Bhp Group Ltd · ASX:BHP
Bhp — BHP Billiton — H1 FY2012 Earnings Presentation
36 slides from Bhp's earnings presentation, Feb 8, 2012
Slide 1: Interim results, half year ended 31 December 2011
For personal use only Western Australia Iron Ore Interim results Half year ended 31 December 2011 Marius Kloppers Chief Executive Officer Graham Kerr Chief Financial Officer 8 February 2012
Slide 2: Disclaimer: Forward-Looking Statements and Non-IFRS Information
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: Disclaimer: Mineral Resources
Disclaimer For personal use only Mineral Resources This presentation includes information on Mineral or Coal Resources. Mineral Resources are compiled by: P Whitehouse (MAusIMM) – Western Australian Iron Ore (WAIO) and Samarco, S O‟Connell (MAusIMM) – Olympic Dam, A Paul (MAusIMM) – Queensland Coal
Slide 4: Interim results: Marius Kloppers, CEO
Escondida For personal use only Interim results Half year ended 31 December 2011 Marius Kloppers Chief Executive Officer
Slide 5: Strong and predictable financial results
Strong and predictable financial results For personal use only • Total Recordable Injury Frequency improved by 16% • Underlying EBITDA of US$18.7 billion, up 8% • Underlying EBIT of US$15.7 billion, up 6% • Attributable profit (excluding exceptional items) of US$9.9 billion, down 7% • Net operating
Slide 6: Robust performance in a challenging environment
Robust performance in a challenging environment For personal use only • Record production for two commodities and Western Australia Iron Ore six operations – WAIO annualised production rose to 178 mtpa (100% basis) in the December 2011 quarter – Record half year production at New South Wales Energy
Slide 7: Prioritising development of the liquids rich Eagle Ford shale
Prioritising development of the liquids rich Eagle Ford shale For personal use only • Completed the acquisition of Petrohawk Onshore US Energy Corporation • Successful combination of high quality Onshore US assets into the BHP Billiton portfolio • Large 7.6 billion barrels of oil equivalent Onshore
Slide 8: Interim results: Graham Kerr, CFO
For personal use only Hotazel Interim results Half year ended 31 December 2011 Graham Kerr Chief Financial Officer
Slide 9: Underlying EBIT analysis
Underlying EBIT analysis Half year ended December 2011 versus December 2010 For personal use only EBIT variance (US$ billion) Uncontrollable Controllable 20.0 0.5 17.7 0.3 2.8 (0.4) (0.5) 0.1 15.7 14.8 15.0 (1.9) Net US$(0.2) billion 10.0 5.0 0.0 H1 FY11 Price¹ Exchange Inflation Sub-total New Volum
Slide 10: Record iron ore production offset by temporary challenges
Record iron ore production offset by temporary challenges in the broader business For personal use only Volume variance (US$ million) US$(484) million 2,000 1,500 31 76 65 1,243 (133) 1,000 (168) (234) 500 (493) 0 (500) (871) (1,000) Iron Ore Manganese Energy Aluminium SSM D&SP Metallurgical Petrole
Slide 11: Short term production constraints led to significant cost pressure
Short term production constraints led to significant cost pressure For personal use only Underlying EBIT cash cost variance1 (US$ million) 400 Structural Non structural 0 17% (218) (400) (315) (455) (597) (800) 83% (1,200) (1,600) (1,585) Raw materials Labour & contractors Maintenance Other Total 1.
Slide 12: Centralised procurement and project hubs delivering benefits
Centralised procurement and project hubs delivering benefits For personal use only • Centralised procurement of key input Average mining truck lead time components mitigates our exposure to tight (months) consumable and mining equipment markets • Long term partnerships with suppliers ensure a prefer
Slide 13: A uniquely diversified portfolio
A uniquely diversified portfolio For personal use only Underlying EBIT1 Underlying EBIT margin1 (H1 FY12, US$ billion) (H1 FY12, %) 16 Iron Ore 65% 14 Metallurgical Coal 35% 12 Iron Ore Ferrous 60% Manganese 14% 10 Petroleum 59% 8 Metallurgical Coal BHP Billiton Energy Coal 27% Manganese 44% 6 Base
Slide 14: US$27 billion of growth projects in execution
US$27 billion of growth projects in execution For personal use only Projects in execution1 Current commitment to growth projects in execution2 (US$ billion) NTP Exp 3 EKATI MAC Misery RX1 30 WAIO Daunia Port and Rail Kipper Antamina NTP Exp Broad- Caval Exp 2 WAIO meadow Ridge Inner 20 GEMCO Harbour
Slide 15: Disciplined and predictable approach to capital management
Disciplined and predictable approach to capital management For personal use only Sources and uses of cash1 Gearing (US$ billion) (%) 40 40 30 30 Net operating cash flow 20 Capital and exploration expenditure 20 Cash dividends Capital management Acquisitions 10 10 Gearing 0 0 FY02 FY03 FY04 FY05 FY06
Slide 16: Interim results: Marius Kloppers, CEO
For personal use only Spence Interim results Half year ended 31 December 2011 Marius Kloppers Chief Executive Officer
Slide 17: Structural drivers of demand remain intact
Structural drivers of demand remain intact For personal use only • Cautious on the short term economic Chinese GDP growth by province outlook for the developed world and (% year on year, 2010) Europe in particular • No simple solution for the structural ≥ 10% imbalances and high levels of sovereign
Slide 18: Predictability = better planning
Predictability = better planning For personal use only • Unchanged and proven strategy focused on Strong and stable EBIT margin1 large, long life, low cost, expandable and (%) upstream assets 80 BHP Billiton Customer Sector Groups • We prioritise investment in businesses that 60 meet all of the crit
