Slide 1: Financial results Year ended 30 June 2016
bhpbilliton Financial results Year ended 30 June 2016 Olympic Dam
Slide 2: Disclaimer: Forward-looking statements
Disclaimer Forward-looking statements This presentation contains forward-looking statements, including statements regarding: trends in commodity prices and currency exchange rates; demand for commodities; plans, strategies and objectives of management; closure or divestment of certain operations or
Slide 3: Andrew Mackenzie, Chief Executive Officer
bhpbilliton Financial results Year ended 30 June 2016 Andrew Mackenzie Chief Executive Officer South Walker Creek
Slide 4: Solid performance in a challenging year
Solid performance in a challenging year Safety Committed to addressing consequences of the Samarco tailings dam failure Zero fatalities at BHP Billiton operated sites Volume Record WAIO and metallurgical coal production; strong conventional petroleum volumes Offset by anticipated Escondida grade dec
Slide 5: Committed to Samarco
Committed to Samarco Rehabilitation progressing well - Germano and Santarem Dams reinforcement works continue - 90% of the 41 work programs initiated - community resettlement ongoing Foundation established - Framework Agreement is the appropriate long-term response Expect findings of the external in
Slide 6: Safety is paramount
Safety is paramount The health and safety of our people and communities always come first - tragically 19 lives were lost following the Samarco dam failure Strong safety performance at BHP Billiton operated sites - zero fatalities in FY16 - TRIF of 4.3 per million hours worked - 20% reduction in hig
Slide 7: Peter Beaven, Chief Financial Officer
bhpbilliton Financial results Year ended 30 June 2016 Peter Beaven Chief Financial Officer Shenzi
Slide 8: Asset quality and operating performance drive margins
Asset quality and operating performance drive margins Underlying EBITDA of US$12.3 billion - Underlying EBITDA margin of 41% - 16% reduction in unit costs Underlying EBIT of US$3.5 billion Underlying attributable profit of US$1.2 billion - Attributable loss of US$6.4 billion - US$7.7 billion of exce
Slide 9: Group EBITDA waterfall
Group EBITDA waterfall Underlying EBITDA variance (US$ billion) 24 21.9 External (US$9.9 billion) Controllable US$0.3 billion 16 1.1 0.2 12.3 12.0 1.4 0.2 (0.3) (0.3) (10.7) (0.4) (0.8) 8 0 FY15 Price1 Foreign exchange Inflation Sub-total Growth volumes Productivity volumes Controllable cash costs F
Slide 10: Financial impact of Samarco dam failure
Financial impact of Samarco dam failure Investment in Samarco written down to US$nil at 31 December 2015 US$1.2 billion provision at 30 June 2016 reflects uncertainty around potential restart - equivalent to 50% share of current estimate of Samarco’s funding obligations under terms of Framework Agre
Slide 11: Free cash flow provides optionality
Free cash flow provides optionality Free cash flow of US$3.4 billion - net operating cash flow of US$10.6 billion - capital and exploration expenditure of US$7.7 billion1 - working capital release of US$0.2 billion - ~40% reduction in Group overheads over 4 years2 Balance sheet is strong - net debt
Slide 12: Disciplined capital allocation
Disciplined capital allocation Our Capital Allocation Framework balances value creation, shareholder returns and balance sheet strength - ‘A’ credit rating maintained1 - total dividends paid of US$4.1 billion - growth capital and exploration expenditure of US$5.7 billion Board will consider addition
Slide 13: Andrew Mackenzie, Chief Executive Officer
bhpbilliton Financial results Year ended 30 June 2016 Andrew Mackenzie Chief Executive Officer Eastern Ridge
Slide 14: Well placed for the conditions we expect
Well placed for the conditions we expect Near-term is difficult - well-supplied markets across our commodity suite - ineffective monetary policy, political uncertainty, populist rejection of free trade suppressing business confidence Fundamentals to return as markets rebalance over the medium term R
Slide 15: Focused portfolio and simplified operating model
Focused portfolio and simplified operating model Optimal portfolio after divestments and demerger - well-capitalised, low-cost, long-life assets with expansion options - diversified across the right commodities - favourable geographic concentration New operating model accelerates productivity gains
Slide 16: Broad suite of opportunities offers significant upside
Broad suite of opportunities offers significant upside We have made significant progress to capture valuation upside and improve returns Productivity On track to deliver US$2.2 billion of gains over two years to end FY17 Absorbed US$1.6 billion impact of grade decline at Escondida in FY16 Latent Lat
Slide 17: Momentum builds into the new financial year
Momentum builds into the new financial year Steady volumes… FY17 copper equivalent volume growth of up to 4% (ex-Onshore US) Onshore US will respond to market conditions …lower costs… productivity gains of US$1.8 billion expected in FY17 unit costs expected to reduce by 12%1 …and higher capital prod
Slide 18: Positioned to grow value and returns
