Provided for the exclusive use of Sreemathy Ganesasubrarnanyam at DB Employee on 2018-11-02T04:56+00:00 DO NOT REDISTRIBUTE Deutsche Bank Research

Rating Company Date IZI Hold BHP 1 November 2018 Company Update Australasia Australia Reuters Bloomberg Exchange Ticker Price at 1 Nov 2018 33.11 M&M - Diversified BHP.AX BHP AU ASX BHP Price target - 12mth 36.00 Resources 52 week range (AUD) 35.50 - 26.95 ALL ORDINARIES 5,958 15% (plus tax rebate) harvest

Valuation & Risks James Gurry We view BHP's A$10.4bn returns program as particularly friendly to Australian Research Analyst shareholders given the tax component on both legs. A 50/50 off-market buyback +61-3-9270-4104 in Australia to commence immediately and then special dividend applicable to all shares on issue in January 2019 post the buyback, should most broadly satisfy Liam Fitzpatrick holders. Within this note we have updated our model and NPV to reflect the Research Analyst announced proceedings. +44-207-541-3233

Robust harvest as equity market faces its current bought of volatility ... J Key changes Net profit (FYE) 9,479.1 to -I, -0.2% In our note Select ive Harvest on 11-Sept, we suggested investors mine carefully 9,464.1 Source: Deutsche Bank for share price upside in WHC and $32, but not ignore the significant dividend harvest on offer at the large caps. Since then Rio Tinto has completed its IPrice/price relative maximum Ltd buyback at 10% of issued ASX shares, BHP has just announced 40 a favourable form of shareholder returns and even our least preferred stock 30 ...... ~ FMG has commenced a buyback. We think that with relatively tight commodity ~~~ ·yW' markets, large operating margins that can soak up some unit cost inflation 20 (particularly in coal and iron ore but not aluminium), a falling AUD, and the Jan '17 Jul '17 Jan '1B Jnha

opportunity to attractively buy into real assets (not intangible concept businesses) - BHP ALL ORDINARIES (Rebased) - we think the sector is in a different position this time as the equity market faces a broader test of strength. Performance (%) 1m 3m 12m Absolute -7.0 -7.6 21.4 Details and our views : ALL ORDINARIES -5.8 -6.4 -0.6 Sot.itoo.' Deutsche Bank I • Of the total $10.5bn shale sale proceeds, $10.4bn is returned so no IKey indicators (FY1) disappointment on size of the program. ROE(%) 19.1 ROA(%) 18.4 ■ Off market by 17-December, A$7.3bn with possible 14% max discount Net debt/equity (%) 27.1 expected, we calculate this as ~8% of Ltd shares and ~5% of total Group Book value/share (USD) 8.91 shares including Pie shares. Price/book (x) 2.8 Net interest cover (x) 21.1 ■ Special dividend to be paid in January 2019 with the remaining $5.2bn, EBIT margin (%) 38.9 Source: Deutsche Bank ■ Special dividend will also include Australian tax franking credits for those I who can use them. While the off market only applies to Ltd shares, the Special dividend will as per usual be on all BHP shares including Pie.

■ Share count of BHP group as of 1-Nov-2018 is 5,324 million

■ Shares repurchased under December market buy-back is 256 million

Deutsche Bank AG/Sydney Distributed on: 01/11/201810:48:10 GMT Deutsche Bank does and seeks to do business with companies covered in its research reports. Thus, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. DISCLOSURES AND ANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX 1. MCI (P) 091/04/2018. Provided for the exc lusive use of Sree mathy Ganesasubramanyam at DB Employee on 20 18-1 1-02TD4:56+00:00 DO NOT REDIST RIBUT E 1 November 2018 M&M - Diversified Resources BHP IZI ■ Shares count of BHP group post market buy-back is 5,067 million

• Reduction in share count is about 5%

■ Capital remaining for special dividends is US$5.2bn

■ Likely special dividend per share is 103 USc (AUD 144cps)

■ Off mkt buyback accretion 4.8%

■ Yield on special dividend 4.3% (144c/Ltd A$33.11)

■ Total extra returns ~9%

■ Base business ordinary dividend yield 5.8% (6.9% DBe at spot commodity prices)

■ Total returns for FY19: 14.8%

Catalysts: BHP is holding a capital allocation day on 21-Nov where we hope to learn more about the approach to possible future shareholder returns, and in particular how capital shall be allocated to conventional oil and copper- the two business areas flagged for growth.

