| 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 an investor presentation that was first given on April 30, 2008, and was subsequently amended to (i) edit the graph on slide 13, (ii) replace the profile of Marcus Randolph, Chief Executive Ferrous and Coal, BHP Billiton with a profile of Don Argus, Chairman, BHP Billiton on slide 33 and (iii) add slides 35 and 36. |
BHP Billiton – Strength, Stability and Growth
May 2008
Disclaimer
This Rio Tinto document Limited has and been Rio prepared Tinto plc by (“Rio BHP Tinto”) Billiton . By Limited reviewing/attending and BHP Billiton this Plc presentation (“BHP Billiton”) you agree and comprises to be bound the by written the following materials/slides conditions. for a presentation concerning BHP Billiton’s offers for The this presentation directors of BHP is, to Billiton the best accept of the responsibility knowledge and for the belief information of the directors contained of BHP in this Billiton, presentation. in accordance Having with taken the all facts reasonable and contains care no to ensure omission that likely such to is affect the case, its import. the information contained in Subject accordingly to the no above, reliance neither should BHP be placed Billiton on, nor the any fairness, of its directors, accuracy officers, or completeness employees of or the advisers information nor any contained other person in the makes presentation any representation or of the views or warranty, given or implied. express To or the implied, extent as permitted to, and by law, arising, neither directly BHP or Billiton indirectly, nor any from of any its use directors, of this officers, information employees or its contents or advisers or otherwise nor any other arising person in connection shall have therewith. any liability whatsoever for any errors or omissions or any loss howsoever sell This or presentation otherwise dispose is for information of, purchase purposes or subscribe only and for, does any securities, not constitute nor or does form it constitute part of any investment offer or invitation advice, to nor acquire, shall it sell or any or otherwise part of it nor dispose the fact of, of or its issue, distribution or any solicitation form the basis of any of, offer or be to relied there be on any in connection sale of securities with, any in contract any jurisdiction or investment in which decision, such offer, nor solicitation does it constitute or sale a would proposal be unlawful to make prior a takeover to registration bid or the or solicitation qualification of under any vote the or securities approval laws in any of any jurisdiction, such jurisdiction nor shall (or under an exemption an exemption therefrom. 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 Neither be restricted this presentation by law and persons nor any into copy whose of it may possession be taken this or transmitted document comes or distributed should or inform redistributed themselves (directly about, or and indirectly) observe, in Japan. any such The restrictions. distribution of this document in other jurisdictions may Information about Rio Tinto is based on public information which has not been independently verified.
This Markets presentation Act 2000 is (Financial directed Promotion) only at persons Order who 2005 (i) are (as amended) persons falling (the within “Order”) Article or (ii) 49(2)(a) have professional to (d) (“high experience net worth companies, in matters relating unincorporated to investments associations falling within etc.”) of Article the Financial 19(5) of the Services Order and 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 timing of statements development in this projects, presentation future production are forward volumes, -looking increases statements. in production The forward and -looking infrastructure statements capacity, include the statements identification regarding of additional contribution mineral synergies, Reserves future and Resources cost savings, and the project cost and lives statements and, without speak limitation, only other as at the statements date of this typically presentation. containing These words statements such as “intends”, are based “expects”, on current “anticipates”, expectations “targets”, and beliefs “plans”, and, “estimates” by their nature, and words are subject of similar to a number import. These of known forward and -unknown looking by risks such and forward uncertainties -looking that statements. could cause The actual forward results, -looking performance statements and are achievements based on numerous to differ assumptions materially from regarding any expected BHP Billiton’s future results, present performance and future business or achievements strategies expressed and the environments or implied in which BHP Billiton and Rio Tinto will operate in the future and such assumptions may or may not prove to be correct. actual There are results a number or performance of factors to that differ could materially cause actual from those results described or performance in the forward to differ -looking materially statements from those