Bhp Group Ltd · ASX:BHP
Bhp — BHP Billiton — FY2014 Earnings Presentation
26 slides from Bhp's earnings presentation, Aug 19, 2014
Slide 1: Results presentation year ended 30 June 2014
For personal use only BHP Billiton Limited BHP Billiton Plc 171 Collins Street Neathouse Place Melbourne Victoria 3000 Australia London SW1V 1LH UK GPO BOX 86 Tel +44 20 7802 4000 Melbourne Victoria 3001 Australia Fax + 44 20 7802 4111 Tel +61 1300 55 47 57 Fax +61 3 9609 3015 bhpbilliton.com bhpbil
Slide 2: Preliminary results 2014 financial year
Jimblebar For personal use only Preliminary results 2014 financial year Andrew Mackenzie Chief Executive Officer Graham Kerr Chief Financial Officer 19 August 2014
Slide 3: Disclaimer: forward-looking statements
Disclaimer For personal use only Forward-looking statements This release 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 certa
Slide 4: Preliminary results 2014 financial year - CEO
New South Wales Energy Coal Escondida For personal use only Preliminary results 2014 financial year Andrew Mackenzie Chief Executive Officer 19 August 2014
Slide 5: Delivering on our commitments
Delivering on our commitments For personal use only • Exceeded production guidance for a number of our core commodities • Another US$2.9 billion of productivity-led gains embedded with more to come • Capital and exploration expenditure declined by 32% to US$15.2 billion • By maintaining financial di
Slide 6: Keeping our people and operations safe
Keeping our people and operations safe For personal use only Total Recordable Injury Frequency (TRIF) (number of recordable injuries per million hours worked) 10 8 down 51% 6 4 2 0 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 Preliminary results, 19 August 2014 Slide 5
Slide 7: Strong financial results
Strong financial results For personal use only • Underlying EBITDA of US$32.4 billion, up 7% • Underlying attributable profit of US$13.4 billion, up 10% • Net operating cash flow of US$25.4 billion, up 26% • Capital and exploration expenditure1 of US$15.2 billion, down 32% • Free cash flow increased
Slide 8: Exceeded guidance for our core commodities
Exceeded guidance for our core commodities For personal use only • Group production1 increased by 9% in FY14 Production records achieved at 12 operations (production volumes, % change, FY14 versus FY13) – record Western Australia Iron Ore (WAIO) production of 225 Mt2 significantly Iron ore exceeded
Slide 9: Positioned for another year of record production
Positioned for another year of record production For personal use only • The ramp-up of major growth projects and our Production3 growth of 16% productivity agenda will deliver another year of (FY13 to FY15, %) record performance in FY15 20 – iron ore production of 225 Mt, up 11% – copper production
Slide 10: Seeking a continual improvement in performance
Seeking a continual improvement in performance For personal use only • Unique systems, processes and our Utilising the power of ‘big data’ organisational design allow us to deploy best (truck utilisation1, %) practice across the Group • We are generating and analysing common data across our global p
Slide 11: Targeting low-cost growth at WAIO to 290 Mtpa
Targeting low-cost growth at WAIO to 290 Mtpa For personal use only • We have more than doubled annual iron ore Maximising return on invested capital production in the Pilbara over the last (WAIO production1, Mtpa) decade through a series of major 300 Target capacity – 290 Mtpa investments • We now
Slide 12: Preliminary results 2014 financial year - CFO
Shenzi For personal use only Preliminary results 2014 financial year Graham Kerr Chief Financial Officer 19 August 2014
Slide 13: Other items affecting underlying profitability
Other items affecting underlying profitability For personal use only Other items (US$ million) Underlying EBIT Tax 600 FY14 H1 FY14 300 170 0 (51) (26) (156) (143) (300) (300) (600) (797) (900) Impairments Mine site Closure costs² Redundancies³ Other 4 Balance sheet Remeasurement rehabilitation¹ mon
Slide 14: Successfully managing the factors we control
Successfully managing the factors we control For personal use only Underlying EBIT variance (US$ billion) 30.0 1.9 22.9 1.0 (0.1) (0.0) 22.9 1.9 1.8 (2.1) (0.2) 20.5 20.0 (0.8) (3.4) 10.0 0.0 Growth volumes energy Exchange Sub-total cash costs¹ FY13 FY14 Price Inflation volumes Price-linked costs Fu
Slide 15: Petroleum & Potash: growing liquids production
Petroleum & Potash: growing liquids production For personal use only • The average realised price of natural gas across our portfolio increased by 16% • Significant growth at Onshore US and Atlantis contributed to an 18% increase in high-margin liquids production • The rise in non-cash charges refle
Slide 16: Copper: lowering unit costs despite grade decline
Copper: lowering unit costs despite grade decline For personal use only • Weaker base metal prices, including a 5% decline in the average realised price of copper, significantly impacted profitability • Insourcing initiatives and the optimisation of contractor activities contributed to a 6% reductio
Slide 17: Iron Ore: delivering capital efficient growth
Iron Ore: delivering capital efficient growth For personal use only • Our average realised price of iron ore declined by 6% to US$103 per wet metric tonne (FOB) in FY14 • WAIO achieved a fourteenth consecutive annual production record and exported 223 Mt1 of high-quality product • A 12% reduction in
Slide 18: Coal: moving sharply down the cost curve
Coal: moving sharply down the cost curve For personal use only • A 24% reduction in unit cash costs at Queensland Coal largely offset the impact of lower prices, which included a 20% decline for our hard coking coal products • Non-cash charges include an impairment at Energy Coal South Africa (-US$2
Slide 19: Aluminium, Manganese & Nickel: leading the way on productivity
Aluminium, Manganese & Nickel: leading the way on productivity For personal use only • Nickel and aluminium prices rallied towards the end of FY14 but remained lower on average for the period • We continued to debottleneck our operations while reducing headcount and consumable costs • Within Other i
Slide 20: Another US$2.9 billion of productivity-led gains
Another US$2.9 billion of productivity-led gains For personal use only Productivity-led volume and cost efficiencies (US$ billion) 4.0 Target We exceeded our target by US$1.1 billion 3.0 0.7 2.9 0.4 2.0 0.4 1.8 0.8 1.0 0.6 0.0 Productivity Operating cash Exploration & FY14 target Productivity Operat
Slide 21: Selective investment and strong growth in free cash flow
Selective investment and strong growth in free cash flow For personal use only • We successfully completed six major capital Increasing competition for capital projects in FY14 (capital and exploration expenditure1, US$ billion) 25 – expansion of Jimblebar mining and processing capacity to 35 Mtpa d
Slide 22: Our balance sheet is strong and getting stronger
Our balance sheet is strong and getting stronger For personal use only • We achieved a US$1.7 billion reduction in Our solid A balance sheet net debt in FY14 to US$25.8 billion (net debt, US$ billion) 29 – finance leases totaling US$757 million 28 were brought to account in H2 FY14 27 • We continued
Slide 23: BHP Billiton: resourcing the future
cdl bhpbilliton resourcing the future
Slide 24: Appendix
For personal use only Appendix
Slide 25: Key net profit sensitivities
Key net profit sensitivities For personal use only Approximate impact1 on FY15 net profit after tax of changes of US$ million US$1/t on iron ore price 135 US$1/bbl on oil price 50 US¢1/lb on copper price 30 US$1/t on metallurgical coal price 30 US¢10/MMbtu on US gas price 25 US¢1/lb on aluminium pri
Slide 26: BHP Billiton: resourcing the future
cdl bhpbilliton resourcing the future