BHP Group Ltd · ASX:BHP
BHP — BHP Billiton — BMO Nesbitt Burns Natural Resources Conference 2004
18 slides from BHP's conference presentation, Mar 1, 2004
Slide 1: Executing the Strategy and Providing for a Growth Economy
Executing the Strategy and Providing for a Growth Economy BMO Nesbitt Burns Natural Resources Conference 1 March 2004
Slide 2: Mike Salamon, Chief Minerals Executive
Mike Salamon Executive Director, Chief Minerals Executive
Slide 3: Executing the Strategy – The BHP Billiton Strategic Focus
Executing the Strategy – The BHP Billiton Strategic Focus M&A Bolt-on Acq. Growth Pipeline Cost Savings and Efficiencies Low Cost, High Quality Assets Page 3
Slide 4: Long Life, World Class Assets
Long Life, World Class Assets M&A North West Shelf Bass Strait Bolt-on Acq. Pilbara Iron Ore Queensland Coal Ingwe Coal Growth Pipeline Escondida Worsley Hillside Savings and Efficiencies Mozal Low Cost, High Quality Assets 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 20 20 20 2
Slide 5: Cost Savings and Efficiencies On Track
Cost Savings and Efficiencies On Track $285M achieved to 31 Dec 2002 – 6 M&A Merger Merger synergies synergies months ahead of target target of of $270M $270M schedule Bolt-on Acq. Growth Pipeline $370M achieved to Further Further target target 31 December 2003 $500M $500M Cost Savings and Efficienc
Slide 6: EBIT by Customer Sector Group
EBIT by Customer Sector Group Half year ended 31 December (US$M) 2003 2002 % Change Petroleum 602 660 -9 Aluminium 307 266 +15 Base Metals 333 83 +301 Carbon Steel Materials 505 506 Diamonds & Spec Products 174 173 +1 Energy Coal 85 124 -32 Stainless Steel Materials 193 61 +216 Exploration & Technol
Slide 7: Steady increases in EBITDA
Steady increases in EBITDA(1) US$ billion 2.0 September 11 Enron SA Rand A$ BEE Charter Iraq war SARS World Trade Bankruptcy strengthen leak Centre Attack Quarterly average 1.5 US$1.324 billion 1.0 0.5 0.0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 FY2002 FY2003 FY2004 Page 7 (1) Excluding exceptional items.
Slide 8: Growth Projects Delivered Since July 2001
Growth Projects Delivered Since July 2001 M&AZamzama Ekati Mt PACE Arthur Bolt-on Acq. Ohanet North Typhoon Aluminium San Juan Base Metals Growth Pipeline Cerrejon Carbon Steel Mozal II Energy Coal Diamonds Antamina Petroleum Tintaya Oxide Savings and Efficiencies Hillside III Escondida IV Bream Gas
Slide 9: Executing the Strategy
Executing the Strategy • Implemented the strategy post-merger in 2001 – Flat global demand for commodities M&A at best – Commodity prices declining in real terms – Near to intermediate term economic Bolt-on Acq.forecast was meek • Focus on low-cost, high-quality asset base – Reduced costs Growth Pip
Slide 10: Providing For a Growth Economy
Providing For a Growth Economy
Slide 11: China – Steel Consumption By Sectors
China – Steel Consumption By Sectors 200 175 150 125 Million Tonnes 100 75 50 25 0 1995 1996 1997 1998 1999 2000 2001 2002 Construction and Real Estate Highways Capital Goods & Machinery Ship Building Containers Durables (Household) Auto Page 11
Slide 12: China's Copper Demand Growth from 1990 to 2002
China’s Copper Demand Growth from 1990 to 2002 Tonnes 4,000 China’s copper consumption has Final consumption Grown by more than 10% per annum 3,000 Since 1990 2,000 1,000 0 -1,000 Japan CIS / E. W. Europe ASEAN Korea / N. America China World Europe Taiwan Page 12 Source: BME, CRU
Slide 13: Chinese Aluminium Production vs. Alumina Imports
Chinese Aluminium Production vs. Alumina Imports Aluminium Production Alumina Imports 6,000 6,000 5,000 5,000 Thousands of tonnes Thousands of tonnes 4,000 4,000 3,000 3,000 2,000 2,000 1,000 1,000 0 0 1990 1992 1994 1996 1998 2000 2002 1990 1992 1994 1996 1998 2000 2002 Page 13
Slide 14: US GDP is back on Track
US GDP is back on Track 10% Annual GDP Growth Rate of 3.1% 8% for 2003 6% 4% 2% 0% -2% 1Q00 3Q00 1Q01 3Q01 1Q02 3Q02 1Q03 3Q03 Page 14
Slide 15: Global Growth Translates to Opportunity for BHP Billiton
Global Growth Translates to Opportunity for BHP Billiton • China – Currently 10% of company revenues, up from 5% a year ago – Will have ‘ups and downs’ but underlying fundamentals of growth are sound – Increasing demand for more raw materials • North America – Rising manufacturing orders and output
Slide 16: Deep inventory of projects
Deep inventory of projects BROWNFIELD Yabulu Yabulu Broadmeadow Ravensthorpe Cerrejon WAIO RGP Ravensthorpe Klipspruit GoM Infrastr. Panda UG Escondida WAIO Acc’d Blackwater CPR Exp’n CPP Esc’da Esc’da WA WA Iron Iron Ore Ore Dendrobium Sulphide Sulphide Long Long Term Term Expansion Expansion Esc’d
Slide 17: Consistent execution of the business strategy
Consistent execution of the business strategy • Maximising the performance of operating assets – Safety M&Aparty product activities grown to 27% – EBIT margins excluding third – Annualised return on capital of 15.4% • Continued savings andBolt-on Acq. efficiencies • Reinvestment in growth projects G
Slide 18: Ohpodilliton
6de Ohpodilliton
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