Bhp Group Ltd · ASX:BHP
Bhp — BHP Billiton — H1 FY2017 Earnings Presentation
23 slides from Bhp's earnings presentation, Feb 21, 2017
Slide 1: Financial results Half year ended 31 December 2016
Financial results Half year ended 31 December 2016 Eastern Ridge
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: Financial results - Andrew Mackenzie, CEO
Financial results Half year ended 31 December 2016 Andrew Mackenzie Chief Executive Officer Mt Arthur Coal
Slide 4: Interim FY17 scorecard
Interim FY17 scorecard Strong cash generation drives debt reduction Safety Despite improvements in a range of safety measures, tragically there was a fatality at Escondida 9%1 reduction in TRIF Volume One-off events and Onshore US deferrals offset underlying release of latent capacity Record WAIO vo
Slide 5: Safety is paramount
Safety is paramount The health and safety of our people and communities always comes first • Tragically, there was a fatality at Escondida during the period • Total Recordable Injury Frequency (TRIF) of 3.9 is down 9%1 TRIF performance at operated sites (Number of recordable injuries per million hou
Slide 6: Progress at Samarco
Progress at Samarco Committed to social and environmental rehabilitation Avenida Beira Rio – Barra Longa November 2015 October 2016 Rehabilitation Legal developments Mine restart • Renova Foundation fully functional • Constructive Preliminary Agreement with • Restart important but must be safe and •
Slide 7: Financial results - Peter Beaven, CFO
Financial results Half year ended 31 December 2016 Peter Beaven Chief Financial Officer Eagle Ford
Slide 8: Strong financial performance
Strong financial performance Diversified portfolio and simplified structure underpins superior margins • Underlying EBITDA of US$9.9 billion, up 65% Leading margins through the cycle (Underlying EBITDA margin2, %) • Underlying EBIT of US$6.0 billion, up US$4.6 billion 60 • Attributable profit of US$
Slide 9: Group EBITDA waterfall
Group EBITDA waterfall Rise in EBITDA driven by commodity prices and productivity Underlying EBITDA variance (US$ billion) External US$3.1 billion Controllable US$0.8 billion 12 1.1 0.0 0.0 9.9 3.5 9.1 0.1 (0.2) (0.3) (0.1) (0.2) 8 6.0 4 0 H1 FY16 Price¹ Foreign Inflation Sub-total Growth Productivi
Slide 10: Productivity lifts margins
Productivity lifts margins Over US$11 billion of productivity gains delivered over past four years • Underlying EBITDA margin of 54% Margins supported by our productivity agenda (Underlying EBITDA margin, %) – without productivity gains, margin would have been <30%1 60 • Costs down at our major asse
Slide 11: Strong cash flow and balance sheet
Strong cash flow and balance sheet Simpler portfolio delivers substantial conversion of higher prices into cash flow • Net operating cash flow of US$7.7 billion Net debt and gearing (Net debt, US$ billion) (Gearing, %) – despite US$1.3 billion working capital increase reflecting 30 36 stock build ah
Slide 12: Disciplined capital allocation
Disciplined capital allocation With heightened uncertainty and elevated prices, we have a bias for debt reduction H1 FY17 • Maintenance: US$0.6 billion including deferred stripping – US$1.4 billion guidance for FY17 under revised definition of Operating Capital maintenance capital productivity produ
Slide 13: Financial results - Andrew Mackenzie, CEO
Financial results Half year ended 31 December 2016 Andrew Mackenzie Chief Executive Officer Olympic Dam
Slide 14: Near-term uncertainty, attractive long-term fundamentals
Near-term uncertainty, attractive long-term fundamentals Copper and oil remain our preferred long-term growth commodities Short-term Medium-term Long-term Modest Growth in Urbanisation Political Steeper economic New supply population, and new uncertainty cost curves growth wealth demand centres Petr
Slide 15: Well placed for anticipated conditions
Well placed for anticipated conditions Our diversified portfolio, strong balance sheet and competitive growth options position us well • Simple portfolio of tier 1 assets, diversified across our preferred Tier 1 portfolio commodities (H1 FY17 Underlying EBITDA margin, %) Iron ore Petroleum 80 Note:
Slide 16: Progress on our roadmap
Progress on our roadmap We have made significant progress across a broad suite of opportunities to grow value and returns Productivity On track for full-year productivity guidance of US$1.8 billion (excluding impact of Escondida industrial action) The benefits of our simplified portfolio and new ope
Slide 17: Emerging stronger from the downturn
Emerging stronger from the downturn We have responded to the challenges of recent years… Progress on our roadmap of value creation and improved returns Demerger and Over US$11 billion of US$7 billion of productivity divestments improvements Added to Onshore US 40% reduction in Latent capacity well i
Slide 18: bhpobilliton
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Slide 19: Appendix
684 bhpbilliton Appendix
Slide 20: BHP Billiton guidance
BHP Billiton guidance Group FY17e FY18e Capital and exploration expenditure (US$bn) 5.6 6.3 Cash basis. Including: Maintenance 1.4 Includes non-discretionary capital expenditure to maintain asset integrity, reduce risks, and meet compliance requirements. Also includes deferred development and produc
Slide 21: BHP Billiton guidance (continued)
BHP Billiton guidance (continued) Copper FY17e Total copper production (Mt) 1.62 Guidance for Escondida at 1.07 Mt. Pampa Norte production is expected to increase. Guidance for Olympic Dam at 160 kt - 170 kt. Guidance for Antamina production at 130 kt and zinc at 90 kt. Excludes impact of Escondida
Slide 22: Key Underlying EBITDA sensitivities
Key Underlying EBITDA sensitivities Approximate impact1 on FY17 Underlying EBITDA of changes of: US$ million US$1/t on iron ore price2 217 US$1/bbl on oil price3 79 US¢10/MMbtu on US gas price 26 US$1/t on metallurgical coal price 42 US¢1/lb on copper price2,4 34 US$1/t on energy coal price2 18 US¢1
Slide 23: Debt maturity profile
Debt maturity profile Debt balances1 (US$ billion2) 8 6 4 2 0 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 Post FY28 US$ Euro Sterling A$ C$ Bonds3 Bonds 3 Bonds 3 Bonds Bonds Subsidiaries % of portfolio 44% 31% 11% 5% 2% 7% Capital markets 93% Asset financing 7% 1. All debt balances