Discounted Cash Flow (DCF) Analysis Unlevered

Teck Resources Limited (TECK)

$29.78

-0.79 (-2.58%)

All numbers are in Millions, Currency in USD

Stock DCF: -40.95 | 29.78 | overvalue

Operating Data

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Revenue	12,048	12,564	11,934	8,948	13,481	14,320.43	15,212.12	16,159.34	17,165.54	18,234.40
Revenue (%)
EBITDA	5,478	6,030	1,222	562	6,073	4,440.23	4,716.71	5,010.41	5,322.39	5,653.81
EBITDA (%)
EBIT	4,011	4,547	-397	-948	4,490	2,545.24	2,703.73	2,872.08	3,050.92	3,240.89
EBIT (%)
Depreciation	1,467	1,483	1,619	1,510	1,583	1,894.99	2,012.99	2,138.33	2,271.48	2,412.92
Depreciation (%)

Balance Sheet Data

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Total Cash	952	1,734	1,026	450	1,427	1,315.04	1,396.92	1,483.90	1,576.30	1,674.45
Total Cash (%)
Account Receivables	1,839	1,258	1,157	1,326	1,987	1,848.19	1,963.27	2,085.52	2,215.38	2,353.33
Account Receivables (%)
Inventories	1,637	2,065	1,981	1,872	2,390	2,442.27	2,594.35	2,755.89	2,927.49	3,109.78
Inventories (%)
Accounts Payable	1,150	1,230	1,323	1,489	3,255	2,039.42	2,166.41	2,301.31	2,444.60	2,596.82
Accounts Payable (%)
Capital Expenditure	-2,299	-2,613	-3,468	-3,628	-4,713	-4,137.03	-4,394.63	-4,668.27	-4,958.95	-5,267.74
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 29.78
Beta	1.063
Diluted Shares Outstanding	534.40
Cost of Debt
Tax Rate	36.72
After-tax Cost of Debt	0.03%
Risk-Free Rate
Market Risk Premium
Cost of Equity	7.904
Total Debt	9,331
Total Equity	15,914.43
Total Capital	25,245.43
Debt Weighting	36.96
Equity Weighting	63.04
Wacc

Build Up Free Cash

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Revenue	12,048	12,564	11,934	8,948	13,481	14,320.43	15,212.12	16,159.34	17,165.54	18,234.40
EBITDA	5,478	6,030	1,222	562	6,073	4,440.23	4,716.71	5,010.41	5,322.39	5,653.81
EBIT	4,011	4,547	-397	-948	4,490	2,545.24	2,703.73	2,872.08	3,050.92	3,240.89
Tax Rate	36.90%	31.11%	-29.27%	23.94%	36.72%	19.88%	19.88%	19.88%	19.88%	19.88%
EBIAT	2,531.09	3,132.49	-513.22	-721.01	2,841.42	2,039.29	2,166.27	2,301.16	2,444.44	2,596.65
Depreciation	1,467	1,483	1,619	1,510	1,583	1,894.99	2,012.99	2,138.33	2,271.48	2,412.92
Accounts Receivable	-	581	101	-169	-661	138.81	-115.08	-122.25	-129.86	-137.95
Inventories	-	-428	84	109	-518	-52.27	-152.07	-161.54	-171.60	-182.29
Accounts Payable	-	80	93	166	1,766	-1,215.58	126.99	134.90	143.30	152.22
Capital Expenditure	-2,299	-2,613	-3,468	-3,628	-4,713	-4,137.03	-4,394.63	-4,668.27	-4,958.95	-5,267.74
UFCF	1,699.09	2,235.49	-2,084.22	-2,733.01	298.42	-1,331.79	-355.54	-377.68	-401.20	-426.18
WACC
PV UFCF						-1,268.50	-322.55	-326.35	-330.19	-334.08
SUM PV UFCF										-2,581.67

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	4.99
Free cash flow (t + 1)	-434.70
Terminal Value	-14,538.58
Present Value of Terminal Value	-11,396.78

Intrinsic Value

Enterprise Value	-13,978.45
Net Debt	7,904
Equity Value	-21,882.45
Shares Outstanding	534.40
Equity Value Per Share	-40.95