Positioned to grow value and returns The right commodities… optimal diversification with petroleum and copper markets expected to rebalance first …the right assets… optimal portfolio of well-capitalised, low-cost, long life assets …the right structure… 12 operated assets, 4 commodities, 3 operating
Slide 19: bhpbilliton
bhpbilliton
Slide 20: Appendix
@ bhpbilliton Appendix
Slide 21: BHP Billiton guidance
BHP Billiton guidance Group FY17e FY18e Capital and exploration expenditure (US$bn) 5.4 6.2 Cash basis. Including: Maintenance 2.0 Exploration 0.8 0.8 US$700m Petroleum and US$60m Copper exploration program planned for FY17. Petroleum FY17e Total petroleum production (MMboe) 200 - 210 Onshore US Cap
Slide 22: BHP Billiton guidance (continued)
BHP Billiton guidance (continued) Copper FY17e Total copper production (Mt) 1.66 Guidance for Escondida at 1.07 Mt. Pampa Norte production is expected to increase. Olympic Dam production guidance to remain unchanged. Guidance for Antamina production to decrease to 130 kt as planned mining sequence m
Slide 23: Key Underlying EBITDA sensitivities
Key Underlying EBITDA sensitivities Approximate impact1 on FY17 Underlying EBITDA of changes of: US$ million US$1/t on iron ore price2 217 US$1/bbl on oil price3 79 US¢10/MMbtu on US gas price 26 US$1/t on metallurgical coal price 42 US¢1/lb on copper price2 34 US$1/t on energy coal price2 18 US¢1/l
Slide 24: Petroleum EBITDA waterfall
Petroleum EBITDA waterfall Underlying EBITDA variance (US$ billion) 8.0 External (US$3.7 billion) Controllable US$0.2 billion 7.2 0.7 4.0 3.7 3.5 (0.0) (3.6) (0.1) (0.0) 0.0 (0.1) (0.4) 0.0 FY15 Price1 Foreign exchange Inflation Sub-total Growth volumes Controllable cash costs Fuel & energy Non-cash
Slide 25: Copper EBITDA waterfall
Copper EBITDA waterfall Underlying EBITDA variance (US$ billion) 6.0 External (US$2.0 billion) Controllable (US$0.6 billion) 5.2 0.3 3.2 0.0 3.0 (2.2) (0.1) 0.2 2.6 0.2 0.0 (0.9) (0.1) 0.0 FY15 Price1 Foreign exchange Inflation Sub-total Growth volumes Productivity volumes Controllable cash costs Fu
Slide 26: Iron Ore EBITDA waterfall
Iron Ore EBITDA waterfall Underlying EBITDA variance (US$ billion) 10.0 External (US$3.4 billion) Controllable US$0.4 billion 8.6 0.1 0.3 5.6 0.3 5.2 0.0 0.1 (0.0) (0.1) 5.0 (3.6) (0.1) 0.0 FY15 Price1 Foreign exchange Inflation Sub-total Growth volumes Productivity volumes Controllable cash costs F
Slide 27: Coal EBITDA waterfall
Coal EBITDA waterfall Underlying EBITDA variance (US$ billion) 1.6 External (US$0.6 billion) Controllable US$0.0 billion 1.2 0.1 0.2 0.0 0.8 0.4 0.6 0.0 0.0 0.6 (0.1) (0.3) (0.9) 0.0 FY15 Price1 Foreign exchange Inflation Sub-total Growth volumes Productivity volumes Controllable cash costs Fuel & e
Slide 28: Other items affecting profitability
Other items affecting profitability Other items (US$ billion) Underlying Underlying EBITDA attributable profit1 Exceptional items1 0.0 (0.3) (0.2) (0.2) (0.2) (0.2) (0.6) (2.0) (2.2) (4.0) (4.9) (6.0) Redundancies and closure costs Royalty and taxation matters Redundancies and closure costs Minor im
Slide 29: Debt maturity profile
Debt maturity profile Debt balances1 (US$ billion2) 8 6 4 2 0 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 Post FY28 US$ Bonds 3Euro Bonds3 Sterling Bonds3 A$ Bonds C$ Bonds Subsidiaries % of portfolio 46% 30%11%5%2%6% Capital markets 94% Asset financing 6% 1. All debt balances are re
Slide 30: We remain positive on long-term copper fundamentals
We remain positive on long-term copper fundamentals Short-term overcapacity in copper remains persistent Subdued demand with slower than expected growth in China and recession in key non-Asian emerging economies Increased supply from new and expanded operations with more growth expected near term Lo
Slide 31: Oil and US gas markets expected to rebalance
Oil and US gas markets expected to rebalance Outlook remains healthy Fundamentals tightening, as healthy demand growth intersects with slower global production growth due to falling production in the US Rate of inventory drawdown will impact price recovery - OPEC and US production remain key watch p
Slide 32: Iron ore demand outlook remains modest
Iron ore demand outlook remains modest Chinese and global steel growth to slow Global steel production is likely to grow modestly in the future China’s steel demand growth to become more cyclical as it moves past the inflection point on its intensity curve As China slows, global steel demand growth
Slide 33: Metallurgical coal outlook supported by growing demand for high-quality product
Metallurgical coal outlook supported by growing demand for high-quality product Demand improvement to be moderate, supply slowly adjusting Cost curve has flattened Lower prices are leading to closures and reduced investment The world continues to require steel and metallurgical coal is essential for
Slide 34: Energy coal expected to remain an important part of the global energy complex
Energy coal expected to remain an important part of the global energy complex Markets expected to remain oversupplied in the near term China’s demand for imports is likely to fall further as domestic overcapacity persists, however coal supply reforms encouraging More supply rationalisation is requir