Bhp Billiton Plc Annual Report 2001 1 2 Bhp Billiton Plc Annual Report 2001 Strength Flexibility Growth Responsibility
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A NEW DAY BEGINS ANNUAL REPORT 2001 REPORT ANNUAL BHP BILLITON PLC BHP BILLITON PLC BHP BILLITON ANNUAL REPORT 2001 WWW.BHPBILLITON.COM STRENGTH FLEXIBILITY GROWTH RESPONSIBILITY FINANCIAL HIGHLIGHTS – BHP BILLITON GROUP US$ million 2001 2000 change Turnover 19 079 18 402 4% EBIT excluding exceptional items 3 627 3 027 20% Attributable profit excluding exceptional items 2 189 1 743 26% Attributable profit including exceptional items 1 529 1 506 2% Operating cash flow and dividends from joint ventures 4 959 4 571 8% Capital & investment expenditure 5 764 1 773 225% Net operating assets (at 30 June) 21 712 20 275 7% Attributable net assets (at 30 June) 11 340 11 036 3% EBITDA interest coverage excluding exceptional items (times) 11.1 9.1 22% Gearing (at 30 June) 38.4% 34.2% 12% 2001 2000 change Basic earnings per ordinary share excluding exceptional items (US cents) 36.8 30.4 21% Basic earnings per ordinary share including exceptional items (US cents) 25.7 26.3 -2% BHP Billiton Plc dividends per ordinary share (US cents) 12.00 11.25 7% BHP Billiton Limited dividends per ordinary share (AUD cents) – excluding bonus issue 51.0 51.0 – – including bonus issue 24.7 24.7 – BHP BILLITON PLC ANNUAL REPORT 2001 1 2 BHP BILLITON PLC ANNUAL REPORT 2001 STRENGTH FLEXIBILITY GROWTH RESPONSIBILITY The merger of Billiton Plc and BHP Limited BHP Billiton has an exceptional collection is the crowning achievement of the past of low cost, long life resource assets year, and a significant event in the global complemented by a management team resources industry. determined to operate those assets in a BHP Billiton has outstanding credentials. highly efficient manner, consistent with As we said at the time of the Dual Listed our Charter and health, safety, Companies (DLC) merger, the new environment and community policies. structure created “a formidable enterprise We have financial strength through both of global scale and diversity, with the our cash flow and our balance sheet, capacity and flexibility to pursue a diversity of products, markets and international growth opportunities, and geographic risks, management depth Paul Anderson, CEO and Managing with outstanding access to major capital and an enviable growth platform. Director (right), with Brian Gilbertson, markets.” This Report illustrates the To lead the resources industry, however, Deputy CEO. strength, flexibility and growth we requires harnessing the knowledge our highlighted then, as well as the people have of markets and customers, responsibility we believe will be essential of risk and opportunities. It will require to being a leading company in the future. intelligent people with the right values The law in the United Kingdom and in and attitudes to transform knowledge into Australia requires us to adopt a different outcomes that create real and sustainable approach to reporting results for the year. value. Our future success will be In the United Kingdom, we are required to determined as much by how we do things report as though the companies had been as by what we do. merged for the whole year, while in As our business continues to evolve, we Australia the report is required to be hope you will keep in touch with these prepared on a stand-alone basis. For this changes through our web site reason we have prepared two Annual www.bhpbilliton.com. Reports – one for BHP Billiton Plc and another for BHP Billiton Limited. The inside front cover contains details about how you can obtain a copy of the Report for BHP Billiton Limited. BHP BILLITON PLC ANNUAL REPORT 2001 3 One illustration of the strength of We have five mining operations in the resource, with high-quality products BHP Billiton is the quality of our Pilbara, the largest of which are Yandi and (copper in concentrate and cathode), world-class assets. Two of those Mt Whaleback (one of the biggest single strong cash flows, robust credit classification assets are shown on this page. pit iron ore mines in the world). Around and a diversified sales base. Our Pilbara mines (above) in the 700 kilometres of rail lines service the In November 2000, with our joint venture north-west of Western Australia represent mines, with trains up to three kilometres partners, we committed to the Escondida one of the world’s largest iron ore long hauling product to the Port Hedland Phase IV development, which will increase operations, enabling us to offer customers processing and shipping facility about processing capacity by 85 per cent, and a range of iron ore types and qualities 400 kilometres away. increase BHP Billiton’s net copper to meet a variety of requirements. We are In terms of production, Escondida (below) production by 230 000 tonnes per annum working closely with steel-making is the world’s largest copper mine, on average over the first five years of full customers to develop raw material supplying more than nine per cent of the production. Further expansion is possible solutions that optimise individual blast world copper market. The mine is located at Escondida Norte, a significant high- furnace performance. Recent initiatives 160 kilometres south-east of the northern grade resource five kilometres north of the have continued to improve operating Chilean city of Antofagasta. A low-cost existing pit, adding greater strength to this efficiency. producer, Escondida is an unequalled world-class asset. 