Slide 1: Preliminary Results – 30 June 2007
For personal use only Preliminary Results – 30 June 2007 22 August 2007 Chip Goodyear Chief Executive Officer Marius Kloppers Chief Executive Non-Ferrous/ Chief Executive Officer Designate Alex Vanselow Chief Financial Officer
Slide 2: Disclaimer
Disclaimer This document has been prepared by BHP Billiton and comprises the slides for a presentation For personal use only concerning BHP Billiton’s preliminary statement of its annual report and accounts for the financial year ending 30 June 2007. The views expressed in this document contain info
Slide 3: Preliminary Results – Chip Goodyear
For personal use only Preliminary Results – 30 June 2007 Chip Goodyear Chief Executive Officer
Slide 4: Highlights – Year ended June 2007
For personal use only Highlights – Year ended June 2007 • HSEC – 12 month rolling Total Recordable Injury Frequency Rate of 7.4, down 16.9% • Outstanding operating and financial results – Annual production records for 8 major commodities and 17 operations – Underlying EBITDA up 27% to US$23.0 billio
Slide 5: Outstanding results driven by strategy direction and execution
Outstanding results driven by strategy direction and execution US$Bn For personal use only 11.0 • 55% Volume Growth 10.0 • Portfolio Management 9.0 8.0 • Cost & Efficiency Gains 7.0 • Commodity Prices (1) 6.0 EBIT 5.0 4.0 3.0 2.0 1.0 0.0 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 FY 2002 FY 2003 FY 2004 FY
Slide 6: Diversity = Strength and stability
For personal use only Diversity = Strength and stability % 70 60 Iron Ore 50 EBIT Margin(1) Met Coal Manganese 40 Energy Coal Petroleum SSM 30 Base Metals Aluminium 20 D&SP BHP Billiton 10 0 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 (1) FY2005, FY2006 and FY
Slide 7: GDP growth compared
GDP growth compared GDP US$Bn For personal use only • Demand to remain strong, driven by 3500 China 3000 • Supply side constraints persist • Inventories remain low 2500 • US becoming less relevant to 2000 resource demand • Prices likely to remain high albeit 1500 volatile 1000 500 0 1980 1981 1982 1
Slide 8: Preliminary Results – Alex Vanselow
For personal use only Preliminary Results – 30 June 2007 Alex Vanselow Chief Financial Officer
Slide 9: Financial Highlights
For personal use only Financial Highlights Year ended June (US$M) 2007 2006 % Change Revenue (with JV share of revenue) 47,473 39,099 +21 Underlying EBITDA 22,950 18,053 +27 Underlying EBIT 20,067 15,277 +31 EBIT – Profit from operations 18,401 14,671 +25 Attributable profit (excluding exceptionals)
Slide 10: Record margins and return on capital
Outstanding assets result in Record margins and return on capital Outstanding Superior Excellent High Margin For personal use only Assets Resource Commodity Petroleum Position Mix Business 60% 48% 50% Return on Capital EBIT Margin(1) 44% 40% 38% 40% 35% 30% 29% 30% 24% 20% 21% 20% 11% 13% 10% 0% FY
Slide 11: Underlying EBIT by Customer Sector Group – Petroleum
For personal use only Underlying EBIT by Customer Sector Group Year ended June (US$M) 2007 2006 %%Change Change Petroleum 3,014 2,968 +1.5 • Record EBIT contribution • Production flat with FY 2006 despite no new projects • Improved operational uptime and successful infill drilling • Atlantis, Genghi
Slide 12: Underlying EBIT by Customer Sector Group – Aluminium
For personal use only Underlying EBIT by Customer Sector Group Year ended June (US$M) 2007 2006 %%Change Change Aluminium 1,856 1,191 +55.8 • Record EBIT contribution • Record production and sales • Worsley Development Capital Project fully ramped up • Acquisition of 33.3% interest in Guinea Alumina
Slide 13: Underlying EBIT by Customer Sector Group – Base Metals
For personal use only Underlying EBIT by Customer Sector Group Year ended June (US$M) 2007 2006 %%Change Change Base Metals 6,905 5,400 +27.9 • Record EBIT contribution • Record annual copper production • Spence commissioned and continued successful ramp up of Escondida Sulphide Leach Project • Cann
Slide 14: Underlying EBIT by Customer Sector Group – Diamonds & Specialty Products
