Slide 1: Results Presentation Year Ended 30 June 2021
17 August 2021 For personal use only To: Australian Securities Exchange New York Stock Exchange RESULTS PRESENTATION YEAR ENDED 30 JUNE 2021 Attached are the presentation slides for a presentation by the Chief Executive Officer and Chief Financial Officer. Further information on BHP can be found at
Slide 2: Growing value and positioning for the future
For personal use only Growing value and positioning for the future Full year ended 30 June 2021 Mike Henry Chief Executive Officer Jansen
Slide 3: Disclaimer
Disclaimer The information in this presentation is current as at 17 August 2021. It is in summary form and is not necessarily complete. It should be read together with the BHP Results for the year ended 30 June 2021. Forward-looking statements For personal use only This presentation contains forward
Slide 4: Financial results
For personal use only Financial results Full year ended 30 June 2021 Mike Henry Chief Executive Officer Spence Growth Option
Slide 5: Delivering on our strategy
Delivering on our strategy Strong operational performance and intended portfolio changes enhance long-term value For personal use only Continued operational excellence and project delivery Strong financial results, record FY dividend Jansen grows value and increases future facing commodities exposur
Slide 6: FY21 operational highlights
FY21 operational highlights We were safe, more reliable and more productive For personal use only Safety Production Unit costs Zero fatalities Records Delivered TRIF1 11% to 3.7 per million hours WAIO, OD2, Goonyella, and concentrator FY21 guidance across WAIO, Escondida worked compared to FY20 th
Slide 7: FY21 financial highlights
FY21 financial highlights A strong set of results enables higher shareholder returns For personal use only Earnings EBITDA margin Free cash flow US$ 37.4 bn 64% US$ 19.4 bn Underlying EBITDA 69% 11% points 140% Net debt Shareholder returns ROCE US$ 4.1 bn 200 US cps 32.5% Final dividend determ
Slide 8: FY21 social value highlights
FY21 social value highlights We have made significant progress across our social value goals and targets For personal use only Operational emissions Inclusion and diversity Social investment On track 29.8% US$ 175 m to reduce GHG emissions by at least female representation across Group including a U
Slide 9: Financial results
For personal use only Financial results Full year ended 30 June 2021 David Lamont Chief Financial Officer BMA
Slide 10: Financial performance
Financial performance Operational excellence supported EBITDA margin of 64%, ROCE to 32.5%, record dividend and strong earnings per share For personal use only Summary income statement Strong earnings delivery FY21 % change (US cents per share) (Index, FY16=100) (US$ billion) 250 Underlying EBITDA 3
Slide 11: Segment performance
Segment performance Delivered on our production and cost guidance. We are systematically unlocking even greater performance from our assets For personal use only Iron Ore10 Copper Petroleum Metallurgical Coal EBITDA: US$26.3 bn US$8.5 bn US$2.3 bn US$593 m EBITDA margin: 77% 7% points 62% 17% po
Slide 12: Continued capital allocation discipline
Continued capital allocation discipline We generated record free cash flow. Our balance sheet is strong For personal use only FY21 Operating Capital productivity productivity Net operating cash flow US$27.2 bn Maintenance capital US$2.3 bn Strong balance sheet Minimum 50% payout ratio dividend US$
Slide 13: Strategic update
For personal use only Strategic update Full year ended 30 June 2021 South Flank
Slide 14: Delivering on our objectives
Delivering on our objectives Driving BHP to deliver leading financial returns For personal use only Delivered … Continued progress • Enabling our people and investing in capability Operational • Safe, more reliable and more productive operations • Harnessing technology and innovation to bring reso
Slide 15: Sustainability shapes our approach
Sustainability shapes our approach Resources are essential for global economic growth and the energy transition For personal use only Environmental accountability Creating Social value Leading Governance practices Committed to material positive impact in Providing skilled jobs for our people and All
