Bhp Group Ltd · ASX:BHP
Bhp — BMO Global Metals & Mining Conference 2019
16 slides from Bhp's conference presentation, Feb 25, 2019
Slide 1: BMO Global Metals & Mining Conference
BMO Global Metals & Mining Conference 25 February 2019 Western Australia Iron Ore
Slide 2: Disclaimer
Disclaimer Forward-looking statements This presentation contains forward-looking statements, including statements regarding: trends in commodity prices and currency exchange rates; demand for commodities; plans, strategies and objectives of management; closure or divestment of certain operations or
Slide 3: BHP's investment proposition
BHP’s investment proposition We have the assets, options, capability and discipline to grow long-term shareholder value and returns Maximise cash flow Capital discipline Value and returns Low-cost producer US$10-15 bn net debt ROCE to ~20% efficiency, technology, culture range to be maintained by FY
Slide 4: Sustainability is one of our core values
Sustainability is one of our core values We will continue our work to improve safety at our operations Safety Health • Tragically, we had one fatality at Saraji (December 2018) • Occupational health exposures reduction projects progressing • TRIF at operated assets of 4.3 per million hours worked, •
Slide 5: Dams and tailings management
Dams and tailings management Increased rigour of our assessment and management of tailings storage facilities since the failure of the Fundão dam at Samarco Facilities Safety Governance Centralised Canadian 115 20 External 93% dam Dam tailings storage active tailings storage annual of >400 dam risk
Slide 6: H1 FY19 financial scorecard
H1 FY19 financial scorecard Returns to shareholders of ~US$13 billion over the last six months Profitability Free cash flow Net debt US$ 10.5 bn US$ 3.6 bn US$ 9.9 bn Underlying EBITDA and 52% margin free cash flow net debt diversified contribution >US$10 bn including down US$1 bn since June 2018 ac
Slide 7: Return on Capital Employed
Return on Capital Employed H1 FY19 ROCE 15%; tailored plans to improve ROCE at every asset ROCE by asset (%) Productivity, technology, latent capacity to drive Antamina8 further improvement 30 25 NSWEC High-return options 20 to slow field decline Cerrejón8 Queensland 15 Coal WAIO Increased equipment
Slide 8: Capital allocation
Capital allocation Disciplined adherence to our Capital Allocation Framework H1 FY19 Operating Capital productivity productivity Net operating cash flow US$7.3 bn Maintenance capital US$0.8 bn Strong balance sheet Minimum 50% payout ratio dividend10 US$2.5 bn Excess cash Includes US$0.6 bn of divi
Slide 9: Striking the right balance to maximise value and returns
Striking the right balance to maximise value and returns US$16 billion reduction in net debt; ~US$20 billion reinvested; US$25 billion returned to shareholders12 Net debt slightly below target range Disciplined investment Increased returns to shareholders (Net debt, US$ billion) (Capital and explora
Slide 10: Market outlook
Market outlook Near-term uncertainty, attractive long-term fundamentals Short term Medium term Long term Growth in New demand Policy Growth Steeper New supply population, centres and uncertainty moderating cost curves wealth themes Decarbonisation Sentiment Prudently Sustainable Emerging and Technol
Slide 11: Our strategic framework
Our strategic framework Leveraging our values, capabilities and resources to meet the evolving needs of markets Culture and capabilities that Commodities with high economic enables the execution of our rent potential that match our business strategy to create long- capabilities term value and return
Slide 12: We expect to deliver on our plans in FY19
We expect to deliver on our plans in FY19 Maximise cash flow Capital discipline Value and returns Cu Eq volumes Net debt 20% ROCE broadly flat in FY19, weighted to H2 to remain at lower end of target at spot prices range13 >US$9 bn <US$8 bn Minimum 50% free cash flow at spot prices capex of underlyi
Slide 13: BHP's investment proposition
BHP’s investment proposition We have the assets, options, capability and discipline to grow long-term shareholder value and returns Maximise cash flow Capital discipline Value and returns Low-cost producer US$10-15 bn net debt ROCE to ~20% efficiency, technology, culture range to be maintained13 by
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Slide 15: Footnotes
Footnotes 1. Slide 4: High potential injury frequency rate: injury events where there was the potential for a fatality. 2. Slide 4: Occupational Exposure Limits (OELs): as compared to Q4 FY18 reported exposures and discounting the protection afforded by respiratory protective equipment. 3. Slide 5:
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