Slide 1: Preliminary results, year ended 30 June 2013
Escondida For personal use only Preliminary results Year ended 30 June 2013 Andrew Mackenzie Chief Executive Officer Graham Kerr Chief Financial Officer 20 August 2013
Slide 2: Disclaimer: forward-looking statements
Disclaimer For personal use only Forward-looking statements This presentation includes forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 regarding future events, conditions, circumstances and the future financial performance of BHP Billiton, i
Slide 3: Disclaimer: Mineral Resources
Disclaimer For personal use only Mineral Resources This presentation includes information on Mineral Resources. Mineral Resources are compiled by: J McElroy (MAusIMM), B Nemeth (MAusIMM) – Saskatchewan Potash. This is based on Mineral Resource information as disclosed in the BHP Billiton News Releas
Slide 4: Preliminary results, CEO section
Port Hedland Escondida For personal use only Preliminary results Year ended 30 June 2013 Andrew Mackenzie Chief Executive Officer 20 August 2013
Slide 5: Key themes
Key themes For personal use only • We continue to extend our strong track record of operating performance • Controllable cash costs reduced by US$2.7 billion in FY13 • Group capital and exploration expenditure to decline to US$16.2 billion in FY14 • A simplified organisation focused on our major bas
Slide 6: Sustainability underpins everything we do
Sustainability underpins everything we do For personal use only Health Safety Environment Community Preliminary results, 20 August 2013 Slide 6
Slide 7: Continued improvement in safety performance
Continued improvement in safety performance For personal use only Total Recordable Injury Frequency (TRIF) (number of recordable injuries per million hours worked) 10 8 6 4 2 0 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 Preliminary results, 20 August 2013 Slide 7
Slide 8: Sustainability underpins everything we do
Sustainability underpins everything we do For personal use only Health Safety Environment Community Preliminary results, 20 August 2013 Slide 8
Slide 9: Robust results reflect record production and substantial productivity gains
Robust results reflect record production and substantial productivity gains For personal use only • Underlying EBITDA of US$28.4 billion, down 16% • Underlying EBIT of US$21.1 billion, declined by 22% as generally weaker commodity prices reduced Underlying EBIT by US$8.9 billion • Attributable profi
Slide 10: We continue to extend our strong track record of operating performance
We continue to extend our strong track record of operating performance For personal use only • Production records achieved across seven Strong growth in our major businesses operations and five commodities in FY13 (production volumes, % change, FY13 versus FY12) • Western Australia Iron Ore (WAIO) A
Slide 11: Our differentiated strategy has delivered superior financial returns
Our differentiated strategy has delivered superior financial returns For personal use only • Consistent growth in our high margin Strong growth in total shareholder returns3 businesses (TSR, 30 June 2003 = 100) 1,000 • Average EBIT margin of 41% and average CAGR 20% return on capital of 29% over 10
Slide 12: Preliminary results, CFO section
For personal use only BMA Preliminary results Year ended 30 June 2013 Graham Kerr Chief Financial Officer 20 August 2013
Slide 13: Key themes
Key themes For personal use only • We continue to extend our strong track record of operating performance • Controllable cash costs reduced by US$2.7 billion in FY13 • Group capital and exploration expenditure to decline to US$16.2 billion in FY14 • A simplified organisation focused on our major bas
Slide 14: Other items affected underlying profitability
Other items affected underlying profitability For personal use only Pre-tax (US$ million) EBITDA D&A Interest 0 (200) (400) (600) (800) Onshore US Embedded Balance sheet Production Mad Dog Tug Harbour Interest rate rig termination derivatives¹ monetary items¹ Sharing Phase 2 project swaps Contract 1
Slide 15: Successfully managing the factors we control
