Bhp Group Ltd · ASX:BHP
Bhp — BHP Billiton — Investor Presentation (May 2018)
18 slides from Bhp's investor presentation, May 15, 2018
Slide 1: Disciplined delivery of value and returns
Disciplined delivery of value and returns Andrew Mackenzie Chief Executive Officer 15 May 2018 Jimblebar
Slide 2: Disclaimer: Forward-looking statements
Disclaimer Forward-looking statements This presentation contains forward-looking statements, including statements which may include: trends in commodity prices and currency exchange rates; demand for commodities; plans; strategies and objectives of management; closure or divestment of certain operat
Slide 3: Key messages
Key messages 15 May 2018 3 Constructive outlook strong demand; disciplined supply1 US$2 bn productivity gains targeted by end FY19 Maximise cash flow Net debt in target range of US$10-15 bn <US$8 bn p.a. to FY20 capital and exploration guidance Capital discipline ~20% ROCE targeted by FY22e2,3 Up to
Slide 4: Value and returns are at the centre of everything we do
Value and returns are at the centre of everything we do 15 May 2018 Andrew Mackenzie, Chief Executive Officer Simple portfolio Distinctive enablers Shareholder value and returns Tier 1 upstream assets Diversified commodities Capital Allocation Framework and balance sheet strength Attractive geograph
Slide 5: Our plans are delivering
0 5 10 15 FY16 FY17 FY18e FY17 average realised prices Actual/forecast Our plans are delivering 15 May 2018 Andrew Mackenzie, Chief Executive Officer 5 Returns (ROCE2, nominal %) 0 50 100 150 FY16 plan FY17 plan FY18 plan FY17 average realised prices Consensus prices Base value4,5 (Index, FY16=100)
Slide 6: We have built base value over the last two years
We have built base value over the last two years 15 May 2018 Andrew Mackenzie, Chief Executive Officer 6 Latent capacity 5 Projects sanctioned at average returns7 of ~60% Cost efficiencies Technology >15% Unit cost reduction6 FuEtxuprelo orapttiioonns 2 Projects sanctioned; Mad Dog 2, Spence Growth
Slide 7: Future opportunities offer further upside
Future opportunities offer further upside 15 May 2018 Andrew Mackenzie, Chief Executive Officer 7 FuEtxuprelo orapttiioonns Exploration Technology Latent capacity Onshore US Cost efficiencies US$2 bn Productivity gains targeted by end FY19 Fully integrated And highly automated from resource to marke
Slide 8: Capital discipline, debt reduction and shareholder returns
Capital discipline, debt reduction and shareholder returns 8 Buy-backs Acquisitions/ divestments Maximise returns and value Debt reduction Organic development Operating productivity Capital productivity Net operating cash flow Maintenance capital Strong balance sheet Minimum 50% payout ratio dividen
Slide 9: Cost efficiencies – focused on further gains
Cost efficiencies – focused on further gains 15 May 2018 9 Productivity gains of US$2 billion targeted by end FY19 Andrew Mackenzie, Chief Executive Officer Optimised mine planning Equipment/plant utilisation Execution of technology initiatives Pre-strip productivity Equipment utilisation via IROC O
Slide 10: Technology – improves safety, costs and unlocks resource
Collision avoidance Equipment automation System integration across value chain Robotics process automation Machine learning analytics Chemical extraction Heap leaching Benchmark projects To drive leadership in safety and productivity Technology – improves safety, costs and unlocks resource 10 Provin
Slide 11: Future options: latent capacity opportunities
Options IRR9 (%) Risk12 (1-5) Timing13 Capex (US$m) Description WAIO Debottlenecking >100 • <2 years <250 Supply chain debottlenecking initiatives at the port and rail, and releasing latent capacity at Jimblebar to increase production to 290 Mtpa Escondida EWS Expansion >50 •• <2 years ~500 Expansio
Slide 12: Future options: growth opportunities
Options IRR9 (%) Risk12 (1-5) Description Atlantis Phase 3 Petroleum ~25 Nonoperated Tie back to existing Atlantis facility unlocked through Advanced Seismic Imaging Olympic Dam BFX Copper ~20 •• Accelerated development into the Southern Mine Area, debottlenecking of existing surface infrastructure
Slide 13: Exploration – focused on petroleum and copper
Greenfield discoveries can deliver copper for US$0.02-US$0.04/lb15 • Focused on porphyries, IOCGs, sediment-hosted copper • Leveraging expertise and technology from our petroleum teams • Concessions secured and new office established in Ecuador Highly prospective Petroleum exploration and appraisal
Slide 14: Onshore US – exit to maximise value and returns
0 10 20 FY16 FY17 H1 FY18 Onshore US – exit to maximise value and returns 15 May 2018 14 Process tracking to plan with bids expected by June 2018, potential for announced deal by year-end17 Andrew Mackenzie, Chief Executive Officer Group ROCE (%) Successful well trials, higher oil price, lower tax r
Slide 15: Delivery of our plans will further improve value and returns
0 100 200 300 FY16 plan FY17 plan FY18 plan (consensus prices) FY22e (consensus prices) FY22e (FY17 prices) Base value4,5 (Index, FY16=100) Value and returns are at the centre of everything we do 0 10 20 30 FY16 FY17 FY18e (forecast) FY22e (consensus prices) FY22e (FY17 prices) 15 May 2018 Andrew Ma
Slide 16: Key messages
Key messages 15 May 2018 16 Constructive outlook strong demand; disciplined supply1 US$2 bn productivity gains targeted by end FY19 Maximise cash flow Net debt in target range of US$10-15 bn <US$8 bn p.a. to FY20 capital and exploration guidance Capital discipline ~20% ROCE targeted by FY22e2,3 Up t
Slide 17: Bhp
Bhp
Slide 18: Footnotes
Footnotes 1. Disciplined supply: Reflects lower levels of investment across the industry. 2. ROCE: Represents annualised attributable profit after tax excluding exceptional items and net finance costs (after tax) divided by average capital employed. Capital employed is net assets before net debt. Pr