Bhp Group Ltd · ASX:BHP
Bhp — FY2024 Earnings Presentation
40 slides from Bhp's earnings presentation, Aug 27, 2024
Slide 1: Delivering on our strategy
Delivering on our strategy Full year ended 30 June 2024 Escondida
Slide 2: Disclaimer
Disclaimer The information in this presentation is current as at 27 August 2024. 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 2024. Forward-looking statements This presentation contains forward-looking statements, w
Slide 3: Performance summary
Performance summary Full year ended 30 June 2024 Mike Henry Chief Executive Officer Western Australia Iron Ore
Slide 4: A winning strategy
A winning strategy Our strategic focus, differentiated portfolio and operational excellence provides an enduring competitive advantage BHP has large, high-quality, long-life assets… …in commodities positively leveraged to global megatrends Jansen GHG Spence WAIO BMA Population Urbanisation Increased
Slide 5: Delivering on our strategy
Delivering on our strategy Strong financial results, with total FY24 dividends of US$7.4 bn Operational excellence: production records at WAIO, Spence and Carrapateena Delivered 9% copper production growth, with a further 4% expected in FY254 Jansen Stage 1 construction ahead of initial schedule and
Slide 6: Focused on safety
Focused on safety Nothing is more important at BHP than protecting the safety and wellbeing of our workforce • Investigation into fatality at BMA’s Saraji mine in January 2024 to inform High-potential injury frequency ongoing fatality prevention efforts (Events) (Frequency rate) 45 0.35 • Improvemen
Slide 7: Social value
Social value Delivering on our framework with tangible results Our social value framework Decarbonisation Healthy Indigenous Safe, inclusive Thriving, Responsible environment partnerships and future ready empowered supply chains workforce communities Operational GHG Nature- Indigenous Female employe
Slide 8: Financial results
Financial results Full year ended 30 June 2024 Vandita Pant Chief Financial Officer Copper South Australia
Slide 9: Financial performance
Financial performance Operational excellence delivers strong underlying results Summary financials Income statement (US$ bn, Underlying) • Underlying EBITDA of US$29.0 bn 60 ‒ Underlying EBITDA margin of 54.0% 55.7 Taxes and royalties: US$10.9 bn • Adjusted effective tax rate of 32.5%12 50 ‒ Adjuste
Slide 10: Group earnings waterfall
Group earnings waterfall Higher EBITDA as key commodity prices increased and we demonstrated strong cost discipline Earnings variance and drivers (US$ bn) Year on year comparison Current year reconciliation 40 External US$1.6 bn Controllable US$(0.6) bn FY24 income statement impacts 35 1.6 0.3 29.6
Slide 11: Segment performance
Segment performance Iron ore Potash Production: 259.7 Mt • Jansen Stage 1 ahead of construction schedule Average realised price: US$101.04/wmt ‒ 52% complete EBITDA margin: 68% • Jansen Stage 2 sanctioned WAIO unit cost20: US$18.19/t ‒ 2% complete WAIO C1 unit cost21: US$15.84/t Copper Energy co
Slide 12: A disciplined approach to capital allocation
A disciplined approach to capital allocation Our strong balance sheet and a healthy competition for capital positions us well for both growth and shareholder returns The Capital Allocation Framework sits at the core of BHP Consistent, strong net operating cash flows and margins24 (Net operating cash
Slide 13: Higher capital spend to unlock organic growth
Higher capital spend to unlock organic growth Medium-term capital forecast to be ~US$11 bn per annum on average with continued flexibility to adjust spend for value Consistent spend on growth in future-facing commodities (US$ bn, nominal) (Total capital in future-facing commodities, %) 12.5 80 Major
Slide 14: Business update
Business update Full year ended 30 June 2024 Mike Henry Chief Executive Officer BMA
Slide 15: Demand trends benefitting our portfolio
