Bhp Group Ltd · ASX:BHP
Bhp — RIO Tinto — Merger or Acquisition (November 2008)
27 slides from Bhp's merger presentation, Nov 6, 2008
Slide 1: Filed by BHP Billiton Pursuant to 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 Marcus Randolph, Chief Executive Ferrous and Coal, BHP Billiton
Slide 2: Resourcing the Future
SHANGHAI Resourcing the Future 6 November 2008 Marcus Randolph Group Executive and Chief Executive Ferrous and Coal 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$) Asian Banking Technology Current 14 Crisis Correction Financial Crisis 12 10 China 8 Emerging Economies 6 4 Developed Economies 2 0 Source: IMF, IMF Forecasts October 2008 Slide 4
Slide 6: China's response
China’s response 1. Loosen credit controls 2. Tax rebates increased by US$36 billion 3. Economic stimulus package of US$450 billion 4. Increase Fixed Asset Investment 5. Stimulate the domestic economy; 90% of GDP Slide 5
Slide 7: Simplicity, accountability and effectiveness
Simplicity, accountability and effectiveness Neptune Gulf – of Mexico Slide 6
Slide 8: Our core strategy is unchanged
Our core strategy is unchanged • World-class, upstream natural resource assets that are large, low-cost and expandable Simplicity • Diversified by commodity, customer and geography • Deep inventory of diversified growth options • Focus on export orientated products Accountability • Overriding commit
Slide 9: Simplicity can be measured: earnings per employee
Simplicity can be measured: earnings per employee EBIT per employee (US$’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 Billiton as at 3
Slide 10: Very strong balance sheet
Very strong balance sheet $ EBIT per $ of Net Debt Ratio 3.0 2.5 2.0 1.5 1.0 0.5 0.0 BHP Billiton Rio Tinto (a) Vale Xstrata Anglo American Note: Underlying EBIT and Net Debt as at 30 June 2008 for BHP Billiton, Rio Tinto, Vale, Xstrata and Anglo American. Figures as per published Annual and Interim
Slide 11: Outstanding FY2008 result driven by strategy and execution
Outstanding FY2008 result driven by strategy and execution (a) Underlying EBITmargin (FY2008) th • Record profit for theconsecutive 7 year Group 48% • Attributable profit up 12%, EPS up 18% Petroleum 67% • Full year dividend of 70 US cents per share, 49% increase Energy Coal 30% • Production increas
Slide 12: Diversification delivers sustainable margin growth
Diversification delivers sustainable margin growth (a) Underlying EBIT margin % 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 FY2008 Notes: a)
Slide 13: Growth is expected to accelerate across the portfolio
Growth is expected to accelerate across the 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 CY2008FCY2009FCY2010FCY2011FCY20
Slide 14: Focused on low risk countries where we already operate
Focused on low risk countries where we already operate (a) Expected production 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 units basis between CY
Slide 15: Large, expandable assets
Large, expandable assets WA Iron Ore Queensland Coal Olympic Dam Mt Newman BMA Olympic Dam • Third largest supplier • World’s leading supplier of • Largest uranium deposit in the • Tripling of capacity expected seaborne metallurgical coal world • Major expansions underway th between 2007 & 2015 • Wo
Slide 16: Our offer for Rio Tinto
Our offer for Rio Tinto Slide 15
Slide 17: Overview of our offer for Rio Tinto
Overview of our 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 • Rio Tintoshareholders arebeingoffered3.4BHPBillit
Slide 18: Significant synergies expected from operations
Significant synergies expected from operations 47 21 15 56 1 45 5557 16 19 4648 1415 20 59 3 12 49 60 4 13 52 8 51 5861 21 9 5 7 6 50 65 Queensland 10 262 11 17 18 Coal Ekati 3 24 48 26 Diavik South Hail Creek Water Creek Goonyella Dalrymple 7 26 5 62 63 Riverside 4848 Poitrel Hay Point 4 6 4848 64
Slide 19: 3.4:1 offer represents compelling value
3.4:1 offer represents compelling value ratio(a) RioTintovsBHPBillitonhistoricalshareexchange 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(asat23-Oct-2008). a) E
Slide 20: Comparative dividend per share
Comparative dividend per share FY2008dividends perA$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) FY2008vsFY2002DPS(b) Netdebt(c) BHP Billiton 5.4x BHP Billiton US$8.5bn Rio Tinto 2.2x Rio Tinto US$42.1bn
Slide 21: Indicative timetable for the offer
Indicative timetable for the offer 2008 Offer Period Event Jul Aug Sep Oct Nov Dec (a) Day 0 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 a
Slide 22: Our offer is more compelling with this financial crisis
Our offer is more compelling with this financial crisis Global Situation BHP Billiton / Rio Combination Stock prices down Expected synergies a higher percentage of value Growth projects being cancelled Highgradegrowthportfolio– selectbest & optimise capital expenditure Management resources scarce Se
Slide 23: Summary - Our Expectations
Summary Our – Expectations • Financial market volatility and economic uncertainty to continue in the short-term • China, India and other developing economies to continue to drive demand for commodities in the long- term • Our diversified portfolio of low cost, high quality assets places us at a comp
Slide 24: Questions and Answers
Questions and Answers Slide 23
Slide 25: 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 26: 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 27: bhpbilliton
ébl bhpbilliton sourcing the future