Bhp Group Ltd · ASX:BHP

Bhp — BHP Billiton — H1 FY2010 Earnings Presentation

40 slides from Bhp's earnings presentation, Feb 10, 2010

  1. Slide 1: Interim Results 31 December 2009

    Newman, Australia For personal use only Interim Results 31 December 2009 Marius Kloppers Chief Executive Officer Alex Vanselow Chief Financial Officer 10 February 2010

  2. Slide 2: Disclaimer

    Disclaimer For personal use only Reliance on Third Party Information The views expressed here contain information 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 reliability of

  3. Slide 3: Interim Results - Marius Kloppers

    Escondida, Chile For personal use only Interim Results 31 December 2009 Marius Kloppers Chief Executive Officer

  4. Slide 4: Financial Results

    Financial Results For personal use only  Underlying EBITDA of US$10.8 billion, down 22.2%  Underlying EBIT of US$8.5 billion, down 28.5%  Attributable profit (excluding exceptionals) of US$5.7 billion  Net operating cash flow of US$5.7 billion  Earnings per share (excluding exceptionals) of 102

  5. Slide 5: Operating Performance

    Operating Performance For personal use only  Safety  Good operating performance  Volume growth from new projects – RGP4, Alumar, Klipspruit  Record production in key commodities – Petroleum and Iron Ore  Portfolio simplification – Sale of Ravensthorpe and Yabulu – Exit from Suriname alumina She

  6. Slide 6: Interim Results - Alex Vanselow

    BMA, Australia For personal use only Interim Results 31 December 2009 Alex Vanselow Chief Financial Officer

  7. Slide 7: Underlying EBIT Analysis

    Underlying EBIT Analysis For personal use only Half-year Ended Dec 2009 vs Dec 2008 (US$bn) 14.0 11.9 12.0 10.0 0.7 0.1 8.5 8.0 0.4 1.1 (4.2) 6.0 (1.5) 4.0 2.0 0.0 1H09 Net Price (a) Exchange Volume New Costs Other 1H10 Operations (a) Including impact of price-linked costs. Interim Results, 10 Febru

  8. Slide 8: Rate Of Cost Decrease

    Rate Of Cost Decrease For personal use only Operating Cost Movement Relative to Preceding Half-year(a) (%) 14.0 Total 12.2 Excluding Non-Cash 10.5 10.0 7.3 6.1 6.0 4.1 3.5 2.2 1.7 2.0 (2.0) (4.1) (6.0) (5.2) 1H08 2H08 1H09 2H09 1H10 (a) All periods excluded third party trading. Interim Results, 10 F

  9. Slide 9: Return On Capital And Margins

    Return On Capital and Margins For personal use only (%) 50 48 48 (a) Return on Capital 45 44 EBIT Margin (a) 40 40 40 38 38 38 35 35 30 30 29 24 25 24 25 20 21 20 15 13 11 10 5 0 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 1H10 (a) Calculated on the basis of UKGAAP for periods prior to FY05. All periods

  10. Slide 10: Diversified and Balanced Across High Margin Commodities

    Diversified and Balanced Across High Margin For personal use only Commodities Underlying EBIT Underlying EBIT Margin(a) (1H10, US$bn) (1H10, %) 9 Metallurgical Coal 28% Metallurgical Coal 8 Manganese Ferrous Manganese 22% 7 Iron Ore (35.1%) Iron Ore 47% 6 SSM SSM 12% D&SP 5 Non Ferrous D&SP 30% 4 Ba

  11. Slide 11: Progressive Investment and Returns

    Progressive Investment and Returns For personal use only Net Operating Cash Flow 1 Organic Growth(a) (US$bn) CAGR: 14% (US$bn) CAGR: 20% 20 12 H1 H1 H2 H2 10 6 0 0 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 1H10 FY10F 2 Balance Sheet 3 Cash Dividends(b) Net Geari