Demand trends benefitting our portfolio Attractive fundamentals for copper and potash, in addition to steelmaking commodities Energy transition is expected to continue to add to traditional demand… … as potash demand stands to benefit from global megatrends (Copper demand, Mt) (MOP demand, Mt) ~1.7x
Slide 16: Jansen S1 progress remains ahead of schedule
Jansen S1 progress remains ahead of schedule First production expected in late CY26, with progress going well across both stages in development Construction tracking well Stage 1 now 52% complete, Stage 2 commenced Summer season construction focused on: - Placement of pre-assembled units for Stage 1
Slide 17: Largest copper growth with pathways to further growth
Largest copper growth with pathways to further growth Unlocking the world’s largest copper endowment with a pathway towards well over 2 Mtpa of copper production Enviable resource base BHP copper production growth largest of the major producers (Growth in reported production (FY22 – FY24) by competi
Slide 18: Copper SA: strategy to double production by mid 2030s
28 Copper SA: strategy to double production by mid 2030s Phased smelter and refinery expansion (SRE) is capital efficient and enables capture of ~US$1.5 bn of OZL synergies Phase 1: Upgrade to two-stage smelter to match asset mineralogy Strategy to deliver 650 ktpa of copper production capacity28 (C
Slide 19: Attractive Chilean copper growth options
Attractive Chilean copper growth options Narrowed ~20 studies across Chile to 4 main pathways across existing and new facilities, FIDs planned in FY26 to FY29 Chilean copper indicative production shows potential pathway to offset decline30 (Mtpa Cu) Recent Market Production Existing New Further Esco
Slide 20: Vicuña district: Filo del Sol and Josemaria
Vicuña district: Filo del Sol and Josemaria Potential consolidation of an emerging copper district Vicuña district Vicuña district straddles the border of Argentina and Chile • Large porphyry copper and epithermal copper-gold-silver deposits with high-grade potential Spence • Filo del Sol and Josema
Slide 21: A sustainable competitive advantage
A sustainable competitive advantage Our proven approach to operating and allocating capital delivers attractive returns and enduring shareholder value Operational excellence Project delivery Capital allocation Generating consistently superior margins32 Expertise and disciplined approach delivers33 B
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Slide 23: Footnotes
Footnotes 1. Slide 4: BHP Underlying EBITDA margin (excluding third party products). Peer data compiled from publicly available information (e.g. company reports). Peers include: Anglo American, Glencore (exc. Marketing), Rio Tinto, Vale. 2. Slide 4: See slide 12 demonstrating consistent net operati
Slide 24: Appendix
BHP Appendix
Slide 25: Copper SA Smelter and Refinery Expansion
Copper SA Smelter and Refinery Expansion Phase 1 (1,100 – 1,400 ktpa concentrate capacity) captures OZL acquisition synergies and enables unlock of Olympic Dam… Feed source Smelter expansion Expanded Two-stage smelting better matches optionality Two stage smelting process refining capacity Copper SA
Slide 26: Oak Dam exploration project update
Oak Dam exploration project update1 First Mineral Resource1 Oak Dam Inferred Resource FY25 Mt Cu % Au g/t Inferred Resource2 1,340 0.66 0.33 • Contains bornite-dominant mineralisation area which, at a 1% Cu cut-off, contains 220 million tonnes at 1.96% Cu and 0.68 g/t Au • First Mineral Resource bei
Slide 27: Chilean copper growth options
Chilean copper growth options An attractive set of options across four main pathways, further update to be given at Chile site tour in November Existing New facilities facilities Expansion and Concentrator debottlenecking at strategy Laguna Seca 1 and 2 New replacement concentrator at Escondida Spen
Slide 28: Safety and social value indicators