Slide 16: Our portfolio benefits in a decarbonising world
Our portfolio benefits in a decarbonising world Focused on increasing future facing commodity exposure For personal use only Cumulative demand in the next 30 years compared to the last 30 years13 (%) 400 1.5°C Scenario Central Energy View Lower Carbon View Climate Crisis 300 200 100 0 Nickel 14 Pota
Slide 17: Sector leading assets across our commodities
Sector leading assets across our commodities We are actively managing our portfolio for long-term value creation For personal use only Maximising value Iron ore Lowest cost iron ore major globally16, with improved product quality Metallurgical coal Petroleum World class resource with a high quality
Slide 18: Jansen is a top tier asset in a future facing commodity
Jansen is a top tier asset in a future facing commodity Significant resource base gives us exposure to potash’s attractive long term, differentiated fundamentals For personal use only Potash market has highly attractive characteristics 6+ Bt resource in world’s best potash basin Mine Transitioning t
Slide 19: Modern, high margin, long life and expandable
Modern, high margin, long life and expandable Jansen S1 is a large, low cost asset that will enter the market at the bottom of the global cost curve For personal use only Jansen S1’s competitive position against peers Stage 1 investment (Average asset age in 2025) Well defined Note: Bubble size US$5
Slide 20: Jansen S1 is resilient with through the cycle returns
Jansen S1 is resilient with through the cycle returns Margins and returns robust even under short-run marginal cost scenarios For personal use only EBITDA margin IRR Payback ~70% 12-14% 7 years Underlying EBITDA margin19 Stage 1 Internal Rate of Return19 from 1st production Operating Cost Optionalit
Slide 21: Creating a global top independent energy company
Creating a global top 10 independent energy company Merger provides choice and delivers benefits for BHP shareholders For personal use only Combination provides BHP Merger delivers a number of shareholders choice benefits for BHP shareholders • Provides shareholders choice to weight exposure between
Slide 22: Combined business creates significant scale
Combined business creates significant scale High-quality, complementary asset portfolios combining high margin oil and long life LNG For personal use only Global top 10 independent energy producer22 (FY21 production, MMboe) • Global top 10 independent energy producer and 300 largest on the ASX Combi
Slide 23: Merger creates platform for strong returns
Merger creates platform for strong returns A resilient asset base to generate strong returns with significant optionality For personal use only Strong Balance sheet with low gearing24 • Strong balance sheet (%, FY21) 100 • Committed to an investment grade credit rating Majors Other independents Fina
Slide 24: Unification to drive simplicity and flexibility
Unification to drive simplicity and flexibility Changes to our portfolio mean the time is right to unify For personal use only Setting BHP up for the future Right time to unify Underlying business unchanged • Simplification, a natural extension of Continued reduction in Plc earnings contribution No
Slide 25: Growing value and positioning for the future
Growing value and positioning for the future We will be even better-placed to deliver long-term value and returns For personal use only Operational excellence Increasing our leverage towards the world’s changing needs Disciplined capital allocation More streamlined and agile Value and returns Financ
Slide 26: For personal use only
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Slide 27: Appendix
For personal use only Appendix
Slide 28: Footnotes
Footnotes and Outlook Jansen S1 Petroleum Unification Social Value Financial Footnotes 1. Slide 5: TRIF – Total Recordable Injury Frequency; being the sum of (fatalities + lost-time cases + restricted work cases + medical treatment cases) multiplied by 1 million/actual hours worked by our employees
Slide 29: Investment proposition
