28 slides from Teck Resources Limited Class A's earnings presentation, Feb 21, 2023
Slide 1: Fourth Quarter 2022 Conference Call
Fourth Quarter 2022 Conference Call February 21, 2023 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 in applicable securities laws (collectively referred to as forward-looking statements). These forward-looking stateme
Slide 3: Agenda
Agenda Fourth Quarter 2022 Results Strategic Announcements • Separation of Teck Metals and Elk Valley Resources • Nippon Steel and POSCO Transactions • Sunset for Class A Shares Closing Remarks and Q&A Global Metals and Mining Conference 3
Slide 4: Fourth Quarter 2022 Results
Fourth Quarter 2022 Results Global Metals and Mining Conference
Slide 5: Record 2022 Financial Results
Record 2022 Financial Results Q4 2022 Gross Profit before D&A Adjusted EBITDA Adjusted Diluted EPS $1.4B $1.5B $1.3B $1.07 share buybacks Gross Profit Profit before Taxes Diluted EPS from Continuing Operations $1.2B $594M $0.47 2022 $0.5B dividends paid Gross Profit Adjusted Adjusted Diluted before
Slide 6: Key Highlights 2022
Key Highlights 2022 Achievements across all four pillars of our copper growth strategy Advanced our copper Sold our interest Returned record Progressed our growth pipeline in Fort Hills cash to shareholders sustainability goals • QB2 in commissioning of • Transaction closed for • $532M in di
Slide 7: QB2 Progress Update
QB2 Progress Update Outlook • Commissioning Line 1 at the concentrator and making final preparations to feed ore to the mills • Expected to reach full capacity by end of 2023 • Project capex unchanged at US$7.4-7.75B • Production of 150-180 kt1 in 2023 and 285-315 kt1 annually in 2024-2026 • Net cas
Slide 8: Industry Leading Copper Growth Pipeline
Industry Leading Copper Growth Pipeline Potential to add >1.5 Mt of current annual copper equivalent production Potential Annual CuEq Production Growth (kt; reporting basis)1 Unrivaled suite of options Near Term (2024-2028) Medium Term (2029-2033) Future Potential (2034+) diversified by geography, s
Slide 9: Unlocking Value for Teck Resources Shareholders
Unlocking Value for Teck Resources Shareholders Separation of Teck Metals and Elk Valley Resources Global Metals and Mining Conference 9
Slide 10: Separation Creates Two World-Class Companies
Separation Creates Two World-Class Companies Unlocking the value of Teck Resources • Teck Metals to realize its full potential as a premier, growth-oriented producer of energy transition metals • EVR established as a pure-play, high-margin steelmaking coal producer • Teck Metals retains steelmaking
Slide 11: Investment Landscape has Changed
Investment Landscape has Changed Copper’s critical role in the energy transition drives premium valuation Growth and reduced cash flow volatility through commodity diversification High-quality seaborne steelmaking coal continues to be a key input to steel and the low-carbon transition Before Today •
Slide 12: Positioning Teck Metals for the Future
Positioning Teck Metals for the Future Premier metals company with industry-leading copper growth Teck Metals • Teck Resources becomes Teck Metals • High-quality, low-cost base metals producer in the Americas • Industry-leading, well-funded copper growth portfolio that is significantly undervalued r
Slide 13: World-Class Canadian Steelmaking Coal Company
World-Class Canadian Steelmaking Coal Company Long-life assets drive significant long-term value Elk Valley Resources (EVR) • Pure-play steelmaking coal company with high-quality, long-life assets with top-tier margins • Nippon Steel and POSCO transactions simplify structure and validate EVR valuati
Slide 14: Transaction Structure
Transaction Structure EVR Common Equity • Teck shareholders receive 1 EVR share for every Pathway to full financial separation 10 Teck shares (subject to Dutch auction process), plus cash Transition Capital Structure (TCS) a. Gross Revenue Royalty (“Royalty”) 87.5% 100% • Royalty payments based on c
