Bhp Group Ltd · ASX:BHP
Bhp — FY2022 Earnings Presentation
33 slides from Bhp's earnings presentation, Aug 16, 2022
Slide 1: Resilience and strength
Resilience and strength Full year ended 30 June 2022 Mike Henry Chief Executive Officer Escondida
Slide 2: Disclaimer
Disclaimer The information in this presentation is current as at 16 August 2022. It is in summary form and is not necessarily complete. It should be read together with the BHP Results for the year ended 30 June 2022. Forward-looking statements This presentation contains forward-looking statements, i
Slide 3: Financial results
Financial results Full year ended 30 June 2022 Mike Henry Chief Executive Officer Western Australia Iron Ore
Slide 4: Delivering value
Delivering value Strong results and strategic milestones achieved in the 2022 financial year More than three and a half years fatality free Solid operational performance against a challenging backdrop Strategic delivery: Petroleum / coal divestments, Jansen and unification Portfolio re-shaped for th
Slide 5: FY22 operational and financial highlights
FY22 operational and financial highlights Continued operational and financial discipline Safety Zero fatalities Unit Disciplined cost control HPI frequency 30% compared to FY211 costs In an inflationary environment Solid performance Record US$41 bn Production EBITDA Record sales volumes at WAIO, r
Slide 6: FY22 social value highlights
FY22 social value highlights US$78 bn total economic contribution during the 2022 financial year Taxes and Record US$17.3 bn Female > 32% royalties representation female representation across the Group, paid to Governments through taxes and royalties3 18% points since FY16 Operational 24% Freshw
Slide 7: Financial results
Financial results Full year ended 30 June 2022 David Lamont Chief Financial Officer BMA
Slide 8: Financial performance
Financial performance Record EBITDA, earnings per share and dividend Summary income statement FY22 % change Strong earnings delivery(i) (US$ billion) (US cents per share) Continuing operations 300 Underlying EBITDA 40.6 16% 250 Underlying EBITDA margin 65% Underlying EBIT 34.4 15% 200 Adjusted e
Slide 9: Group EBITDA waterfall
Group EBITDA waterfall Solid underlying and cost performance but inflation a headwind Underlying EBITDA variance (US$ billion) External US$5.2 billion Controllable US$0.4 billion 45 1.2 40.3 40.6 5.5 1.7 0.4 (1.5) 35.1 (1.2) (0.5) Inflationary pressures by category 30 (US$bn) 0.0 (0.4) (0.8) (1.2) (
Slide 10: Consistent performance
Consistent performance Consistently strong margins and a high baseline of cash flow are differentiated Margins ahead of peers through commodity cycles14 Consistently delivered >US$15 bn in net operating cash flow(i) (Underlying EBITDA margin, %) (Bloomberg commodity index, rebased) (US$ billion) 1…
Slide 11: Strong segment performance
Strong segment performance Iron ore Nickel Average realised price: US$113.10/t Average realised price: US$23,275/t EBITDA: US$21.7 bn EBITDA: US$0.4 bn EBITDA margin: 71% EBITDA margin: 23% WAIO unit cost15: US$16.81/t • Smelter outage in Q4 FY22 WAIO C1 unit cost16: US$15.05/t Copper Potash Average
Slide 12: Increasing capital spend in future facing commodities
Increasing capital spend in future facing commodities Major capital includes Jansen Stage 1 execution, as well as options in copper, nickel and at WAIO Capital expenditure to increase18 (US$ billion, nominal) (capex in future facing commodities, %) 10.0 64.0 Exploration capital focused on copper and
Slide 13: Balancing investment with shareholder returns
Balancing investment with shareholder returns Continued capital allocation discipline Since introducing the CAF, we’ve balanced reinvestment and returns20 (%) FY22 Balance Operating Capital sheet productivity productivity Net operating cash flow 21% US$29.3 bn 35% Capital Maintenance capital US$2.8
Slide 14: Business update
Business update Full year ended 30 June 2022 Mike Henry Chief Executive Officer Jansen
Slide 15: Well positioned in a complex environment
Well positioned in a complex environment Emerging demand differentiation across regions and commodity clusters, as well as within the supply side Demand-side themes Supply-side themes Energy Industry Inflation China Rest of World crisis cost curves bottlenecks Policy stance: Trend into FY23: Policy
Slide 16: Portfolio positively leveraged to megatrends
Portfolio positively leveraged to megatrends Low cost assets and world class resource base across a differentiated set of commodities 30/30 year growth Portfolio Population Rising living Decarbonising Electrifying Geopolitical BHP 1.5C Urbanisation growth standards power transport risk scenario Cop
Slide 17: Social value framework