include, expressed but are or not implied limited in to, the BHP forward Billiton’s -looking ability statements. to successfully Factors combine that could the cause businesses any proposed of transaction, BHP Billiton including and Rio Tinto the receipt and to of realise required expected regulatory synergies and anti from -trust that approvals, combination, Rio the Tinto’s presence willingness of a competitive to enter into proposal any proposed in relation transaction, to Rio Tinto, the successful satisfaction completion of any conditions of any to transaction, rates, future as business well as combinations additional factors or dispositions such as changes and the in outcome global, political, of litigation economic, and government business, actions. competitive, Additional market risks or regulatory and factors forces, that could future cause exchange BHP and Billiton interest results rates, to differ changes materially in tax from Report those on Form described 20-F for in the the forward fiscal year -looking -ended statements June 30, can 2007, be and found Rio in Tinto’s BHP Billiton’s filings with filings the with SEC, the including US Securities Rio Tinto’s and Exchange Annual Report Commission on Form (the 20-F “SEC”), for the fiscal including year BHP -ended Billiton’s December Annual 31, statements. 2007, which are The available information at the and SEC’s opinions website expressed (http://www. in thissec. presentation gov). Other are unknown subject to or change unpredictable without factors notice and could BHP cause Billiton actual expressly results to disclaims differ materially any obligation from those (except in the as forward required -looking by law or forward the rules -looking of the UK statements Listing Authority contained and herein the London to reflect Stock any Exchange, change in BHP the UK Billiton’s Takeover expectations Panel, or with the listing regard rules thereto of ASX or any Limited) change or in undertaking events, conditions to disseminate or circumstances any updates on or which revisions any such to any statement is based.
Slide 2
Disclaimer (continued)
the None future of the earnings statements per share concerning of the expected enlarged BHP cost savings, Billiton group revenue for current benefits and (and future resulting financial incremental years will EBITDA) necessarily and match EPS accretion or exceed in the this historical presentation or published should be earnings interpreted per to share mean of that 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 “Registration Billiton plans Statement”), to register which the will offer contain and sale a prospectus of securities (the it would “Prospectus”), issue to Rio as well Tinto as plc other US shareholders relevant materials. and Rio No Tinto such plc materials ADS holders have yet by filing been with filed. the This SEC communication a Registration is Statement not a (the substitute for any Registration Statement or Prospectus that BHP Billiton may file with the SEC.
U. PROSPECTUS S. INVESTORS AND AND ANY U. S. OTHER HOLDERS DOCUMENTS OF RIO TINTO MADE PLC AVAILABLE SECURITIES TO THEM AND ALL AND/OR HOLDERS FILED OF WITH RIO THE TINTO SEC PLC REGARDING ADSs ARE THE URGED POTENTIAL TO READ TRANSACTION, ANY REGISTRATION AS WELL STATEMENT, AS ANY AMENDMENTS AND SUPPLEMENTS TO THOSE DOCUMENTS, WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
Investors (http://www. and sec. security gov), once holders such will documents be able to are obtain filed a with free the copy SEC. of the Copies Registration of such Statement documents and may the also Prospectus be obtained as well from as BHP other Billiton relevant without documents charge, filed once with they the are SEC filed at with the the SEC’s SEC. website Information for US Holders of Rio Tinto Limited Shares shareholders BHP Billiton Limited should is carefully not required consider to, and the does following: not plan to, prepare and file with the SEC a registration statement in respect of the Rio Tinto Limited Offer. Accordingly, Rio Tinto Limited The those Rio of Tinto the United Limited States. Offer Financial will be an statements exchange offer included made in for the the document securities will of be a prepared foreign company. in accordance Such offer with is foreign subject accounting to disclosure standards requirements that may of not a foreign be comparable country that to the are financial different from 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 of It may their be officers difficult and for directors you to enforce may be your residents rights and of foreign any claim countries. you may You have may arising not be under able to the sue U. a S. foreign federal company securities or laws, its officers since the or directors issuers are in a located foreign in court a foreign for violations country, of and the some U.S. or all 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 negotiated should purchases. 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 References in this presentation to “$” are to United States dollars unless otherwise specified.