For personal use only Underlying EBIT by Customer Sector Group Year ended June (US$M) 2007 2006 %%Change Change Diamonds & Specialty Products 261 345 -24.3 • Solid operational performance from RBM • Higher value Ekati underground production to increase future EBIT • The Koala Underground project on
Slide 15: Underlying EBIT by Customer Sector Group – Stainless Steel Materials
For personal use only Underlying EBIT by Customer Sector Group Year ended June (US$M) 2007 2006 %%Change Change Stainless Steel Materials 3,697 901 +310.3 • Record EBIT contribution • Record annual nickel production • Ravensthorpe and Yabulu expansion commissioning progressing well • Increased explo
Slide 16: Underlying EBIT by Customer Sector Group – Iron Ore
For personal use only Underlying EBIT by Customer Sector Group Year ended June (US$M) 2007 2006 %%Change Change Iron Ore 2,738 2,537 +7.9 • Record EBIT contribution • Record iron ore production and sales • WAIO Rapid Growth Project 3 (to 129 Mtpa) commissioning commenced • FY 2008 WAIO production es
Slide 17: Underlying EBIT by Customer Sector Group – Manganese
For personal use only Underlying EBIT by Customer Sector Group Year ended June (US$M) 2007 2006 %%Change Change Manganese 253 132 +91.7 • Record manganese ore production • Increased annual manganese alloy production • Strong market conditions during the year • Groote Eylandt expansion in feasibility
Slide 18: Underlying EBIT by Customer Sector Group – Metallurgical Coal
For personal use only Underlying EBIT by Customer Sector Group Year ended June (US$M) 2007 2006 %%Change Change Metallurgical Coal 1,249 1,834 -31.9 • Record annual production • Record throughput at Hay Point Coal terminal • Hay Point Coal terminal expansion to 44 Mtpa commissioning commenced • Thir
Slide 19: Underlying EBIT by Customer Sector Group – Energy Coal
For personal use only Underlying EBIT by Customer Sector Group Year ended June (US$M) 2007 2006 %%Change Change Energy Coal 484 327 +48.0 • Higher export prices driven by strong demand • Record annual production at Hunter Valley Coal • 3 new projects in feasibility • Divestment of Koornfontein, Opti
Slide 20: Higher capture of price benefit to EBIT
Higher capture of price benefit to EBIT US$M For personal use only 22,000 20,067 20,000 2,697 85% 2,327 18,000 3,425 16,000 15,277 72% 2,463 14,000 12,000 10,000 8,000 6,000 H1 H2 Column 4 4,000 2,000 0 FY 2006 EBIT Net Price Variance (1) Price to EBIT FY 2007 EBIT Preliminary Results (1) Net price
Slide 21: Lowest rate of cost increase in years – 3.6%
Lowest rate of cost increase in 3 years – 3.6% (1) Investment Recouped One Other Business For personal use only Investment Recouped One Other Business + in in Revenue Revenue + Offs Offs + - Excellence Excellence = $714M $714M $372M $372M $267M $267M $149M $149M $129M $129M $203M $203M US$M 400 350
Slide 22: Financial strength and discipline
For personal use only Financial strength and discipline 28 • Record net operating 24 cash flow of US$15.6Bn • Strong balance sheet Dividend US cents per share 20 16 • Dividend rebased 12 • Share buy-backs continue 8 • 24% CAGR on dividends 4 0 Nov 01 May 02 Oct 02 May 03 Oct 03 May 04 Aug 04 Feb 05
Slide 23: Preliminary Results – Marius Kloppers
For personal use only Preliminary Results – 30 June 2007 Marius Kloppers Chief Executive Non-Ferrous/ Chief Executive Officer Designate
Slide 24: Growth delivered since July 2001
Growth delivered since July 2001 BROW NFIELD For personal use only Acquisition - $7. 2Bn Cerrejon WMC Resources Zona Norte Prod & Cap Expansion San Juan UG WAIO WAIO BMA Tintaya Bream Gas Dendrobium WAIO Mt Mt Arthur Arthur RGP RGP RGP 22 Phase 2 Oxide Pipeline North Paranam North BMA Phase 1 WAIO E
Slide 25: Growth since FY 2001 – Equivalent units rebased
Growth since FY 2001 – Equivalent units rebased For personal use only Projects impacting FY 2008 200 • Atlantis, Genghis Khan, Neptune, Zamzama Ph II, Stybarrow • Yabulu, Ravensthorpe • Spence, Escondida Suphide Leach, Pinto Valley Production growth (rebased to 100) (1) 150 • RGP3, Samarco • Koala U