Footnotes and Outlook Jansen S1 Petroleum Unification Social Value Financial Investment proposition We grow shareholder value through operational excellence, optimal allocation of capital and creating sustainable returns For personal use only Operational Disciplined Value and returns excellence capi
Slide 30: A compelling outlook for value
Footnotes and Outlook Jansen S1 Petroleum Unification Social Value Financial A compelling outlook for value Continued signs of recovery and renewal in the near term; further opportunity emerges beyond that For personal use only Policy makers Fears of Growth & inflation Synchronised Macro environment
Slide 31: Jansen S1 capital expenditure and operating costs
Footnotes and Outlook Jansen S1 Petroleum Unification Social Value Financial Jansen S1 capital expenditure and operating costs US$5.7 billion over 6 years of construction, first production CY27 For personal use only Investment spend profile Capital cost breakdown of Jansen S1 (US$ billion) (US$5.7 b
Slide 32: Outbound logistics support Jansen S1 and beyond
Footnotes and Outlook Jansen S1 Petroleum Unification Social Value Financial Outbound logistics support Jansen S1 and beyond Agreements and investment set to deliver efficient path to market for Jansen’s product For personal use only Rail Location of Westshore Terminal ~2,000km from Jansen 25 km Rai
Slide 33: Jansen S1 Financial Modelling
Footnotes and Outlook Jansen S1 Petroleum Unification Social Value Financial Jansen S1 Financial Modelling Operator and 3% crown royalty calculation = (K20 tonnes produced) x For personal use only BHP, 100% interest ownership (average realised price) x (3% royalty rate) Royalty US$5.7 bn, C$7.5 bn 3
Slide 34: Petroleum merger mechanics
Footnotes and Outlook Jansen S1 Petroleum Unification Social Value Financial Petroleum merger mechanics Merger with Woodside will create a global top 10 independent energy company and largest energy company on the ASX For personal use only Existing BHP shareholders would own 48% of combined business
Slide 35: Combined business provides size, scale and diversity
Footnotes and Outlook Jansen S1 Petroleum Unification Social Value Financial Combined business provides size, scale and diversity Significant resources across two heartlands with emerging options For personal use only Australia4 BHP Combined Resource1 Woodside Gulf of Mexico US Gulf of Mexico Greate
Slide 36: Petroleum portfolio | Producing assets and growth projects
Footnotes and Outlook Jansen S1 Petroleum Unification Social Value Financial Petroleum portfolio | Producing assets and growth projects Quality assets concentrated in key heartlands in the Gulf of Mexico, Trinidad & Tobago and Australia For personal use only Producing Assets1 FY21 End of 1P3 2P3 2P+
Slide 37: Petroleum portfolio | Embedded growth within producing assets
Footnotes and Outlook Jansen S1 Petroleum Unification Social Value Financial Petroleum portfolio | Embedded growth within producing assets Suite of quality projects in key heartlands to support production longevity For personal use only Sanctioned Projects (in execution) Estimated peak FY22 – FY30 C
Slide 38: Petroleum portfolio | Woodside assets
Footnotes and Outlook Jansen S1 Petroleum Unification Social Value Financial Petroleum portfolio | Woodside assets Diversified, quality portfolio with growth optionality For personal use only Producing Assets CY20 Production 2P1 2C1 2P+2C1 Asset Description Operator Woodside ownership (MMboe) (MMboe
Slide 39: Statement of petroleum resources
Footnotes and Outlook Jansen S1 Petroleum Unification Social Value Financial Statement of petroleum resources For personal use only The estimates of Petroleum Reserves and Contingent Resources contained in this presentation are based on, and fairly represent, information and supporting documentation
Slide 40: Unification overview, timeline and approvals
Footnotes and Outlook Jansen S1 Petroleum Unification Social Value Financial Unification overview, timeline and approvals For personal use only Indicative timeline • If approved, unification is expected to occur in H1 CY22, with the proposed Petroleum with Woodside to follow. • Final Board decision
