BHP BILLITON LIMITED ANNUAL REPORT 2002 STABILITY GROWTH VALUE Corporate Directory
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BHP BILLITON LIMITED ANNUAL REPORT 2002 STABILITY GROWTH VALUE Corporate Directory Stability. Growth. Value . BHP BILLITON LIMITED BHP BILLITON REGISTERED OFFICE CORPORATE CENTRES Australia United Kingdom BHP Billiton Limited 1-3 Strand Bourke Place London WC2N 5HA UK 600 Bourke Street Telephone (44 20) 7747 3800 Melbourne VIC 3000 Facsimile (44 20) 7747 3900 Telephone (61 3) 9609 3333 Neathouse Place Facsimile (61 3) 9609 3015 London SW1V 1LH UK Company Secretary Telephone (44 20) 7802 7000 Karen J Wood Facsimile (44 20) 7603 8008 Shareholder Services South Africa Principal Register and Share Office 6 Hollard Street 43rd Floor 600 Bourke Street Johannesburg 2001 Melbourne VIC 3000 Republic of South Africa Australia Telephone (27 11) 376 9111 Telephone (61 3) 9609 4559 Facsimile (27 11) 838 4716 Facsimile (61 3) 9609 4545 United States United Kingdom 1360 Post Oak Boulevard, Suite 150 The Registrar Houston, TX 77056-3020 USA Computershare Investor Services Plc The Pavilions Telephone (1 713) 961 8500 Bridgwater Road Facsimile (1 713) 961 8400 Bristol BS99 7NH Telephone (44 870) 702 0003 (Ext. 7121) MARKETING OFFICES Facsimile (44 870) 889 3120 Netherlands Contents United States Verheeskade 25 ADR Depositary, Transfer Agent and Registrar 2521 BE The Hague Chairman’s Review 2 JPMorgan Chase Bank The Netherlands Chief Executive’s Report 4 Shareholder Services Telephone (31 70) 315 6666 Financial Performance 6 PO Box 43013 Facsimile (31 70) 315 6767 Marketing Hubs 8 Providence, RI 02940-3013 USA Marketing and Financial Risk Singapore Management 10 Telephone (1 781) 575 4328 (outside of USA) 168 Robinson Road Review of Operations 12 1 800 990 1135 (toll-free within USA) Capital Tower Customer Sector Group Reviews Facsimile (1 781) 575 4082 Singapore 068912 Aluminium 14 Email: [email protected] Telephone (65) 6349 3333 Base Metals 16 Facsimile (65) 6349 4000 Carbon Steel Materials 18 Energy Coal 20 Other details provided to assist shareholders. Petroleum 22 About this Report Germany Stainless Steel Materials 24 BHP Billiton was created through the Dual Listed Companies (DLC) merger of BHP Limited (now BHP Billiton Limited) and Trustee Steel 26 Billiton Plc (now BHP Billiton Plc), which was concluded on 29 June 2001. Deutsche Boerse Clearing AG Health, Safety, Environment BHP Billiton Limited and BHP Billiton Plc continue to exist as separate companies, but operate on a combined basis as BHP and Community (HSEC) Review 28 Billiton. The headquarters of BHP Billiton Limited, and the global headquarters of the combined BHP Billiton Group, are Dividend paying bank located in Melbourne, Australia. BHP Billiton Plc is located in London, United Kingdom. Both companies have identical Boards BHP Billiton Locations 30 of Directors and are run by a unified management team. Shareholders in each company have equivalent economic and voting Deutsche Bank AG Board of Directors 32 rights in the BHP Billiton Group as a whole. Receive your Annual Report electronically. Switzerland The BHP Billiton Limited Annual Reports (Concise Report and Combined Executive Committee 35 The laws in Australia and the UK require us to adopt a different approach to reporting results. This Concise Report deals with the affairs of the BHP Billiton Group. Trustee Financial Statements) are also posted on the Internet. Shareholders are Corporate Governance Statement 38 Copies of the Annual Reports for BHP Billiton Plc and BHP Billiton Limited (Concise Report and Combined Financial SEGA Schweizerrische encouraged to visit www.bhpbilliton.com to inspect the electronic Remuneration Report 47 Statements) can be found on www.bhpbilliton.com. Shareholders may also request a copy by telephoning 1300 655 140 Effekten-Giro AG version of the Annual Report and provide feedback to the Company. BHP Billiton Charter 59 (within Australia) or (61 3) 9609 4559 (from elsewhere). Dividend paying bank Directors’ Report 60 Throughout this Report, the terms BHP Billiton, the Company, the Merger and the Group refer to the combined group, The single entity financial statements of BHP Billiton Limited are available including both BHP Billiton Limited and subsidiary companies and BHP Billiton Plc and subsidiary companies. The term UBS AG on the Company’s website (www.bhpbilliton.com) and are available to Concise Financial Statements 65 ‘the merger’ has a corresponding meaning. Credit Suisse First Boston shareholders on request free of charge. Auditors’ Report 89 Throughout the Report, a reference to a year is to a financial year unless otherwise indicated. Shareholder Information 90 BHP Billiton Limited. ABN 49 004 028 077. Registered in Australia. Registered Office: Level 45, 600 Bourke Street, Melbourne Victoria 3000, Australia. Corporate Directory IBC BHP Billiton Plc. Registration Number 3196209. Registered in England and Wales. Registered Office: 1–3 Strand, London WC2N 5HA United Kingdom. Excellence at the asset level is the foundation of our business BHP Billiton is the largest diversified resources company in the world We are distinguished from other resources companies by 5. Portfolio management the quality of our outstanding assets; our deep inventory of 6. Funding and capital management growth projects; our customer-focused marketing; our 7. Value-adding growth diversification across countries, commodities, markets and shareholders; our Petroleum business; and our innovation. 