Bhp Group Ltd · ASX:BHP
Bhp — RIO Tinto — Merger or Acquisition (October 2008)
25 slides from Bhp's merger presentation, Oct 28, 2008
Slide 1: Filed by BHP Billiton under Rule 425
Filed by: BHP Billiton Plc and BHP Billiton Limited Pursuant to Rule 425 under the Securities Act of 1933 Subject Company: Rio Tinto plc Commission File No.: 001-10533 The following are slides comprising a presentation that was given by Alex Vanselow, Chief Financial Officer, BHP Billiton on October
Slide 2: Resourcing the Future
SHANGHAI Resourcing the Future 28 October 2008 Alex Vanselow Chief Financial Officer Macquarie Private Wealth Special Presentation
Slide 3: Disclaimer
Disclaimer By reviewing/attending this presentation you agree to be bound by the following conditions. The directors of BHP Billiton Limited and BHP Billiton Plc (“BHP Billiton") accept responsibility for the information contained in this presentation. Having taken all reasonable care to ensure that
Slide 4: Disclaimer (continued)
Disclaimer (continued) No statement concerning expected cost savings, revenue benefits (and resulting incremental EBITDA) and EPS accretion in this presentation should be interpreted to mean that the future earnings per share of the enlarged BHP Billiton group for current and future financial years
Slide 5: Short-term global economic turmoil
Short-term global economic turmoil Gross domestic production (% growth, constant 2006 US$) 14 Asian Banking Technology Current US Crisis Correction Financial Crisis 12 10 China 8 Emerging Economies 6 4 Developed Economies 2 0 Source:IMF,IMFForecasts. Slide 4
Slide 6: In the long-term China remains on the steep part of the development curve
However in the long-term China remains on the steep part of the development curve supported by six growth drivers Housing Structural Reform High Value Manufacturing Rising Incomes Urbanisation Rural Development Slide 5
Slide 7: Outstanding performance
Outstanding performance Neptune Gulf – of Mexico Slide 6
Slide 8: Our core strategy sets us apart in our industry
Our core strategy sets us apart in our industry • Focus on world-class assets that are large, low-cost and expandable Simplicity • Focus on the extraction of upstream natural resources • Portfolio diversified by commodity, customer and geography reducing the volatility of cash flows Accountability •
Slide 9: Despite our size, simplicity is a core element of this strategy
Despite our size, simplicity is a core element of this strategy EBIT per employee (US$’000) 700 600 500 400 300 200 Pre-Alcan 100 Post-Alcan 0 BHP Billiton Rio Tinto(a) Vale Xstrata Anglo American Note: EBIT and Employees as per last published Annual Report, data does not include contractors. BHP Bi
Slide 10: Outstanding FY2008 result driven by strategy and execution
Outstanding FY2008 result driven by strategy and execution (a) Underlying EBITmargin (FY2008) • Achieved record profit for ththe 7 consecutive year Group 48% • Attributable profit up 12%, EPS up 18% Petroleum 67% • Dividend rebased upwards a signal of our outlook confidence Energy Coal 30% • Full ye
Slide 11: The benefits of diversification across a high margin portfolio
The benefits of diversification across a high margin portfolio (a) Underlying EBITmargin % 80 70 60 Petroleum Aluminium 50 Base Metals D&SP SSM 40 Iron Ore Manganese 30 Met Coal Energy Coal 20 BHP Billiton 10 0 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY200
Slide 12: We are accelerating growth from a diversified project portfolio
We are accelerating growth from a diversified project portfolio Expected production growth % of growth CY2007-2012 (Copper equivalent tonnes '000s) (Estimated & unrisked) 14,000 12,000 Steelmaking Non-Ferrous Materials 10,000 18% 8,000 45% 6,000 37% 4,000 Energy 2,000 0 CY2007 CY2008FCY2009FCY2010FC
Slide 13: Focused on low risk volume growth from existing assets
Focused on low risk volume growth from existing assets and in our own backyard (a) Expectedproduction growth (Copper equivalent tonnes, CY2007-CY2012) By project type (b) By region (c) New Greenfield 3% 13% 87% 97% Brownfield Existing 63% Notes: a) Growth in production volumes on a copper equivalent
Slide 14: Example Olympic Dam
Example Olympic Dam cdl bhpbilliton Slide 13 cing the future
Slide 15: The Rio Tinto Offer
The Rio Tinto Offer oll bhpbilliton Slide 14 ing the future
Slide 16: Overview of the offer for Rio Tinto
Overview of the offer for Rio Tinto • Pre-conditional offer, capable of acceptance by shareholders following completion of regulatory processes and posting of offer documents • Regulatory processes anticipated to be completed around the end of 2008 • RioTintoshareholders arebeingoffered3.4BHPBillito
Slide 17: 3.4:1 offer represents compelling value
3.4:1 offer represents compelling value RioTintovsBHPBillitonhistorical ratio(a) shareexchange 3.6 : 1 BHPBilliton'sofferforRioTinto 3.4 : 1 3.2 : 1 3.0 : 1 2.8 : 1 2.6 : 1 2.4 : 1 2.2 : 1 Jul-2007 Sep-2007 Nov-2007 Jan-2008 Mar-2008 May-2008 Jul-2008 Sep-2008 Source: Datastream (as at 23-Oct-2008).
Slide 18: Comparative dividend per share
Comparative dividend per share FY2008dividendsperA$1,000 ofshares(a) FY2007toFY2008DPSgrowth (b) A$31.92 BHP Billiton BHP Billiton 49% (3.2% yield) A$25.45 Rio Tinto Rio Tinto 31% (2.5% yield) FY2008 vs FY2002 DPS (b) Net debt (c) BHP Billiton 5.4x BHP Billiton US$8.5bn Rio Tinto 2.2x Rio Tinto US$4
Slide 19: Combination is about reducing risk, not increasing it
Combination is about reducing risk, not increasing it • Increased sizedoesnotmeanincreased complexity –simplicity ofthebusiness modelremainskey • Operating as one company results in: – More diversified asset portfolio, lower risk – An enhanced portfolio of growth opportunities – Greater ability to d
Slide 20: Indicative timetable for the offer
Indicative timetable for the offer 2008 Offer Period Event Jul Aug Sep Oct Nov Dec Day 0(a) Day 60 Post Day 60 Regulatory Approvals Satisfaction of regulatory approval pre-conditions Offer Documentation (within 28 days of the Posting of offer documents for Rio Tinto plc offer pre conditions being an
Slide 21: Summary
Summary • We expect financial market volatility and economic uncertainty to continue in the short-term • However, China, India and other developing economies are expected to continue to drive demand for commodities in the long-term • Our uniquely diversified portfolio of low cost and high quality as
Slide 22: Questions and Answers
Questions and Answers Slide 21
Slide 23: BHP Billiton's senior management team
BHP Billitons’ senior management team Chairman and Chief Executive Officer Don Argus Marius Kloppers Chairman Chief Executive Officer • Chairman of BHP Billiton • 15 years resources Group since June 2001 experience • Chairman of BHP Limited • 15 years at BHP Billiton since April 1999 Group Managemen
Slide 24: More information for shareholders
More information for shareholders Internet More information on BHP Billiton or BHP Billiton’s offer for Rio Tinto can be found at either of the following web pages: BHP Billiton: www.bhpbilliton.com BHP Billiton’s offer for Rio Tinto: www.bhpbilliton.com\RioTintoOffer Or Email: investor.relations@bh
Slide 25: cdl
cdl bhpbilliton esourcing the future