2018 Q1 Conference Call. April 27, 2018

Transcription

1 2018 Q1 Conference Call April 27, 2018

2 Forward-Looking Information Caution This presentation includes forward-looking information or forward-looking statements under Canadian and US securities laws, which we refer to as forward-looking formation. Forward-looking information is based upon our current views, which can change significantly, and actual results and events may be significantly different from what we currently expect. Examples of forwardlooking information include: our expectations about strong nuclear growth and growth in reactor construction and uranium demand, supply, consumption, prices, and long-term contracting; our forecasts relating to our CRA trial and TEPCO dispute; our 2018 plans and outlook; and our views on the uranium required to meet our 2018 commitments. Material risks that could lead to a different result include: unexpected changes in uranium supply or demand, our production, purchases, sales, costs, taxes, our mineral reserve and resource estimates, currency exchange rates, and government regulations or policies; the risk of litigation or arbitration claims against us that have an adverse outcome, including lack of success in our dispute with CRA or with TEPCO; the risk that our contract counterparties may not satisfy their commitments; the risk that our cost reduction strategies or other strategies are unsuccessful or have unanticipated consequences; and the risk our estimates and forecasts prove to be inaccurate. In presenting the forward-looking information, we have made material assumptions which may prove incorrect about: uranium demand, supply, consumption, long-term contracting and prices; trade restrictions; growth in reactor construction; our production, purchases, sales, and costs; taxes and currency exchange rates; about market conditions and other factors upon which we have based our 2018 plans and outlook; the accuracy of our estimates; the absence of new and adverse government regulations or policies; the successful outcome of any litigation or arbitration claims against us; the timing of the judge s decision in the CRA trial and of the TEPCO arbitration hearing and outcomes of those disputes; our ability to complete contracts on the agreed-upon terms; and that our cost reduction strategies and other strategies will successfully achieve their objectives. Please also review the discussion in our most recent annual and first quarter MD&A and our most recent annual information form for other material risks that could cause actual results to differ significantly from our current expectations, and other material assumptions we have made. Forward-looking information is designed to help you understand management s current views of our near- and longer-term prospects, and it may not be appropriate for other purposes. We will not necessarily update this information unless we are required to by securities laws. Cameco - Q Results Conference Call 2

3 Current state of industry A lot of moving parts Demand Side US: Potential for additional reactor closures Belgium: Planning to phase out nuclear Japan: Restarted more reactors China: Approved 6 8 new construction starts; approval to load fuel into first AP 1000 India and Middle East: Moving forward with plans for nuclear Supply Side McArthur River/ Key Lake: Production suspended Paladin: Announced plan to put Langer Heinrich on care and maintenance subject to approval US: DOE suspended excess uranium sales in 2018 US: Trade action under Section 232 of Trade Expansion Act and review of Russian Suspension Agreement Russia: Potential ban on all trade with US nuclear power companies Cameco - Q Results Conference Call 3

4 Production & consumption Gap is highlighted *Based on 2017 production and operable reactors **Operable reactors in Asia include 40 in Japan, of which 7 have restarted Cameco - Q Results Conference Call 4

5 Cautiously more optimistic A challenging market $140 US / lb U 3 O 8 $120 $100 $80 $60 Spot Price 11% January March 2018 $40 $20 $0 Spot (weekly) Long-term (monthly) Cameco - Q Results Conference Call 5

6 Cautiously more optimistic Growth in industry Currently Under Construction reactors under 55 construction Cameco - Q Results Conference Call 6

7 Cautiously more optimistic Supply is not incentivized Uncertain future supply Low Uranium Prices Reserve Life Supply Disruption/ Discipline Lack of Investment Declining Contract Protection Mine Development Lead time Cameco - Q Results Conference Call 7

8 Strong nuclear growth Reactors Under Construction Non-traditional markets China India UAE Cameco - Q Results Conference Call 8

9 Cameco specific updates CRA Trial For years 2003, 2005, 2006 Final arguments concluded Remain confident in our position Expect decision any time TEPCO Dispute Three arbitrators appointed Expect case will be heard Q Final decision dependent on when deliberations conclude Statement of claim $682 million US plus interest and legal costs Cameco - Q Results Conference Call 9

10 A Deliberate Strategy Navigate by investment-grade rating = self-manage risk Disciplined actions taken: Production suspensions: 2016 Rabbit Lake and US 2018 McArthur River/Key Lake 2018 dividend reduction Operational changes: shift schedules air commuter services Organizational changes: reduced workforce restructured global marketing Cameco - Q Results Conference Call 10

11 Q1 Results Uranium deliveries, prices, and revenue Q Actuals Q Actuals Change Delivery volume (m lbs) % Average realized price ($/lb) % Revenue ($ millions) % Cameco - Q Results Conference Call 11

12 As Expected Cash from ops and costs Change Cash from operations >100% Avg. unit cost of sales ($/lb) 12% Direct Admin 17% Exploration 20% Cameco - Q Results Conference Call 12

13 2018 Outlook Meeting our commitments Production Purchases Inventory & opportunistic purchases Uranium Required million lbs* 9.2m lbs 8-9m lbs * Sales volume m lbs, provide Orano up to 5.4 m lbs Cameco - Q Results Conference Call 13

14 Managing for the Long-Term Focus on what we can control Focused on tier-one strategy Restructuring organization for efficiency Disciplined management of our production, inventory and purchases Protecting and extending value of contract portfolio Maximizing cash flow while maintaining our investment-grade rating Positioning company to self-manage risk and deliver long-term value Cameco - Q Results Conference Call 14

15 Q&A Investor Relations th Street West Saskatoon, Saskatchewan Cameco - Q Results Conference Call 15

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