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October 2014 Earnings Call – BHP Billiton Limited

BHP Billiton Limited · Oct 19, 2014 · 54 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. October 2014 Earnings Call – BHP Billiton Limited – slide 1
    Jimblebar Preliminary results 2014 financial year Andrew Mackenzie Chief Executive Officer Graham Kerr Chief Financial Officer 19 August 2014
  2. October 2014 Earnings Call – BHP Billiton Limited – slide 2
    New South Wales Energy Coal Escondida Preliminary results 2014 financial year Andrew Mackenzie Chief Executive Officer 19 August 2014
  3. October 2014 Earnings Call – BHP Billiton Limited – slide 3
    Delivering on our commitments Exceeded production guidance for a number of our core commodities Another US2.9 billion of productivity-led gains embedded with more to come Capital and exploration expenditure declined by 32% to US15.2…
  4. October 2014 Earnings Call – BHP Billiton Limited – slide 4
    Keeping our people and operations safe Total Recordable Injury Frequency (TRIF) (number of recordable injuries per million hours worked) 10 8 down 51% 6 4 2 0 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14…
  5. October 2014 Earnings Call – BHP Billiton Limited – slide 5
    Strong financial results Underlying EBITDA of US32.4 billion, up 7% Underlying attributable profit of US13.4 billion, up 10% Net operating cash flow of US25.4 billion, up 26% Capital and exploration expenditure1 of US15.2 billion,…
  6. October 2014 Earnings Call – BHP Billiton Limited – slide 6
    Exceeded guidance for our core commodities Group production1 increased by 9% in FY14 Production records achieved at 12 operations (production volumes, % change, FY14 versus FY13) record Western Australia Iron Ore (WAIO) production of…
  7. October 2014 Earnings Call – BHP Billiton Limited – slide 7
    Positioned for another year of record production The ramp-up of major growth projects and our Production3 growth of 16% productivity agenda will deliver another year of (FY13 to FY15, %) record performance in FY15 20 iron ore…
  8. October 2014 Earnings Call – BHP Billiton Limited – slide 8
    Seeking a continual improvement in performance Unique systems, processes and our Utilising the power of big data organisational design allow us to deploy best (truck utilisation1, %) practice across the Group We are generating and…
  9. October 2014 Earnings Call – BHP Billiton Limited – slide 9
    Targeting low-cost growth at WAIO to 290 Mtpa We have more than doubled annual iron ore Maximising return on invested capital production in the Pilbara over the last (WAIO production1, Mtpa) decade through a series of major 300…
  10. October 2014 Earnings Call – BHP Billiton Limited – slide 10
    Shenzi Preliminary results 2014 financial year Graham Kerr Chief Financial Officer 19 August 2014
  11. October 2014 Earnings Call – BHP Billiton Limited – slide 11
    Other items affecting underlying profitability Other items (US million) Underlying EBIT Tax 600 FY14 H1 FY14 300 170 0 (51) (26) (156) (143) (300) (300) (600) (797) (900) Impairments Mine site Closure costs Redundancies…
  12. October 2014 Earnings Call – BHP Billiton Limited – slide 12
    Successfully managing the factors we control Underlying EBIT variance (US billion) 30.0 1.9 22.9 1.0 (0.1) (0.0) 22.9 1.9 1.8 (2.1) (0.2) 20.5 20.0 (0.8) (3.4) 10.0 0.0 Growth volumes energy Exchange…
  13. October 2014 Earnings Call – BHP Billiton Limited – slide 13
    Petroleum & Potash: growing liquids production The average realised price of natural gas across our portfolio increased by 16% Significant growth at Onshore US and Atlantis contributed to an 18% increase in high-margin liquids…
  14. October 2014 Earnings Call – BHP Billiton Limited – slide 14
    Copper: lowering unit costs despite grade decline Weaker base metal prices, including a 5% decline in the average realised price of copper, significantly impacted profitability Insourcing initiatives and the optimisation of contractor…
  15. October 2014 Earnings Call – BHP Billiton Limited – slide 15
    Iron Ore: delivering capital efficient growth Our average realised price of iron ore declined by 6% to US103 per wet metric tonne (FOB) in FY14 WAIO achieved a fourteenth consecutive annual production record and exported 223 Mt1 of…
  16. October 2014 Earnings Call – BHP Billiton Limited – slide 16
    Coal: moving sharply down the cost curve A 24% reduction in unit cash costs at Queensland Coal largely offset the impact of lower prices, which included a 20% decline for our hard coking coal products Non-cash charges include an…
  17. October 2014 Earnings Call – BHP Billiton Limited – slide 17
    Aluminium, Manganese & Nickel: leading the way on productivity Nickel and aluminium prices rallied towards the end of FY14 but remained lower on average for the period We continued to debottleneck our operations while reducing…