Slide 26: Deep inventory of growth projects
Deep inventory of growth projects BROW NFIELD As at 22 August 2007 For personal use only $US $US Size of bubble in dicates proposed capital expenditure; 200M 200M Pinto Atlantis bold outer border signifies sanctioned project. Valley Koala Koala North Klipspruit Klipspruit UG UG NWS NWS T5 T5 NWS Dou
Slide 27: Deep inventory of projects and options
Deep inventory of projects and options As at 22 August 2007 For personal use only Proposed capital expenditure WA WA Iron Iron Ore Ore Saraji Saraji NWS NWS <$500M <$500M $501M-$2Bn $501M-$2Bn $2Bn+ $2Bn+ Quantum Quantum 11 WFG WFG Shenzi Nth Angola Angola Canadian Canadian DRC CMSA && DRC CMSA Heap
Slide 28: A premier energy portfolio
For personal use only A premier energy portfolio • World class energy assets • Global marketing capability Oil & Gas • Significant growth in next 3 years • Flexible options • Top quartile returns • Well positioned to meet growth • Outstanding exploration success Fuel inputs used in the production of
Slide 29: Future focus
For personal use only Future focus Core strategy is unchanged: – People Growth Options – Run current assets at full potential Project Pipeline – Accelerate development Financial Strength projects and Discipline The BHP Billiton Way – Create future options (Value Added Processes) World Class Assets ‘
Slide 30: Preliminary Results – Chip Goodyear
For personal use only Preliminary Results – 30 June 2007 Chip Goodyear Chief Executive Officer
Slide 31: Summary
For personal use only Summary • Outstanding operating and financial results • FY 2008 to see significant volume growth across Petroleum, Base Metals, Iron Ore and Stainless Steel Materials • Outlook remains positive – Long term fundamentals intact – Supply side constraints continue to challenge – Pr
Slide 32: For personal use only
For personal use only
Slide 33: Appendix
For personal use only Appendix
Slide 34: Underlying EBIT by Customer Sector Group
For personal use only Underlying EBIT by Customer Sector Group Year ended June (US$M) 2007 2006% % Change Change Petroleum 3,014 2,968 +2 Aluminium 1,856 1,191 +56 Base Metals 6,905 5,400 +28 Diamonds & Specialty Products 261 345 -24 Stainless Steel Materials 3,697 901 +310 Iron Ore 2,738 2,537 +8 M
Slide 35: Net finance costs, taxation and attributable profit
For personal use only Net finance costs, taxation and attributable profit Year ended June (US$M) 2007 2006 Underlying EBIT 20,067 15,277 JV net finance costs (122) (95) JV tax expense (1,201) (950) Exceptional items (343) 439 EBIT - Profit from operations 18,401 14,671 Net finance costs (390) (505)
Slide 36: Underlying EBIT analysis
Underlying EBIT analysis For personal use only Year ended June 07 vs June 06 US$M 23,000 586 22,000 6,122 21,000 (714) (145) 36 20,067 (416) (271) 20,000 (259) (149) 19,000 18,000 17,000 16,000 15,277 15,000 14,000 13,000 12,000 11,000 10,000 (1) (2) Ju n-06 Net Price Volu me Cash Costs Non Cash Inf
Slide 37: Impact of major commodity price
Impact of major commodity price For personal use only Year ended June 2007 vs June 2006 Total price variance US$7,101 million(1) US$M Nickel 3,852 3900 3600 3300 3000 2700 2400 2100 Copper 1800 1,559 1500 1200 Other Aluminium Base Iron 900 703 Metals Ore 555 549 600 Thermal Other Coal Alumina Petrol
Slide 38: Impact of major volume changes
Impact of major volume changes For personal use only Year ended June 07 vs June 06 Total volume(1) variance US$218 million US$M Met 180 Coal 160 Copper 150 141 Manganese 120 63 Alumina 90 58 Iron Ore 27 Thermal 60 Aluminium Coal 22 Nickel Oil & Gas 30 18 15 13 0 -30 Other (25) -60 D&SP (54) -90 Cann
Slide 39: Declining rate of cost increase
For personal use only Declining rate of cost increase (1) 9% 8.4% Total 8% Excl Non-Cash 6.7% 7% 5.9% 5.8% 6% 5.6% 5.5% 4.9% 5% 4.5% 4.3% 3.9% 4.0% 4% 3.0% 3% 2% 1% 0% (2) (2) H1 2005 H2 2005 H1 2006 H2 2006 H1 2007 H2 2007 (1) Cost increases are shown relative to the preceeding half year. Prelimina
Slide 40: Outstanding assets: EBIT margin by Customer Sector Group
