Bhp Group Ltd · ASX:BHP
Bhp — BHP Billiton — H1 FY2013 Earnings Presentation
36 slides from Bhp's earnings presentation, Feb 20, 2013
Slide 1: Interim results, half year ended 31 December 2012
For personal use only Port Hedland Interim results Half year ended 31 December 2012 Marius Kloppers Chief Executive Officer Graham Kerr Chief Financial Officer 20 February 2013
Slide 2: Disclaimer
Disclaimer For personal use only Forward-looking statements This presentation includes forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 regarding future events, conditions, circumstances and the future financial performance of BHP Billiton, i
Slide 3: Interim results - Escondida
Escondida For personal use only Interim results Half year ended 31 December 2012 Marius Kloppers Chief Executive Officer 20 February 2013
Slide 4: Key themes
Key themes For personal use only • We are delivering on our commitments • Strong and predictable operating performance • Controllable cash costs reduced by US$1.9 billion on an annualised basis • Major projects are on schedule and budget • Ongoing divestment program continues to create substantial v
Slide 5: Solid results despite weaker prices
Solid results despite weaker prices For personal use only • Total Recordable Injury Frequency improved to 4.6 per million hours worked • Underlying EBITDA of US$13.2 billion, down 29% • Underlying EBIT of US$9.8 billion, down 38% • Attributable profit (excluding exceptional items) of US$5.7 billion,
Slide 6: Strong and consistent performance
Strong and consistent performance For personal use only • Production records achieved across Strong growth in our high margin businesses five operations (sales volumes, % change, H1 FY13 versus H1 FY12) Copper • Unchanged guidance for our major, high margin businesses Alumina • Copper equivalent pro
Slide 7: Interim results - Newman
Newman For personal use only Interim results Half year ended 31 December 2012 Graham Kerr Chief Financial Officer 20 February 2013
Slide 8: Key themes
Key themes For personal use only • We are delivering on our commitments • Strong and predictable operating performance • Controllable cash costs reduced by US$1.9 billion on an annualised basis • Major projects are on schedule and budget • Ongoing divestment program continues to create substantial v
Slide 9: Underlying EBIT analysis
Underlying EBIT analysis For personal use only EBIT variance (H1 FY13 versus H1 FY12, US$ billion) 18.0 15.9 12.0 0.7 0.3 0.4 (0.1) 9.8 9.5 (0.2) (5.7) (0.4) (0.4) (0.4) (0.3) 6.0 0.0 energy New H1 FY12 H1 FY13 Exchange Price linked Other Price Sub-total Volume cash costs¹ costs Non-cash & ceased &
Slide 10: Delivering strong growth in our high margin businesses
Delivering strong growth in our high margin businesses For personal use only Volume variance (H1 FY13 versus H1 FY12, US$ million) 900 44 5 62 101 678 141 (131) 600 456 435 (243) 300 0 Iron Ore Base Metallurgical Energy Manganese Aluminium D&SP¹ Sub-total Petroleum¹ Total Metals Coal Coal & Nickel M
Slide 11: Controllable cash costs reduced by US$1.9 billion on an annualised basis
Controllable cash costs reduced by US$1.9 billion on an annualised basis For personal use only Cash cost savings (US$ million) Controllable Uncontrollable 1,500 US$1.9 billion 287 annualised controllable 1,200 1,133 cash cost saving (98) 258 944 900 299 686 600 87 397 387 (97) 300 0 (P&L) & business
Slide 12: A weaker US dollar has 'hidden' implications for profitability
A weaker US dollar has ‘hidden’ implications for profitability For personal use only Foreign exchange gain/(loss) on balance sheet monetary items (US$ million) 0 (200) (169) (95) (79) (400) (65) (32) (30) (14) (7) (600) (83) (574) Iron Ore Metallurgical Base Energy Petroleum Aluminium Manganese D&SP
Slide 13: Our projects remain on schedule and budget
Our projects remain on schedule and budget For personal use only WAIO Worsley NWS North Caval Inner E&G Rankin B Ridge Harbour WAIO Bass Strait NWS Macedon Broad- HPX3 EKATI NWS Escondida Jimblebar LGCP CWLH Ore Access meadow Misery2 GWF-A FY12 FY13 FY14 FY15 FY16 Antamina Cerrejon Escondida Exp P40
Slide 14: Ongoing divestment program continues to create substantial value
Ongoing divestment program continues to create substantial value For personal use only • Good progress on our strategic commitment Significant increase in prospective divestment proceeds1 (US$ billion) to simplify the portfolio 5.0 • Asset sales totalling US$4.3 billion either announced or completed
Slide 15: Royalties, taxes and exceptional items
Royalties, taxes and exceptional items For personal use only • US$6.1 billion paid in the form of federal taxes, Newman Primary School state taxes and production royalties • Underlying effective tax rate, including royalty related taxation, was 38% • We have voluntarily donated 1% (US$1 billion) of
Slide 16: Interim results - BMA
For personal use only BMA Interim results Half year ended 31 December 2012 Marius Kloppers Chief Executive Officer 20 February 2013
Slide 17: Key themes
Key themes For personal use only • We are delivering on our commitments • Strong and predictable operating performance • Controllable cash costs reduced by US$1.9 billion on an annualised basis • Major projects are on schedule and budget • Ongoing divestment program continues to create substantial v
Slide 18: Global growth is strengthening, Chinese commodities demand is moderating
Global growth is strengthening, Chinese commodities demand is moderating For personal use only • The global economy looks set to benefit from Contribution to global GDP growth (% YoY) a period of improving economic growth 5 • China will remain the primary driver of 4 3 commodities demand and its cyc