  12. Slide 12: Interim Results - Marius Kloppers

    Spence, Chile For personal use only Interim Results 31 December 2009 Marius Kloppers Chief Executive Officer

  13. Slide 13: Commodity Prices Have Generally Recovered

    Commodity Prices Have Generally Recovered For personal use only Commodity Price Movements (1 Jan 08 = 100) 160 140 120 100 80 Aluminium Copper 60 Nickel WTI 31% 40 Iron Ore (Fines, CFR) 20 Dec 07 Feb 08 Apr 08 Jun 08 Aug 08 Oct 08 Dec 08 Feb 09 Apr 09 Jun 09 Aug 09 Oct 09 Dec 09 Source: Bloomberg. I

  14. Slide 14: The Short Term Is Largely Driven By China

    The Short Term Is Largely Driven By China For personal use only Regional Crude Steel Production Indices (H1 CY08 = 100) 120 China 110 ROW 100 90 80 70 31% 60 50 H1 CY08 Aug 08 Oct 08 Dec 08 Feb 09 Apr 09 Jun 09 Aug 09 Oct 09 Dec 09 Source: WSA. Interim Results, 10 February 2010 Slide 14

  15. Slide 15: Economies Are Still Dependent On Stimulus

    Economies Are Still Dependent On Stimulus For personal use only US Borrowing by Sector (Annualised) (US$bn) 3,000 Government 2,500 Business Household 2,000 1,500 1,000 500 0 (500) (1,000) 3Q99 3Q00 3Q01 3Q02 3Q03 3Q04 3Q05 3Q06 3Q07 3Q08 3Q09 Source: US Federal Reserve Flow of Funds. Annualised Borr

  16. Slide 16: Longer Term Fundamentals Remain Strong

    Longer Term Fundamentals Remain Strong For personal use only Expected GDP Growth (CAGR to 2025) 2009 Nominal GDP (%) (US$tr) 8 15 12 6 9 Non 4 Investment 6 2 3 Investment 0 China US China US Source: Global Insight. Interim Results, 10 February 2010 Slide 16

  17. Slide 17: We Are Well Positioned

    We Are Well Positioned For personal use only Chinese Net Coking Coal Imports Abbot FY09 Measured, Indicated (mt) Point & Inferred Resource(a) (c) Wards 40 Coking Coal Imports Well 12 Resource Life (years)(b)(c) Coal in Coke Exports 30 Coking Coal Exports Goonyella Riverside Dalrymple Bay 20 Net Impo

  18. Slide 18: Focussed On Long Term Value Creation From An Unchanged Strategy

    Focussed On Long Term Value Creation From An For personal use only Unchanged Strategy  Overriding commitment to HSEC  A long life, low cost, Tier 1 resource base  Deep inventory of growth projects  Diversified by commodity, geography and customer  Financial strength and stability from a solid A

  19. Slide 19: Progressive Growth and Income

    Progressive Growth and Income For personal use only Investments Cash Dividends(b) (US$bn) (US$bn) 24 Organic Growth 5 CAGR: 25% Non Organic (a) H1 CAGR: 20% Organic H2 20 4 16 3 12 2 8 1 4 0 0 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10F FY11F FY10F (a) Refle

  20. Slide 20: Delivering Strong Results

    Delivering Strong Results For personal use only  Emerged from the downturn well GEMCO, Australia positioned  Ensuring the portfolio remains low cost  Maintaining a strong balance sheet  Continuing to invest in high quality growth Interim Results, 10 February 2010 Slide 20

  21. Slide 21: BHP Billiton: resourcing the future

    édl bhpbilliton resourcing the future

  22. Slide 22: Appendix

    For personal use only Appendix

  23. Slide 23: Diversity = Stability and Strength

    Diversity = Stability and Strength For personal use only EBIT Margin(a) (%) 70 Petroleum 60 Aluminium 50 Base Metals D&SP 40 SSM 30 Iron Ore Manganese 20 Met Coal 10 Energy Coal BHP Billiton 0 H1 (b) H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 2H 1H 2H (b) 1H FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 (a)

