Bhp Group Ltd · ASX:BHP
Bhp — BHP Billiton — Investor Presentation (July 2006)
24 slides from Bhp's investor presentation, July 2006
Slide 1: by snl
by snl “Buying 200g UL Fo Ny 4 OY) JER 2008 mse dM ah FFICIAL SPONSOR OF THE BEING 2008 OLYMPIC GAMES
Slide 2: BHP Billiton China
BHP Billiton Clinton Dines – President BHP Billiton China July / August 2006
Slide 3: China is a domestic demand story driven by six drivers
China is a domestic demand story driven by six drivers Housing Wealth Structural Reform Urbanization Manufacturing BHP Billiton China Rural Reform Page 3 31/07/2006
Slide 4: Demographics – aging and urbanizing
Demographics – aging and urbanizing Chengdu 1990 Chengdu 2002 Year Population # Over 60 2004 1.3 bn 140 mn 2020 1.4 bn 240 mn 2050 1.5 bn 440 mn BHP Billiton China Page 4 31/07/2006
Slide 5: Working-Age Population (millions)
By 2020, the urban population is expected to triple, but the working age population will be in decline 160 950 Substantial fall: China’s Urban Population post 2020 Total Urban Population (Millions) Working-Age Population (millions) 150 Population Density (Sq Km) 2005 2010 2020 900 532 658 970 140 Ur
Slide 6: Urbanization is expected to lead to strong city development
Urbanization is expected to lead to strong city development but the quality of that growth is likely to be uneven. China’s tiered city structure: Today: 45 tier 1-3 cities 2010: 86 tier 1-3 cities 2020: 147 tier 1-3 cities Tier 1 Tier 2 Tier 3 Total Urban Population (millions): 532 658 970 BHP Billi
Slide 7: China's economy is deep and well-distributed
China’s economy is deep and well-distributed Gross Domestic Product By Industry Sector and Percentage Change 9000 Data are 40 Nominal 8000 35 7000 30 Percent Change 6000 USD Millions 5000 25 4000 20 3000 15 2000 10 1000 0 5 1991 1993 1995 1997 1999 2001 2003 2005 PCTCHG Primary Industry Secondary In
Slide 8: But economic growth still concentrated in the east
But economic growth still concentrated in the east Pop. GDP GDP per Share(%) (million) capita (USD) East 482 2117 58 Mid 711 767 39 West 40 380 3 BHP Billiton China Page 8 31/07/2006
Slide 9: China Driving Global Growth: share of global consumption
China Driving Global Growth: China’s share of global consumption, 2004 World rank, 2005 Percentage world consumption, 2005 Oil 2 9 Aluminium 2 22 Iron Ore 1 41 Nickel 2 16 Copper 1 22 Steel 1 31 Coal 1 37 Nuclear 11 2 Alumina 1 20 Data: BP Statistical Review of World Energy, IISI, World Bank, UN Com
Slide 10: Money supply and loan growth
Money supply and loan growth Money Supply and Financial Institution Loan Growth Change YoY, sa = seasonally adjusted 24 22 20 18 16 14 12 10 8 6 4 Jun-2000 Jun-2001 Jun-2002 Jun-2003 Jun-2004 Jun-2005 Jun-2006 M2: YoY Loans M2: sa YoY Loans: sa YoY BHP Billiton China Page 10 31/07/2006 CEIC
Slide 11: Growth of the trade surplus
Ja -10000 -5000 0 5000 10000 15000 n- 0 BHP Billiton China Ap 2 Page 11 31/07/2006 r- 0 Ju 2 l-0 O 2 ct -0 Ja 2 n- 0 A 3 pr -0 Ju 3 l-0 O 3 ct -0 Growth of the trade surplus Ja 3 n- 0 Trade Balance A 4 pr -0 Ju 4 l-0 O 4 ct -0 Ja 4 n- 0 Ap 5 r- 0 Ju 5 l-0 O 5 Trade Balance 3MMA ct -0 Ja 5 n- 0 A 6 p
Slide 12: Foreign exchange reserves
Foreign exchange reserves 1000 900 800 700 USD Billions 600 500 400 300 200 100 0 0 2 4 6 8 0 2 4 6 9 9 9 9 9 0 0 0 0 19 19 19 19 19 20 20 20 20 Foreign Reserves BHP Billiton China Page 12 31/07/2006
Slide 13: Comparison of current account balances
Comparison of current account balances 200 100 0 European Monetary Union Japan China Saudi Arabia Singapore Brazil United States -100 -200 -300 -400 -500 -600 -700 Current Account Balance (USD Billions) Data: World Bank BHP Billiton China Page 13 31/07/2006
Slide 14: RMB – further revaluation?
