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2016 Teck Sustainability Report Conference Call
- 1. 2016 Sustainability Report ConferenceCall May 8, 2017
- 2. Forward-Looking Information Both theseslides 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) and comparable legislation in other provinces (collectively, “forward-looking statements”), concerning our business, goals, operations and strategy. Some forward-looking statements may be identified by words like “expect”, “anticipate”, “plan”, “estimate”, “potential”, “may”, “will”, “should”, “believe” and similar expressions. Forward-looking statements in these slides and the accompanying oral presentation include, but are not limited to, statements relating to management's expectations with respect to our business and sustainability strategies, our sustainability goals and our anticipated timeframes for achieving such goals and strategies. These forward-looking statements are based on current estimates, projections, beliefs and assumptions of the management team which are believed to be reasonable, though inherently uncertain and difficult to predict including, but not limited to, assumptions regarding general business and economic conditions, technological solutions, receipt of regulatory approvals and ongoing relations with interested parties. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance, experience or achievements of Teck to be materially different from those expressed or implied by the forward- looking statements. Risks and uncertainties that could influence actual results include, but are not limited to: regulatory action, changes in laws and governmental regulations, development and use of new technology, natural disasters and adverse weather conditions, changes in commodity prices, general business and economic conditions, and the future operation and financial performance of Teck generally. Certain of these risks and other additional risk factors are described in more detail in Teck’s Annual Information Form and its management’s discussion and analysis and other documents available at www.sedar.com and in public filings with the United States Securities and Exchange Commission at www.sec.gov. These statements speak only as of the date of this Presentation. Teck does not assume the obligation to revise or update these forward-looking statements after the date of this document or to revise them to reflect the occurrence of future unanticipated events, except as may be required under applicable securities laws. Under no circumstances should the information contained herein be considered an offer to sell or a solicitation of an offer to invest in securities. 2
- 3. Agenda About Teck Approach toSustainability 2016 Sustainability Topics Sustainability Outlook for 2017 Questions 3
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- 5. Teck Overview • Diversifiedresource company, committed to responsible mining and mineral development • Major business units focused on steelmaking coal, zinc, copper and energy • Own or have an interest in 12 mines, one large metallurgical complex, and several major development projects in the Americas • Over 100 years of experience 5
- 6. Our Approach toBusiness 6 Sustainability Best people Balance sheet strength Nimble response to opportunity Operating excellence Long life, low cost assets in stable jurisdictions
- 7. 2016 Safety Performance •Improved performance across safety metrics in 2016 • High Potential Injury frequency reduced by ~50% since 2013 • Advanced occupational health and hygiene strategy Next phase of Courageous Safety Leadership, our core program for building culture of safety, rolled out across operations 0 0.2 0.4 0.6 0.8 1 1.2 2013 2014 2015 2016 Frequency(per200,000hoursworked) High-Potential Incident Frequency YTD High Potential Incident Frequency - Level 3 YTD Serious High Potential Incident Frequency - Level 4 YTD Potentially Fatal Occurrence Frequency - Level 5 7
- 8. Financial Performance 8 2016 Q12017 Revenue $9.3 billion $2.9 billion Gross profit before depreciation & amortization* $3.8 billion $1.5 billion Profit attributable to shareholders $1.0 billion $572 million EBITDA* $3.4 billion $1.3 billion Adjusted EBITDA* $3.4 billion $1.5 billion Adjusted profit attributable to shareholders* $1.1 billion $1.91/share $671 million $1.16/share Significant increases in earnings *Non-GAAP financial measures. See “Use of Non-GAAP Financial Measures” section of our quarterly news releases for further information. Debt reduced by US$2.1 billion since September 2015
- 9. 2016 Sustainability Highlights 9 Rankedin top 10% of the world’s largest companies on Dow Jones Sustainability Index Taking action on our short-term sustainability goals to 2020 Strong performance in our most material sustainability topics
- 10. Looking Forward • Generatingsignificant free cash flow • High quality organic growth options • Continue to reduce debt opportunistically • First oil at Fort Hills in eight months • Advancing towards 2020 sustainability goals 1010
- 11. 11 Approach to Sustainability MarciaSmith Senior Vice President, Sustainability and External Affairs
- 12. Approach to Sustainability 12 Short-term Visions 2020& 2030 Sustainability Goals Key Sustainabilty Topics Economic, Social and Environmental Context Long-term
- 13. 13 Our Sustainability Strategy 2011:Launch strategy with short and long- term goals 2015: Complete first set of short- term goals 2020: Target date for next set of short- term goals 2030: Target date for long- term goals Community Water Our People Biodiversity Energy and Climate Change Air
