BHP Billiton. Chris Lynch Chief Financial Officer. Merrill Lynch Australasia Investment Conference New York 30 September 2002

Transcription

1 BHP Billiton Chris Lynch Chief Financial Officer Merrill Lynch Australasia Investment Conference New York 30 September 2002

2 Key investment theme Slide 2

3 Stability, Growth, Value We seek to earn superior returns for our shareholder as the world s premier supplier of natural resources and related products and services Slide 3

4 The largest company in a consolidating sector Top five companies account for around 50% of resource equity market value double their share of 10 years ago Market Cap. on 16/09/02 (US$bn) BHPB Rio Tinto Alcoa Anglo Market value value of of minerals industry US$235 bn bn Value of of top top five five US$110 bn bn Newmont CVRD Alcan AngloGold WMC Placer Dome Impala Inco Pechiney Phelps Dodge Xstrata Noranda Freeport Lonmin Falconbridge Teck Cominco Slide 4

5 A global footprint Petroleum Aluminium Base Metals Carbon Steel Materials Diamonds & Spec Prod Energy Coal Stainless Steel Materials Slide 5

6 Low cost, high margin asset base c.80% of operating asset EBIT comes from first quartile cash operating margin assets 1 st Quartile Highest Margin Cash Costs 2 nd Quartile 3 rd Quartile 4 th Quartile Lowest Margin 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Cumulative Operating Asset EBIT (FY2002) Slide 6

7 World class assets with long reserve lives North West Shelf Bass Strait Pilbara Iron Ore Queensland Coal Ingwe Coal Cannington Escondida Worsley EBIT EBIT from from the the above assets represents 64% 64% of of EBIT EBIT in in FY2002 Slide 7

8 Outstanding diversification stable cash flows By Commodity Customer Sector Group EBIT: 13% 15% 7% 6% 29% 30% Carbon Steel Materials Petroleum Energy Coal Aluminium Diamonds & Spec. Prod. Base Metals Stainless Steel Materials South America By Geography Net Operating Assets: 20% 8% 5% 33% 34% Australia Southern Africa North America Rest of World By Market Sales: 13% 14% 11% 15% 28% 19% Europe Other Asia North America Japan Rest of World Australia Data for FY2002 (continuing operations) Slide 8

9 Deep inventory of projects B R O W N F I E L D Escondida Phase IV Tintaya Oxide Bream Gas Pipeline San Juan Mount Arthur North Zamzama Mozal 2 Mining Area C & PACE Hillside 3 NWS 4th Train GoM Infrastr. Yabulu R thorpe Esc da Norte Dendrobium Aluminium Base Metals Carbon Steel Energy Coal Nickel Petroleum CY G R E E N F I E L D Size of bubble indicates proposed capital expenditure; bold outer border signifies sanctioned project $US 200m Ohanet Minerva ROD Angostura Mad Dog Spence Atlantis 2006 Expenditure measured against alternative uses for capital - project pipeline is value enhancing Slide 9

10 Petroleum - room for growth 1. EXXONMOBIL 2. SHELL 3. BP 4. CHEVRONTEXACO 5. TOTALFINA ELF 6. CONOCOPHILLIPS 7. ENI 8. REPSOL-YPF 9. ENCANA 10. ANADARKO 11. UNOCAL 12. OCCIDENTAL 13. AMERADA 14. MARATHON 15. TALISMAN 16. BURLINGTON 17. DEVON 18. BHP BILLITON 19. Canadian Nat 20. APACHE 21. BG 22. KERR-MCGEE 23. NEXEN 24. ENTERPRISE OIL 25. HUSKY 26. WINTERSHALL 27. PETRO-CANADA 28. EOG 29. WOODSIDE 30. SUNCOR Annual Production (MMboe) 18th 18th in in terms terms of of production Source: Evaluate Energy (excludes companies with significant state ownership) BHP Billiton based on FY 2002 data (others primarily CY 2001) Market Values as at August 2002 Slide 10 Oil & Gas and Energy - Market Value (US$M) 1. EXXONMOBIL 2. BP 3. RD/SHELL 4. TOTALFINAELF 5. CHEV-TEXACO 6. ENI 7. PETROCHINA 8. BHP BILLITON 9. E.ON 10. ENEL 11. SCHLUMBERGER 12. DUKE ENERGY 13. SUEZ 14. PETROBRAS 15. TOKYO ELEC. 16. PHILLIPS 17. EL PASO 18. RWE 19. YUKOS 20. SOUTHERN 21. CONOCO 22. STATOIL 23. DOMINION 24. EXELON 25. GAZPROM 26. ENDESA 27. REPSOL YPF 28. BG GROUP 29. AEP 30. SURGUT'GAZ 8th 8th in in terms terms of of Market Market Cap Cap

11 Cost savings margin and bottom line growth $220m achieved in FY02 Merger synergies $270m 2% real p.a. FY03 - FY05 Further target $500m Slide 11

12 Developing internal growth options Market Value Market skills Technical skills Financial skills Develop Develop Opportunity Opportunity Develop further Options Sell Securitise Joint Venture Time Company Value Visibility of opportunities Slide 12

13 Pyramid of opportunity M&A Bolt-on Acq. Growth Pipeline Cost Savings Low Cost, High Quality Assets Slide 13

14 Value Drivers - What distinguishes us from the rest I. Stability from Outstanding Assets II. III. IV. Stability from the Portfolio Effect Stability and Growth from Customer-Centric Marketing Growth from Deep Inventory of Projects V. Growth from Petroleum VI. Growth through Innovation Slide 14

15 Strong financial commitments Return on Capital > 15% by 2006 Maintain a strong single A credit rating Minimum EBITDA to interest cover of 8x over the cycle Maintain net gearing of 35-40% Project pipeline funded from internal cash flows Merger benefits of $270 million by end FY 2003 Cost savings total of $500 million by end FY 2005 Slide 15

16 Stability, Growth, Value We seek to earn superior returns for our shareholder as the world s premier supplier of natural resources and related products and services We can do more than this We aspire to be one of the world s premier companies Slide 16

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