Successfully managing the factors we control For personal use only EBIT variance (FY13 versus FY12, US$ billion) 30.0 27.2 24.0 0.6 2.2 (0.1) 0.2 21.1 1.8 (0.6) 0.4 (1.0) 18.0 18.0 (8.9) (0.7) 12.0 6.0 0.0 Other New Sub-total cash costs¹ costs energy one-off items FY12 Fuel & Price Non-cash & FY13 V
Slide 16: Substantial growth in our major basins
Substantial growth in our major basins For personal use only Volume variance (FY13 versus FY12, US$ million) 2,500 260 2 2,057 2,000 415 1,791 (266) 1,500 1,380 1,000 500 0 Iron Ore Coal¹ Copper Aluminium, Sub-total Petroleum¹ Total Manganese and Minerals Nickel 1. Excludes new and acquired/ceased a
Slide 17: Controllable cash costs reduced by US$2.7 billion
Controllable cash costs reduced by US$2.7 billion For personal use only Cash cost savings (US$ million) Controllable Uncontrollable 3,500 649 3,278 (114) 3,000 546 2,743 2,500 924 2,197 2,000 1,500 105 73 619 1,273 (168) 1,000 458 500 186 0 cash costs¹ materials contractors (EBIT) operations Other O
Slide 18: Disciplined management of our capital
Disciplined management of our capital For personal use only • Capital and exploration expenditure of Expenditure profile for our major projects in execution2 US$21.7 billion1 in FY13 (US$ billion) • Capital and exploration expenditure will decline to US$16.2 billion1 in FY14 – average annual investm
Slide 19: Disciplined management of our capital
Disciplined management of our capital For personal use only • Capital and exploration expenditure of Strong balance sheet US$21.7 billion1 in FY13 (net gearing, %) 40 • Capital and exploration expenditure will 30 decline to US$16.2 billion1 in FY14 20 – average annual investment at Jansen of US$800
Slide 20: A temporary increase in our effective tax rate
A temporary increase in our effective tax rate For personal use only • We paid US$8.5 billion of income and royalty related taxation and US$2.7 billion for other production royalties – included US$200 million of MRRT during the period • Effective tax rate, excluding exceptional items, for FY13 was 3
Slide 21: Preliminary results, CEO section
Neptune For personal use only Preliminary results Year ended 30 June 2013 Andrew Mackenzie Chief Executive Officer 20 August 2013
Slide 22: Key themes
Key themes For personal use only • We continue to extend our strong track record of operating performance • Controllable cash costs reduced by US$2.7 billion in FY13 • Group capital and exploration expenditure to decline to US$16.2 billion in FY14 • A simplified organisation focused on our major bas
Slide 23: More balanced global growth and lower investment will support commodity markets
More balanced global growth and lower rates of investment will support commodity markets For personal use only • The transition in the Chinese economy is Cumulative consumption 20101 underway (copper kg/capita) (steel t/capita) 300 12 – we expect GDP growth of 7% to 8% in 10 240 the short to medium
Slide 24: A simplified organisational design
A simplified organisational design For personal use only Chief Chief Executive Financial Officer Officer President President President Chief President President President President President Aluminium, Governance and Petroleum and Legal HSEC, Marketing People and Iron Ore Coal Copper Manganese and G
Slide 25: Increasing focus on our major basins
Increasing focus on our major basins For personal use only Contribution to FY13 EBIT Aluminium, Manganese Coal 3% & Nickel 1% Copper 17% Iron Ore 52% Saskatchewan (Potash) Petroleum & Potash Onshore US 27% (Oil & gas) Gulf of Mexico (Oil & gas) WAIO Queensland Coal (Iron ore) (Metallurgical coal) Es
Slide 26: Iron Ore: optimising our supply chain in the Pilbara
Iron Ore: optimising our supply chain in the Pilbara For personal use only • Iron ore production is expected to increase by Iron ore production 11% to 188 mt (BHP Billiton share) in FY14 (index, FY09 = 100, BHP Billiton share) 200 – includes a 10% increase at WAIO CAGR +10% 150 100 50 0 FY09 FY10 FY
Slide 27: Iron Ore: optimising our supply chain in the Pilbara