Slide 19: Strong growth in our Western Australia Iron Ore business
Strong growth in our Western Australia Iron Ore business For personal use only • WAIO annualised production rose to BHP Billiton Underlying EBIT contribution (H1 FY12) 178 mtpa (100% basis) in the December 2011 quarter Western • Prior FY12 production guidance for WAIO Australia of 159 mtpa (100% bas
Slide 20: Substantial low risk volume growth anticipated at key assets
Substantial low risk volume growth anticipated at key assets For personal use only • A substantial increase in copper production at Escondida production1 Escondida as operations progress towards (index annualised H1 FY12, BHP Billiton share) higher grade ore in the main pit 200 • Queensland Coal pos
Slide 21: The options and capability to develop large scale, high quality projects
The options and capability to develop large scale, high quality projects For personal use only Saskatchewan Potash Feasibility: Queensland Coal Jansen Stage 1 Potash Port Execution: Pre-feasibility: Caval Ridge Jansen Stages 2 & 3 Daunia Hay Point Stage 3 Expansion Broadmeadow Life Extension Pre-fea
Slide 22: A large, low cost iron ore business with significant expansion potential
A large, low cost iron ore business with significant expansion potential For personal use only • WAIO US$779 million (BHP Billiton share) Global iron ore deposits1 pre-commitment investment for an outer harbour (average Fe grade, %) development at Port Hedland 75 • Targeting Board approval in H2 CY1
Slide 23: The leading metallurgical coal business
The leading metallurgical coal business For personal use only • Leading resource position, premier products Global metallurgical coal deposits1 and industry leading margins (by basin) • Projects in execution total US$4.9 billion2 Bowen Basin Queensland • Numerous longer term development options Coal
Slide 24: Large and expandable Base Metals assets
Large and expandable Base Metals assets For personal use only • Escondida Organic Growth Project 1 will set the Global copper deposits1 framework for multiple phases of expansion (Cu grade excluding by-products1, %) 3.00 – Targeting Board approval in H1 CY12 with commissioning scheduled for CY15 1.0
Slide 25: Developing a world class presence in potash
Developing a world class presence in potash For personal use only • Three billion tonne resource delineated at Jansen1 Jansen • US$1.2 billion committed to date with ground freezing and shaft sinking programs underway • Targeting Board approval for the first phase in CY12 • Planned capacity of 8 mtp
Slide 26: Consistent execution of a well defined strategy
Consistent execution of a well defined strategy For personal use only • Strong and predictable financial results • We have taken action to address industry wide challenges in the nickel, aluminium and manganese alloy product groups • Substantial, low risk volume growth is anticipated at key assets i
Slide 27: BHP Billiton: resourcing the future
cdl bhpbilliton resourcing the future
Slide 28: Appendix
For personal use only Appendix
Slide 29: Impact of major commodity price movements
Impact of major commodity price movements Half year ended December 2011 versus December 2010 For personal use only Total price variance1 (US$ million) 1,400 1,322 1,050 927 927 700 391 350 160 50 0 (106) (350) (223) (700) (673) Petroleum Metallurgical Iron Ore Energy Coal D&SP Aluminium SSM Manganes
Slide 30: Rate of cost change
Rate of cost change For personal use only Operating cost movement relative to preceding year1 (%) 12.0 Total Excluding non-cash 10.5 10.1 9.8 9.0 9.0 6.0 5.3 5.0 4.9 4.8 4.3 4.2 3.0 0.0 0.0 (0.8) (3.0) FY07 FY08 FY09 FY10 FY11 H1 FY12² 1. Excludes the impact of inflation, foreign exchange, price lin
Slide 31: Summary of key FX components in tax expense/(income)
Summary of key FX components in tax expense/(income) For personal use only December 2011 December 2010 Restatement of expense/(income) expense/(income) US$ million US$ million Current tax payable (123) 391 Deferred tax balances on fixed assets 82 (1,750) Deferred tax balances on US$ debt 151 316 Def
Slide 32: Capital and exploration expenditure
Capital and exploration expenditure For personal use only US$ billion FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12F Growth 1.9 2.0 1.7 2.6 4.0 5.5 6.1 7.3 8.1 9.4 Sustaining and Other 0.8 0.7 0.9 1.3 2.1 1.6 1.8 2.0 1.7 2.2 Exploration 0.4 0.3 0.5 0.5 0.8 0.8 1.4 1.3 1.3 1.2 Total 3.1 3.0
Slide 33: An unparalleled portfolio of growth options
An unparalleled portfolio of growth options For personal use only Olympic Dam IndoMet Project 3 Coal Expansion Cerrejon P500 Illawarra Coal Expansion Potash Yeelirrie Potash Jansen Scarborough Young Stage 2 MAC 32 Potash NTP Oxide Guinea Jansen Exp 3 EKATI Leach MAC Alumina Stage 1 Misery Wards WAIO
Slide 34: Maturity profile analysis
Maturity profile analysis For personal use only Debt repayments1 (US$ million) 6,000 4,000 2,000 0 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 Post FY20 US$ Euro Bank CP Jointly Controlled Bonds Bonds Debt Issuance2 Entities3 Subsidiaries4 % of portfolio 61% 17% 0% 12% 8% 2% Capital Markets 78% Bank Sup
Slide 35: Key net profit sensitivities
Key net profit sensitivities For personal use only Approximate impact1 on FY12 net profit after tax of changes of US$ million US$1/t on iron ore price 95 US$1/bbl on oil price 40 US$1/t on energy coal price 25 US$1/t on metallurgical coal price 20 US¢1/lb on aluminium price 20 US¢1/lb on copper pric
Slide 36: BHP Billiton: resourcing the future
cdl bhpbilliton resourcing the future