Slide 1: Results Presentation Year Ended 30 June 2016
For personal use only BHP Billiton Limited BHP Billiton Plc 171 Collins Street Neathouse Place Melbourne Victoria 3000 Australia London SW1V 1LH UK GPO BOX 86 Tel +44 20 7802 4000 Melbourne Victoria 3001 Australia Fax + 44 20 7802 4111 Tel +61 1300 55 47 57 Fax +61 3 9609 3015 bhpbilliton.com bhpbil
Slide 2: Financial results Year ended June 2016
For personal use only Financial results Year ended 30 June 2016 Olympic Dam
Slide 3: Disclaimer
Disclaimer For personal use only 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
Slide 4: Financial results Year ended June 2016
For personal use only Spence Escondida Financial results Year ended 30 June 2016 Andrew Mackenzie Chief Executive Officer South Walker Creek
Slide 5: Solid performance in a challenging year
Solid performance in a challenging year Safety Committed to addressing consequences of the Samarco tailings dam failure For personal use only Zero fatalities at BHP Billiton operated sites Volume Record WAIO and metallurgical coal production; strong conventional petroleum volumes Offset by anticipat
Slide 6: Committed to Samarco
Committed to Samarco For personal use only • Rehabilitation progressing well Samarco infrastructure – 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
Slide 7: Safety is paramount
Safety is paramount For personal use only • The health and safety of our people and communities always Total Recordable Injury Frequency at operated sites come first (number of recordable injuries per million hours worked1) 10 – tragically 19 lives were lost following the Samarco dam failure • Stron
Slide 8: Financial results Year ended June 2016
For personal use only Financial results Year ended 30 June 2016 Peter Beaven Chief Financial Officer Shenzi
Slide 9: Asset quality and operating performance drive margins
Asset quality and operating performance drive margins For personal use only • Underlying EBITDA of US$12.3 billion Leading margins through the cycle (Underlying EBITDA margin1, %) – Underlying EBITDA margin of 41% 60 – 16% reduction in unit costs • Underlying EBIT of US$3.5 billion • Underlying attr
Slide 10: Group EBITDA waterfall
Group EBITDA waterfall For personal use only Underlying EBITDA variance (US$ billion) 24 21.9 External (US$9.9 billion) Controllable US$0.3 billion 16 1.1 0.2 0.2 12.3 12.0 1.4 (0.3) (0.3) (10.7) (0.4) (0.8) 8 0 FY15 Price¹ Foreign Inflation Sub-total Growth Productivity Controllable Fuel & Non-cash
Slide 11: Financial impact of Samarco dam failure
Financial impact of Samarco dam failure For personal use only • Investment in Samarco written down to US$nil at Equity accounted investment in Samarco 31 December 2015 Income statement impacts H1 H2 (US$ million) FY16 FY16 FY16 • US$1.2 billion provision at 30 June 2016 reflects uncertainty Share of
Slide 12: Free cash flow provides optionality
Free cash flow provides optionality For personal use only • Free cash flow of US$3.4 billion Capital and exploration expenditure (cash basis) (US$ billion) – net operating cash flow of US$10.6 billion 24 – capital and exploration expenditure of US$7.7 billion1 – working capital release of US$0.2 bil
Slide 13: Disciplined capital allocation
Disciplined capital allocation For personal use only • Our Capital Allocation Framework balances value Capital allocation in FY16 (US$ billion) creation, shareholder returns and balance sheet strength H1 H2 FY16 – ‘A’ credit rating maintained1 5.3 5.3 10.6 Net operating cash flow – total dividends p
Slide 14: Financial results Year ended June 2016
For personal use only Escondida Financial results Year ended 30 June 2016 Andrew Mackenzie Chief Executive Officer Eastern Ridge
Slide 15: Well placed for the conditions we expect
Well placed for the conditions we expect For personal use only • Near-term is difficult Commodity market outlook to 2025 – well-supplied markets across our commodity suite – ineffective monetary policy, political uncertainty, populist rejection of free trade suppressing Supply opportunity by 2025 (v
Slide 16: Focused portfolio and simplified operating model
Focused portfolio and simplified operating model For personal use only • Optimal portfolio after divestments and demerger Tier 1 portfolio (FY16 Underlying EBITDA margin, %) – well-capitalised, low-cost, long-life assets with 80 expansion options Note: Bubble size represents FY16 – diversified acros
Slide 17: 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 For personal use only Productivity On track to deliver US$2.2 billion of gains over two years to end FY17 Absorbed US$1.6 billion impact of grade decline at Escond
Slide 18: Momentum builds into the new financial year
Momentum builds into the new financial year For personal use only Steady volumes… Lowest unit operating costs in a decade expected in FY17 (Mt, operating cost per copper equivalent tonne) • FY17 copper equivalent volume growth of up to 4% (ex-Onshore US) • Onshore US will respond to market condition
Slide 19: Positioned to grow value and returns