RMB – further revaluation? • RMB expected to continue 8.3 appreciating gradually due to: 8.25 – Worries that a rapid 8.2 revaluation could derail rural income growth 8.15 – Concerns that revaluation 8.1 Spot could disproportionately hurt Exchange small and medium-sized 8.05 private enterprises Rate:
Slide 15: The high savings rate is a function of limited credit availability
The high savings rate is a function of the limited availability of credit and minimal social safety net rather than an indicator of future consumption • Though China has a very high overall savings rate (42%), it is worth 60% examining what that means in practical terms: 50% Total • Companies save a
Slide 16: China's high savings rate funds investment
China’s high savings rate funds investment – but also speaks to under-developed capital markets • The FAI series gets a lot of attention 30% but includes the value of land transfers and transfers of used capital 25% • GFCF calculated according to international practice. 20% Gross Fixed • Increasing
Slide 17: Manufacturing Price Indexes
Manufacturing Price Indexes Price Indexes PY = 100 50 40 30 Change YoY 20 10 0 -10 May-2004 Nov-2004 May-2005 Nov-2005 May-2006 CPI PPI PPI Manufacturing PPI Raw Materials PPI Petroleum & Natural Gas EconData BHP Billiton China Page 17 31/07/2006
Slide 18: Business sentiment improving due to strong demand
Business sentiment improving due to strong demand Purchasing Manager’s Index (Score of 50 or above equals expectation of expansion) 59 57 55 53 PMI Output Prices 51 49 47 45 Dec-05 Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 Source: CLSA BHP Billiton China Page 18 31/07/2006
Slide 19: China components of trade balance
China components of trade balance Components of China's Trade Balance USD Millions 40000 30000 20000 USD Millions 10000 0 -10000 -20000 May-2000 May-2001 May-2002 May-2003 May-2004 May-2005 May-2006 Primary Products Chemicals and Related Products Manufactured Goods Machinery and Transport Equipm Met
Slide 20: China's trade balance with the world
China’s trade balance with the world China's Trade Balance with the World USD Millions 200000 150000 100000 50000 0 -50000 -100000 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Asia Africa Europe Latin America North America Oceania BHP Billiton China Page 20 31/07/2006 EconData
Slide 21: Recession in the US doesn't necessarily lead to problems in China
Recession in the US doesn’t necessarily lead to problems in China 4 2 Magnitude of 2001 GDP Slowdown % China 0 1.2 1 0.8 0.6 0.4 0.2 0 Japan -2 Philippines -4 -6 Malaysia Taiwan -8 Hong Kong -10 Singapore -12 -14 0% 10% 20% 30% 40% 50% 60% 70% Source: CEIC, UBS 2001Peak-to-trough export growth swing
Slide 22: Rising incomes make housing affordable
Rising incomes make housing affordable, though there are still not enough low and middle income units House price growth 90 (%) Urban per capita disposable income growth 80 70 60 50 China 40 30 20 10 0 1999 2000 2001 2002 2003 2004 2005 1999- 2005 House price growth 70 (%) Per capita disposable inco
Slide 23: There has been huge progress in bank reform
There has been huge progress in bank reform….. NPLs to total loans 2002 2003 2004 3Q 2005 State-Owned Commercial 25.6% 20.1% 15.6% 10.1% Banks Bank of China 22.5% 16.3% 5.1% … China Construction Bank 15.2% 9.1% 3.9% … Industrial & Commercial Bank 24.4% 21.2% 19% … Agricultural Bank 36% 30.8% 26.8% …
Slide 24: by snl
by snl “Buying 200g UL Fo Ny 4 OY) JER 2008 mse dM ah FFICIAL SPONSOR OF THE BEING 2008 OLYMPIC GAMES