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Escondida, Chile
Positioned for GrowthPositioned for GrowthExane BNP Paribas European Seminar
Andrew Mackenzie Chief Executive Non-Ferrous8 J 20118 June 2011
Disclaimer
Reliance on Third Party InformationThe views expressed herein contain information that has been derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness or reliability of the information. This presentation p y y p y pshould not be relied upon as a recommendation or forecast by BHP Billiton.
Forward Looking StatementsThis presentation includes forward-looking statements within the meaning of the U.S. Securities Litigation Reform Act of 1995 regarding future events and the future financial performance of BHP Billiton. These forward-looking statements are not guarantees or predictions of f t re performance and in ol e kno n and nkno n risks ncertainties and other factors man of hich are be ond o r control andfuture performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results to differ materially from those expressed in the statements contained in this presentation. For more detail on those risks, you should refer to the sections of our annual report on Form 20-F for the year ended 30 June 2010 entitled “Risk factors”, “Forward looking statements” and “Operating and financial review and prospects” filed with the U.S. Securities and Exchange Commission.
No Offer of SecuritiesNothing in this presentation should be construed as either an offer to sell or a solicitation of an offer to buy or sell BHP Billiton securities in any jurisdiction.
Non-GAAP Financial InformationBHP Billiton results are reported under International Financial Reporting Standards (IFRS). References to Underlying EBIT and EBITDA exclude any exceptional items. A reconciliation to statutory EBIT is contained within the profit announcement, available at our website www.bhpbilliton.com.
Slide 2Positioned for Growth, Exane BNP Paribas European Seminar, 8 June 2011
Agenda
Supportive long term market fundamentals
Well positioned for growth
Concluding remarks
Slide 3Positioned for Growth, Exane BNP Paribas European Seminar, 8 June 2011
Supportive long term market fundamentals, but volatility to continue in the near term
Longer term, global GDP growth to Global GDP growth rate (% per annum)remain robust
Strong emerging market growth continues
(% per annum)
5
6Developed economies
Developing economiescontinues
Developed market data has improved
4
5
improved
However, economic risks remain
E i k t i fl ti 2
3
– Emerging market inflation– Sovereign debt issues
1
2
01900-1920
1920-1930
1930-1940
1940-1950
1950-1960
1960-1970
1970-1980
1980-1990
1990-2000
2000-2010
2010-2020
2020-2025
Source: 1900 to 1980 – J. Bradford De Long (“Estimates of World GDP”, 1998); 1980 to 2010 –IMF World Economic Outlook Database; 2010 to 2025 Forecast – Global Insight.
Slide 4Positioned for Growth, Exane BNP Paribas European Seminar, 8 June 2011
Chinese GDP is set to grow substantially to 2030
World GDP per capita1
(US$’000, real 2005 PPP)
US
50Bubble size = GDP of US$5 trillion (real 2005 PPP)
( $ , )
US
Eurozone
Japan
Australia Canada
30
40
South Korea
China 2030
US 1980 Japan
198020
China
India
Brazil
Chile Russia
South Africa
India 203010
00 200 400 600 800 1,000 1,200 1,400 1,600
Population( illi )
Source: Global Insight; BHP Billiton analysis.1. All figures for 2009 unless mentioned otherwise.
Slide 5
(million persons)
Positioned for Growth, Exane BNP Paribas European Seminar, 8 June 2011
Commodity intensity trends evolve with economic development
USA(Intensity index)( y )
ElectricityEmerging economies
Developed economies
160
180
120
140
Copper100
120
Steel60
80
GDP per capita $
400 5 10 15 20 25 30 35 40 45 50
Slide 6
Source: World Bank; Brook Hunt; CRU; IISI; Global Insight; CISA; worldsteel; JBS; IEA; BHP Billiton analysis.