Slide 3
BHP Billiton – Strength, Stability and Growth
Today: The world’s leading diversified mining company Our past: A proven track record Our future: The outlook is exciting The offer for Rio Tinto
Slide 4
Today: The world’s leading diversified mining company
Slide 5
A diversified global portfolio
Metallurgical Coal Base Metals Manganese
#1 global supplier of seaborne #3 global producer of copper, silver and lead #1 global supplier of
traded metallurgical coal seaborne manganese ore
Energy Coal Iron Ore Stainless Steel Materials
#4 global supplier of seaborne #3 global supplier #3 global nickel producer
export thermal coal of seaborne iron ore
Petroleum Aluminium Diamonds & Specialty Products
A significant oil and gas exploration #4 global producer of bauxite and #4 aluminium EKATI Diamond Mine is one of the world’s
and production business company based on net third party sales largest gem quality diamond producers.
Aluminium Base Metals
Diamonds & Specialty Products Energy Coal Iron Ore Manganese Metallurgical Coal Petroleum Stainless Steel Materials Offices
Note: Location of dots indicative only
Slide 6
The world’s largest diversified natural resources company
Top 10 metals and mining companies
(Market capitalisation as at 18-Apr-2008, US$bn)
Australian head office Non-Australian head office
240 180 120 60 0
BHP Billiton
Vale
Rio Tinto (a)
China Shenhua
Anglo American
Xstrata
Norilsk Nickel
Freeport McMoRan
Anglo Platinum
Barrick Gold
Sources: Bloomberg, Datastream. a) Rio Tinto undisturbed market cap as at 31-Oct-2007.
Slide 7
Led by an experienced management team
Chairman and Chief Executive Officer
Don Argus
Chairman
• Chairman of BHP Billiton Group since June 2001
• Chairman of BHP Limited since April 1999
Marius Kloppers
Chief Executive Officer
• 15 years resources experience
• 15 years at BHP Billiton
Group Management Committee
Alex Vanselow
Chief Financial Officer
• 19 years resources experience
• 19 years at BHP Billiton
Marcus Randolph
Chief Executive Ferrous and Coal
• 31 years resources experience
• 9 years at BHP Billiton
• Previously worked at Rio Tinto
Alberto Calderon
Chief Commercial Officer
• 9 years resources experience
| • |
|
2 years at BHP Billiton |
Michael Yeager
Chief Executive Petroleum
• 27 years resources experience
| • |
|
2 years at BHP Billiton |
Karen Wood
Chief People Officer
| • |
|
7 years resources experience |
| • |
|
7 years at BHP Billiton |
Andrew Mackenzie(a)
Chief Executive Non Ferrous
• 30 years resources experience
• Yet to start at BHP Billiton
• Previously worked at Rio Tinto
Notes: a) Andrew Mackenzie’s appointment to BHP Billiton was announced on 20-Nov-2007, he has not yet commenced his new role at BHP Billiton. He previously worked at Rio Tinto where he was Chief Executive, Diamonds and Industrial Minerals.
Slide 8
Maintaining our commitment to our core strategy
Large, low-cost, expandable assets
Focus on the extraction of upstream natural resources
Portfolio diversified by commodity, customer and geography reducing the volatility of cash flows
Maintenance of a deep diversified inventory of growth options
Focus on export orientated products
Overriding commitment to ethics, safety, environmental practice and community engagement
Employer of choice, and a preferred partner for countries and customers
Slide 9
A unique diversified portfolio balanced across high margin commodities
Underlying EBITDA
(CY2007, 12 months, US$bn)
24,000 18,000 12,000 6,000 0
4,677
23,623
FY2002
CY2007
Diamond & Specialty Products Energy Coal
Energy Petroleum (21%)
Aluminium
Stainless Steel Materials
Non Ferrous (56%) Base Metals
Metallurgical Coal
Carbon Manganese Steel Materials Iron Ore (22%)
Underlying EBITDA Margin(a)
(CY2007, 12 months)
Diamond &
34% Specialty Products
Energy Coal 23%
Petroleum 75%
Aluminium 43%
Stainless Steel
52% Materials
Base Metals 70% Metallurgical Coal 36% Manganese 40% Iron Ore 52%
Note: Historical financial information has been restated for comparative purposes per note 1 of BHP Billiton’s half-year financial report for the half-year ended 31-Dec-2007. CY2007 represents the 12 months ending 31-Dec-2007. a) EBITDA margin excludes third party sales.