- 14. Alignment with theUN Sustainable Development Goals (SDGs) to 2030 14 This icon denotes how our activities are aligned with the UN SDGs. • Understanding how Teck’s activities contribute • Aligning our reporting & communications • Engaging with governments & other stakeholders
- 15. 15 2016 Sustainability Topics MarciaSmith Senior Vice President, Sustainability and External Affairs
- 16. Most Material SustainabilityTopics in 2016 16 Learn more in Teck’s 2016 Sustainability Report, which was compiled in accordance with the Global Reporting Initiative’s Standards core option and independently assured. Click image to view/download the report. Economic • Economic Performance and Contributions • Business Ethics • Mine Closure • Our Workforce Sociall • Health and Safety of Our Workforce • Relationships with Indigenous Peoples • Community Engagement • Emergency Preparedness • Human Rights • Product Impacts Environmental • Water Management • Tailings and Mine Waste Management • Environmental Management • Air Quality • Energy and Climate Change • Biodiversity
- 17. Communities and IndigenousPeoples Context • Many operations located close to local communities. • Most operations, exploration and development projects located within or adjacent to Indigenous Peoples’ territories. • Community engagement throughout the mining life cycle to address concerns and define mutual benefits common practice. 17 Approach • Protect human rights and engage with communities on potential impacts. • Build strong relationships and create lasting mutual benefits. • Engage with Indigenous Peoples early and work to achieve their Free, Prior and Informed Consent for our activities. 2016 Performance $128 million in spending with suppliers who self-identified as Indigenous. Outlook for 2017 → Engage local communities in preparation for the closure of Coal Mountain Operations in British Columbia. → Engage Indigenous Peoples and other stakeholders as we advance our Frontier, Quebrada Blanca Phase 2 and NuevaUnión projects. Reached new agreements with Indigenous Peoples in the areas we operate, including an Impact Management and Benefits Agreement with the Ktunaxa Nation Council. Focus Areas:
- 18. Case Study Impact Managementand Benefits Agreement (IMBA) 18 The IMBA sets out commitments for both parties on environmental and cultural stewardship. In May 2016, the Ktunaxa Nation Council and Teck formally signed an IMBA. Ktunaxa Nation Territory encompasses Teck’s five steelmaking coal operations in the Elk Valley, B.C. One of the most comprehensive agreements of its kind in Canada.
- 19. Inclusion and Diversity Context •Women and Indigenous Peoples have typically been under-represented in the mining industry. • Growing expectation from employees and communities to have a more diverse workforce. 19 Approach • Build a more diverse workforce that includes more women and Indigenous Peoples. • Set the course through an Executive Diversity Committee. • Support site-based diversity initiatives, such as mentorship programs. 2016 Performance Developed and released an Inclusion and Diversity Policy, endorsed by our Board of Directors and senior management team. Outlook for 2017 → Implement the Inclusion and Diversity Policy. → Advance partnerships to support women, including work with UN Women in Chile to empower Indigenous women. 9% increase in the number of women in operational and technical roles at Teck. In total, women make up 15% of our workforce. Focus Areas:
- 20. Environmental Management Context • Effectiveenvironmental management requires mining companies to recognize and address long-term impacts across the mining life cycle. 20 Approach • Embed in our sustainability strategy, policies and management standards. • Focus on water management, tailings and mine waste management, air quality, biodiversity and energy and climate change. • Conduct regular audits of our sites on environmental compliance. 2016 Performance Decreased total water use by 11% since 2013. Won the Mining Association of Canada’s Towards Sustainable Mining Leadership Awards for Elkview and Highland Valley Copper Operations. Invested $35 million into a Smelter Recycle Building at our Trail Operations that will reduce fugitive dust emissions by up to 25%. Outlook for 2017 → Advance a variety of environmental performance initiatives in addition to the cross-company water steering committee, which was established in early 2017. Focus Areas:
- 21. Case Study Strategy forClimate Action 21 1. Reducing Our Carbon Footprint 2. Positioning Teck for the Low-Carbon Economy 3. Advocating for Climate Action 4. Adapting to the Physical Impacts Reduce energy use by 6,000 TJ Reduce GHGs by 450 kt Commit to 100 MW of alternative energy By 2030…
- 22. Case Study Elk ValleyWater Quality Plan 22 Undertaken a robust research and development program and implementing additional aquatic monitoring. Working towards short, medium and long-term water quality targets. Completed commissioning of our first water treatment facility under the Plan at our Line Creek Operations in 2016.
- 23. Sustainability Outlook for2017 23 Manage emerging risks and embrace opportunities created by developing issues. Focus on working towards our 2020 goals. Support sustainable development on the world stage through the SDGs and other frameworks.
- 24. 24 Fraser Phillips Senior VicePresident, Investor Relations and Strategic Analysis Teck Resources Limited T: 604.699.4621 E: [email protected] Questions? Marcia Smith Senior Vice President, Sustainability and External Affairs Teck Resources Limited T: 604.699.4616 E: [email protected] www.teck.com/responsibility
- 25. 2016 Sustainability Report ConferenceCall May 8, 2017