(US$’000, real 2005 PPP)
Positioned for Growth, Exane BNP Paribas European Seminar, 8 June 2011
A uniquely diversified portfolio to capture the demand opportunity
Underlying EBIT margin1
(H1 FY11 %)Underlying EBIT(H1 FY11 US$ billion) (H1 FY11, %)
37%
36%
Metallurgical Coal
Manganese
(H1 FY11, US$ billion)
ManganeseMetallurgical Coal
15
36%
62%
19%
Manganese
Iron Ore
SSM
Ferrous(51.2%)Iron Ore
1019%
33%
52%
SSM
D&SP
B M t lD&SPSSM
52%
1%
14%
Base Metals
Aluminium
E C l
Non Ferrous(27.8%)
Energy Coal
Base Metals
Aluminium5
14%
59%
Energy Coal
Petroleum
Energy(21.0%)
Energy Coal
Petroleum
0
1. Excludes third party trading.
Slide 7Positioned for Growth, Exane BNP Paribas European Seminar, 8 June 2011
What makes a tier 1 resource
Mineral Inventory
Mineral ResourceMineral Resource
Range of Potential Mineralisation xplo
ratio
n
Min
eral
isat
ion
Range of Potential Mineralisation(Based on Exploration Results)
Ore Reserve
Adv
ance
d E
x
disc
over
ed M
Und
Increasing geological knowledge and confidence
The range of Potential Mineralisation is estimated from geological information including boreholes, outcrops and geophysical information. The potential quantity is conceptual in nature, there has been insufficient exploration to define a Mineral Resource and it is uncertain if further exploration will result in the determination of a Mineral Resource.
Slide 8Positioned for Growth, Exane BNP Paribas European Seminar, 8 June 2011
Escondida is an example of a tier 1 resource
820,000 m drilled during the last three years in exploration and development sa
tion
exploration and development
A significant volume of Potential Mineralisationhas been identified in Escondida, capable of
ResourcePotential Mineralisation
cove
red
Min
eral
is
Reserve
multiplying our current mineral inventory
1,550,000 m of additional drilling is planned over the next five years to test new targets and
Und
isc
over the next five years to test new targets and improve knowledge on existing inventory
This increased quantity and confidence of the
Increasing geological knowledge and confidence
Conveyor belt of Escondida concentrator capacity expansion projects (ktpd nameplate)
mineral inventory underpin the studies to grow processing capacity beyond OGP1
Escondida has the potential to remain as a
InstalledDefinition (Feasibility)Selection (Pre-Feasibility)Maximum Future OptionsMinimum Future Options
( p p )
Escondida has the potential to remain as a material copper producer for several decades
Minimum Future Options
Slide 9
Los Colorados
Laguna Seca
LSD OGP1 (net) Studies
Positioned for Growth, Exane BNP Paribas European Seminar, 8 June 2011
Significant investment underpins our tier 1 growth strategy
Strong pipeline of investment(US$ billion)
80
90
(US$ billion)
E
Energy Coal
60
70
Potash
PetroleumEnergy
N f
Aluminium
Stainless Steel Materials
30
40
50
Metallurgical Coal
Copper
Non-ferrous
Manganese
10
20
30 Metallurgical Coal
Iron Ore
Ferrous
0Future options Pre-feasibility Feasibility Execution Other growth
capexTotal spend
FY11 to FY15Commodity split
Note: Excluding sustaining capital and exploration expenditure and future investment associated with the acquisition of the Fayetteville Shale.