Slide 41: Unification impact on corporate structure
Footnotes and Outlook Jansen S1 Petroleum Unification Social Value Financial Unification impact on corporate structure Unification would be implemented by way of UK scheme of arrangement, whereby BHP Group Limited would acquire BHP Group Plc For personal use only Current Structure Proposed Structure
Slide 42: Unification will not change ability to fully frank dividends
Footnotes and Outlook Jansen S1 Petroleum Unification Social Value Financial Unification will not change ability to fully frank dividends Unification will remove the DDS1 and enable all dividends and franking credits to be paid directly to BHP shareholders For personal use only Franking credit (FC)
Slide 43: Social value scorecard
Footnotes and Outlook Jansen S1 Petroleum Unification Social Value Financial Social value scorecard We are making good progress on our social value commitments For personal use only Category1 Key indicators FY21 H2 FY21 H1 FY21 FY20 Target Fatalities 0 0 0 0 Zero work-related fatalities High Potenti
Slide 44: Samarco and Renova Foundation
Footnotes and Outlook Jansen S1 Petroleum Unification Social Value Financial Samarco and Renova Foundation Renova has spent R14 billion on remediation and compensation programs; resettlement progressing For personal use only Compensation Resettlement Samarco • ~R4.7 billion (~US$1.1 billion) paid in
Slide 45: Australian Cultural Heritage management update
Footnotes and Outlook Jansen Stage 1 Petroleum Unification Social Value Financial Australian Cultural Heritage management update Consistent with our Indigenous Peoples Policy Statement, Indigenous Peoples Strategy and Reconciliation Action Plan commitments For personal use only Category Milestones
Slide 46: Exceptional items
Footnotes and Outlook Jansen S1 Petroleum Unification Social Value Financial Exceptional items Attributable profit of US$11.3 billion includes an exceptional loss of US$5.8 billion For personal use only Gross Tax Net Year ended 30 June 2021 US$M US$M US$M Year ended 30 June 2021 US$M Other income 34
Slide 47: Return on Capital Employed
Footnotes and Outlook Jansen S1 Petroleum Unification Social Value Financial Return on Capital Employed FY21 ROCE of 32.5% For personal use only ROCE ROCE by asset FY21 (%, excluding Onshore US) (%) 35 90 Antamina2 60 30 50 25 40 WAIO1 20 30 Escondida Pampa 15 20 Norte Petroleum ex- Exploration Olym
Slide 48: Balance sheet
Footnotes and Outlook Jansen S1 Petroleum Unification Social Value Financial Balance sheet Net debt of US$4.1 billion and gearing of 6.9% For personal use only Movements in net debt Debt maturity profile3 (US$ billion) (US$ billion) 8 15 1.1 (19.4) 12.0 10 6 12.0 2.1 0.4 4.1 5 7.9 4 0 - - - - - - 2
Slide 49: BHP guidance
Footnotes and Outlook Jansen S1 Petroleum Unification Social Value Financial BHP guidance Group FY22e For personal use only Capital and exploration expenditure (US$bn) ~9.0 Cash basis; FY22: Minerals - ~US$6.7 bn; Petroleum – US$ 2.3 bn. Including: Maintenance 3.2 Maintenance: Includes non-discretio
Slide 50: BHP guidance (continued)
Footnotes and Outlook Jansen S1 Petroleum Unification Social Value Financial BHP guidance (continued) Copper FY22e Medium term For personal use only Copper production (kt) 1,590 – 1,760 Escondida: 1,000 - 1080 kt; Pampa Norte 330-370 kt; Olympic Dam: 140 - 170 kt; Antamina: 120-140 kt (zinc 115 – 13
Slide 51: BHP guidance (continued)
Footnotes and Outlook Jansen S1 Petroleum Unification Social Value Financial BHP guidance (continued) Coal FY22e Medium term For personal use only Metallurgical coal production (Mt) 39 - 44 Energy coal production (Mt) 13 - 15 Capital and exploration expenditure (US$bn) 0.6 Queensland Coal Production
Slide 52: Key Underlying EBITDA sensitivities
Footnotes and Outlook Jansen S1 Petroleum Unification Social Value Financial Key Underlying EBITDA sensitivities For personal use only Approximate impact1 on FY22 Underlying EBITDA of changes of: US$ million US$1/t on iron ore price2 234 US$1/bbl on oil price3 41 US$1/t on metallurgical coal price 3
Slide 53: For personal use only
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