Bhp Group Ltd · ASX:BHP
Bhp — BHP Billiton — FY2010 Earnings Presentation
33 slides from Bhp's earnings presentation, Aug 25, 2010
Slide 1: Preliminary Results 30 June 2010
Newman, Australia For personal use only Preliminary Results 30 June 2010 Marius Kloppers Chief Executive Officer Alex Vanselow Chief Financial Officer 25 August 2010
Slide 2: Disclaimer
Disclaimer For personal use only Reliance on third party information This document contains information, including information relating to PotashCorp, that has been derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accu
Slide 3: Preliminary Results June 2010 - Marius Kloppers
Middelburg, South Africa For personal use only Preliminary Results 30 June 2010 Marius Kloppers Chief Executive Officer
Slide 4: Financial results
Financial results For personal use only Underlying EBITDA of US$24.5 billion, up 10% Underlying EBIT of US$19.7 billion, up 8% Attributable profit (excluding exceptionals) of US$12.5 billion, up 16% Net operating cash flow of US$17.9 billion Earnings per share (excluding exceptionals) of 2
Slide 5: Operating review
Operating review For personal use only Safety Record production in key commodities – Petroleum and Iron Ore Five new projects commissioned – RGP4, Alumar, Klipspruit, Newcastle Third Port, Pyrenees Continued investment in organic growth – US$2.9 billion approved for projects and pre-commitme
Slide 6: Preliminary Results June 2010 - Alex Vanselow
Antamina, Peru For personal use only Preliminary Results 30 June 2010 Alex Vanselow Chief Financial Officer
Slide 7: Underlying EBIT analysis
Underlying EBIT analysis For personal use only Year ended June 2010 vs June 2009 (US$ billion) 22.0 Uncontrollable Controllable 0.6 1.0 19.7 1.0 0.0 1.9 (0.5) 19.0 18.2 16.7 16.0 (2.5) 18% YoY 13.0 10.0 FY09 Price (a) Exchange Sub-total Volume New Costs (b) Portfolio Other FY10 & inflation operation
Slide 8: Successfully managing our costs
Successfully managing our costs For personal use only Cost variance(a) (FY10, US$ million) 300 Uncontrollable Controllable 64 150 548 65 (76) 219 2 0 (150) (270) (217) (300) US$282 million saving (450) (483) (600) Raw materials, One-off Sub-total Other Labour & Operating Total cash Non cash Total co
Slide 9: A uniquely diversified portfolio
A uniquely diversified portfolio For personal use only Underlying EBIT(a) Underlying EBIT margin(a) (FY10, US$ billion) (FY10, %) 21 Metallurgical Coal 34% Metallurgical Coal 18 Manganese Manganese 33% Ferrous 15 (43.5%) Iron Ore 54% Iron Ore SSM 20% 12 SSM D&SP D&SP 38% 9 Non Ferrous Base Metals (3
Slide 10: Successful execution of a well defined and simple strategy
Successful execution of a well defined and For personal use only simple strategy Diversified peer production comparison – June 2010 (Copper equivalent units(a) – Indexed to 100, for the quarter ended September 2008) 120 BHP Billiton Peer group 100 80 60 Sep 08 Dec 08 Mar 09 Jun 09 Sep 09 Dec 09 Mar
Slide 11: A strong balance sheet creates opportunities
A strong balance sheet creates opportunities For personal use only 1 Return on capital and EBIT margin 2 Net operating cash flow (US$ billion) (US$ billion) CAGR: 21% 50 Return on capital 20 H1 EBIT margin H2 25 10 0 0 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY02 FY03 FY04 FY05 FY06 FY07 FY08 F
Slide 12: Preserving our financial flexibility
Preserving our financial flexibility For personal use only Committed facility of US$45 billion BHP Billiton remains committed to maintaining a solid A credit rating Commitment to a progressive dividend policy Preserves financial flexibility Tranche A Term Facility B Term Facility B Revolving
Slide 13: The largest corporate taxpayer in Australia
The largest corporate taxpayer in Australia For personal use only BHP Billiton is the largest corporate Composition of Australian taxes paid taxpayer in Australia FY04 – FY10 Continues a pattern of paying significant taxes in Australia Production – A$5.5 billion paid in FY10 taxes (b) 19% – A$29
Slide 14: Preliminary Results June 2010 - Marius Kloppers
Escondida, Chile For personal use only Preliminary Results 30 June 2010 Marius Kloppers Chief Executive Officer
Slide 15: Market volatility continues
Market volatility continues For personal use only VIX index S&P 500 PMI (Daily %) (%) 80 65 60 55 40 45 China India Japan US 20 35 Germany Eurozone 0 25 Jun 06 Jun 07 Jun 08 Jun 09 Jun 10 Jun 06 Jun 07 Jun 08 Jun 09 Jun 10 Source: S&P 500. Source: Purchasing Managers Index from individual country pu
Slide 16: OECD debt levels remain a fundamental issue
OECD debt levels remain a fundamental issue For personal use only US borrowing flows by sector (annualised) (US$ billion) 3,000 Government Business Household 2,000 1,000 0 (1,000) Q1 99 Q1 00 Q1 01 Q1 02 Q1 03 Q1 04 Q1 05 Q1 06 Q1 07 Q1 08 Q1 09 Q1 10 Annualised borrowing calculated from the quarter
Slide 17: Spending cuts are likely to impact growth
Spending cuts are likely to impact growth For personal use only Eurozone (Area 16) government expenditure/revenue (€ billion, quarterly data annualised) 4,600 Expenditure Revenues 4,300 4,000 ? 3,700 3,400 CY06 CY07 CY08 CY09 CY10 Source: eurostat. Preliminary Results, 25 August 2010 Slide 17