Safety and social value indicators We continue to emphasise the safety culture that must be present every day to eliminate fatalities and serious injuries at BHP Key safety indicators1 FY24 FY23 Target/Goal Fatalities 1 2 Zero work-related fatalities High-potential injury (HPI) frequency2 0.11 0.173
Slide 29: Climate Transition Action Plan 2024
Climate Transition Action Plan 2024 Setting out our commitment to being sustainable, and growing shareholder value while addressing climate change Portfolio Value chain GHG emissions Climate policy (Scope 3 emissions) advocacy As the global population grows and urbanises and the world pursues − Supp
Slide 30: Samarco and Renova Foundation
Samarco and Renova Foundation R$37 bn spent on reparation and compensation programs with ~50% paid out directly to claimants Resettlement and environment Compensation / litigation Samarco • ~91% of resettlement cases1 completed across the • ~430,000 people have received ~R$17.5 bn in • Completed jud
Slide 31: Continued capital allocation discipline
Continued capital allocation discipline Strong competition for capital as we focus on creating value FY24 Operating Capital productivity productivity Net operating cash flow US$20.7 bn Maintenance and decarbonisation capital US$3.0 bn Strong balance sheet ✓ Minimum 50% payout ratio dividend US$6.7 b
Slide 32: Return on Capital Employed
Return on Capital Employed ROCE of 27.2% for FY24 ROCE ROCE by asset (%) (%) 55 70 50 60 45 40 50 35 40 30 Antamina1 25 30 WAIO Escondida 20 20 15 BMA 10 Pampa 10 Norte Copper South Australia 5 0 0 FY19 FY20 FY21 FY22 FY23 FY24 0 10 20 30 40 50 Average capital employed Half year results (total) Full
Slide 33: Exceptional items
Exceptional items Consolidated Financial Consolidated Financial Exceptional FY2024 US$M Statements excluding Exceptional items commentary Statements items Exceptional items Revenue 55,658 − 55,658 Other income 1,285 877 408 Blackwater and Daunia gain on disposal Expenses excluding net finance costs,
Slide 34: Balance sheet
Balance sheet Net debt of US$9.1 bn and gearing of 15.7% Movements in net debt Debt maturity profile2 (US$ bn) (US$ bn) 12 8 11.2 0.3 9.1 1.4 0.4 6 8 7.7 4 4 2 0 (11.9) 0 FY25 FY26 FY27 FY28 FY29 FY30 FY31 - Post FY41 (4) FY40 FY23 Free cash Dividends Dividends 1 Lease Other FY24 US$ Euro Sterling f
Slide 35: BHP guidance
BHP guidance Group FY25e Capital and exploration expenditure (US$ bn) ~10 Cash basis. Split by category: Maintenance and decarbonisation capital 3.0 Includes non-discretionary spend for deferred development and production stripping; risk reduction, compliance and asset integrity; and decarbonisation
Slide 36: BHP guidance (continued)
BHP guidance (continued) Copper FY25e Medium-term Copper production (kt) 1,845 – 2,045 Escondida: 1,180 – 1,300 kt; Spence: 240 – 270 kt; Copper South Australia: 310 – 340 kt; Antamina: 115 – 135 kt (zinc 90 – 110 kt). Escondida Copper production (kt, 100% basis) 1,180 – 1,300 900 – 1,000 Medium-ter
Slide 37: Key Underlying EBITDA sensitivities
Key Underlying EBITDA sensitivities Approximate impact1 on FY24 Underlying EBITDA of changes of: US$ m US$1/t on iron ore price2 233 US$1/t on steelmaking coal price 10 US¢1/lb on copper price2 37 US$1/t on energy coal price2,3 14 US¢1/lb on nickel price 1.2 AUD (US¢1/A$) operations4 166 CLP (US¢0.1
Slide 38: Competent Person Statement: Copper Mineral Resources
Competent Person Statement: Copper Mineral Resources Copper Mineral Resources Competent Person Statement The information in this slide relates to Copper Mineral Resources as at 30 June 2024. Mineral Resources are inclusive of Ore Reserves and is based on information compiled by Marcelo Cortes as Com
Slide 39: Competent Person Statement: Copper Mineral Resources
Competent Person Statement: Copper Mineral Resources Compiled Copper Mineral Resources as at 30 June 2024 Measured Resources Indicated Resources Inferred Resources Total Resources Deposit Ore Type Contained Metal BHP Interest (%) Tonnes (Mt) % TCu Tonnes (Mt) % TCu Tonnes (Mt) % TCu Tonnes (Mt) % TC
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