Filed by: BHP Billiton Plc
and BHP Billiton Limited
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: Rio Tinto plc
Commission File No.: 001-10533
The following are slides comprising a presentation that was given by Alex Vanselow, Chief Financial Officer, BHP Billiton on August 18, 2008.
August
2008 Alex Vanselow Chief Financial Officer Preliminary Results Sales Team Briefing |
Preliminary
Results - Sales Team Briefing Slide 2 Disclaimer By viewing this presentation you agree to be bound by the following conditions. The directors of BHP Billiton Limited and BHP Billiton Plc (BHP Billiton") accept responsibility for the information contained in this presentation. Having taken all reasonable care to ensure that such is the case, the information contained in this presentation is, to the best of the knowledge and belief of the directors of BHP Billiton, in accordance with the facts and contains no omission likely to affect its import. Subject to the above, neither BHP Billiton nor any of its directors, officers, employees or
advisers nor any other person makes any representation or warranty, express or implied, as to, and accordingly no reliance should be placed on, the fairness, accuracy or completeness of the information contained in the presentation or of the views given or implied. To the extent permitted by law, neither BHP Billiton nor any of its
directors, officers, employees or advisers nor any other person shall have any liability whatsoever for any errors or omissions or any loss howsoever arising, directly or
indirectly, from any use of this information or its contents or otherwise arising in connection therewith. Information about Rio Tinto plc and Rio Tinto Limited (Rio Tinto") is based on public information which has not been independently verified. This presentation is for information purposes only and does not constitute or form part of
any offer for sale or issue of any securities or an offer or invitation to purchase or subscribe for any such securities, nor shall it or any part of it be relied on in
connection with, any contract or investment decision, nor does it constitute a proposal to make a takeover bid or the solicitation of any vote or approval in any jurisdiction, nor shall
there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any
such jurisdiction (or under an exemption from such requirements). No offering of securities shall be made into the United States except pursuant to registration under the US Securities Act of 1933, as amended, or an exemption therefrom. Neither this presentation nor any copy of it may be taken or transmitted or distributed or redistributed
(directly or indirectly) in Japan. The distribution of this presentation in other jurisdictions may be restricted by law and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions. This presentation is directed only at persons who (i) are persons falling within Article
49(2)(a) to (d) ("high net worth companies, unincorporated associations etc.") of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (the
"Order") or (ii) have professional experience in matters relating to investments falling within Article 19(5) of the Order or (iii) are outside the United
Kingdom (all such persons being referred to as "relevant persons"). This presentation must not be acted on or relied on by persons who are not relevant persons Certain statements in this presentation are forward-looking statements (including
statements regarding contribution synergies, future cost savings, the cost and timing of development projects, future production volumes, increases in production and infrastructure
capacity, the identification of additional mineral Reserves and Resources and project lives and, without limitation, other statements typically containing words such as
"intends," "expects," "anticipates," "targets," plans," "estimates" and words of similar import.) These statements are based on current expectations and beliefs and numerous assumptions regarding BHP Billiton's present and future business strategies and the environments in which BHP Billiton and Rio Tinto will operate in the future and such
assumptions, expectations and beliefs may or may not prove to be correct and by their nature, are subject to a number of known and unknown risks and uncertainties that could cause actual results, performance and achievements to differ materially. Factors that could cause actual results or performance to differ materially from those expressed or implied in the forward-looking statements include, but are not limited to, BHP Billiton's ability to successfully combine the businesses of BHP Billiton and Rio Tinto and to realise expected synergies from that combination, the presence of a competitive proposal in relation to Rio Tinto, satisfaction of any conditions to any proposed transaction, including the receipt of required regulatory and anti-trust approvals, Rio Tintos willingness to enter into any proposed transaction, the successful completion of any transaction, and the risk factors discussed in BHP Billiton's and Rio Tintos filings with the U.S. Securities and Exchange Commission ("SEC") (including in Annual Reports on Form 20-F) which are available at the SEC's website (http://www.sec.gov). Save as required by law or the rules of the UK Listing