What about more coking coal? Our recent China trip highlighted coking coal as a strategic concern for China's steel industry given robust steel-making conditions and the priority of thermal coal production and power generation .

Coking coal is ~20% of BHP EBITDA and the company has guided to 43-46Mt this year at unit cost $68-72/tonne in FY19 lowering to $58/t medium term .

Within this note we also include our buyback accretion tables and BHP's history of capital management.

IFore casts and ratios Year End Jun 30 2017A 2018A 2019E 2020E 2021E Sales (USDm) 38,285 43,638 44,113 44,843 44,137 EBITDA (USDm) 20,296 20,262 23,760 24,326 23,006 Net Profit (USDm) 6,732 8,933 9,464 9,883 8,960 EPS (USD) 1.26 1.67 1.94 2.11 2.01 OLD EPS (USD) 1.26 1.67 1.94 2.13 2.03 % Change 0.0% 0.0% -0.3% -0.8% -0.9% PER (x) 14.0 13.3 12.1 11.1 11.7 PE Relative (x) EV/EBITDA (x) 6.0 6.8 5.5 5.5 5.9 Yield (net) (%) 4.7 5.3 10.0 5.3 5.1 Franking (% ) 100 100 100 100 100 Source: Deursche Bank estimates , compan y data

Page 2 Deutsche Bank AG/Sydney F',ov iclecl fo, l11eexc lusive use o1 SrnE,inathy G;,11osasubrmn~nyrnr 1 at DB Employ ee on 20 18-11 -02T 04:56- 100:00 DO NO r f,ED IS TRIBUl E 1 November 2018 M&M - Diversified Resources BHP IZ]

IFigure 1: BHP buy-back program Units 2011 Dac-18 Asset sale proceeds net of tax US$bn 6.3 10.4 Portion of promised capital return for Ltd buyback % 100% 50% Proposed buyback amount A$bn 6.0 7,3 AUD/USD exchange rate 0,95 0,71 Market price A$ 47.50 33,11 Buy-back discount (subject to ATO approval) % 14.0% 14.0% Buy-back price A$ 40.85 28.47 Scale back % 78.3% Likely high BHP BIiiiton Ltd shares bought back m 147.0 256.4 % of BHP Billtion Group Issued capital % 2.7% 4.8% ;'/I>ot BHP Blllt1on LIOISSUeO capltal % 4.4% 8.0% Capital component A$ 0.28 0.38 Additional capital component A$ 9.03 Fully franked dividend component A$ 40.57 28.09 Tax value A$ 49.88 28.47 Group EBITDAlost on US Shale divestment US$m 928 Group EBITDAlost on US Shale divestment % 3.8%

Source: Company data - 2011 buyback , ~20l8buY bDdt

IFigure 2: BHP-RIO buy back history

200 Aug,2018 (RIO) : US$1 ,75bn on­ market buy-back completed; US$2 .2bn to be bought back lthrough Feb-2019 160 Nov,2(118(BHP): usss..2bf'Ioff•= I~ NoY-2Q07(OH P): J buy..badland special dividends of USS2/lboofl • [ mN11-al buy•bilck u.s~,~--=====:\.-. Allg•2010 (RIO) : l USS9.2l>n buy-bad< 120 lannounced Mor-2007 (BHP): r I I j l/SS2,8bo off• O\JUl\ct buy-bod< 80 -- r

- BHP share price (A$) ~ RIO share price (A$)

So urce: Bloomberg Finance LP, Company data

IFigure 3: December 2018 buy-back shares summary BHP December 2018 buy-back Units Share count BHP Group as of 1-Nov-2018 m 5,324 Shares repurchased under December market buy-back m 256 Share count BHP Group post market buy-back m 5,067 Reduction in share count % 5% Capital remaining for special dividends US$bn 5.20 likely special dividend per share US cents 103