Social value framework BHP’s positive contribution to society – our people, partners, the economy, the environment, local communities and shareholders Our framework prioritises our efforts Our scorecard defines goals and metrics Decarbonisation Contributing to the world’s climate ambitions Ensures f
Slide 18: Accelerating the pathway to deliver on organic options
Accelerating the pathway to deliver on organic options We are accelerating studies across a range of potentially accretive organic growth options Organic opportunities Longer term opportunities Accelerating options WAIO Growth Jansen Stages 3-4 (Iron ore) (Potash) WAIO Growth • Sustaining options to
Slide 19: A differentiated continuous improvement approach
A differentiated continuous improvement approach A decade of investment that underpins delivery of reliable operational outcomes Data People & Digital enablement supporting value creation Inclusive, performance orientated culture strategy culture Safer BHP Deep technical capability enables improveme
Slide 20: Resilience and strength
Resilience and strength Consistent returns underpinned by operational excellence, capital allocation discipline and Social Value leadership Operational Disciplined Value and returns excellence capital allocation World class Driving Agile decision Strong Embedded A framework Sustainability Increasing
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Slide 22: Appendix
BHP Appendix
Slide 23: Footnotes
Footnotes 1. Slide 5: Zero fatalities at our operated assets. High-potential injuries (HPI) are recordable injuries and first aid cases where there was the potential for a fatality. 2. Slide 5: Sites where BOS deployment has been completed have achieved on average a 24 basis point improvement versus
Slide 24: Social value scorecard
Social value scorecard We are making good progress on our social value commitments Category1 Key indicators FY22 H2 FY22 H1 FY22 FY21 Target/Goal Fatalities 0 0 0 0 Zero work-related fatalities Safety and High Potential Injury (HPI) frequency 0.14 0.12 0.17 0.20 Year-on-year improvement of HPI frequ
Slide 25: Environmental Resilience
Creating an equitable and sustainable future for people and planet Overview • A charitable organisation solely funded by BHP but operates independently. • The Foundation focuses on the world’s most complex social and environmental challenges, catalysing new solutions by blending bold ambition, trans
Slide 26: Samarco and Renova Foundation
Samarco and Renova Foundation Significant contribution to local economy: >16,500 jobs, R$23.1 bn spent on reparation and compensation programs Renova Resettlement Samarco • Approximately R$11.2 bn paid in compensation • 145 resettlement cases completed across the • Restart has contributed ~9,000 dir
Slide 27: Increasing capital spend in future facing commodities
Increasing capital spend in future facing commodities Major capital includes Jansen Stage 1 execution, as well as options in copper, nickel and at WAIO Capital expenditure to increase (US$ billion, nominal) (capex in future facing commodities, %) 10.0 64.0 • On average medium term spend is split acr
Slide 28: Return on Capital Employed
Return on Capital Employed Record ROCE of 48.7% for FY22 on a total operations basis ROCE ROCE by asset FY22 (%) (%) 55 80 50 70 45 60 40 Antamina1 50 35 WAIO BMA 40 Nickel West 30 25 30 Escondida 20 20 15 10 Pampa 10 Olympic Potash Norte Dam 5 0 0 (10) FY18 FY19 FY20 FY21 FY22 0 10 20 30 40 50 Half
Slide 29: Balance sheet
Balance sheet Net debt of US$0.3 billion and gearing of 0.7% Movements in net debt Debt maturity profile3 (US$ billion) (US$ billion) 6 10 5 4.1 (25.2) 2.5 0.7 0.8 0.3 0 4 17.9 (0.5) (5) (10) 2 (15) (20) 0 (25) FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 - Post FY21 Free cash Dividends Dividends Le
Slide 30: BHP guidance
BHP guidance Group FY23e Capital and exploration expenditure (US$bn) 7.6 Cash basis. Including: Maintenance capital 3.5 Includes non-discretionary capital expenditure to maintain asset integrity, reduce risks, and meet compliance requirements. Improvement capital 2.6 Major capital in steel making 0.
Slide 31: BHP guidance (continued)
BHP guidance (continued) Iron Ore FY23e Medium term Iron ore production (Mt) 249 – 260 Western Australia Iron Ore: 246 – 256 Mt; Samarco 3 – 4 Mt. Capital and exploration expenditure (US$bn) 2.2 Western Australia Iron Ore Iron ore production (Mt, 100% basis) 278 – 290 >300 Unit cash costs (US$/t) 18
Slide 32: Key Underlying EBITDA sensitivities
Key Underlying EBITDA sensitivities Approximate impact1 on FY22 Underlying EBITDA of changes of: US$ million US$1/t on iron ore price2 228 US$1/t on metallurgical coal price 23 US¢1/lb on copper price2 31 US$1/t on energy coal price2 13 US¢1/lb on nickel price 1.0 AUD (US¢1/A$) operations3 117 CLP (
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