Authority and the London Stock Exchange, the UK Takeover Panel, or the listing rules of ASX Limited, BHP Billiton undertakes no duty to update any forward-looking statements in
this presentation. |
Preliminary
Results - Sales Team Briefing Slide 3 Disclaimer continued No statement concerning expected cost savings, revenue benefits (and resulting incremental
EBITDA) and EPS accretion in this presentation should be interpreted to mean that the future earnings per share of the enlarged BHP Billiton group for current and
future financial years will necessarily match or exceed the historical or published earnings per share of BHP Billiton, and the actual estimated cost savings and revenue
benefits (and resulting EBITDA enhancement) may be materially greater or less than estimated. Information Relating to the US Offer for Rio Tinto plc BHP Billiton plans to register the offer and sale of securities it would issue to Rio Tinto plc US shareholders and Rio Tinto plc ADS holders by filing with the SEC a Registration Statement (the Registration Statement), which will contain
a prospectus (the Prospectus), as well as other relevant materials. No such materials have yet been filed. This communication is not a substitute for any Registration Statement or Prospectus that BHP Billiton may file with the SEC. U.S. INVESTORS AND U.S. HOLDERS OF RIO TINTO PLC SECURITIES AND ALL HOLDERS OF RIO TINTO PLC ADSs ARE URGED TO READ ANY REGISTRATION STATEMENT, PROSPECTUS AND ANY OTHER DOCUMENTS MADE AVAILABLE TO THEM AND/OR FILED WITH THE
SEC REGARDING THE POTENTIAL TRANSACTION, AS WELL AS ANY AMENDMENTS AND
SUPPLEMENTS TO THOSE DOCUMENTS, WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors and security holders will be able to obtain a free copy of the Registration
Statement and the Prospectus as well as other relevant documents filed with the SEC at the SEC's website (http://www.sec.gov), once such documents are filed with the SEC. Copies of
such documents may also be obtained from BHP Billiton without charge, once they
are filed with the SEC. Information for US Holders of Rio Tinto Limited Shares BHP Billiton Limited is not required to, and does not plan to, prepare and file with the SEC a registration statement in respect of the Rio Tinto Limited Offer. Accordingly, Rio Tinto Limited shareholders should carefully consider the following: The Rio Tinto Limited Offer will be an exchange offer made for the securities of a foreign
company. Such offer is subject to disclosure requirements of a foreign country that are different from those of the United States. Financial statements included in the document will be prepared in accordance with foreign accounting standards that may not be comparable to the financial statements of United States companies. Information Relating to the US Offer for Rio Tinto plc and the Rio Tinto Limited Offer for Rio Tinto shareholders located in the US It may be difficult for you to enforce your rights and any claim you may have arising under the U.S. federal securities laws, since the issuers are located in a foreign country, and some or all of their officers and directors may be residents of foreign countries. You may not be able to sue a foreign company or its officers or directors in a foreign court for violations of the U.S. securities laws. It may be difficult to compel a foreign
company and its affiliates to subject themselves to a U.S. court's judgment. You should be aware that BHP Billiton may purchase securities of either Rio Tinto plc or Rio Tinto Limited otherwise than under the exchange offer, such as in open market or privately negotiated purchases. BHP Billiton results are reported under International Financial Reporting Standards (IFRS).
References to Underlying EBIT and Underlying EBITDA exclude any exceptional items. A reconciliation to profit from operations is contained within the profit
announcement References in this presentation to $ are to United States dollars unless otherwise specified. |
Preliminary
Results - Sales Team Briefing Slide 4 Overview Year ended June 2008 HSEC Outstanding operating and financial results Annual production records set in 7 commodities Underlying EBITDA up 22% to US$28.0 billion Underlying EBIT up 21% to US$24.3 billion Attributable profit of US$15.4 billion, up 12% Earnings per share of 275 US cents, up 18% Underlying EBIT margin and ROCE of 48% and 38% respectively Growth projects proceeding well with significant volume growth achieved in FY2008 and expected in FY2009 Final dividend rebased to 41 US cents per share an increase of 52%, consistent with outlook and higher earnings and cash flow , |
Preliminary
Results - Sales Team Briefing Slide 5 Outstanding results driven by strategy and execution Notes: a) FY2002 to FY2005 calculated on the basis of UKGAAP. Subsequent periods calculated under
IFRS. Underlying EBIT (a) (US$bn) H2 H1 9.6 14.7 3.1 3.5 5.5 9.9 15.3 20.1 24.3 0 5 10 15 20 25 FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 |
Preliminary