~ource: Deutsche Bank, Company data

Deutsche Bank AG/Sydney Page 3 P,ovidecl ro, til e &xclusivc, use of Sree malh y Ganesasub rarnanya,n al DB Emplo yee on 2 0 1 8 -1 1-0 2 f0 4:56< 00 :00 0 0 NOT RED IS rHI BUI E 1 November 2018 M&M - Diversified Resources BHP IZ]

IFigure 4: BHP financial summary IFXiCOMMoomES INomlniilJ f'l 17A FYl£111 MeF Mo F FY2tF fY22f IMarket Data Ltd Pie Tota( ,I\UDUSO 0.76 0.78 0.73 0.73 0.73 0,73 Ticker BHP.AX ULl,L 011-Brent tUSS/bbll 61 84 78 76 71 70 l&w•"'""' llx• • 33.11 ,~ .62 0,1 - WTI IUS$/bbll 49 59 71 66 62 63 Shom pr,c,, iVSD°""" 'lontJ 23_,o 19.i;a CoppertUSl/lbJ 2.46 3.06 2.97 3.19 3.36 3.39 Price difference 18% -15% Iron ore - lump IUS$/t) • CIF 76 80 79 71 69 70 Shares on issue (m) 3,212 2,112 5,324 Iron ore • fines IUSS/ll • CIF 68 67 84 BO 68 69 % al shares split Lid v Pie 60% 40% Colclngcoal (USS/I) 19Cl 197 11111 168 148 145 Soot FX l,AUO USDI (VSO ,Glll'I 0.7 1 1~ Thermal coal IUS$/I) - contract 67 91 100 101 96 90 j ~1o,1u,1Co!I I USOmJ 75,3\,4 42. 109 117.462 US nowral oa•(USS/mmBtu) 3.04 2.88 2.97 3.06 3.20 3 .27 ,Ii of t'N.1 cap split 64"" JG'Ji,

[KE'i'..flNAtlCW.Mlall!CS Jf4PV!HJr9l US$M USS/sh ASfsh Underlying Earning•(USSM) 6,732 8,933 9,484 9,883 8,960 8,876 Iron ore 73,287 15,04 20.32 EPS (UScl 126 167 194 2 11 201 235 Base Metals (Copper) 24,116 4 95 6 69 EPS Change (%1 5 0 0 IOI Petroleum 18.536 3_90 5. 14 DPS (UScl B3 118 234 125 119 139 Met Coal 20,457 420 5.67 66% 70% 121% 59% 59% 59% Potash - Jansen {capex value) 2.800 057 0 78 Energy Coal (NSW & Columb ia) 7,393 1.52 2 05 Opera ti ng Cash Flow lUS$M} 16,804 18.461 16,627 17,642 17,456 18,373 Nickel West (gross) 2,561 0 ,53 071 Capex and exploration expenditure (USSMI (5,220) (5,802) 17,5561 (7,859) (7,107) 15,997( -1,800 -0 ,37 -0 50 Other investing casl1 flow s Oncl d1veslmentsl !US$MI 1,059 11191 10,670 Group & Unallocated -921 -0.19 -0 26 Free CBBhFlow IUSSM) · before dividends 12,643 12,640 19,741 8,883 10,348 12,376 Provisions and rehab -8.200 -1 ,68 -2 27 Dividend (US$M) 12.9211 15,2201 111,7641 16,5181 (5,5021 16.6071 Less Net debl -13,29 1 -2 ,73 -J 74 Share Buybacks (US$M) (9,890) 15.0001 (5,0001 15,0001 Tolel l•ol . ~ sp. dlvldondtl 124,837 26.64 34.60 FrooCuh Flow (US$MI • beforedebt 9,722 7,320 (1,912) (1,635) 1163) 1,768 Special dividends 5,200 1 07 l'4 Fn,e Ceah Flow yield ('II,) 10.4'11, 10.3'11, 17.7'11, 8.4'11, 10.2'11, 12.8'11, Total (Incl . due ap. dividends) 130,137 26.71 36.04 P/FCF 10 10 6 11 10 8 WACC (nom inal) 8'11, Sharea 4,873M