Slide 19: Copper long term fundamentals remain compelling
Copper long term fundamentals remain compelling For personal use only • Robust supply growth is expected to result in a Large supply deficit in the longer term more balanced market in the near term (primary copper, million tonnes) 30 • Longer term outlook continues to be underpinned Demand 2025 by s
Slide 20: Iron ore prices will remain volatile in the short term
Iron ore prices will remain volatile in the short term For personal use only • Over the last decade, Chinese demand for Schematic iron ore cost curve (US$/t, CIF China) seaborne iron ore overwhelmed the capacity of the low cost supply basins Current cost curve • Prices responded to induce high cost
Slide 21: Metallurgical coal prices to remain range bound
Metallurgical coal prices to remain range bound For personal use only • Supply behaviour is important given the low Seaborne exports of US metallurgical coal demand growth rates of traditional markets (US$/t, FOB) (million tonnes) 400 80 • The sharp price increase in CY11 induced a Hard coking coal
Slide 22: Aluminium to remain in over capacity
Aluminium to remain in over capacity For personal use only • Long term fundamentals for copper and Chinese primary aluminium capacity and demand (million tonnes) aluminium present a stark contrast 40 Capacity • Aluminium is expected to remain in over Demand 30 capacity 20 • Chinese aluminium produce
Slide 23: Strong momentum underpinned by growth in our major basins
Strong momentum underpinned by growth in our major basins For personal use only FY12 to FY14 production growth contribution Other 10% Copper 12% Petroleum 27% Metallurgical coal 25% Iron ore 26% Onshore US (Oil & gas) Gulf of Mexico (Oil & gas) WAIO (Iron ore) Queensland Coal (Metallurgical coal) FY
Slide 24: Allocating capital in a disciplined manner to maximise returns
Allocating capital in a disciplined manner to maximise returns For personal use only Capital is being deployed to our Capital expenditure for major highest EBITDA margin1 CSGs projects in execution <40% (US$ billion) EBITDA margin 40-50% EBITDA margin >50% FY13e FY14e FY15e FY16e Onshore US (Oil & g
Slide 25: Strong growth at a lower unit cost
Strong growth at a lower unit cost For personal use only • WAIO run rate of +220 mtpa1 is Escondida Western Australia Iron Ore (index, FY12 production = 100) (index, FY12 production = 100) anticipated before end FY15 200 200 • Escondida copper production of over CAGR 14% CAGR 8% 1.3 mt1 is forecast
Slide 26: Positioned to sustain superior shareholder returns
Positioned to sustain superior shareholder returns For personal use only • Consistent execution of our proven strategy Total shareholder returns2 has delivered sector leading results (%) 50 • Total shareholder return of 47% since FY08 • We have returned US$56.9 billion1 to shareholders since FY03 25
Slide 27: Key themes
Key themes For personal use only • We are delivering on our commitments • Strong and predictable operating performance • Controllable cash costs reduced by US$1.9 billion on an annualised basis • Major projects are on schedule and budget • Ongoing divestment program continues to create substantial v
Slide 28: For personal use only
cdl bhpbilliton resourcing the future
Slide 29: Appendix
For personal use only Appendix
Slide 30: Impact of commodity price movements
Impact of commodity price movements For personal use only Total price variance1 (H1 FY13 versus H1 FY12, US$ million) 1,000 316 0 (28) (58) (62) (385) (439) (1,000) (1,602) (2,000) (3,000) (3,169) (4,000) Base Metals D&SP Manganese Petroleum Aluminium Energy Coal Metallurgical Iron Ore & Nickel Coal
Slide 31: Summary of key exchange rate components in tax expense/(income)
Summary of key exchange rate components in tax expense/(income) For personal use only H1 FY13 H1 FY12 Restatement of expense/(income) expense/(income) US$ million US$ million Current tax payable 17 (123) Deferred tax balances on fixed assets 43 82 Deferred tax balances on US$ debt 12 151 Deferred ta
Slide 32: Capital and exploration expenditure
Capital and exploration expenditure For personal use only Minerals and conventional oil and gas capital and exploration expenditure US$ billion FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13e Growth 2.0 1.7 2.6 4.0 5.5 6.1 7.3 8.1 9.2 14.4 Sustaining and other 0.7 0.9 1.3 2.1 1.6 1.8 2.0 1.7
Slide 33: Maturity profile analysis
Maturity profile analysis For personal use only Debt balances1 (US$ billion2) 6 4 2 0 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 Post FY28 Jointly US$ Euro Sterling A$ Bank CP Controlled Bonds Bonds Bonds Bonds Debt Issuance Entities3 Subsidiaries4 % of portfolio
Slide 34: Key net profit sensitivities
Key net profit sensitivities For personal use only Approximate impact1 on FY13 net profit after tax of changes of US$ million US$1/t on iron ore price 110 US$1/bbl on oil price 45 US¢10/MMbtu on US gas price 25 US$1/t on metallurgical coal price 25 US¢1/lb on aluminium price 25 US¢1/lb on copper pri
Slide 35: Strength in diversity
Strength in diversity For personal use only EBIT margin1 (%) 75 Petroleum 50 Aluminium & Nickel Base Metals D&SP Iron Ore Manganese 25 Metallurgical Coal Energy Coal Total 0 FY03 FY04 FY05 FY06 FY07 FY08 FY09² FY10 FY11 FY12² H1 FY13² 1. Calculated on the basis of UKGAAP for periods prior to FY05, e
Slide 36: For personal use only
cdl bhpbilliton resourcing the future