Results - Sales Team Briefing Slide 6 0 50 100 150 200 A track record of project delivery Copper equivalent production growth (a) (Indexed, 100=FY2001) Projects successfully delivered: 44 since the DLC merger 10 completed in FY2008 10% growth estimated in FY2009 Completed projects ramping up in FY2009 Atlantis South, Genghis Khan, Samarco, Ravensthorpe/Yabulu Exp., Cliffs, Koala Underground, Spence, Escondida Sulphide Leach and Pinto Valley First production expected in FY2009 GEMCO, Neptune, Shenzi, NWS Train 5, NWS Angel and Alumar Notes: a) Production from continuing operations converted to copper equivalent units using FY2008 average realised prices. |
Preliminary
Results - Sales Team Briefing Slide 7 Diversity = Stability and Strength % EBIT Margin (1) FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 0 10 20 30 40 50 60 70 80 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 Petroleum Aluminium Base Metals D&SP SSM Iron Ore Manganese Met Coal Energy Coal BHP Billiton (1) FY2002 to FY2005 are calculated under UKGAAP. Subsequent periods are calculated under IFRS. All periods exclude third party trading activities. |
Preliminary
Results - Sales Team Briefing Slide 8 Short-term global challenges exist Global economic activity is moderating Financial market instability, housing market decline and inflationary pressures Emerging economies not immune Inflationary pressures Some decline in fixed asset investment growth (isolated to a small number of industries) Exchange rate appreciation reducing export competitiveness 0% 2% 4% 6% Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 United States annual GDP growth (a) (Annual growth, %) China annual GDP growth (b) (Annual growth, %) 8% 10% 12% 14% Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Notes: a) Source: US Department of Commerce, Bureau of Economic Analysis. b) Source: CEIC |
Preliminary
Results - Sales Team Briefing Slide 9 However, long-term fundamentals of emerging/developing economies remain intact 2.8% 2.3% 1.3% 2.9% 3.5% 6.4% 6.7% 7.0% 9.8% 10.1% 9.4% 10.1% 0% 2% 4% 6% 8% 10% 12% Average historical growth CY1990-CY2000 Average historical growth CY2001-CY2007 Average forecast growth CY2008-CY2009 Average forecast growth CY2010-CY2013 Developed Economies Emerging & Developing Economies China Source: World economic outlook database, April 2008. IMF world GDP growth (%) |
Preliminary Results - Sales Team Briefing Slide 10 Supply-side constraints are limiting the industrys response Equipment stress Industrial action and wage disputes Labour shortages Equipment shortages Significant cost pressures, including fuel Energy and power constraints Declines in ore-grade levels Rising tariffs Infrastructure bottlenecks Developments are increasingly tending to be: Smaller Lower grade Higher risk geographies Equipment shortages longer lead times and project delivery dates Rising capital costs Resources nationalism Existing Supply Future Supply Growth |
Preliminary Results - Sales Team Briefing Slide 11 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 CY2007 CY2008 CY2009F CY2010F CY2011F CY2012F Accelerating growth from a diversified portfolio of projects % of growth CY2007-2012 (Estimated & unrisked) Note: Growth in production volumes on a copper equivalent units basis between CY2007 and
CY2012 calculated using BHP Billiton estimates for BHP Billiton production.
Production volumes exclude BHP Billitons Specialty Products operation and all bauxite production. All energy coal business are included. Alumina volumes reflect only tonnes available for external sale. Conversion of production forecasts to copper equivalent units completed using long term consensus price
forecasts, plus BHP Billiton assumptions for diamonds, domestic coal and manganese. Prices as at July 2008. Production in copper equivalent tonnes (Copper equivalent tonnes '000s) 45% 37% 18% Steelmaking Materials Energy Non-Ferrous |
Preliminary Results - Sales Team Briefing Slide 12 Ordinary dividends per share (US cents per share) 0 10 20 30 40 50 60 70 FY2005 FY2006 FY2007 FY2008 H1 H2 0 50 100 150 200 250 300 FY2005 FY2006 FY2007 FY2008 Earnings per share (US cents per share) Note: BHP Billitons EPS represents reported underlying EPS for the financial year ending 30
June. Delivering superior returns to shareholders CAGR 36% CAGR 37% |
Preliminary Results - Sales Team Briefing Slide 13 Summary Excellent operating and financial results Long-term demand outlook remains strong despite some short-term economic uncertainty Supply-side constraints are limiting the ability for the industry to respond to demand growth BHP Billitons portfolio of assets focused in stable geographies provides a competitive advantage Future growth being delivered from lower risk projects Liverpool Bay |
Preliminary Results - Sales Team Briefing Slide 14 Indicative Timetable for the Offer Feb Mar Nov Dec Jan Oct Sep Aug Jul Jun May Apr Mar Feb Jan 2009 2008 6-Feb-2008 BHP Billiton announced pre- conditional offers for all of the outstanding shares of Rio Tinto Offer Announcement Satisfaction of Regulatory Approval Pre-conditions 30-May-2008: Form CO filed with the European Commission 3-Jul-2008: US merger review completed 4-Jul-2008: Entered into Phase 2 investigation with the European Commission European Commission decision due by December 2008 All regulatory processes expected to be completed or waived by the end of 2008 Offer Period Early 2009 UK Offer Timetable 50% minimum acceptance condition must be satisfied in both the Rio Tinto plc and Rio Tinto Ltd offers by Day 60 |
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