Bhp Group Ltd · ASX:BHP
Bhp — RIO Tinto — Merger or Acquisition (April 2008)
16 slides from Bhp's merger presentation, Apr 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 first given on April 28, 2008.
Slide 2: BHP Billiton: Strength, Stability and Growth
BHP BillitonStrength, – Stability and Growth April 2008
Slide 3: Disclaimer
Disclaimer Thisdocument hasbeenprepared by BHPBillitonLimitedandBHPBillitonPlc(“BHPBilliton") andcomprises thewrittenmaterials/slides fora presentation concerning BHPBilliton's offersfor RioTintoLimitedandRioTintoplc(“RioTinto”).Byreviewing/attending thispresentation youagreetobeboundby thefollowing
Slide 4: Disclaimer (continued)
Disclaimer (continued) Noneofthestatements concerning expectedcostsavings,revenuebenefits(andresultingincremental EBITDA)andEPSaccretion inthispresentation shouldbeinterpreted tomeanthat thefutureearnings pershareoftheenlargedBHPBillitongroupforcurrentandfuturefinancialyearswillnecessarily matchor e
Slide 5: The largest global diversified resources company
The largest global diversified resources company Metallurgical Coal Base Metals Manganese #1 global supplier of seaborne #3 global producer of copper, silver and lead #1 global supplier of traded metallurgical coal seaborne manganese ore Energy Coal Iron Ore Stainless Steel Materials #4 global suppl
Slide 6: A unique diversified portfolio balanced across high margin commodities
A unique diversified portfolio balanced across high margin commodities (a) Underlying EBITDA Underlying EBITDA Margin (CY2007, 12 months, US$bn) (CY2007, 12 months) 24,000 23,623 Diamond & Specialty Products Diamond & 34% Energy Coal Specialty Products Energy Petroleum Energy Coal 23% (21%) 18,000 P
Slide 7: A track record of investing early to meet demand
A track record of investing early to meet demand… Completed projects (US$bn) FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 Antamina Escondida Phase IVWAIO - Area C NWS Train 4 Escondida Norte Spence Genghis Khan Typhoon San Juan UG Mt Arthur North ROD Paranam BMA Phase 2 Atlantis South Tintaya Ox
Slide 8: Delivering significant EPS and DPS growth for shareholders
…and delivering significant EPS and DPS growth for shareholders Earningspershare(a) Ordinarydividends pershare(b) (US$ per share) (US cents per share) 2.50 50 47.0 2.34 2.00 40 36.0 29% CAGR 1.68 50% CAGR 1.50 30 28.0 26.0 1.06 1.00 20 14.5 13.0 0.56 0.50 10 0.31 0.31 0.00 0 FY2002FY2003FY2004FY2005
Slide 9: Diversified growth across the portfolio
Diversified growth across the portfolio DRC CMSA Heap Smelter Leach 2 Angola CMSA Heap Worsley WA Iron Ore Olympic Dam & DRC Macedon Leach 1 E&G RGP 4 WA Iron Ore Cannington Kipper Expansion 1 NWS Quantum 1 Life Ext Canadian Caroona Daunia Knotty Angel Head Perseverance Potash Shenzi Deeps Yabulu Th
Slide 10: BHP Billiton has exposure to all the key steel-making raw materials
BHP Billiton has exposure to all the key steel-making raw materials Underlying EBIT (a) Indexed commodity price movement (b) (US$bn, CY 2007) (100 = JFY2003) 800 US$4.7bn HardCokingCoal(c) 700 US$4.2bn JFY2008: +206-240% Manganese 0.6 BHP is the #1 global 0.2 Manganese(d) 600 supplier of seaborne JF
Slide 11: Well positioned to meet energy demand regardless of fuel mix
Well positioned to meet energy demand regardless of fuel mix Projected world primary energy demand (2007 = 100) 180 170 Nuclear 160 Coal 150 Gas Energy Demand 140 Renewables 130 Oil 120 110 100 90 2007 2010 2015 2020 2025 2030 Source: EIA International Energy Outlook 2007 and WNA Global Nuclear Fuel
Slide 12: Short-term uncertainty exists, although China and India growth appears resilient
Short-term uncertainty exists, although China and India growth appears to be remaining resilient (a) (b) OECDindustrial production andleadingindicator Chinashareof worldcommodity demand (Smoothed annual change) (2007, %) 10% Fe Ore 42% 8% OECD Leading Coal 39% 6% Indicator Steel 36% 4% 2% Al 32% 0%
Slide 13: BHP Billiton and Rio Tinto, a natural fit
BHP Billiton and Rio Tinto, a natural fit • Whether you are a shareholder in Rio Tinto or BHP Billiton or both companies, BHP Billiton believes a combination makes enormous sense • Both have world-leading portfolios of large-scale, low-cost, long-life assets • For many of the assets ownership is sha
Slide 14: BHP Billiton and Rio Tinto share prices strongly correlated, BHP outperforming
BHP Billiton and Rio Tinto’s share prices have been strongly correlated, with BHP Billiton outperforming BHPBillitonLtdandRioTintoLtdTSR(a) BHP Billiton Ltd Rio vs Tinto Ltd Relative Performance (Index: Jun-2001 = 100) (Price performance relative to Jun-2001 = 100) 600 BHP Billiton 500 CAGR 30% 500
Slide 15: The 3.4:1 offer represents a 45% premium
The 3.4:1 offer represents a 45% premium RioTintovsBHPBillitonhistorical ratio(a) shareexchange 3.6 : 1 06-Feb-2008 BHP Billiton's offer for Rio Tinto 3.4 : 1 3.2 : 1 12-Nov-2007 3.0 : 1 BHP Billiton's proposal 45% 2.8 : 1 (c) premium 2.6 : 1 (b) Pre approach fair value exchange ratio 2.4 : 1 2.2 :
Slide 16: Conclusion: Strength, stability and growth
Conclusion Strength, – stability and growth • The core strategy of BHP Billiton remains unchanged • BHP Billiton is focused on producing volumes from its low cost assets to take advantage of the strong market conditions • BHP Billiton on a standalone basis has a bright future • A combination of BHP