Bhp Group Ltd · ASX:BHP
Bhp — H1 FY2023 Earnings Presentation
32 slides from Bhp's earnings presentation, Feb 21, 2023
Slide 1: Results presentation for the half year ended 31 December 2022
21 February 2023 To: Australia Securities Exchange New York Stock Exchange RESULTS PRESENTATION FOR THE HALF YEAR ENDED 31 DECEMBER 2022 Attached are the presentation slides for BHP’s HY2023 Results Presentation by the Chief Executive Officer and Chief Financial Officer. A video of this presentation
Slide 2: BHP Group Limited registered office details
BHP Group Limited ABN 49 004 028 077 LEI WZE1WSENV6JSZFK0JC28 Registered in Australia Registered Office: Level 18, 171 Collins Street Melbourne Victoria 3000 Australia Tel +61 1300 55 4757 Fax +61 3 9609 3015 BHP Group is headquartered in Australia Follow us on social media
Slide 3: December 2022 Half year results
December 2022 Half year results Escondida
Slide 4: Disclaimer
Disclaimer The information in this presentation is current as at 21 February 2023. It is in summary form and is not necessarily complete. It should be read together with the BHP Results for the half year ended 31 December 2022. Forward-looking statements This presentation contains forward-looking st
Slide 5: Financial results: Half year ended December 2022
Financial results Half year ended 31 December 2022 Mike Henry Chief Executive Officer Western Australia Iron Ore
Slide 6: H1 performance
H1 performance Colleague tragically lost in fatal incident at WAIO in February 2023 Operating performance remains steady Strong financial performance and shareholder returns Production guidance held and coal cost guidance revised Accelerating studies for growth options, OZL proposed acquisition on t
Slide 7: H1 FY23 operational and financial performance
H1 FY23 operational and financial performance A strong set of results despite increased external pressures 20% Controlling costs Unit Safety Cost guidance for Escondida and WAIO unchanged, Decline in high-potential injury (HPI) frequency from costs and BMA and NSWEC cost guidance increased largely
Slide 8: H1 FY23 social value highlights
H1 FY23 social value highlights Making significant contributions where we operate and putting our Social Value Framework into action Taxes and US$7.5 bn Female > 33% royalties representation female representation across the Group, paid to Governments through taxes and royalties5 16% points since F
Slide 9: Financial results: Half year ended December 2022
Financial results Half year ended 31 December 2022 David Lamont Chief Financial Officer Escondida
Slide 10: Financial performance
Financial performance Strong earnings at a 54% underlying EBITDA margin and 29.4% ROCE Summary financials One of the highest HY earnings in the last decade(i) H1 FY23 % change10 (US cents per share) (US$ billion) Underlying EBITDA 13.2 28% 300 Underlying EBITDA margin 54% 250 Underlying EBIT 10.8
Slide 11: Group EBITDA waterfall
Group EBITDA waterfall Strong controllable cost performance, lower prices and external inflation the biggest drivers Underlying EBITDA variance (US$ billion) External US$(4.5) billion Controllable US$(0.2) billion 20 18.5 18.0 15 0.4 13.5 0.7 13.2 (3.9) (1.0) (0.5) (0.4) Inflationary pressures by ca
Slide 12: Segment performance
Segment performance Iron ore Nickel EBITDA: US$7.6 bn EBITDA: US$0.1 bn EBITDA margin: 65% EBITDA margin: 10% WAIO unit cost20: US$18.30/t • Slower ramp up of refinery following planned maintenance WAIO C1 unit cost21: US$15.50/t Copper Potash EBITDA: US$2.8 bn • Jansen Stage 1 continues to be on ti
Slide 13: Business update
Business update Half year ended 31 December 2022 Mike Henry Chief Executive Officer Jansen
Slide 14: Portfolio positively leveraged to megatrends
Portfolio positively leveraged to megatrends Built to compete in a complex but opportunity-rich environment Portfolio Copper Nickel Iron Ore Metallurgical Coal Potash Largest endowment23 Second largest Lowest cost iron ore Leading met coal Large-scale resource supports sulphide resources24 producer2
Slide 15: Near term growth
Near term growth Projects at WAIO and Jansen are underway and on track Growth to >300 Mtpa, studying options for 330 Mtpa Stage 1 on track, Stage 2 studies accelerated • Rail and port debottlenecking and optimisation to deliver >300 Mtpa at WAIO • Jansen Stage 1 project execution at 16% and running
