BHP Billiton Stability, Growth, Value A CEO s perspective

BHP Billiton Stability, Growth, Value A CEO s perspective

1990 - Industry Structure In 1990 the top five companies accounted for less than 25% of total resource equity market value 12 De Beers Gencor Alcoa Newmont Alcan Amplats Placer Dome Reynolds Driefontein WMC Barrick GFSA Noranda Minorco Inco Pechiney MIM BHP Rio Tinto Anglo Am. 10 8 6 4 2 Market value of minerals industry US$150bn Value of Top Five US$36bn Market Cap. at end of 1990 (US$B) 0

Largest company in a consolidating sector Market value of minerals industry US$328 bn Value of Top Five US$146 bn Value of BHP Billiton US$ 45 bn Value of BHP Billiton CVRD Alcan Norilsk Barrick Anglogold Amplats Gold Fields Impala Placer Dome Inco Xstrata Freeport Pechiney BHPB Rio Tinto Anglo American Alcoa Newmont Phelps Dodge Alumina 50 45 40 35 30 25 20 15 10 5 Market Cap. on 03/10/03 (US$Bn) 0 Source: Datastream

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

Investment Proposition Stability Growth Value

Stability from Tier 1 assets North West Shelf

Stability from Tier 1 assets Bass Strait

Stability from Tier 1 assets Pilbara Iron Ore

Stability from Tier 1 assets Queensland Coal

Stability from Tier 1 assets Ingwe Coal

Stability from Tier 1 assets Cannington

Stability from Tier 1 assets Escondida

Stability from Tier 1 assets Worsley

2022 Stability from Tier 1 assets North W est Shelf B as s S trait Pilbara Iron Ore Queensland Coal In gw e C o al Cannington Escondida Worsley 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 EBIT from the above assets represented 67% of EBIT in FY 2003 EBIT from the above assets represented 67% of EBIT in FY 2003

Stability from the portfolio By Commodity Customer Sector Group EBIT: Base Metals 8% Diamonds & Specialty Products 10% Stainless Steel Materials 4% Carbon Steel Materials 27% Aluminium 15% Energy Coal 5% Petroleum 31% Data for year ended 30 June 2003

Stability from the portfolio By Geography Net Operating Assets: North America 9% Rest of World 7% South America 30% Southern Africa 21% Australia 33% Data for year ended 30 June 2003

Stability from the portfolio By Market Sales: Rest of World 10% Australia 10% Europe 32% Japan 14% North America 14% Other Asia 20% Data for year ended 30 June 2003

Stability from the portfolio US$ billion 1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0 September 11 World Trade Centre Attack Enron Bankruptcy SA Rand A$ strengthen Average - US$1.228 billion BEE Charter leak Iraq war SARS Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY2002 FY2003

Growth from project pipeline B R O W N F I E L D Mount Arthur North Hillside 3 Area C Cerrejon Exp n PACE WAIO Acc Exp n NWS 4th Train Broadmeadow Esc da GoM Infrastr. Norte Dendrobium Paranam Klipspruit Yabulu R thorpe Esc da Sulphide CY2003 2004 2005 2006 2007 Ohanet ROD Minerva G R E E N F I E L D Mad Dog Angostura As at 28 August 2003 Size of bubble indicates proposed capital expenditure; bold outer $US border signifies sanctioned project 200m Spence Aluminium Base Metals Carbon Steel Atlantis Energy Coal Nickel Petroleum

Growth improving margins EBIT Margin Bubble size represents turnover BHP Billiton 24.3%* 60% Diamonds & Specialty Products (1) 50% Petroleum 40% 30% Aluminium 20% 10% 0% SSM Energy Coal (1) Excluding exploration and technology * Third party sales are excluded Base metals Carbon Steel Materials 0 200 400 600 800 1,000 1,200 1,400 EBIT (US$m)

Growth improving margins (US$M) FY 02 H1 03 H2 03 Total Cost related merger benefits 160 40 200 Non cost related merger benefits 60 25 85 Total merger benefits 220 65 285 Cost savings Operating Excellence 32 168 200 Strategic sourcing - 40 40 Portfolio mix 38 32 70 Total cost savings 70 240 310 Total cost savings & merger benefits (before one-off costs) 220 135 240 595

Growth improving margins Selling more product Reducing risk At higher margins Meeting needs of customers

Creating value Projects Cost Savings Marketing

Creating value 45 45 Market Capitalisation (US$ billion) 40 35 30 25 20 Pre-merger proforma BHP Billiton 40 35 30 25 20 15 15 10 March 2001 June 2002 June 2003 10 BHP Billiton Mkt Cap: (Mar 01) US$ 28.1bn (Oct 03) US$ 44.7bn

Priorities for cash flow Value accretive projects Pipeline has average IRRs of 15-25% All internally funded Greenfield and brownfield opportunities

Priorities for cash flow Capital structure Target strong single A credit rating Target gearing 35% - 40% EBITDA interest cover >8x

Priorities for cash flow Returning capital to shareholders Progressive dividend policy Dividends increased 11.5% last year Share buyback programmes in Ltd and Plc

Priorities for cash flow Value accretive projects Capital structure Return to shareholders

Strategic focus

Questions