 15% 24% Costs Operating Supplies & Parts 14% 1
Slide 28: Sensitivities
Sensitivities Estimated Effect of Changes on our Annualized Profitability1 ($M) Estimated Effect on Profit Attributable Estimated Effect 2024 Mid-Range to Shareholders3 on EBITDA*, 3 Production Estimates2 Changes ($ in millions) ($ in millions) US$ exchange C$0.01 $ 63 $ 110 Copper (kt) 502.5 US$0.0
Slide 29: Settlement Pricing Adjustments
Settlement Pricing Adjustments Simplified Settlement Pricing Adjustment Model for Base Metals (Pre-tax settlement pricing adjustment in C$M) Outstanding at Outstanding at Quarterly Pricing December 31, 2023 September 30, 2023 Adjustments Mlbs US$/lb Mlbs US$/lb C$M Copper 127 $ 3.87 189 $ 3.74 $ 13
Slide 30: Endnotes
Endnotes Slide 5: 2023 Highlights Slide 24: Copper Guidance 1. As at February 21, 2024. See Teck’s Q4 2023 press release for further details. 1. As at February 21, 2024. See Teck’s Q4 2023 press release for further details. 2. We include 100% of production from our Quebrada Blanca and Carmen de Anda
Slide 31: Endnotes
Endnotes Slide 28: Sensitivities 1. As at February 21, 2024. The sensitivity of our annualized profit(loss) attributable to shareholders and EBITDA to changes in the Canadian/U.S. dollar exchange rate and commodity prices, before pricing adjustments, based on our current balance sheet, our 2024 mid-
Slide 32: Non-GAAP Financial Measures and Ratios
Non-GAAP Financial Measures and Ratios Global Metals and Mining Conference
Slide 33: 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 34: Reconciliation of Segmented EBITDA
Reconciliation of Segmented EBITDA Reconciliation between Segmented Profit and Segmented EBITDA ($M) Steelmaking 3 months ending December 31, 2023 Copper Zinc Coal Corporate Total Profit (Loss) before Taxes $M (264) (19) 997 (20) 694 Net finance expense $M 167 13 30 (156) 54 Depreciation and amortiz