8. Creative thinking, commercial judgement and transaction execution Our vision is to earn superior returns for shareholders as the world’s premier supplier of natural resources and related Excellence at the asset level is the foundation of our products and services. To this end, the Company’s Strategic business. Our assets are organised into Customer Sector Framework sets out eight imperatives. They are: Groups (CSGs) based on natural customer-oriented groupings. Marketing is conducted through our two ‘hubs’ 1. Zero harm to people and the environment in The Hague and Singapore. This structure allows us to 2. Operating excellence focus on the needs of our customers. The Annual Report 3. Project evaluation and execution presents our 2002 results, strategic direction, and operational reviews of the CSGs. 4. Serving customers best Aluminium Energy Coal ‘By delivering expansion projects in line ‘We are moving forward with growth with approved milestones, we will projects to reinforce our low-cost supply strengthen our position as one of the position, while building on our capabilities world’s leading low-cost producers to deliver enhanced customer service.’ of aluminium.’ 14 20 Base Metals Petroleum ‘While tempering production to reflect ‘Following considerable success in meeting today’s lower demand, we are progressing our growth objectives, we are progressing our development projects in readiness for our exploration and development activities future recovery in the market.’ to underpin future production capability.’ 16 22 Carbon Steel Materials Stainless Steel Materials ‘As well as pushing ahead with our ‘Our focus is on reducing production costs growth projects, we are determined to and optimising productivity in order to protect the competitive position and enhance our position as a leading supplier attractive margins we maintain in our of quality raw materials to the stainless key markets.’ 18 steel industry.’ 24 1 The merged Company • The successful demerger of BHP Steel. One should not spend too much time reflecting on the past, but • A smooth transition of the Chief Executive Officer it would be remiss of me not to revisit the merits of the merged responsibilities from Paul Anderson to Brian Gilbertson. Company’s value proposition and then comment upon some of • A restructure of the Board that will result in a downsizing from the opportunities that should add future value. 17 members to 12. The merger has created a Company with an exceptional low- How then do these initiatives transfer into value? cost asset base. It has long-life operations, with outstanding commodity and country diversification. BHP Billiton is an industry Creating value leader or has a near-leader position in aluminium, metallurgical There are a number of ways to measure a company’s ability to coal, seaborne steaming coal, copper, ferro alloys, iron ore and create value: from an external perspective, by focusing on those titanium minerals, and substantial interests in oil and gas, LNG, value propositions that will drive its share price over time, or nickel, diamonds and silver. from an internal perspective by analysing its business fundamentals, e.g. strategy, operational effectiveness and the Since the creation of BHP Billiton on 29 June 2001, there have quality of its human resource assets. been many outstanding initiatives undertaken and completed from a Board perspective. For the purposes of this review I would The mining industry has often been characterised as highly list the following initiatives as integral to the long-term wellbeing cyclical and has had difficulty covering its cost of capital during of the Group: economic downturns. However, a close analysis of our 2002 • The finalisation and publication of our Strategic Framework, financial results (2001 financial results do not include the BHP which detailed the key value drivers that distinguished us from Billiton Plc Group) gives an indication of how the Group is our competitors and outlined the strategic imperatives that will delivering on those external value drivers that contribute realise our full potential. to sustained share price throughout the cycle. • The Performance