Bhp Group Ltd · ASX:BHP
Bhp — BHP Billiton — FY2010 Earnings Presentation
34 slides from Bhp's earnings presentation, Aug 25, 2010
Slide 1: BHP Billiton Group Financial Information
BHP BILLITON GROUP FINANCIAL INFORMATION For the year ended 30 June 2010
Slide 2: Preliminary Results 30 June 2010
Newman, Australia Preliminary Results 30 June 2010 Marius Kloppers Chief Executive Officer Alex Vanselow Chief Financial Officer 25 August 2010
Slide 3: Disclaimer
Disclaimer Reliance on third party information This document contains information, including information relating to PotashCorp, that has been derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness or
Slide 4: Middelburg, South Africa
Middelburg, South Africa Preliminary Results 30 June 2010 Marius Kloppers Chief Executive Officer
Slide 5: Financial results
Financial results • Underlying EBITDA of US$24.5 billion, up 10% • Underlying EBIT of US$19.7 billion, up 8% • Attributable profit (excluding exceptionals) of US$12.5 billion, up 16% • Net operating cash flow of US$17.9 billion • Earnings per share (excluding exceptionals) of 224.1 US cents • Final
Slide 6: Operating review
Operating review • Safety • Record production in key commodities – Petroleum and Iron Ore • Five new projects commissioned – RGP4, Alumar, Klipspruit, Newcastle Third Port, Pyrenees • Continued investment in organic growth – US$2.9 billion approved for projects and pre-commitments • Regulatory revie
Slide 7: Antamina, Peru
Antamina, Peru Preliminary Results 30 June 2010 Alex Vanselow Chief Financial Officer
Slide 8: Underlying EBIT analysis
Underlying EBIT analysis Year ended June 2010 vs June 2009 (US$ billion) 22.0 Uncontrollable Controllable 0.6 1.0 19.7 1.0 0.0 (0.5) 19.0 1.9 18.2 16.7 16.0 (2.5) 18% YoY 13.0 10.0 FY09 Price(a) Exchange & inflation Sub-total Volume New operations Costs(b) Portfolio management(c) Other FY10 (a) Incl
Slide 9: Successfully managing our costs
Successfully managing our costs Cost variance(a) (FY10, US$ million) Uncontrollable Controllable 64 150 548 65 (76) 219 2 0 (150) (270) (217) (300) US$282 million saving (450) (483) (600) Raw materials, logistics & freight One-off Sub-total uncontrollable Other Labour & maintenance Operating perform
Slide 10: A uniquely diversified portfolio
A uniquely diversified portfolio Underlying EBIT(a) (FY10, US$ billion) 21 Metallurgical Coal 18 Manganese Ferrous 15 (43.5%) Iron Ore SSM D&SP 9 Non Ferrous Base Metals (30.6%) 6 Aluminium Energy Coal 3 Energy Petroleum (25.9%) Underlying EBIT margin(a) (FY10, %) Metallurgical Coal 34% Manganese 33
Slide 11: Successful execution of a well defined and simple strategy
Successful execution of a well defined and simple strategy Diversified peer production comparison – June 2010 (Copper equivalent units(a) – Indexed to 100, for the quarter ended September 2008) BHP Billiton Peer group Sep 08 Dec 08 Mar 09 Jun 09 Sep 09 Dec 09 Mar 10 Jun 10 (a) Copper equivalent unit
Slide 12: A strong balance sheet creates opportunities
A strong balance sheet creates opportunities 1 Return on capital and EBIT margin (US$ billion) 50 Return on capital EBIT margin FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 2 Net operating cash flow (US$ billion) CAGR: 21% 20 H1 H2 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 3 Balance sheet Net gea
Slide 13: Preserving our financial flexibility
Preserving our financial flexibility • Committed facility of US$45 billion • BHP Billiton remains committed to maintaining a solid A credit rating • Commitment to a progressive dividend policy • Preserves financial flexibility Tranche A Term Facility B Term Facility B Revolving Facility C Revolving
Slide 14: The largest corporate taxpayer in Australia
The largest corporate taxpayer in Australia BHP Billiton is the largest corporate taxpayer in Australia Continues a pattern of paying significant taxes in Australia – A$5.5 billion paid in FY10 – A$29 billion paid since FY04 Total tax payments as a % of profits of Australian operations(a): – in FY10
Slide 15: Escondida, Chile
Escondida, Chile Preliminary Results 30 June 2010 Marius Kloppers Chief Executive Officer
Slide 16: Market volatility continues
Market volatility continues VIX index S&P 500 (Daily %) 80 60 40 20 Jun 06 Jun 07 Jun 08 Jun 09 Jun 10 Source: S&P 500. PMI (%) 65 China India Japan US 35 Germany Eurozone Jun 06 Jun 07 Jun 08 Jun 09 Jun 10 Source: Purchasing Managers Index from individual country publications and MARKIT Economics.
Slide 17: OECD debt levels remain a fundamental issue
OECD debt levels remain a fundamental issue US borrowing flows by sector (annualised) (US$ billion) 3,000 2,000 1,000 0 (1,000) Government Business Household Q1 99 Q1 00 Q1 01 Q1 02 Q1 03 Q1 04 Q1 05 Q1 06 Q1 07 Q1 08 Q1 09 Q1 10 Annualised borrowing calculated from the quarterly change in debt outs
Slide 18: Spending cuts are likely to impact growth
Spending cuts are likely to impact growth Eurozone (Area 16) government expenditure/revenue (€ billion, quarterly data annualised) 4,600 4,300 4,000 3,700 3,400 Expenditure Revenues CY06 CY07 CY08 CY09 CY10 Source: eurostat.
