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H2-2015 Financial Results – BHP Billiton Limited

BHP Billiton Limited · Jan 31, 2016 · 36 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. H2-2015 Financial Results – BHP Billiton Limited – slide 1
    Yandi Financial results Half year ended 31 December 2015
  2. H2-2015 Financial Results – BHP Billiton Limited – slide 2
    Spence Escondida Financial results Half year ended 31 December 2015 Andrew Mackenzie Chief Executive Officer Escondida
  3. H2-2015 Financial Results – BHP Billiton Limited – slide 3
    Key themes Well-supplied markets compounded by global economic uncertainty Commodity markets have weakened significantly (H1 FY15 to H1 FY16 price change1, %) prices to remain low as markets rebalance 0 volatility to persist as…
  4. H2-2015 Financial Results – BHP Billiton Limited – slide 4
    Samarco Reclamation work, Barra Longa Infrastructure reconstruction, Mariana Samarco Minas Gerais, Brazil Supporting fish rescue, Linhares Monitoring room, Samarco Interim results 23 February 2016 Slide 5
  5. H2-2015 Financial Results – BHP Billiton Limited – slide 5
    The health and safety of our people always come first Total Recordable Injury Frequency at operated sites (excludes Samarco) (number of recordable injuries per million hours worked1) 10 8 6 down 50% 4 2 0 FY06 FY07…
  6. H2-2015 Financial Results – BHP Billiton Limited – slide 6
    Macedon Financial results Half year ended 31 December 2015 Peter Beaven Chief Financial Officer Gulf of Mexico
  7. H2-2015 Financial Results – BHP Billiton Limited – slide 7
    Strong cash flow Asset quality and operating performance provide resilience Leading margins through the cycle (Underlying EBITDA margin2, %) net operating cash flow of US5.3 billion 60 Underlying EBITDA margin of 40% Balance sheet…
  8. H2-2015 Financial Results – BHP Billiton Limited – slide 8
    Falling prices weighed on EBIT Underlying EBIT variance (US billion) 10.0 Uncontrollable (-US7.0 billion) Controllable (US0.0 billion) 8.3 +0.6 Productivity volumes Escondida 5.0 Controllable grade cash costs impact…
  9. H2-2015 Financial Results – BHP Billiton Limited – slide 9
    Financial impact of Samarco dam failure Total after tax charge of US858 million recognised by Equity accounted investment in Samarco BHP Billiton Half year ended 31 December 2015 US million US655 million share of loss relating to the…
  10. H2-2015 Financial Results – BHP Billiton Limited – slide 10
    Tier 1 assets and operational excellence provide resilience Sustainable free cash flow Our portfolio of high-quality assets (H1 FY16 Underlying EBITDA margin, %) optimised portfolio of well-capitalised, low-cost, long-life 80…
  11. H2-2015 Financial Results – BHP Billiton Limited – slide 11
    Value in a strong balance sheet Our balance sheet is strong Long-dated maturity profile1 (debt maturity profile, US billion2) long-dated maturity profile with low refinancing risk 8 highest credit rating in the sector 6 net debt…
  12. H2-2015 Financial Results – BHP Billiton Limited – slide 12
    Escondida Financial results Half year ended 31 December 2015 Andrew Mackenzie Chief Executive Officer Mt Arthur Coal
  13. H2-2015 Financial Results – BHP Billiton Limited – slide 13
    Sector-leading capital management track record Our capital management policies have been well suited to Volume growth Return on invested capital macroeconomic conditions since the merger (FY02 to FY15 CAGR, %) (FY02 to FY15 average,…
  14. H2-2015 Financial Results – BHP Billiton Limited – slide 14
    Markets are undergoing significant changes Rate, magnitude and correlation of decline in commodity prices Proportion of industry supply loss-making at current prices1 has surprised (%) 45 signs of faster transition from industry to…
  15. H2-2015 Financial Results – BHP Billiton Limited – slide 15
    A more flexible dividend policy Minimum dividend of 50% of Underlying attributable profit Our new dividend policy is aligned with our historical cash returns (cumulative, US billion) minimum 50% payout of US0.04 per share 80…
  16. H2-2015 Financial Results – BHP Billiton Limited – slide 16
    Financial discipline to optimise returns and value We continue to generate material cash flow Operating Capital productivity productivity provides capital allocation optionality We will strictly adhere to a disciplined capital…
  17. H2-2015 Financial Results – BHP Billiton Limited – slide 17
    Competition for free cash flow Near-term competitive opportunities Disciplined capital expenditure focused on efficiency and flexibility3 (US billion) major projects in execution in Copper and Petroleum 15 capital-efficient latent…
  18. H2-2015 Financial Results – BHP Billiton Limited – slide 18
    More to come from productivity Embedded annualised productivity gains of US10 billion since FY12 Unit costs continue to fall rapidly1 (US per copper equivalent tonne) reduced average unit costs by 40% since the beginning of our…
