Bhp Group Ltd · ASX:BHP
Bhp — BHP Billiton — H1 FY2011 Earnings Presentation
29 slides from Bhp's earnings presentation, Feb 16, 2011
Slide 1: Interim results 31 December 2010
BMA For personal use only Interim results 31 December 2010 Marius Kloppers Chief Executive Officer Al Vanselow Alex V l Chi f Fi Chief Financial i l Offi Officer 16 February 2011
Slide 2: Disclaimer
Disclaimer For personal use only Reliance on Third Party Information The views expressed herein contain information that has been derived from publicly available sources that have not been independently verified. No representation p or warranty y is made as to the accuracy, y completeness p or relia
Slide 3: Interim results – Marius Kloppers
Pyrenees For personal use only Interim results 31 December 2010 Marius Kloppers Chief Executive Officer
Slide 4: Record interim financial results
Record interim financial results For personal use only Underlying EBITDA of US$17.3 billion, up 60% Underlying EBIT of US$14.8 billion, up 74% Attributable profit (excluding exceptionals) of US$10.7 billion, up 88% Net operating cash flow of US$12.2 US$12 2 billion, billion up 123% Earning
Slide 5: Operating review
Operating review For personal use only Improvement in safety TEMCO Strong operating performance across the portfolio – WA Iron Ore ramping up to RGP4 capacity – Record milling rates at Olympic Dam and Antamina – First production from MAC20 Newman – Ongoing ramp up at Alumar – Record manganese or
Slide 6: Interim results – Alex Vanselow
Worsley For personal use only Interim results 31 December 2010 Alex Vanselow Chief Financial Officer
Slide 7: Underlying EBIT analysis
Underlying EBIT analysis For personal use only Half year ended December 2010 vs December 2009 (US$ billion) Uncontrollable Controllable 20.0 8.5 15.6 0.6 14.8 15.0 (1.1) (0.3) (0.2) (0.6) (0.6) Net US$0.4 billion 10.0 8.5 5.0 0.0 H1 FY10 Price¹ Exchange Inflation Sub-total New Volume Costs² Other H1
Slide 8: Strong volumes offset by the deferral of drilling in the Gulf of Mexico
Strong volumes offset by the deferral of drilling in For personal use only the Gulf of Mexico Volume variance (US$ million) US$372 million 600 587 300 0 138 99 (300) 45 6 (464) (39) (600) Petroleum D&SP Other Energy Coal Iron Ore Base Metals New operations Note: Volume variance calculated on Underly
Slide 9: Industry wide cost pressures present an increasing challenge
Industry wide cost pressures present an For personal use only increasing challenge Cash cost variance1 (US$ million) 0 (49) (100) (89) (143) (200) (240) (300) Labour & contractors Raw materials Maintenance Other 1 Excluding non-cash cost variance of US$(92) million. Interim Results, 16 February 2011
Slide 10: A weaker US dollar has 'hidden' implications for costs
A weaker US dollar has ‘hidden’ implications for For personal use only costs Foreign exchange gain/(loss) on balance sheet monetary items (US$ million) 400 1,044 301 200 0 (200) (213) (115) (400) (94) (83) (600) (40) (34) (800) (164) (743) Iron Ore Metallurgical Base Energy Stainless Aluminium Other
Slide 11: A uniquely diversified portfolio
A uniquely diversified portfolio For personal use only Underlying EBIT Underlying EBIT margin1 (H1 FY11, FY11 US$ billion) (H1 FY11, FY11 %) 15 Metallurgical Coal Metallurgical Coal 37% Manganese Manganese 36% Ferrous Iron Ore (51.2%) Iron Ore 62% 10 SSM 19% SSM D&SP 33% D&SP Non Ferrous B Base Meta
Slide 12: The power of our diversified model
The power of our diversified model For personal use only EBIT margin1 (%) 75 Petroleum Aluminium 50 Base Metals D&SP SSM Iron Ore 25 Manganese Metallurgical Coal Energy Coal Total 0 FY02² FY03 FY04 FY05 FY06 FY07 FY08 FY09² FY10 H1 FY11 1 Calculated on the basis of UKGAAP for p periods p prior to FY
Slide 13: Strong cash flow + a strong balance sheet = substantial flexibility
Strong cash flow + a strong balance sheet = For personal use only substantial flexibility Net operating cash flow Balance sheet (US$ billion) Net gearing (%) 20 40 H2 H1 10 20 0 0 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 H1 FY11 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 H1 FY11 Note: Calculat
Slide 14: Industry leading shareholder returns