  18. October 2014 Earnings Call – BHP Billiton Limited – slide 18
    Another US2.9 billion of productivity-led gains Productivity-led volume and cost efficiencies (US billion) 4.0 Target We exceeded our target by US1.1 billion 3.0 0.7 2.9 0.4 2.0 0.4 1.8 0.8 1.0 0.6 0.0 Productivity…
  19. October 2014 Earnings Call – BHP Billiton Limited – slide 19
    Selective investment and strong growth in free cash flow We successfully completed six major capital Increasing competition for capital projects in FY14 (capital and exploration expenditure1, US billion) 25 expansion of Jimblebar…
  20. October 2014 Earnings Call – BHP Billiton Limited – slide 20
    Our balance sheet is strong and getting stronger We achieved a US1.7 billion reduction in Our solid A balance sheet net debt in FY14 to US25.8 billion (net debt, US billion) 29 finance leases totaling US757 million 28 were brought…
  21. October 2014 Earnings Call – BHP Billiton Limited – slide 21
  22. October 2014 Earnings Call – BHP Billiton Limited – slide 22
    Escondida Unlocking shareholder value Andrew Mackenzie Chief Executive Officer 19 August 2014
  23. October 2014 Earnings Call – BHP Billiton Limited – slide 23
    Worsley Creating a new global metals and mining company
  24. October 2014 Earnings Call – BHP Billiton Limited – slide 24
    A proven strategy and financial discipline Our strategy is to own and operate large, We have delivered strong outperformance long-life, low-cost, expandable, upstream (total shareholder return4, %) assets diversified by commodity,…
  25. October 2014 Earnings Call – BHP Billiton Limited – slide 25
    Our major businesses will define our success By investing primarily in our major resource FY14 Underlying EBITDA basins where the market fundamentals were supportive we enhanced investment returns Our Petroleum and Potash, Copper,…
  26. October 2014 Earnings Call – BHP Billiton Limited – slide 26
    Extending our strong track record NewCo Having assessed alternatives for our non-core assets we concluded that a demerger will maximise value for our shareholders The creation of NewCo, a high-quality GEMCO Worsley Cannington…
  27. October 2014 Earnings Call – BHP Billiton Limited – slide 27
    The proposed demerger It is intended that NewCo would be an Australian incorporated company listed on the Australian Securities Exchange (ASX) and have an inward secondary listing on the Johannesburg Stock Exchange (JSE) BHP…
  28. October 2014 Earnings Call – BHP Billiton Limited – slide 28
    Pampa Norte A simpler and more productive BHP Billiton
  29. October 2014 Earnings Call – BHP Billiton Limited – slide 29
    Sharpening BHP Billitons focus June 2005 Aluminium 50 assets in total Base Metals 33 operated assets Carbon Steel Materials 24 minerals assets Stainless Steel Materials 9 petroleum assets Energy Coal 14 countries Petroleum…
  30. October 2014 Earnings Call – BHP Billiton Limited – slide 30
    Sharpening BHP Billitons focus June 2014 Petroleum & Potash 41 assets in total Copper 30 operated assets Iron Ore 20 minerals assets Coal 10 petroleum assets Aluminium, Manganese & Nickel 13 countries Operated major project…
  31. October 2014 Earnings Call – BHP Billiton Limited – slide 31
    Sharpening BHP Billitons focus The future 50% reduction in the number of assets Petroleum & Potash 19 assets in total Copper 12 operated assets Iron Ore 7 minerals assets Coal 5 petroleum assets Operated major project 8 countries…
  32. October 2014 Earnings Call – BHP Billiton Limited – slide 32
    A simpler and more productive organisation BHP Billiton core portfolio1 Under review Operated Non-operated Minerals Western Australia Olympic Dam Escondida Pampa Norte Samarco Antamina Nickel West Iron Ore Queensland Coal2…
  33. October 2014 Earnings Call – BHP Billiton Limited – slide 33
    Retaining the benefits of diversification and supplying commodities to the world A portfolio consisting of our core assets will Diversified by commodity, geography and market be further aligned with our differentiated (core portfolio,…
  34. October 2014 Earnings Call – BHP Billiton Limited – slide 34
    Delivering stronger growth and margins The core portfolio generated stronger A higher margin business performance compared with the broader (Underlying EBIT margin2, %) portfolio over the last 10 years 75 Core portfolio production…
  35. October 2014 Earnings Call – BHP Billiton Limited – slide 35
    Our unique ore bodies underpin our competitive advantage We have more than 100 years of inventory in The scale of our core assets is a differentiator (resource life1, years) our major minerals basins Olympic Dam 910 Escondida Our…
  36. October 2014 Earnings Call – BHP Billiton Limited – slide 36
    We will invest selectively and maintain financial discipline Capital and exploration expenditure declined Investing for value over volume by 32% in FY14 and will be below our US15 (capital and exploration expenditure2, US billion)…