Iron Ore: optimising our supply chain in the Pilbara For personal use only • Iron ore production is expected to increase by Utilisation of train load-out 11% to 188 mt (BHP Billiton share) in FY14 (index, July 2012 = 100) 175 – includes a 10% increase at WAIO +20% increase from the March quarter • O
Slide 28: Iron Ore: optimising our supply chain in the Pilbara
Iron Ore: optimising our supply chain in the Pilbara For personal use only • Iron ore production is expected to increase by Jimblebar 11% to 188 mt (BHP Billiton share) in FY14 – includes a 10% increase at WAIO • Our productivity drive is in action across the business and has delivered a significant
Slide 29: Petroleum: strong growth in liquids production
Petroleum: strong growth in liquids production For personal use only • Petroleum production is expected to increase by Petroleum production 6% to 250 MMboe in FY14 (index, FY09 = 100, BHP Billiton share) 200 – includes 15% growth in Onshore US volumes, CAGR +12% underpinned by an anticipated 75% inc
Slide 30: Petroleum: strong growth in liquids production
Petroleum: strong growth in liquids production For personal use only • Petroleum production is expected to increase by Black Hawk drilling time1 6% to 250 MMboe in FY14 (index, Q1 FY13 = 100) 100 – includes 15% growth in Onshore US volumes, productivity underpinned by an anticipated 75% increase imp
Slide 31: Petroleum: strong growth in liquids production
Petroleum: strong growth in liquids production For personal use only • Petroleum production is expected to increase by 6% to 250 MMboe in FY14 – includes 15% growth in Onshore US volumes, underpinned by an anticipated 75% increase in liquids production • As we build our experience, we have improved
Slide 32: Copper: Escondida continues to deliver
Copper: Escondida continues to deliver For personal use only • Copper production is expected to remain Copper production unchanged at 1.2 mt (BHP Billiton share) in FY14 (index, FY09 = 100, BHP Billiton share) 125 • Escondida production remains on track to deliver 1.3 mt1 of copper in FY15 100 75 50
Slide 33: Copper: Escondida continues to deliver
Copper: Escondida continues to deliver For personal use only • Copper production is expected to remain Crushing and conveying system performance unchanged at 1.2 mt (BHP Billiton share) in FY14 (index, FY12 daily throughput average = 100) 150 • Escondida production remains on track to deliver +13%2
Slide 34: Copper: Escondida continues to deliver
Copper: Escondida continues to deliver For personal use only • Copper production is expected to remain OGP1, Escondida unchanged at 1.2 mt (BHP Billiton share) in FY14 • Escondida production remains on track to deliver 1.3 mt1 of copper in FY15 • Implementation of our systems and the completion of m
Slide 35: Coal: a rapid turnaround at Queensland Coal
Coal: a rapid turnaround at Queensland Coal For personal use only • Coal production is expected to increase by 3% to Coal production 114 mt (BHP Billiton share1) in FY14 (index, FY09 = 100, BHP Billiton share 1) 125 – energy coal production is expected to remain energy coal metallurgical coal steady
Slide 36: Coal: a rapid turnaround at Queensland Coal
Coal: a rapid turnaround at Queensland Coal For personal use only • Coal production is expected to increase by 3% to Goonyella truck fleet utilisation 114 mt (BHP Billiton share1) in FY14 (index, September 2011 average fleet annualised hours = 100) 150 – energy coal production is expected to remain
Slide 37: Coal: a rapid turnaround at Queensland Coal
Coal: a rapid turnaround at Queensland Coal For personal use only • Coal production is expected to increase by 3% to Caval Ridge CPP 114 mt (BHP Billiton share1) in FY14 – energy coal production is expected to remain steady at 73 mt – metallurgical coal production is forecast to rise by 9% to 41 mt1
Slide 38: An enviable position in Saskatchewan
An enviable position in Saskatchewan For personal use only Preliminary results, 20 August 2013 Slide 38
Slide 39: We remain confident in the long term outlook for potash
