Bhp Group Ltd · ASX:BHP
Bhp — BHP Billiton — FY2012 Earnings Presentation
37 slides from Bhp's earnings presentation, Aug 22, 2012
Slide 1: Preliminary results Year ended 30 June 2012
Newman For personal use only Preliminary results Year ended 30 June 2012 Marius Kloppers Chief Executive Officer Graham Kerr Chief Financial Officer 22 August 2012
Slide 2: Disclaimer: Forward looking statements
Disclaimer For personal use only 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
Slide 3: Preliminary results Year ended 30 June 2012
Escondida For personal use only Preliminary results Year ended 30 June 2012 Marius Kloppers Chief Executive Officer
Slide 4: Key themes
Key themes For personal use only • Strong operating performance and robust financial results • Targeting a significant reduction in operating costs • Disciplined investment has established strong momentum in our major businesses • Our projects in execution are expected to create substantial value fo
Slide 5: Robust financial results
Robust financial results For personal use only • Total Recordable Injury Frequency improved by 6% • Underlying EBITDA of US$33.7 billion, down 9% • Underlying EBIT of US$27.2 billion, down 15% • Attributable profit (excluding exceptional items) of US$17.1 billion, down 21% • Attributable profit of U
Slide 6: Strong operating performance
Strong operating performance For personal use only • Record production at 10 operations Effective asset utilisation1 in FY12 (%) 90% – Western Australia Iron Ore (WAIO) shipments rose to a rate of 179mtpa (100% basis) in the June 2012 quarter • Temporary operational challenges – industrial action an
Slide 7: Preliminary results Year ended 30 June 2012
Eagle Ford For personal use only Preliminary results Year ended 30 June 2012 Graham Kerr Chief Financial Officer
Slide 8: Strength in diversity
Strength in diversity For personal use only • The value of our diversified strategy was Underlying EBIT1 reflected in the Group‟s Underlying EBIT (%) margin of 39%1 100 75 • Net operating cash flow of US$12.1 billion 50 in H2 FY12 declined by 1% when 25 compared with H1 FY12 and demonstrated the cas
Slide 9: Underlying EBIT analysis
Underlying EBIT analysis For personal use only EBIT variance (FY12 versus FY11, US$ billion) 40.0 Uncontrollable (2.2) Controllable (2.6) 32.0 0.8 1.5 29.8 30.0 (2.0) (1.0) 27.2 (2.0) (1.7) (0.4) (0.0) 20.0 10.0 0.0 FY11 Sub-total Non-cash FY12 Exchange and inflation outages and Price¹ Major costs E
Slide 10: Investment in high margin organic growth delivered tangible results
Investment in high margin organic growth delivered tangible results For personal use only Volume variance1 (US$ million) 3,000 64 17 152 269 (35) 2,313 (138) 2,267 (375) 2,000 1,548 (719) 1,000 308 (1,240) 0 SSM Coal Metallurgical D&SP Sub-total Total Energy Coal Manganese Iron Ore Aluminium Base Me
Slide 11: Targeting significant cost savings in FY13
Targeting significant cost savings in FY13 For personal use only • The rate of cost escalation was exacerbated FY12 cash costs escalation1 by a number of temporary factors (%) +5% • Queensland Coal and Escondida will benefit Metallurgical Coal significantly as production recovers from recent challen
Slide 12: Major projects in our core products underpin near term growth and returns
Major projects in our core products underpin near term growth and returns For personal use only Major projects currently in execution1 Iron Ore Metallurgical Coal D&SP (capital expenditure, US$ billion) Petroleum Energy Coal SSM Base Metals Manganese Aluminium ≤ US$500m US$501m-US$5bn FY12 FY13e FY1
Slide 13: Disciplined management of our capital
Disciplined management of our capital For personal use only • Our priorities for capital are unchanged Strong balance sheet (net gearing, %) – first: invest in high return growth 40 opportunities throughout the economic cycle 30 – second: maintain a solid A credit rating 20 – third: grow our progres
Slide 14: Royalties, taxes and exceptional items
Royalties, taxes and exceptional items For personal use only • US$11.9 billion was distributed in the form of federal taxes, state taxes and production royalties representing 44% of Underlying EBIT • Attributable profit of US$15.4 billion included exceptional items of US$1.7 billon 1 – non-cash tax
Slide 15: Preliminary results Year ended 30 June 2012
Mt Arthur Coal For personal use only Preliminary results Year ended 30 June 2012 Marius Kloppers Chief Executive Officer
Slide 16: Our positive long term view remains unchanged
Our positive long term view remains unchanged For personal use only • Concerns surrounding the Eurozone GDP change between 2011 and 2025 and the slowdown in China have led to (2005 real PPP US$ trillion) significant volatility 30 • Measured improvement in the external China GDP CAGR: 7.2% environmen
Slide 17: Demand is only one side of the price equation
Demand is only one side of the price equation For personal use only • Demand growth alone is not a good Cumulative demand growth Price indicator of price performance (% growth relative to 2000) (US$ per metric tonne) 80 10,000 – inducement pricing: the copper Copper price was very well supported as
Slide 18: Pricing will be partly driven by the pace of the supply response
Pricing will be partly driven by the pace of the supply response For personal use only • Robust aluminium demand will Forecast supply additions relative to anticipated continue to be met by strong supply 20 year demand growth (2000 to 2020) (%) • The low cost iron ore supply 100 response is well adv