  24. Slide 24: Underlying EBIT By Customer Sector Group

    Underlying EBIT By Customer Sector Group For personal use only Half-year Ended 31 December (US$m) 2009 2008 Change % Petroleum 2,326 2,675 (13.0) Aluminium 154 289 (46.7) Base Metals (including Uranium) 2,462 (111) N/A Diamonds & Specialty Products 170 79 115.2 Stainless Steel Materials 200 (752) N/

  25. Slide 25: Financial Highlights

    Financial Highlights For personal use only Half-year Ended 31 December (US$m) 2009 2008 Change % Revenue 24,576 29,780 (17.5) Underlying EBITDA 10,838 13,939 (22.2) Underlying EBIT 8,502 11,899 (28.5) Attributable Profit (excluding exceptionals) 5,702 6,128 (7.0) Attributable Profit 6,135 2,617 134.

  26. Slide 26: Cash Flow

    Cash Flow For personal use only Half-year Ended 31 December (US$m) 2009 2008 Operating Cash Flow and Dividends 8,895 17,004 Net Interest Paid (144) (147) Tax Paid (a) (3,035) (3,763) Net Operating Cash Flow 5,716 13,094 Capital Expenditure (4,606) (5,345) Exploration Expenditure (439) (620) Purchase

  27. Slide 27: Net Interest and Tax

    Net Interest and Tax For personal use only Half-year Ended 31 December (US$m) 2009 2008 Change % Net Interest Expense 232 332 (30.1) Taxation Expense/(Income) Income Tax Expense 2,494 3,537 (29.5) Royalty Related Taxation 188 351 (46.4) Total Taxation Expense 2,682 3,888 (31.0) Foreign Exchange Impa

  28. Slide 28: Summary Of Key FX Components In Tax Expense/(Income)

    Summary Of Key FX Components For personal use only In Tax Expense/(Income) December 2009 December 2008 Restatement of Expense / (Income) Expense / (Income) US$m US$m Current Tax Payable 152 (1,047) Deferred Tax Balances on Fixed Assets (900) 2,655 Deferred Tax Balances on US$ Debt 351 (392) Deferred

  29. Slide 29: Key Net Profit Sensitivities

    Key Net Profit Sensitivities For personal use only Approximate Impact(a) on FY10 Net Profit After Tax of Changes of US$m US$1/t on Iron Ore Price 80 US$1/bbl on Oil Price 40 US$1/t on Metallurgical Coal Price 20 US¢1/lb on Aluminium Price 25 US¢1/lb on Copper Price 20 US$1/t on Energy Coal Price 20

  30. Slide 30: Impact Of Major Commodity Price Movements

    Impact Of Major Commodity Price Movements For personal use only Half-year Ended Dec 2009 vs Dec 2008 Total Price Variance – US$(4,219) million(a) (US$m) 4,000 Copper 3,000 2,770 2,000 Nickel 1,000 326 00 Other (22) Aluminium (1,000) (283) Energy Coal (606) Petroleum (2,000) (765) Manganese (1,486) I

  31. Slide 31: Impact Of Major Volume Changes

    Impact Of Major Volume Changes For personal use only Half-year Ended Dec 2009 vs Dec 2008 Total Volume(a) Variance – US$1,069 million (US$m) 600 Manganese 487 500 400 Met Coal 300 259 Iron Ore 211 200 Petroleum 113 D&SP 75 100 00 (100) Other (76) (200) (a) Volume variances calculated using previous

  32. Slide 32: Impact Of Major Cost Changes

    Impact Of Major Cost Changes For personal use only Half-year Ended Dec 2009 vs Dec 2008 Total Cost Variance – US$745 million (US$m) Raw Materials / 400 Fuel & Energy 320 300 One-offs 200 173 Non Cash 162 Operating Improvements 100 75 Mining / Maintenance Shipping Grade 11 & Demurrage 22 8 0 Labour O