Slide 16: Accelerating our future facing options
Accelerating our future facing options We are accelerating studies across a range of organic growth options in copper, nickel and potash Organic opportunities in copper Longer term opportunities Jansen Stages 3-4 (Potash) Escondida Accelerating options Brownfield Options (Copper) Escondida and Pampa
Slide 17: Innovative and agile in our approach
Innovative and agile in our approach We are creating and accelerating longer term options Metals Exploration Ventures • Innovative machine learning to define next • Investing in emerging technology • Dedicated to accelerating innovative, generation of targets under cover; 15 new companies with the p
Slide 18: OZ Minerals proposed acquisition progressing
OZ Minerals proposed acquisition progressing South Australian copper basin BHP tenements • Acquisition of 100% of OZL OZL tenements Producing asset Agreed terms • To be executed by way of a scheme of arrangement Project • Cash price of A$28.25 per OZL share (A$9.8 billion28)29 Major road Power trans
Slide 19: Investment proposition
Investment proposition Attractive returns underpinned by operational excellence, capital allocation discipline and Social Value commitment Operational Disciplined Value and returns excellence capital allocation World class Driving Agile decision Strong Embedded A framework Commitment to Increasing E
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Slide 21: Footnotes
Footnotes 1. Slide 5: There were zero fatalities during the December 2022 half. A fatal incident occurred subsequently at our WAIO operations in February 2023. 2. Slide 5: WAIO achieved record production of 146 Mt (100% basis) for the half year. 3. Slide 5: Production guidance for the 2023 financial
Slide 22: Appendix
BHP Appendix
Slide 23: Safety and social value indicators
Safety and social value indicators We are making good progress on our safety and social value targets/goals Key safety indicators1 H1 FY23 FY22 H1 FY22 Target/Goal Fatalities 0 0 0 Zero work-related fatalities High Potential Injury (HPI) frequency (per million hours worked) 0.13 0.14 0.17 Year-on-ye
Slide 24: Creating an equitable and sustainable future for people and planet
Creating an equitable and sustainable future for people and planet • A charitable organisation working with partner organisations to help solve the world’s most complex social and environmental challenges. • The independent work of the BHP Foundation’s portfolio complements BHP’s Social Value approa
Slide 25: Samarco and Renova Foundation
Samarco and Renova Foundation Significant contribution to local economy: >20,000 jobs, R$28.1 billion spent on reparation and compensation programs Renova Resettlement Samarco • ~410,000 people have received indemnification • ~70% of resettlement cases completed across • ~12,000 direct and indirect
Slide 26: Continued capital allocation discipline
Continued capital allocation discipline Our balance sheet is strong H1 FY23 Operating Capital productivity productivity Net operating cash flow US$6.8bn Maintenance capital US$1.1 bn Strong balance sheet Minimum 50% payout ratio dividend US$5.8bn Excess cash US$(0.9) bn Additional Organic Acquisit
Slide 27: Return on Capital Employed
Return on Capital Employed ROCE of 29.4% for H1 FY23 ROCE ROCE by asset (%) (%) 55 60 50 50 45 40 40 35 30 Antamina1 30 BMA Escondida WAIO 25 20 20 15 10 Pampa Olympic Norte 10 Dam Nickel West 0 5 Potash 0 (10) FY18 FY19 FY20 FY21 FY22 FY23 0 10 20 30 40 50 Half year results (total) Full year result
Slide 28: Balance sheet
Balance sheet Net debt of US$6.9 billion and gearing of 12.9% Movements in net debt Debt maturity profile2 (US$ billion) (US$ billion) 6 8 0.6 6.9 0.3 0.5 6 8.7 4 4 2 0.3 (3.5) 2 0 (2) 0 (4) FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 - Post FY22 Free cash flow Dividends paid Dividends paid Lease O
Slide 29: 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 30: 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$/t) 1
Slide 31: Key Underlying EBITDA sensitivities
Key Underlying EBITDA sensitivities Approximate impact1 on H2 FY23 Underlying EBITDA of changes of: US$ million US$1/t on iron ore price2 116 US$1/t on metallurgical coal price 10 US¢1/lb on copper price2 19 US$1/t on energy coal price2 8 US¢1/lb on nickel price 0.8 AUD (US¢1/A$) operations3 75 CLP
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