Positioned to grow value and returns For personal use only The right commodities… We have opportunities to significantly increase returns (Return on Capital Employed3 at consensus prices, nominal) • optimal diversification with petroleum and copper markets expected to rebalance first …the right asse
Slide 20: For personal use only
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Slide 21: Appendix
For personal use only Appendix
Slide 22: BHP Billiton guidance
BHP Billiton guidance For personal use only Group FY17e FY18e Capital and exploration expenditure (US$bn) 5.4 6.2 Cash basis. Including: Maintenance 2.0 Exploration 0.8 0.8 US$700m Petroleum and US$60m Copper exploration program planned for FY17. Petroleum FY17e Total petroleum production (MMboe) 20
Slide 23: BHP Billiton guidance (continued)
BHP Billiton guidance (continued) For personal use only Copper FY17e Total copper production (Mt) 1.66 Guidance for Escondida at 1.07 Mt. Pampa Norte production is expected to increase. Olympic Dam production guidance to remain unchanged. Guidance for Antamina production to decrease to 130 kt as pla
Slide 24: Key Underlying EBITDA sensitivities
Key Underlying EBITDA sensitivities For personal use only Approximate impact1 on FY17 Underlying EBITDA of changes of: US$ 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$1/t on energy
Slide 25: Petroleum EBITDA waterfall
Petroleum EBITDA waterfall For personal use only Underlying EBITDA variance (US$ billion) 8.0 External (US$3.7 billion) Controllable US$0.2 billion 7.2 0.7 4.0 3.5 3.7 (0.0) 0.0 (3.6) (0.1) (0.0) (0.1) (0.4) 0.0 FY15 Price¹ Foreign Inflation Sub-total Growth Controllable Fuel & Non-cash² Other³ FY16
Slide 26: Copper EBITDA waterfall
Copper EBITDA waterfall For personal use only Underlying EBITDA variance (US$ billion) 6.0 External (US$2.0 billion) Controllable (US$0.6 billion) 5.2 0.3 3.2 0.0 3.0 (2.2) (0.1) 0.2 2.6 0.2 0.0 (0.9) (0.1) 0.0 FY15 Price¹ Foreign Inflation Sub-total Growth Productivity Controllable Fuel & Non-cash²
Slide 27: Iron Ore EBITDA waterfall
Iron Ore EBITDA waterfall For personal use only Underlying EBITDA variance (US$ billion) 10.0 External (US$3.4 billion) Controllable US$0.4 billion 8.6 0.1 0.3 0.3 5.6 5.2 0.1 0.0 (0.0) (0.1) 5.0 (3.6) (0.1) 0.0 FY15 Price¹ Foreign Inflation Sub-total Growth Productivity Controllable Fuel & Non-cash
Slide 28: Coal EBITDA waterfall
Coal EBITDA waterfall For personal use only Underlying EBITDA variance (US$ billion) 1.6 External (US$0.6 billion) Controllable US$0.0 billion 1.2 0.1 0.2 0.0 0.8 0.4 0.0 0.0 0.6 0.6 (0.1) (0.3) (0.9) 0.0 FY15 Price¹ Foreign Inflation Sub-total Growth Productivity Controllable Fuel & Non-cash² Other
Slide 29: Other items affecting profitability
Other items affecting profitability For personal use only Other items (US$ billion) Underlying Underlying EBITDA attributable profit1 Exceptional items1 0.0 (0.2) (0.2) (0.2) (0.2) (0.3) (0.6) (2.0) (2.2) (4.0) (4.9) (6.0) Redundancies and Royalty and Redundancies and Minor impairments Royalty and G
Slide 30: Debt maturity profile
Debt maturity profile For personal use only Debt balances1 (US$ billion2) 8 6 4 2 0 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 Post FY28 US$ Euro Sterling A$ C$ Bonds3 Bonds 3 Bonds 3 Bonds Bonds Subsidiaries % of portfolio 46% 30% 11% 5% 2% 6% Capital markets 94% Asset financing 6%
Slide 31: We remain positive on long-term copper fundamentals
We remain positive on long-term copper fundamentals For personal use only Short-term overcapacity in copper remains persistent Global demand slow recently, but long run trend is still positive (Refined copper demand1, Mt) • Subdued demand with slower than expected growth in China 22.5 and recession
Slide 32: Oil and US gas markets expected to rebalance
Oil and US gas markets expected to rebalance For personal use only Outlook remains healthy Oil mass balance: global (Inventory change, MMbbl/d) • Fundamentals tightening, as healthy demand growth intersects with slower global production growth due to falling production in the US 2.0 • Rate of invent
Slide 33: Iron ore demand outlook remains modest
Iron ore demand outlook remains modest For personal use only Chinese and global steel growth to slow Global steel production break-down (Regional split %) (CAGR %) • Global steel production is likely to grow modestly in the future 100 10 • China’s steel demand growth to become more cyclical as it mo
Slide 34: Metallurgical coal outlook supported by growing demand for high-quality product
Metallurgical coal outlook supported by growing demand for high-quality product For personal use only Demand improvement to be moderate, supply slowly adjusting Seaborne metallurgical coal supply and demand (Bt) • Cost curve has flattened • Lower prices are leading to closures and reduced investment
Slide 35: 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 For personal use only Markets expected to remain oversupplied in the near term Additional seaborne supply required to meet expected demand (Bt) • China’s demand for imports is likely to fall further as domestic overcapacit