Slide 18: China is also slowing its economy near term
China is also slowing its economy near term For personal use only Money supply (M1) and credit growth (YoY %) 40 M1 Loan growth 30 20 10 0 Jun 05 Dec 05 Jun 06 Dec 06 Jun 07 Dec 07 Jun 08 Dec 08 Jun 09 Dec 09 Jun 10 Source: CEIC. Preliminary Results, 25 August 2010 Slide 18
Slide 19: Significant progress towards market pricing in key bulk commodities
Significant progress towards market pricing in For personal use only key bulk commodities China spot iron ore price Breakdown of FY10 iron ore sales (US$/dmt) (Volume as a % of total) 280 Tangshan (66% Fe) 100% Platts CFR China (62% Fe) Platts FOB WA (62% Fe) Platts CFR China Forward Curve 80% 220 P
Slide 20: Diversification delivers healthy margins despite significant volatility
Diversification delivers healthy margins despite For personal use only significant volatility EBIT margin(a) (%) 70 Petroleum 60 Aluminium 50 Base Metals D&SP 40 SSM 30 Iron Ore Manganese 20 Metcoal 10 Energy Coal Total 0 (b) (b) FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 (a) Calculated on the bas
Slide 21: A compelling offer for a Tier 1 business
A compelling offer for a Tier 1 business For personal use only Accelerates our entry into fertilisers Potash is an attractive commodity Saskatchewan PotashCorp has Tier 1 assets New Brunswick Sussex Further diversifies the portfolio Fully funded offer which preserves financial flexibility
Slide 22: We are well positioned
We are well positioned For personal use only The baseline strategy is unchanged We have delivered another strong set of results Our unique portfolio positions us to deliver superior margins and returns The acquisition of PotashCorp is consistent with our strategy Port Hedland, Australia Prel
Slide 23: BHP Billiton - resourcing the future
édl bhpbilliton resourcing the future
Slide 24: Appendix
For personal use only Appendix
Slide 25: Impact of major volume changes
Impact of major volume changes For personal use only Year ended June 2010 vs June 2009 Total Volume Variance(a) – US$2,902 million (US$ million) 1,000 Petroleum 882 Manganese 799 800 Iron Ore 600 546 Met Coal 473 400 D&SP 177 200 Energy Coal 108 Other (83) 0 (200) (a) Volume variances calculated usi
Slide 26: Impact of major commodity price movements
Impact of major commodity price movements For personal use only Year ended June 2010 vs June 2009 Total Price Variance(a) – US$1,019 million (US$ million) 5,000 Copper 3,943 4,000 3,000 2,000 Nickel 866 1,000 Aluminium Iron Ore Other Petroleum 234 224 109 45 0 (1,000) Energy Coal (460) (2,000) Manga
Slide 27: Rate of cost decrease
Rate of cost decrease For personal use only Operating cost movement relative to preceding year(a) (%) 14.0 Total Excluding non-cash 10.0 9.0 8.5 7.6 6.8 6.0 5.3 4.3 4.3 3.6 2.0 0.0 (0.7) (2.0) (6.0) FY06 FY07 FY08 FY09 FY10 (a) Excluding the impact of inflation, foreign exchange, price-linked costs
Slide 28: Summary of key FX components in tax expense/(income)
Summary of key FX components For personal use only in tax expense/(income) June 2010 June 2009 Restatement of Expense / (Income) Expense / (Income) US$ million US$ million Current Tax Payable 266 (885) Deferred Tax Balances on Fixed Assets (396) 1,566 Deferred Tax Balances on US$ Debt 289 (156) Defe
Slide 29: Cash flow
Cash flow For personal use only Year Ended 30 June (US$ million) 2010 2009 Operating Cash Flow and Dividends 23,296 25,212 Net Interest Paid (421) (314) Tax Paid (a) (5,507) (6,035) Tax Refunded 552 - Net Operating Cash Flow 17,920 18,863 Capital Expenditure (9,323) (9,492) Exploration Expenditure (
Slide 30: Capital and Exploration Expenditure
Capital and Exploration Expenditure For personal use only US$ billion FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11F Growth 1.9 2.0 1.7 2.6 4.0 5.5 6.1 7.3 8.1 Sustaining and Other 0.8 0.7 0.9 1.3 2.1 1.6 1.8 2.0 1.7 Exploration 0.4 0.3 0.5 0.5 0.8 0.8 1.4 1.3 1.3 Total 3.1 3.0 3.1 4.4 6.9 7.9 9
Slide 31: Maintenance of a deep, diversified inventory of growth options
Maintenance of a deep, diversified inventory of growth options Future Options(a) Feasibility Execution For personal use only Navajo Navajo Saraji Saraji Laguna Laguna NWS NWS Potash Potash –– South South East East Seca Seca Caval Caval Jansen Saraji Saraji Exp Exp Potash Potash –– Browse Browse Yeel
Slide 32: Maturity profile analysis
Maturity profile analysis For personal use only Debt Balances(a) (US$ million(b)) 2,800 2,400 2,000 1,600 1,200 800 400 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 Post 2020 US$ Euro Bank CP Jointly Controlled Bonds Bonds Debt Issuance Entities(c) Subsidiaries(d) % of Portfolio 57% 31% 0% 0% 10%
Slide 33: Key net profit sensitivities
Key net profit sensitivities For personal use only Approximate impact(a) on FY11 net profit after tax of changes of US$ million US$1/t on iron ore price 85 US$1/bbl on oil price 40 US$1/t on metallurgical coal price 20 US¢1/lb on aluminium price 20 US¢1/lb on copper price 20 US$1/t on energy coal pr