[BALANCE SHEET ANO RETURNS Net Debt (US$M) 16,321 10,934 13,291 16,384 16,060 14,867 IVelualion IHV18I Goering (ND/ND+E - '11,) 21')(, 16'11, 21')(, 24'11, 26')(, 24'11, ROE(%) 12% 16% 19% 23% 22% 25% Iron ore ROA('lf,) 12')(, 14'11, 18')(, 20'11, 19'11, 20')(, 49% ROCE('lf,) 10'11, 16'11, 18')(, 18'11, 17')(, 18% Nickel West PRODUCTION Coppertkl>- consolidated 1,326 1,763 1,1!73 1,769 1,761 1,888 Copper (1<1)-equ ity 998 1,238 1,180 1,234 1,236 1,3 77 Iron ore (ML)-Attribulable (incl Jimblebarl 228 234 237 256 259 279 Energy Coal Iron oro (Mt) - Pilbara(100%) 288 276 279 281 284 318 iNSW& Petroleum (Mmbo e) - US Onshore 80 72 20 Columbia) Petroleum (% Liquids! - US Onshore 43% 40% 37% 0% 0% 0% 5% Petroleum (Mmb oe) - Conventio nal 128 120 117 10B 102 104 Petroleum (Mmboe> • Total 206 182 137 108 102 104 Potash • Jansen (capex Coal - Hard coking (Mt) - Att ributable 39.8 42.6 44 .5 46.5 48.1 49. 1 value) Coal· Hard coking (MU· Old (100%) 71.2 76.6 78.6 83.6 68.B 88.6 2% Met Coal 29.6 29.2 28.5 28.4 28.4 28.4 Coal - Ther mal IMO 14% Nicl

CAPEX(US$MI J Growth capox spl rt (2019A Growth Petroleum - US Onshore 575 Petroleum - Conve ntional 697 442 838 956 705 480 Petroleum 1,272 442 838 966 706 480 Coppe r 596 812 1,500 1,400 750 600 Iron Ore 800 1,000 1,100 250 Polash Coal 141 (JJ 100 150 150 50 8% Potash 162 230 280 180 Total Growth Capex 2,028 1,481 3,618 3,686 2,706 1,380 Copper Sustaining Capax 2,227 3,608 3,146 3,268 3,487 3,700 42% Petroleum - Consolldated Capex 4,262 4,879 8,884 8,946 6,182 6,080 Conventional Explora tion 968 823 892 914 915 917 24% Total capox i ncl. Explorotlon 6,220 6,602 7,666 7,668 7,107 6,987 Guidance !consolidated exclud ing share from mid FY19J 6,900 <8,000 <8.000

EBITOAIUSSMJ [ EBrTOAsp ltt (2019A Petroleum - US Onshor e 1,004 Petroleum - Conventional 3,059 3,341 4,402 4,076 3,910 4,060 Petroleum 4,063 3,341 4,402 4,078 3,910 4,060 Copper 3,646 B,622 6,861 6,876 6,911 7,366 Iron Ore e,on 8,9(!0 7,79(! 8,082 7,863 8,631 Coal 3,784 4,387 6,140 4,474 3,621 3,633 G&A [corporate, G&A (corporate. Nickel W es t. Potash) (1731 171 584 709 911 247 Nickel West, 20,298 23,183 23,780 24,326 23,006 23,826 Tot.el Potash) 2% EBIT(U S$M) Petroleum - US Onshor e 17771 Petroleum - Conventional • 1,343 1,546 2,870 2,568 2,507 2,721 Petroleum 666 1,648 2,870 2,688 2,607 2,721 Petroleum - Copper 2,006 4,388 3,874 4,690 4,641 4,866 Copper Conventional Iron Ore 7,197 7,195 6,008 8,348 6,904 6,786 25% 18% Coal 3,060 3,682 4,440 3,806 2,976 2,871 G&A (corporate , Nicke l West , PotashJ 1430) (2501 122) 529 610 479 Tot.el 12,388 16,682 17,170 17,840 18,637 17,824