  19. H2-2015 Financial Results – BHP Billiton Limited – slide 19
    Key themes Well-supplied markets compounded by global economic uncertainty prices to remain low as markets rebalance Tier 1 Assets volatility to persist as Chinas economy transitions recovery will take time but continue to see…
  20. H2-2015 Financial Results – BHP Billiton Limited – slide 20
  21. H2-2015 Financial Results – BHP Billiton Limited – slide 21
    Appendix
  22. H2-2015 Financial Results – BHP Billiton Limited – slide 22
    A simpler and more productive organisation Operated Non-operated Non-core Australia Minerals Western Queensland NSW Energy Olympic Nickel West Australia IO Coal Coal Dam Americas Minerals Escondida Pampa Norte Jansen (CCO…
  23. H2-2015 Financial Results – BHP Billiton Limited – slide 23
    Petroleum Production decreased by 5% to 124.7 MMboe due to deferred development activity in Onshore US and natural field decline in Conventional The decline in non-cash costs reflects the non-recurrence of Onshore US non-exceptional…
  24. H2-2015 Financial Results – BHP Billiton Limited – slide 24
    Crude oil Short-term drivers OECD commercial inventory of crude oil and other liquids (billion bbl) Crude oil prices under pressure 3.1 OPEC decision to maintain production levels 2.9 resilient non-OPEC supply large, growing…
  25. H2-2015 Financial Results – BHP Billiton Limited – slide 25
    US natural gas Short-term drivers North American gas supply and demand (bcf/d) (annual, %) Weaker winter demand combined with ongoing supply overhang 2 6 contributing to high inventory levels 1 3 Market expected to rebalance in…
  26. H2-2015 Financial Results – BHP Billiton Limited – slide 26
    Copper Escondida grade decline unfavourably impacted productivity volumes by US342 million and controllable cash costs by US299 million Escondida EBIT also impacted by inventory movements and write-downs of US448 million partial…
  27. H2-2015 Financial Results – BHP Billiton Limited – slide 27
    Copper Short-term drivers Surge in capital investment following high prices (US billion) (US/lb) Prices fell as demand growth in China underperformed against 30 4.5 expectations while supply from new projects continued to enter the…
  28. H2-2015 Financial Results – BHP Billiton Limited – slide 28
    Iron Ore WAIO production increased by 6% to a record 131 Mt1 underpinned by Jimblebar operating at full capacity and improved plant utilisation at Newman WAIO unit cash costs declined 25% to US15.21 per tonne with full year guidance…
  29. H2-2015 Financial Results – BHP Billiton Limited – slide 29
    Iron ore Short-term drivers Steel intensity per capita (kg crude steel per capita, per annum) Chinas steel demand becoming more variable as the country 1,000 transitions to the next phase of development 750 Iron ore prices likely to…
  30. H2-2015 Financial Results – BHP Billiton Limited – slide 30
    Coal Queensland Coal unit cash costs1 declined by 17%, as the operations benefited from a stronger US dollar, lower diesel prices and a further reduction in labour and contractor costs unit costs for FY16 now expected to be US59 per…
  31. H2-2015 Financial Results – BHP Billiton Limited – slide 31
    Metallurgical coal Short-term drivers Seaborne metallurgical coal supply growth (Mtpa, year-on-year change) Supply is being curtailed, however further production cuts are 30 required to offset weakening demand 15 China continues to…
  32. H2-2015 Financial Results – BHP Billiton Limited – slide 32
    Other items affecting profitability Other items (US billion) Underlying Underlying EBIT attributable profit1 Exceptional items1 0.0 (0.1) (0.2) (0.2) (0.1) (0.1) (0.2) (0.4) (0.9) (2.0) (4.0) (4.9) (6.0) Redundancies…
  33. H2-2015 Financial Results – BHP Billiton Limited – slide 33
    Debt maturity profile Debt balances1 (US billion2) 8 6 4 2 0 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 Post FY28 US Euro Sterling A C Bonds3 Bonds 3 Bonds 3 Bonds Bonds Subsidiaries % of portfolio…
  34. H2-2015 Financial Results – BHP Billiton Limited – slide 34
    BHP Billiton guidance Group FY16e FY17e Capital and exploration expenditure (USbn) 7.0 5.0 Cash basis; BHP Billiton share; excludes capitalised deferred stripping and non-controlling interests; includes BHP Billiton proportionate share…
  35. H2-2015 Financial Results – BHP Billiton Limited – slide 35
    BHP Billiton guidance (continued) Copper FY16e Total copper production (Mt) 1.5 Guidance for Escondida remains unchanged at approximately 0.94 Mt. Pampa Norte production is now expected to be ahead of the prior year. Olympic Dam…
  36. H2-2015 Financial Results – BHP Billiton Limited – slide 36
    Key net profit sensitivities Approximate impact1 on FY16 net profit after tax of changes of: US million US1/t on iron ore price2 147 US1/bbl on oil price3 60 US10/MMbtu on US gas price 24 US1/t on metallurgical coal price 23…

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