Slide 10Positioned for Growth, Exane BNP Paribas European Seminar, 8 June 2011
Development activities clustered around our key hubs
Underlying EBIT(H1 FY11)
Execution: Daunia
Hay Point Stage 3 ExpansionF ibilit
Queensland CoalExecution:
DauniaHay Point Stage 3 Expansion
F ibilit
Queensland CoalWestern Australia Iron OreOther
Feasibility:Jansen Stage 1
Saskatchewan PotashFeasibility:
Jansen Stage 1
Saskatchewan Potash
Feasibility:Caval Ridge
Pre-feasibility:BMC Wards Well
Goonyella ExpansionP t d R il E i
Feasibility:Caval Ridge
Pre-feasibility:BMC Wards Well
Goonyella ExpansionP t d R il E i
Olympic Dam
EscondidaQueensland Coal
gPre-feasibility:
Jansen Stages 2 & 3 Potash Port Vancouver WA
gPre-feasibility:
Jansen Stages 2 & 3 Potash Port Vancouver WA
Port and Rail ExpansionPort and Rail Expansion
Execution:
Western Australia Iron OreExecution:
Western Australia Iron Ore
Execution:E did O A
Escondida CopperExecution:
E did O A
Escondida Copper
Execution: WAIO Expansion to +220mtpa
Pre-feasibility: Port Hedland Outer Harbour
Central Pilbara Mines
Execution: WAIO Expansion to +220mtpa
Pre-feasibility: Port Hedland Outer Harbour
Central Pilbara Mines
Escondida Ore AccessFeasibility:
Escondida Organic Growth Project 1Escondida Oxide Leach Area Project
Pre-feasibility: Escondida Bioleach Pad Extension IV
Escondida Ore AccessFeasibility:
Escondida Organic Growth Project 1Escondida Oxide Leach Area Project
Pre-feasibility: Escondida Bioleach Pad Extension IV
Feasibility:Olympic Dam Project 1
Pre-feasibility:
Olympic Dam Copper/UraniumFeasibility:
Olympic Dam Project 1Pre-feasibility:
Olympic Dam Copper/Uranium
Escondida Bioleach Pad Extension IVEscondida Bioleach Pad Extension IV Pre feasibility: Olympic Dam Project 2
Pre feasibility: Olympic Dam Project 2
Slide 11
Note: All projects remain under review until such time as they are sanctioned for execution.
Positioned for Growth, Exane BNP Paribas European Seminar, 8 June 2011
Translating tier 1 resources into value for shareholders
High return tier 1 assets The stability of a diversified portfolio
50
Return on capital(%)
EBIT margin1
(%)
100Petroleum AluminiumB M t l D&SP
40
50
75
100 Base Metals D&SPSSM Iron OreManganese Metallurgical CoalEnergy Coal Total
20
30
25
50
0
10
FY06 FY07 FY08 FY09 FY10 H1 FY110
25
FY02² FY03 FY04 FY05 FY06 FY07 FY08 FY09² FY10 H1
1. Calculated on the basis of UKGAAP for periods prior to FY05, except for the exclusion of PRRT from Petroleum's and BHP Billiton Group's results for all periods. All periods exclude third party trading activities. The Exploration and Technology business has been included in BHP Billiton Group's results from
FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 H1 FY11
Peer groupBHP Billiton
Note: Peer group includes Rio Tinto, Vale, Anglo American and Xstrata.Source: Annual Reports, interim press releases and BHP Billiton analysis.
FY02 to FY05 and excluded from Diamonds and Specialty Products (D&SP).2. Negative margins are not shown as the y-axis is set at zero. Stainless Steel
Materials (SSM) had a negative EBIT margin in FY02 and FY09.
Slide 12Positioned for Growth, Exane BNP Paribas European Seminar, 8 June 2011
Well positioned for growth and shareholder returns
Our strategy has not changed BHP Billiton weighted average TSR (Ltd 60% and Plc 40%)
We plan to investment in excess of US$80 billion over five years
400%1,200%
1,200%
(Ltd 60% and Plc 40%)
in organic growth
We are returning cash to
300%
We are returning cash to shareholders via a progressive dividend and a US$10 billion share buy-back
200%200%
y
Our tier 1 portfolio continues to deliver superior margins and
100%
42%deliver superior margins and returns 0%
10 years¹5 years¹3 years¹
1. Period ended 31 December 2010.
Slide 13Positioned for Growth, Exane BNP Paribas European Seminar, 8 June 2011