We remain confident in the long term outlook for potash For personal use only • We expect demand growth of 2% to 3% per Supply deficit in the long term annum to 2030 (million tonnes) demand 2030 • Core demand drivers for potash remain in place potential supply gap demand 2020 – a growing global popu
Slide 40: Investment at Jansen creates tangible value for our shareholders today
Investment at Jansen creates tangible value for our shareholders today For personal use only • Investing US$2.6 billion at Jansen Jansen Potash project – the excavation and lining of two shafts will be completed in CY16 – the installation of surface infrastructure and utilities will be completed in
Slide 41: Our plan will deliver substantial growth in free cash flow
Our plan will deliver substantial growth in free cash flow For personal use only • Our disciplined plan is in action right across the business • We have delivered strong volume growth and substantial productivity led cost savings • We have committed to a major reduction in capital expenditure having
Slide 42: BHP Billiton: resourcing the future
édl bhpbilliton resourcing the future
Slide 43: Appendix
For personal use only Appendix
Slide 44: Strength in diversity
Strength in diversity For personal use only EBIT margin1 (%) 75 50 25 0 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12² FY13 Petroleum and Potash Copper Iron Ore Coal Aluminium, Manganese and Nickel Group 1. Calculated on the basis of UKGAAP for periods prior to FY05, except for the exclusion of PRRT
Slide 45: Impact of commodity price movements
Impact of commodity price movements For personal use only Total price variance (FY13 versus FY12, US$ million) 0 (27) (521) (555) (1,000) (2,000) (3,000) (3,666) (4,000) (4,126) (5,000) Petroleum Copper Aluminium, Manganese Coal Iron Ore and Nickel Preliminary results, 20 August 2013 Slide 45
Slide 46: A weaker US dollar has hidden implications for Underlying EBIT
A weaker US dollar has hidden implications for Underlying EBIT For personal use only Foreign exchange gain/(loss) on balance sheet monetary items (US$ million) 0 59 (100) (89) (90) 31 (57) 9 (200) (43) (300) Group and Coal Copper Aluminium, Petroleum and Iron Ore Total unallocated Manganese and Pota
Slide 47: Our high quality project pipeline
Our high quality project pipeline For personal use only WAIO Caval Jansen shaft Inner Macedon Ridge development Harbour WAIO NWS North Bass Strait Broad- HPX3 NWS Jimblebar Rankin B LGCP meadow GWF-A FY13 FY14 FY15 FY16 Cerrejon Escondida P40 OLAP WAIO Escondida Appin Kipper1 Daunia Port and Rail OG
Slide 48: Capital and exploration expenditure
Capital and exploration expenditure For personal use only Minerals and conventional oil and gas capital and exploration expenditure US$ billion FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14e2 Growth 1.7 2.6 4.0 5.5 6.1 7.3 8.1 9.2 14.4 13.6 Sustaining and other 0.9 1.3 2.1 1.6 1.8 2.0 1.7 2
Slide 49: Summary of key exchange rate components in tax expense/(income)
Summary of key exchange rate components in tax expense/(income) For personal use only FY13 FY12 Restatement of expense/(income) expense/(income) US$ million US$ million Current tax payable 250 (91) Deferred tax balances on fixed assets 149 59 Deferred tax balances on US$ debt 85 205 Deferred tax bal
Slide 50: Maturity profile analysis
Maturity profile analysis For personal use only Debt balances1 (US$ billion2) 6 5 4 3 2 1 0 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 Post FY28 Jointly US$ Euro Sterling A$ C$ CP Controlled Bonds Bonds Bonds Bonds Bonds Issuance Entities3 Subsidiaries4 % of portfolio
Slide 51: Key net profit sensitivities
Key net profit sensitivities For personal use only Approximate impact1 on FY14 net profit after tax of changes of US$ million US$1/t on iron ore price 115 US$1/bbl on oil price 45 US¢10/MMbtu on US gas price 25 US$1/t on metallurgical coal price 25 US¢1/lb on aluminium price 25 US¢1/lb on copper pri
Slide 52: Jansen Potash project
Jansen Potash project For personal use only Preliminary results, 20 August 2013 Slide 52
Slide 53: BHP Billiton: resourcing the future
édl bhpbilliton resourcing the future