4 BHP BILLITON PLC ANNUAL REPORT 2001 STRENGTH FLEXIBILITY GROWTH RESPONSIBILITY A premier diversified global World-class assets resources group Market Capitalisation A major strength is our quality portfolio as at 30 June 2001 Market capitalisation of US$31 billion as at of long-life, low-cost assets in diverse 30 June 2001 and turnover of US$19 billion 35 geographic locations. for 2001, makes the BHP Billiton Group one of the world’s largest diversified Strong management team 30 resources groups. The DLC merger has deepened and strengthened our management team. An industry leader Our team has: 25 We hold industry leader or near-leader positions in a range of products, being the: • a shared vision with a clearly articulated set of values and proven track record 20 • world’s largest exporter of energy of delivering results and increasing (thermal) coal shareholder value US$billion 15 • world’s largest exporter of metallurgical • a demonstrated ability to improve coal for the steel industry operating results while 10 • world’s third-largest producer of iron ore reducing leverage • world’s third-largest producer of copper • extensive experience managing projects 5 • western world’s third-largest producer in diverse political, geographic and of aluminium geological environments • demonstrated ability to improve 0 • world’s largest producer of manganese, chrome and ferroalloys. operating efficiencies and to acquire Alcoa Alcan CVRD Rio Tinto and integrate assets. BHP Billiton stern MiningCompany We also have substantial interests in oil, Anglo American We gas, liquified natural gas (LNG), nickel, Source: Datastream diamonds and silver. BHP BILLITON PLC ANNUAL REPORT 2001 5 The flexibility to respond effectively to the The focus of The Hague team will be on One of the first projects to be approved by needs of our customers and markets is a aluminium, base metals and the European BHP Billiton was the Mount Arthur North key outcome of BHP Billiton’s new business energy coal market, as well as freight and (MAN) open-cut energy coal mine (below), at model. As a first step, Customer Sector logistics. an estimated capital cost of US$411 million. Groups have been established, and a new Our position in coal is another illustration Adjacent to the Bayswater Colliery in the marketing organisation formed with twin of the flexibility of our group, allowing us Hunter Valley, NSW, Australia, this high- hubs in Singapore and The Hague in the to facilitate logistical arbitrage, substitute value ‘brownfield‘ expansion will produce Netherlands. product from across different geographical up to 15 million tonnes per annum of raw The Singapore team’s emphasis will be regions, and trade in third-party products. coal. Full capacity production is expected on the Asian energy market (built around We have played a leading role in changing by 2006. energy coal, oil and gas) and carbon the way coal is traded, through the MAN and Bayswater will be mined as one steel-making raw material. Pictured establishment, with other leading members large operation, providing benefits from above are Yoshiaki Kusuhara, Manager, of the world coal industry, of Global Coal, synergies in management, mining plants, General Administration Division, Nippon an Internet-based marketplace where infrastructure and equipment, and Steel Kimitsu Works, with Yoshio Kotani participants can trade electronically in coal marketing – further illustrating our and Victor Petersen, BHP Billiton Marketing. products and related instruments. resource flexibility. 6 BHP BILLITON PLC ANNUAL REPORT 2001 STRENGTH FLEXIBILITY GROWTH RESPONSIBILITY Flexibility to pursue new Flexibility to provide customer and opportunities because of our: market solutions because our: North America • access to international capital markets • diversity of products allows us to look Southern Africa as a member of the Financial Times Stock at bundling customer solutions Rest of World Australia Exchange (FTSE) 100 Index in London • Customer Sector Group structure focuses and our position as one of the largest Europe the organisation on customers rather companies in the Australian Stock Japan than assets South Korea Exchange (ASX) All Ordinaries Index Other Asia • global marketing team structure allows • financial strength resulting from better servicing of customer TURNOVER BY GEOGRAPHICAL MARKET substantial annual cash-generating At 30 June 2001 requirements, enabling us to source capability and a robust balance sheet product from different geographical • knowledge of markets, countries, risks regions and, potentially, third parties and products. • product marketers co-located in Flexibility to manage risk because our: Singapore and The Hague can share • geographic, product and market diversity knowledge of customer requirements.