BHP Group Regulatory News (BHP)

UK Listing Authority Submissions

The following document has today been submitted to the National Storage Mechanism and will shortly be available for inspection at www.hemscott.com/nsm.do:

· 2018 Global Metals, Mining and Steel Conference Presentation.

The document may also be accessed via BHP's website - bhp.com

NEWS RELEASE

BHP delivering value and returns

BHP Chief Executive Officer, Andrew Mackenzie, today said the continued successful delivery of the Company's roadmap to grow long-term shareholder value, together with stronger commodity prices, has underpinned a significant increase in return on capital employed and delivered a 30 per cent increase in BHP's base value (1) over the past two years.

Speaking at the Bank of America Merrill Lynch Global Metals, Mining & Steel Conference in Florida, Mr Mackenzie said: "We have maximised operating cash flow as we have lowered costs through productivity; we have been disciplined and transparent in capital allocation; and we have identified new options to increase value and returns." 

Mr Mackenzie said over the past two years, through six key value drivers, BHP has:

· Reduced unit costs by more than 15 per cent;

· Accelerated our technology and innovation program;

· Progressed five high-return, latent capacity projects;

· Sanctioned two major projects in copper and oil;

· Made discoveries at four petroleum exploration prospects; and

· Improved the performance of our Onshore US acreage in preparation for exit into a supportive price environment.

"Alongside this, we have reduced net debt by over US$10 billion, returned US$8 billion to shareholders and, crucially, replenished our pipeline with new opportunities.

"This pipeline has the potential to add a further 40 per cent to the value of BHP, subject to our strict capital allocation processes."

Looking ahead, Mr Mackenzie said BHP:

· Continues to target a further US$2 billion in productivity gains by the end of the 2019 financial year, on top of the more than US$12 billion achieved since 2012;

· Would leverage its scale and simplicity to capitalise on the benefits of new technology to reinforce our position in safety and productivity and deliver a step-change in company performance;

· Has renewed its suite of latent capacity opportunities which have the potential to generate average returns in excess of 100 per cent;

· Continues to enhance its pipeline of future options, diversified across commodities and timeframes, which have an unrisked value of more than US$15 billion and the potential to deliver average returns of 17 per cent;

· Would continue to push its ongoing exploration program, focused on copper and petroleum, in line with favourable outlooks for these commodities; and

· Is making good progress with the exit from its Onshore US business, with the quality of acreage, higher oil prices, a lower US corporate tax rate and positive results from recent well trials all contributing to encouraging interest from potential bidders.

"BHP is set-up for future success. We have a simple, unique portfolio of the very best assets, diversified across attractive commodities.

"Our relentless pursuit of productivity, aided by a more agile and connected culture, will make sure we realise the full potential of our assets and capitalise on strong prices. On top of this, we have built an attractive suite of opportunities to drive further improvement. But, as always, we will remain disciplined in the allocation of capital with all investments weighed against cash returns to shareholders.

"Our path is deliberate, and we remain firm in our resolve to increase value and returns."

An audio-webcast of the presentation will be made available at: http://www.veracast.com/webcasts/baml/metalsmining2018/id57103254932.cfm

Further information on BHP can be found at: bhp.com

(1) Base value reflects planning forecasts (at consensus prices) before the addition of a broad suite of upside opportunities.

APPENDIX

The following information is included in Andrew Mackenzie's presentation slides.

Unit costs

Latent capacity

Future options

1. Based on an exchange rate of AUD/USD 0.75 and USD/CLP 663. Unit costs are in nominal terms.

2. Returns at 2018 analyst consensus price forecasts; ungeared, post-tax, nominal return.

3. Risk profile is based on a BHP assessment of each project against defined quantified and non-quantified risk metrics rated out of 5; 5 represents more risk.

4. Represents potential first production.

5. IRR is ~14% excluding the remaining investment for completion of the shafts and installation of essential service infrastructure and utilities.

Follow us on social media