Outstanding assets For personal use only EBIT margin(1) by Customer Sector Group 70% 2005 2006 2007 60% 50% 40% 30% 20% 10% 0% Pet roleum Aluminium Base Metals Diamonds & Stainless Iron Ore Manganese Metallurgical Energy Coal S pecialty S teel Materials Coal Products Preliminary Results (1) Margins
Slide 41: Cash flow
For personal use only Cash flow Year ended June (US$M) 2007 2006 Operating cash flow and JV dividends (1) 20,211 14,665 Net interest paid (380) (378) Tax paid (2) (4,236) (3,811) Net operating cash flow 15,595 10,476 Capital expenditure (3) (6,383) (5,239) Exploration expenditure (793) (766) Purchas
Slide 42: Strong Cash Flow - delivering value to shareholders
For personal use only Strong Cash Flow - delivering value to shareholders Organic Growth (1) Net Operating Cash Flow US$M 9000 8000 US$M 7000 16000 6000 5000 14000 4000 H1 H2 3000 12000 2000 1000 10000 0 (3) (3) (3) FY02 FY03 FY04 FY05 FY06 FY07 8000 Return to Shareholders (2) 6000 US$M 9000 8000 40
Slide 43: Portfolio management – US$6.0Bn of disposals
For personal use only Portfolio management – US$6.0Bn of disposals US$M 6,000 Proceeds from sale of assets US$M 5,000 FY 2007 444 FY 2006 934 4,000 FY 2005 1,035 3,000 FY 2004 277 2,000 FY 2003 (1) 2,472 1,000 FY 2002 845 Total proceeds 6,007 0 (1) Includes BHP Steel demerger and BHP Steel loans Sal
Slide 44: China
China • Sales into China increasing but diversification remains For personal use only • Currently 20% of total company revenues US$M 5,500 5,293 5,000 ROW Europe 4,500 Australia 3,999 4,000 3,611 3,500 Japan China 2,946 3,000 Other Asia 2,500 Nth 2,407 America 2,000 1,588 1,500 1,357 1,075 1,000 785
Slide 45: Capital & exploration expenditure
Capital & exploration expenditure (1) US$ Billion 2002 2003 2004 2005 2006 2007 2008 (F) For personal use only (1) Includes expenditure Growth 1.9 2.0 1.8 2.6 4.2 5.2 7.0 for jointly controlled entities Sustaining & Other 0.9 0.7 0.8 1.2 1.4 1.4 1.5 (2) 2008 Forecast Exploration (2) 0.4 0.3 0.5 0.5
Slide 46: Sanctioned development projects (US$14.3Bn)
Sanctioned development projects (US$14.3Bn) Share of For personal use only Initial Minerals Projects Commodity Approved Production Capacity Progress Production Capex (100%) Target Date US$M Alumar Refinery Expansion Alumina 725 Q2 CY09 2 million tpa On schedule and (Brazil) – 36% budget 70,000 tpa c
Slide 47: Sanctioned development projects (US$14.3Bn) cont.
Sanctioned development projects (US$14.3Bn) cont. Share of For personal use only Initial Approved Production Capacity Petroleum Projects Commodity Capex Production (100%) Progress Target Date US$M 200,000 barrels and 180 On schedule and Atlantis South (USA) – 44% Oil/Gas 1,630 H2 CY07 million cubic
Slide 48: Sanctioned development projects (US$14.3Bn) cont.
Sanctioned development projects (US$14.3Bn) cont. Share of For personal use only Initial Petroleum Projects Approved Production Capacity Commodity Production Progress (cont’d) Capex (100%) Target Date US$M North West Shelf Angel 800 m illion cubic feet gas On schedule and Oil/Gas 200 End CY08 (Austr
Slide 49: Development projects in feasibility
For personal use only Development projects in feasibility Minerals Projects Estimated Share Forecast Initial Project Capacity Commodity of Capex* (US$5.4Bn) Production* (100%)* US$M Worsley Efficiency and Growth Alumina 1,000 End CY10 1.1 million tpa (Australia) – 86% Guinea Alumina Project (Guinea)
Slide 50: Development projects in feasibility
For personal use only Development projects in feasibility Minerals Projects Estimated Share Forecast Initial Project Capacity Commodity of Capex* (US$5.4Bn) Production* (100%)* US$M M t Arthur Coal UG (Australia) – Energy Coal 475 End CY10 7 million tpa saleable coal 100% Navajo South M ine Extensio
Slide 51: Key net profit sensitivities
For personal use only Key net profit sensitivities Approximate impact(1) on FY 2008 net profit after tax of changes of: (US$M) US$1/t on iron ore price 60 US$1/bbl on oil price 30 US$1/t on metallurgical coal price 20 USc1/lb on aluminium price 30 USc1/lb on copper price 25 US$1/t on energy coal pri
Slide 52: For personal use only
For personal use only