Source: Deutsch e Bank. Company data

Page 4 Deutsche Bank AG/Sydney F'rov,clccl fo, the exclusive use of S1ecm1athy Ganesc1submmcinya111 RI DB Employee on 2018-11-02104:56+00:00 DO NOT REDIS rRIBUTE 1 November 2018 M&M- Diversified Resources BHP IZI IFigure 5: BHP significant events ir.ient 2001 BHP Billiton merger approved 2001 Antamina Copper-Zinc project in Northern Peru achieves commercial production 2001 in Canada starts Misery Pipe production 2002 BHP Billiton completes withdrawal from the Ok Tedi copper mine in PNG 2002 Demerger of BHP Steel 2003 appointed as BHP Billiton Chief Executive 2003 First oil and gas production from the Boris field in the deepwater Gulf of Mexico 2004 BHP Billiton approves US$870mn for Escondida Sulphide Leach Copper Project in Chile 2004 BHP Billiton approves US$990 million for Spence copper project in Northern Chile 2005 Oil and natural gas production begins from the Mad Dog in the deepwater Gulf of Mexico 29-Aug-0S BHP extends on market buyback by 12 months to 30-Sep-06 and nearly doubles the number of shares to be bought back to 356mn from 186mn . BHP Billiton acquired Western Mining Corporation (WMC) for A$7.85 per share (A$9.2bn), adding key assets Olympic Dam (copper/gold in South Australia) and Nickel West (Western 2005 Australia) 2006 BHP Billiton agrees to sell its Australian Coal Bed Methane (CBM) interests to The Australian Gas Light Company (AGL) for US$687mn 3-Apr-06 BHP completes A$2.2Sbn (US$1.6bn) off-market share buy-back 26-Mar-07 BHP completes US$3.Sbn off market buy-back 31-May-07 succeeds Chip Goodyear as Chief Executive Officer Nov-07 BHP proposes to merge with Rio Tinto, offering three BHP shares for one Rio share. Rio rejects approach Dec-07 BHP suspends on market buyback Feb-08 BHP increases Rio offer to 3.4 shares 17-Jul-08 Acquires New Saraji Coal project in Queensland for US$1.2bn Nov-08 BHP withdraws offer for Rio Tinto 2009 First oil and natural gas production from the Shenzi development in the deepwater Gulf of Mexico 2009 BHP Billiton celebrates the opening of the "Newman Mining Hub" at its Western Australia Iron Ore operations Jun-09 Rio Tinto and BHP Billiton sign a non-binding agreement to establish a production JV covering Western Australian Iron Ore assets 2009 First production from the expansion of the Alu mar alumina refinery in Brazil 2010 BHP Billiton acquires Athabasca Potash in Canada Aug-10 BHP makes cash offer for Potash Corp of Saskatchewan at US$130/share for US$40bn Dct-10 BHP Billiton and Rio Tinto drop plans for Western Australia Iron Ore JV following concerns from regulators in Europe and Asia Nov-10 BHP withdraws from Potash Corp takeover after Canadian Investment Review rejection Nov-10 BHP reactivates buyback 22-Feb-11 BHP acquires Chesapeake Energy Corp's interests in the Fayetteville Shale, USA for US$4.75bn 22-Feb-11 BHP announces off-market buyback that will form part of its expanded US$10bn capital management initiative 24-Mar-11 BHP approves US$7.4bn of CAPEXto fuel production growth in the WA Iron Ore operations 24-Mar·ll BHP approves US$2.Sbn for three met coal projects in the Bowen Basin, Queensland 2-May-11 Samarco approves US$3.Sbn (BHP share US$1.7Sbn) for iron ore operations in Fourth Pellet Plant Project, Samarco, Brazil 15-Jul-11 BHP acquires Energy Corp for US$12.lbn, which provides BHP with operated positions in the Permian Basin, Eagle Ford, and Haynesville shales 12-Dct-11 BHP announces US$1.2bn in pre-commitment capital to fund the first phase of the Olympic Dam Project to develop an open pit mine in South Australia 1-Feb-12 BHP exits Titanium minerals industry after selling its 37% non-operated interest in (RBM) to Rio Tinto 14-Feb-12 BHP approves US$2.6bn investment for the Escondida mine for the Organic growth Project 1 (OGPl) and the Oxide Leach Area Project (DLAP) 14-Nov-12 BHP sells diamonds business to Harry Winston Diamond Mines for US$500mn 7-Jun-13 Sells interest in Browse oil/gas JV for pre tax profit $1.Sbn 2013 Work stops on Port Hedland Outer-Harbour Iron Ore expansion and Olympic Dam expansions lH FY14 Share of Jimblebar iron ore WA and Pinto Valley Copper (USA) sold for $2.2bn 5-Nov-15 Samarco BHP's 50/50 Iron Ore JV in Brazil with Vale suffers failure causing extensive flood and the loss of 17 lives Oct-15 Issue hybrid debt $6.Sbn that matures 2075 with varying interest rates up to 6.25%. Feb-16 Drops long held progressive dividend policy in place of 50% of EPSplus additional as can afford .