  33. Slide 33: Investments

    Investments For personal use only US$bn FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10F FY11F Growth 1.9 2.0 1.7 2.6 4.0 5.5 6.1 7.3 8.9 11.5 Sustaining and Other 0.8 0.7 0.9 1.3 2.1 1.6 1.8 2.0 2.2 2.3 Exploration(a) 0.4 0.3 0.5 0.5 0.8 0.8 1.4 1.3 1.3 1.2 Investment(b) 0.0 0.0 0.0 6.6 0.5 0.7 0.2 0.

  34. Slide 34: We Are In A Unique Position

    We Are In A Unique Position For personal use only Net Gearing Interest Cover (%) (Times) 40 100 Net Gearing (LHS) Underlying EBITDA Interest Cover 30 75 20 50 10 25 0 0 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 1H10 Moody’s Investment Services A3 A2 A1 A1 Standard & Poor’s A- A A+ A+ Underlying G

  35. Slide 35: Maturity Profile Analysis

    Maturity Profile Analysis For personal use only Debt Balances(a) (US$m(b)) 2,800 2,400 2,000 1,600 1,200 800 400 0 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 Post FY20 US$ Euro Bank CP Jointly Controlled Bonds Bonds Debt Issuance Entities(c) Subsidiaries(d) % of Portfolio 56% 31% 1% 0% 10% 2%

  36. Slide 36: Diversification Remains For Sales Into China

    Diversification Remains For Sales Into China For personal use only  25% of total company revenues in 1H10 1H10 Revenue by Location of Customer (US$m) ROW Europe 7,000 6,657 Australia 6,205 6,000 Japan 5,294 5,010 5,043 5,000 China 4,830 Petroleum Other Asia Aluminium 3,999 Base Metals 4,000 3,611 N

  37. Slide 37: Maintenance Of A Deep Diversified Inventory Of Growth Options

    Maintenance Of A Deep Diversified Inventory For personal use only Of Growth Options Future Options(a) Feasibility Execution NWS NWS Peak Peak Downs Downs Worsley Worsley Indonesia Indonesia Saraji Exp CWLH CWLH Coal Saraji Saraji Saraji Yeelirrie Exp (Caval (Caval E&G E&G Coal Potash Potash East Eas

  38. Slide 38: Provisional Pricing

    Provisional Pricing For personal use only LME – Copper, Grade A Cash US$/lb – A.M. Official (US$) 5.00 3 Month 3 Month 3 Month 3 Month 4.50 4.00 LME 4Q09 ave US$3.02/lb 3.50 LME 3Q09 ave US$2.65/lb 3.00 LME 2Q09 ave US$2.12/lb 2.50 2.00 LME 1Q09 ave US$1.55/lb 1.50 1.00 0.50 0.00 Dec 08 Jan 09 Feb 0

  39. Slide 39: Delivering Value to Shareholders

    Delivering Value to Shareholders For personal use only Net Operating Cash Flow Organic Growth(a) (US$bn) (US$bn) 6 6 4 CAGR 14% 4 CAGR 19% 2 2 0 0 1H02 1H10 1H02 1H10 Net Gearing Dividends per Share (%) (US¢) 50 50 40 40 30 30 CAGR 26% 20 20 10 10 0 0 1H02 1H10 1H02 1H10 (a) Includes capital and exp

  40. Slide 40: Steel Intensity Per Capita Grows Strongly As A Nation Becomes Wealthier

    Steel Intensity Per Capita Grows Strongly For personal use only As A Nation Becomes Wealthier Industrial Development & Finished Steel Consumption Growth (kg) China/India steel intensity 1,200 Other country steel intensities South Korea Possible path range for China 1,000 800 600 Japan China today Ge

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