Slide 19: China is also slowing its economy near term
China is also slowing its economy near term Money supply (M1) and credit growth (YoY %) 40 30 20 10 0 M1 Loan growth Jun 05 Dec 05 Jun 06 Dec 06 Jun 07 Dec 07 Jun 08 Dec 08 Jun 09 Dec 09 Jun 10 Source: CEIC.
Slide 20: Significant progress towards market pricing in key bulk commodities
Significant progress towards market pricing in key bulk commodities China spot iron ore price (US$/dmt) Breakdown of FY10 iron ore sales (Volume as a % of total) Tangshan (66% Fe) Platts CFR China (62% Fe) Platts FOB WA (62% Fe) Platts CFR China Forward Curve Platts FOB WA Forward Curve Jan 07 Jan 0
Slide 21: Diversification delivers healthy margins despite significant volatility
Diversification delivers healthy margins despite significant volatility EBIT margin(a) (%) 70 60 50 40 30 20 10 0 FY02 (b) FY03 FY04 FY05 FY06 FY07 FY08 FY09 (b) FY10 Petroleum Aluminium Base Metals D&SP SSM Iron Ore Manganese Metcoal Energy Coal Total (a) Calculated on the basis of UKGAAP for perio
Slide 22: A compelling offer for a Tier business
A compelling offer for a Tier 1 business Accelerates our entry into fertilisers Potash is an attractive commodity PotashCorp has Tier 1 assets Further diversifies the portfolio Fully funded offer which preserves financial flexibility We remain committed to a solid A credit rating Saskatchewan Patien
Slide 23: We are well positioned
We are well positioned The baseline strategy is unchanged We have delivered another strong set of results Our unique portfolio positions us to deliver superior margins and returns The acquisition of PotashCorp is consistent with our strategy Port Hedland, Australia
Slide 24: cde
cde bhpbilliton resourcing the future
Slide 25: Appendix
Appendix dé bhpbilliton resourcing the future
Slide 26: Impact of major volume changes
Impact of major volume changes Year ended June 2010 vs June 2009 Total Volume Variance(a) – US$2,902 million (US$ million) 1,000 (200) Petroleum 882 Manganese 799 Iron Ore 546 Met Coal 473 D&SP Energy Coal 108 Other (83) (a) Volume variances calculated using previous year margin and includes new ope
Slide 27: Impact of major commodity price movements
Impact of major commodity price movements Year ended June 2010 vs June 2009 Total Price Variance(a) – US$1,019 million (US$ million) 5,000 4,000 3,000 2,000 1,000 0 (1,000) (2,000) (3,000) (4,000) Copper 3,943 Nickel 866 Aluminium Iron Ore Other Petroleum 234 224 109 45 Energy Coal (460) Manganese (
Slide 28: Rate of cost decrease
Rate of cost decrease Operating cost movement relative to preceding year(a) (%) 14.0 10.0 6.0 2.0 (2.0) (6.0) Total Excluding non-cash 9.0 8.5 7.6 6.8 5.3 4.3 3.6 4.3 0.0 (0.7) FY06 FY07 FY08 FY09 FY10 (a) Excluding the impact of inflation, foreign exchange, price-linked costs and third party tradin
Slide 29: Summary of key FX components in tax expense/(income)
Summary of key FX components in tax expense/(income) Restatement of Current Tax Payable Deferred Tax Balances on Fixed Assets Deferred Tax Balances on US$ Debt Deferred Tax Balances on Timing Differences Other Items Total June 2010 Expense / (Income) US$ million (396) 289 (27) (26) June 2009 Expense
Slide 30: Cash flow
Cash flow Year Ended 30 June (US$ million) Operating Cash Flow and Dividends Net Interest Paid Tax Paid (a) Tax Refunded Net Operating Cash Flow Capital Expenditure Exploration Expenditure Purchases of Investments and Other Assets Proceeds from Sale of Fixed Assets & Investments Net Cash Flow Before
Slide 31: Capital and Exploration Expenditure
Capital and Exploration Expenditure US$ billion FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11F Growth 1.9 2.0 1.7 2.6 4.0 5.5 6.1 7.3 8.1 Sustaining and Other 0.8 0.7 0.9 1.3 2.1 1.6 1.8 2.0 1.7 Exploration 0.4 0.3 0.5 0.5 0.8 0.8 1.4 1.3 1.3 Total 3.1 3.0 3.1 4.4 6.9 7.9 9.3 10.6 11.1 15.0 (US$
Slide 32: Maintenance of a deep, diversified inventory of growth options
Maintenance of a deep, diversified inventory of growth options Future Options(a) Potash – Jansen Phase 3 West Africa Exploration Olympic Dam Project 2 Potash - Boulder WA Iron Ore Quantum 1 Knotty Head Navajo South Thebe IndoMet Coal Red Hill UG Nimba Potash - Other NWS GWF Saraji Exp Olympic Dam Pr
Slide 33: Maturity profile analysis
Maturity profile analysis Debt Balances(a) (US$ million(b)) 2,800 2,400 2,000 1,600 1,200 2011 2012 2013 2014 2015 2016 2017 2018 2019 Post 2020 US$ Bonds Euro Bonds Bank Debt CP Issuance Jointly Controlled Entities(c) Subsidiaries(d) % of Portfolio 57% 31% 0% 0% 10% 2% Capital Markets 88% Bank Supp
Slide 34: Key net profit sensitivities
Key net profit sensitivities Approximate impact(a) on FY11 net profit after tax of changes of US$ million US$1/t on iron ore price 85 US$1/bbl on oil price 40 US$1/t on metallurgical coal price 20 US¢1/lb on aluminium price 20 US¢1/lb on copper price 20 US$1/t on energy coal price 20 US¢1/lb on nick