Mar-17 US activist fund Elliot discloses shareholding and calls for change including selling petroleum, unifying the dual listing structure and returning more cash to shareholders via buybacks. 17-Aug-17 Approves $2.Sbn to extend life of Spence Copper mine Chile Approves 80Mt/vr ~South Flank Iron Ore mine Pilbara for $2.9bn (for 85% share), replacing B0Mt/yr. and in process upgrading BHP's average ore grade. Approval came sooner 14-Jun-18 than originally guided. Nov-18 Completes sale of US On shore assets for a gross consideration of US$10.Sbn Nov-18 BHP announces US$10.4bn shareholder return pro ram

Source: Company data

Deutsche Bank AG/Sydney Page 5 Provided to, the exclusive use or Sreemalhy Ganesas ubram anyam at DB Employe e on 2018-11-02rD 4:56 >00:00 DO NOT REDI STRIBUTE 1 November 2018 M&M - Diversified Resources BHP IZI Model updated: 01 November 2018 Fiscal year end 30.Jun 2016 2017 2018 2019E 2020E 2021E IRunning the numbers IFinancial Summary Australasia DB EPS (USD) 0.23 1.26 1.67 1.94 2.11 2.01 Reported EPS (USD) -1.20 1,10 0.69 1.94 2.11 2.01 Australia DPS (USD) 0.30 0.83 1.18 2.34 1.25 1.19 M&M - Diversified Resources BVPS (USD) 10.20 10.76 10.44 8.91 8.96 9.04