  37. October 2014 Earnings Call – BHP Billiton Limited – slide 37
    Simplicity and focus will be the catalyst for greater productivity As we concentrate our effort on 12 operated Escondida assets and seven joint ventures in our core portfolio we will be able to improve productivity more quickly…
  38. October 2014 Earnings Call – BHP Billiton Limited – slide 38
    Growth in value and shareholder returns We see great value in a strong balance sheet and remain committed to our solid A credit rating It provides the necessary confidence and flexibility to invest selectively in our diversified…
  39. October 2014 Earnings Call – BHP Billiton Limited – slide 39
    Energy Coal South Africa A new global metals and mining company
  40. October 2014 Earnings Call – BHP Billiton Limited – slide 40
    A new global metals and mining company A global portfolio of significance Nickel Brazil RoW Americas Brazil Metallurgical coal Colombia Australia Colombia The new company will operate 11 Silver China Southern Africa assets…
  41. October 2014 Earnings Call – BHP Billiton Limited – slide 41
    A dedicated board and management team will bring renewed focus to this portfolio Board David Crawford (Chairman) Chief Executive Officer Graham Kerr Group Group Chief Chief Financial Chief Legal Chief People Executive…
  42. October 2014 Earnings Call – BHP Billiton Limited – slide 42
    A high-quality portfolio with a competitive position in each of its commodities NewCos commodity exposure is high-quality, A complementary portfolio of high-quality assets competitively positioned in the first or second (company…
  43. October 2014 Earnings Call – BHP Billiton Limited – slide 43
    A high-quality portfolio with a competitive position in each of its commodities Illawarra Coal produces high-quality, hard A complementary portfolio of high-quality assets coking coal with installed capacity of 9 Mtpa (company position…
  44. October 2014 Earnings Call – BHP Billiton Limited – slide 44
    A high-quality portfolio with a competitive position in each of its commodities Energy Coal South Africa is the third largest A complementary portfolio of high-quality assets energy coal exporter in the region with sales of (company…
  45. October 2014 Earnings Call – BHP Billiton Limited – slide 45
    A high-quality portfolio with a competitive position in each of its commodities Worsley and Alumar are large, modern A complementary portfolio of high-quality assets integrated alumina refineries with combined (company position on the…
  46. October 2014 Earnings Call – BHP Billiton Limited – slide 46
    A high-quality portfolio with a competitive position in each of its commodities Hillside and Mozal have combined AP30 A complementary portfolio of high-quality assets processing capacity of 1.3 Mtpa (1.0 Mtpa (company position on the…
  47. October 2014 Earnings Call – BHP Billiton Limited – slide 47
    A high-quality portfolio with a competitive position in each of its commodities Cannington is the worlds largest silver mine A complementary portfolio of high-quality assets with production of 25.2 Moz in FY14 (company position on the…
  48. October 2014 Earnings Call – BHP Billiton Limited – slide 48
    A high-quality portfolio with a competitive position in each of its commodities Cerro Matoso is one of the worlds leading A complementary portfolio of high-quality assets ferro-nickel assets with production of 44 kt in (company…
  49. October 2014 Earnings Call – BHP Billiton Limited – slide 49
    A high-quality portfolio with a competitive position in each of its commodities NewCo would be the worlds largest producer A complementary portfolio of high-quality assets of manganese ore with an interest in mines at (company position…
  50. October 2014 Earnings Call – BHP Billiton Limited – slide 50
    A proven performer with significant upside NewCo is cash flow positive today despite Australian assets dominate the earnings mix weakness in many of its commodity markets (Underlying EBITDA, US billion) and major expansions have been…
  51. October 2014 Earnings Call – BHP Billiton Limited – slide 51
    Shareholders would be rewarded as margins expand On formation, NewCo will target an investment grade credit rating and have a strong balance sheet with minimal net debt before finance leases This structure will provide NewCo with…
  52. October 2014 Earnings Call – BHP Billiton Limited – slide 52
    Queensland Coal Key messages
  53. October 2014 Earnings Call – BHP Billiton Limited – slide 53
    Unlocking shareholder value Having assessed alternatives for our non-core assets we concluded that a demerger will maximise value for our shareholders The creation of a new high-quality global metals and mining company largely…
  54. October 2014 Earnings Call – BHP Billiton Limited – slide 54

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