Slide 15: EVR Cash Flow Waterfall
EVR Cash Flow Waterfall TCS supports resilience and returns to shareholders Resiliency of EVR Cash Flow Capital Environmental Preferred Share from Operations Expenditures Stewardship Trust Dividends1 Transition Capital Structure (87.5% to Teck Metals) 90% Gross Revenue Preferred Share Royalty Redemp
Slide 16: Transition Capital Structure
Transition Capital Structure Structure leveraged to HCC prices provides flexibility and resiliency to EVR Illustrative Sensitivity of Cumulative TCS Proceeds Structure Economics to LT HCC Pricing Assumptions ($B, 100% basis) ~$34B Preferred Royalty • TCS is estimated to be fully paid in ~11 years1 a
Slide 17: Sunset for Class A Shares Modernizes Capital Structure
Sunset for Class A Shares Modernizes Capital Structure Dual Class Amendment Effective Date of the Dual Class Amendment • Sunsets increasingly a common feature of dual class 1 New Class A common share structures 1 Class A common share + • Multiple voting rights eliminated in year 6 • Not conditional
Slide 18: Transaction Timeline and Approvals
Transaction Timeline and Approvals Announcement Record Date Annual and Closing EVR Shares for Meeting Special Meeting Date Begin Trading1 21 7 26 February March April May June 2023 Shareholder approvals (Subject to regulatory approval) a. Separation Subject to 66 2/3% approval by Class A and B share
Slide 19: Separation Creates Two World-Class Companies
Separation Creates Two World-Class Companies Unlocking value for Teck Resources shareholders • Teck Metals retains steelmaking coal cash flows during transition period to fund copper growth and realize its full potential • Provides investors choice of businesses with unique fundamentals and value pr
Slide 20: Appendix
Appendix Global Metals and Mining Conference
Slide 21: Production Guidance
Production Guidance Copper Zinc Steelmaking Coal 2022 2023 2024-2026 2022 2023 2024-2026 2022 2023 2024-2026 Actual Guidance1 Guidance1 Actual Guidance1 Guidance1 Actual Guidance1 Guidance1 Copper2,3,4 Zinc in concentrate2,3,5 Steelmaking coal (Mt) 21.5 24.0-26.0 24.0-26.0 Highland Valley 119.1 110-
Slide 22: Unit Cost and Sales Guidance
Unit Cost and Sales Guidance Unit Costs Copper2 Zinc3 Steelmaking Coal 2022 2023 2022 2023 2022 2023 (US$/lb) Actual Guidance1 (US$/lb) Actual Guidance1 (C$/tonne) Actual Guidance1 Total cash unit costs 2.02 2.05-2.25 Total cash unit costs 0.58 0.68-0.78 Adjusted site cash cost of sales 89 88-96 Net
Slide 23: Capital Expenditures Guidance
Capital Expenditures Guidance Teck’s share in C$ millions, except as noted. Sustaining and Growth Capital Capitalized Stripping 2022 Actual 2023 Guidance1 2022 Actual 2023 Guidance1 Sustaining Capitalized Stripping Copper2 $ 297 $ 510 Copper $ 336 $ 295 Zinc 244 150 Zinc 89 55 Steelmaking coal3 520
Slide 24: Water Treatment Guidance
Water Treatment Guidance Steelmaking Coal Capital Expenditures and Operating Costs Related to Water Treatment1 Long-Term 2022 2023 2023-2024 Guidance3 Actual Guidance2 Guidance2 (C$/tonne) Capital Expenditures Sustaining capital (water management and water treatment, including $ 184 $ 220 $ 450-550
Slide 25: Sensitivities
Sensitivities Sensitivity of our Annualized Profit Attributable to Shareholders and EBITDA1 Estimated Effect on Profit Attributable Estimated Effect 2023 Mid-Range to Shareholders3 on EBITDA3 Production Estimates2 Changes ($ in millions) ($ in millions) US$ exchange C$0.01 $ 60 $ 98 Copper (kt) 417.
Slide 26: Non-GAAP Financial Measures and Ratios
Non-GAAP Financial Measures and Ratios Global Metals and Mining Conference
Slide 27: 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 28: Teck.com/Investors
Visit us at Teck.com/Investors Contact Investor Relations investors@teck.com 1.877.759.6226 or 604.699.4257 Global Metals and Mining Conference