IBHP IValuation Metrics Price/Sales (x) 2.5 2.5 2.7 2.6 2.5 2.6 Reuters: BHP.AX Bloomberg: BHP AU P/E (DB) (x) 64.8 14.0 13.3 12.1 11.1 11.7 P/E (Reported) (x) nm 16.0 32.1 12.1 11.1 11.7 P/BV (x) 1.3 1.6 2,5 2.8 2.8 2.8 IHold FCF yield (%) 5.0 14.0 11.4 9.0 10.0 10.8 Dividend yield (%) 2.0 4.7 5.3 10.0 5.3 5.1 Price (1 Nov 18) AUD 33.11 EV/Sales 3.6 3.2 3.2 3.0 3.0 3.1 Target Price AUD 36.00 EV/EBITDA 8.9 6.0 6.8 5.5 5.5 5.9 EV/EBIT 31.7 9.7 10.1 7.7 7.5 8.3 52 Week range AUD 26.95 - 35.50 Iincome Statement (USDm) Market cap (m) AUDm 161,343 44,843 44,137 USDm 114,320 Sales 30,912 38,285 43,638 44,113 EBITDA 12,340 20,296 20,262 23,760 24,326 23,006 EBIT 3,469 12,389 13,641 17,170 17,940 16,537 ICompany Profile Pre-tax profit -7,259 10,322 11,830 16,357 17,197 15,808 BHP Billiton Limited Is an international resources company. The Net income -6,385 5,890 3,705 9,464 9,883 8,960 company'sprincipal business lines are mineral and petroleum production, including coal (thermal and coking), iron ore, ICash Flow (USDm) copper, and oil & gas (conventional and unconventional, LNG). Cash fiow from operations 10,625 16,804 18,461 16,627 17,842 17,456 Net Capex -6,673 -3,607 -4,890 -6,394 -6,945 -6,192 Free cash flow 3,952 13,197 13,571 10,234 10,897 11,265 Equity raised/(bought back) 0 0 0 -9,890 -5,000 -5,000 Dividends paid -4,130 -2,921 -5,220 -11,764 -6,518 -5,502 IPrice Performance Net inc/(dec) in borrowings 4,451 -5,543 -3,660 -2,173 -4,460 -2,000 Other investing/financing cash flows -372 -543 -2,740 9,955 -538 -563 Net cash flow 3,664 3,510 1,649 -4,530 -6,533 -2,716 35 Change in working capital -207 352 118 299 176 -291 '"1§ IBalance Sheet (USDm) 20 I Cash and cash equivalents 10,319 14,153 15,871 11,341 4 ,B08 2,092 Jan '17 Jul '17 Jan '18 Jul '1B Property, plant and equipment 83,975 80,497 67,182 56,585 57,144 56,868 Goodwill 2,480 2,389 468 749 1,031 1,312 ==~- BHP ALL ORDINARIES [Rebased) Other assets 22,179 19,967 28,472 28,505 28,565 28,287 Total assets 118,953 117,006 111,993 97,180 91,546 88,559 IMarg in Trends Debt 36,421 30,474 26,805 24,632 20,172 16,172 other liabilities 22,461 23,806 24,518 23,508 23,347 23,274 Total liabilities 58,882 54,280 51,323 48,140 43,519 41,446 Total shareholders' equity 60,071 62,726 60,670 49,040 48,028 47,113 Net debt 26,102 16,321 10,934 13,291 15,364 16,080 I I 1-I IKey Company Metrics ~ti16 17 18 ·t 19E 20E 21E Sales growth (%) -30.7 23.9 14,0 1.1 1.7 -1,6 DB EPS growth (%) -82.9 452 .6 32.7 15.7 9.2 -5.0 EBITDA Margin +- EBIT Margin Payout ratio (%) nm 75.0 169.5 120.6 59.1 59.1 Growth & Profitibility I EBITDA Margin (%) 39.9 53.0 46.4 53.9 54.2 52.1 EBIT Margin (%) 11.2 32.4 31.3 38.9 40.0 37.5 ROE(%) 2.0 12.1 15.8 19.1 23.2 21.9 Net debUequity (%) 43.5 26.0 18.0 27.1 32.0 34,1 Net interest cover (x) 3.4 8.7 11.0 21.1 24.1 22.7

Hilt16 17 18 19E f- 20E 1 ➔21E 1~IDuPont Analysis Sales growth (LHS) - ROE (RHS) EBIT margin (%) 11.2 32.4 31,3 38.9 40.0 37.5 x Asset turnover (x) 0.3 0.3 0.4 0.4 0.5 0.5 ISolvency x Financial cost ratio (x) 0.7 0.9 0.9 1.0 1.0 1.0 x Tax and other effects (x) -2.6 0.5 0.3 0,6 0.6 0.6 = ROA (post tax) (%) -5.2 5.0 3.2 9,0 10.5 9.9 x Financial leverage (x) 2.0 2.1 2.0 2.1 2.2 2.2 =ROE(%) -10.7 10.6 6.6 19.1 23.2 21.9 annual growth(%) na na -37.8 191.2 21.4 -5.8 x NT Nshare (avg) (x) 11.2 10.5 10.6 10.1 9.1 9.2 = Reported EPS -1.20 1.10 0.69 1.94 2.11 2.01 ~t114116 17 18 19E 20E· tt:21E annual growth (%) na na -37.1 179.0 9.2 -5.0 Net debt/equity (LHS) + Net Interest cover (RHS) Source: Company data, Deutsche Bank estimates James Gurry +61 3 9270-4104 james [email protected]

Page 6 Deutsche Bank AG/Sydney