Industry leading shareholder returns For personal use only Cash dividends1 Five year net capital returned to shareholders2 (US$ billion) (US$ billion) CAGR 23% 6 40 H2 H1 29.3 30 4 20 16.7 10 2 2.8 0 (2.6) (3.8) 0 (10) BHP Peer 1 Peer 2 Peer 3 Peer 4 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11
Slide 15: Interim results – Marius Kloppers
Olympic Dam For personal use only Interim results 31 December 2010 Marius Kloppers Chief Executive Officer
Slide 16: Improving near term economic fundamentals
Improving near term economic fundamentals For personal use only Strong emerging market growth Manufacturing (PMI) continues ti 65 Increasingly positive developed market k t data d t 55 However, economic risks remain 45 – Sovereign debt issues China India – Policy responses to emerging Japan ma
Slide 17: Our business model delivers strong margins and returns
Our business model delivers strong margins For personal use only and returns Underlying EBIT margin Return on capital (%) (%) 50 50 40 40 30 30 20 20 10 10 0 0 FY06 FY07 FY08 FY09 FY10 H1 FY06 FY07 FY08 FY09 FY10 H1 FY11 FY11 BHP Billiton Peer group Note: Peer group includes Rio Tinto, Vale, Anglo A
Slide 18: Significant capital expenditure to underpin future growth
Significant capital expenditure to underpin For personal use only future growth Strong pipeline of investment (US$ billion) 90 Manganese SSM Energy Coal Aluminium D&SP 60 Metallurgical Coal Base Metals 30 Petroleum Iron Ore 0 Future Pre-Feasibility Feasibility Execution Other Growth Total Spend Comm
Slide 19: A simple business model built around Tier 1 resources
A simple business model built around For personal use only Tier 1 resources 50+ years Bowen Basin Pilbara Metallurgical Coal Iron Ore Saskatchewan 12.8bt resource 16.1bt resource Potash 3.4bt resource 50+ 50+ 40+ 40 years years years Escondida Copper 100+ 8.5bt resource Olympic Dam years Copper/Uran
Slide 20: Well positioned for growth and shareholder returns
Well positioned for growth and For personal use only shareholder returns Our strategy has not changed BHP Billiton weighted average TSR (Ltd 60% and Plc 40%) 1,200% 1,200% 400% A record set of financial results Investment in organic growth 300% exceeding US$80 billion over five years 200% 200%
Slide 21: BHP Billiton – resourcing the future
dl Oohpbilliton resourcing the future
Slide 22: Appendix
For personal use only Appendix
Slide 23: Impact of major commodity price movements
Impact of major commodity price movements For personal use only Half year ended December 2010 vs December 2009 Total price variance1 (US$ million) 5,000 4,276 4 000 4,000 3,000 2,000 1,379 , 1,147 1,000 526 318 286 244 197 158 0 Iron Ore Base Metals Metallurgical Petroleum Energy Coal Manganese Stai
Slide 24: Rate of cost change
Rate of cost change For personal use only Operating cost movement relative to preceding year1 (%) 14.0 Total 12.2 Excluding non-cash 10.5 10.0 7.3 6.1 6.0 5.5 4.1 4.0 3.5 3.4 2.7 2.2 1.7 2.0 (2.0) (4.1) (6.0) (5.2) 1H08 2H08 1H09 2H09 1H10 2H10 1H11 1 Excluding the impact of inflation, foreign excha
Slide 25: Summary of key FX components in tax expense/(income)
Summary of key FX components For personal use only in tax expense/(income) December 2010 December 2009 Restatement of Expense / (Income) Expense / (Income) US$ million US$ million Current Tax Payable 391 152 Deferred Tax Balances on Fixed Assets (1,750) (900) Deferred Tax Balances on US$ Debt 316 35
Slide 26: Capital and exploration expenditure
Capital and exploration expenditure For personal use only 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
Slide 27: Maintenance of a deep, diversified inventory of growth options
Maintenance of a deep, diversified inventory For personal use only of growth options Future options1 Feasibility Execution Potash – Illawarra Coal Caval Jansen Sarajij Kipper Thebe E Expansion i Potash – Browse East Ridge CMSA Heap H Phase 3 LNG Worsley Young Yeelirrie Leach 1 E&G3 NWS DRC Smelter A
Slide 28: Maturity profile analysis
Maturity profile analysis For personal use only Debt balances1 (US$ million2) 3,000 2,000 1,000 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Post 2020 US$ Euro Bank CP Jointly Controlled Bonds Bonds Debt Issuance Entities3 Subsidiaries4 % of Portfolio 54% 32% 0% 0% 12% 2% Capital Markets 86%
Slide 29: Key net profit sensitivities
Key net profit sensitivities For personal use only Approximate impact1 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 pric