Slide 19: Prioritising low risk, high return growth
Prioritising low risk, high return growth For personal use only • Our diversified strategy delivers superior Asset turnover1 margins and returns (%) 70 • Our 20 major projects are largely low risk expansions of existing operations that will deliver first production before end FY15 60 • Current inves
Slide 20: Maximising our inner harbour capacity in WAIO
Maximising our inner harbour capacity in WAIO For personal use only • Our major projects are on schedule WAIO system capacity and budget (mtpa, 100% basis) 300 – completion of the Port Hedland Inner +220mtpa Harbour Expansion project in H2 CY12 Jimblebar Mine takes our port capacity to 220mtpa1 Expa
Slide 21: Delivering low risk growth in Base Metals
Delivering low risk growth in Base Metals For personal use only • Antamina expansion project delivered first Antamina throughput capacity production in the March 2012 quarter (ktpd, 100% basis) 150 – generates a high rate of return 36 130 94 – forecast copper production growth of 100 32% in CY12 50
Slide 22: Significant latent capacity in Metallurgical Coal
Significant latent capacity in Metallurgical Coal For personal use only • Industrial action and wet weather severely Queensland Coal production capacity3 constrained production at Queensland Coal (mtpa, 100% basis) 80 • Strong Australian dollar, general inflationary 10 66 12 pressure and soft demand
Slide 23: Accelerating development of our liquids rich shale assets
Accelerating development of our liquids rich shale assets For personal use only • Prioritise development of the oil and Onshore US capital expenditure liquids rich Eagle Ford shale with (US$ billion) appraisal drilling in the Permian Basin 4.5 • Investment in the Eagle Ford offers 3.0 particularly h
Slide 24: Strong near term momentum in our major businesses
Strong near term momentum in our major businesses For personal use only • Growth in WAIO production rate to Forecast production2 +220mtpa1 before end FY15 (index=100) 150 150 • Escondida copper production to increase to over 1.3mt1 in FY15 100 100 • Completion of the Hay Point Stage Three 50 50 Expa
Slide 25: Longer term development options
Longer term development options For personal use only Olympic Dam Project Jansen • Following a major capital review, BHP Billiton has decided to study an alternative, less capital intensive design of the Olympic Dam open pit expansion that involves new technologies • This design has the potential to
Slide 26: Longer term development options
Longer term development options For personal use only Permian Basin WAIO • 440,000 acres with a significant appraisal program underway • Encouraging results indicate potential for a 100Mboe/day shale liquids business • More than 60 wells are planned for FY13 WAIO growth beyond 240mtpa • WAIO has inv
Slide 27: Committed to further simplify the portfolio
Committed to further simplify the portfolio For personal use only • Our business generates more cash per Cash margin1 unit of product and a higher level of cash (US$ per copper equivalent unit) flow per employee 3,500 • The sale of our 37% non-operated interest in Richards Bay Minerals is well advan
Slide 28: Superior returns throughout the cycle
Superior returns throughout the cycle For personal use only • Our proven strategy has delivered sector Total shareholder returns2 leading returns (%) 700 • We have returned US$53.8 billion1 to shareholders over the last 10 years 600 • The unique diversification of our high quality asset portfolio me
Slide 29: Key themes
Key themes For personal use only • Strong operating performance and robust financial results • Targeting a significant reduction in operating costs • Disciplined investment has established strong momentum in our major businesses • Our projects in execution are expected to create substantial value fo
Slide 30: BHP Billiton: resourcing the future
cdl bhpbilliton resourcing the future
Slide 31: Appendix
For personal use only Appendix
Slide 32: Impact of major commodity price movements
Impact of major commodity price movements For personal use only Total price variance1 (FY12 versus FY11, US$ million) 2,000 1,504 1,000 339 246 95 0 (245) (400) (584) (1,000) (1,337) (1,578) (2,000) Petroleum Metallurgical D&SP Energy Coal Aluminium Manganese SSM Iron Ore Base Metals Coal 1. Include
Slide 33: Summary of key exchange rate components in tax expense/(income)
Summary of key exchange rate components in tax expense/(income) For personal use only FY12 FY11 Restatement of expense/(income) expense/(income) US$ million US$ million Current tax payable (91) 695 Deferred tax balances on fixed assets 59 (2,481) Deferred tax balances on US$ debt 205 234 Deferred ta
Slide 34: 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 35: Maturity profile analysis
Maturity profile analysis For personal use only Debt repayments1 (US$ million) 6,000 4,000 2,000 0 FY13 FY14 FY15 FY16 FY17 FY18 FY19 Post FY20 US$ Euro Bank CP Jointly Controlled Bonds Bonds Debt Issuance2 Entities3 Subsidiaries4 % of portfolio 71% 17% 0% 4% 7% 1% Capital Markets 88% Bank Supported
Slide 36: 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 37: BHP Billiton: resourcing the future
édl bhpbilliton resourcing the future