Slide 10
Overriding commitment to ethics, safety, environmental practice and community engagement
Sustainable development is fundamental to our success Our licence to operate depends on responsibly operating our business:
– A track record of being valued by our communities will contribute to us being considered a ‘company of choice’ by governments, business partners and communities
– Improves the ability to attract and retain a skilled and motivated workforce
– Our reputation as an ethical, responsible business will assist in our ability to attract capital 2007 sustainability report available on our website
www.bhpbilliton.com/bb/sustainableDevelopment.jsp
We aim to be a business that creates a positive legacy
Slide 11
Our past: A proven track record
Slide 12
BHP Billiton invested in growth early to meet demand
Completed projects
(US$bn)
FY2002
FY2003
FY2004
FY2005
FY2006
FY2007
FY2008
Antamina Typhoon Tintaya Oxide
Escondida Phase IV San Juan UG Bream Gas Pipeline Mozal 2 Zamzama
WAIO—Area C Mt Arthur North Hillside 3 Ohanet Cerrejon Zona Norte WAIO—Prod & Cap Exp WAIO Acc Exp
NWS Train 4 ROD GOM WAIO RGP1 Mad Dog Minerva Angostura Panda UG Dendrobium BMA Phase 1
Escondida Norte Paranam Worsley DCP Escondida Sulphide WAIO RGP2
Spence BMA Phase 2 Blackwater Coal
Genghis Khan Atlantis South Pinto Valley Stybarrow Koala UG WAIO RGP3 Ravensthorpe Yabulu
1.0
2.1
3.9
13.1
14.6
16.0
22.7
FY2002
FY2003
FY2004
FY2005
FY2006
FY2007
FY2008YTD
Historical completed projects WMC acquisition Completed projects in financial year Rio Tinto cumulative completed projects
Source: BHP Billiton and Rio Tinto annual and half-yearly reports. Note: Total represents capital expenditure on completed projects.
Slide 13
Most developments have been executed to expectations, wherever on the globe they are located
Major minerals development projects commissioned since July 2001(a) (b)
120% 100% 80% 60% 40% 20% 0%
Budget
Time
Over Budget Behind Schedule
Under Budget Ahead of Schedule
Mozal 2 Hillside 3 Escondida Escondida Escondida Spence Mount Arthur MAC WAIO WAIO WAIO Ravensthorpe Phase IV Norte Sulphide North & PACE RGP1 RGP2 RGP3
Notes:a) Selected projects >US$100m and managed by BHP Billiton. Excludes petroleum projects. Performance relative to initial announced US$ budget. b) BHP Billiton provided the latest update for the status of the Ravensthorpe project at the announcement of its full year 2007 preliminary results on 22 August 2007. At that time the expected cost was 212% of the initial announced US$ budget and 136% of the initial target schedule.
Slide 14
Delivering superior EPS growth for shareholders…
Earnings per share
(US$ per share)
50% CAGR
US$ 0.31
US$ 0.31
US$ 0.56
US$ 1.06
US$ 1.68
US$ 2.34
FY2002
FY2003
FY2004
FY2005
FY2006
FY2007
Note:
BHP Billiton’s EPS represents reported underlying EPS for the financial year ending 30-June. EPS in FY2002 excludes the results of BHP Billiton’s Steel business which was demerged in July 2002.
Slide 15
… and dividend growth, with 12 consecutive ordinary dividend increases
Ordinary dividends per share
(US cents per share)
50 45 40 35 30 25 20 15 10 5 0
Full year dividend Interim dividend
29% CAGR
13.0
14.5
26.0
28.0
36.0
47.0
6.5
7.0
16.5
13.5
17.5
20.0
29.0
increase 45% in dividend interim
FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008
Note: Two interim dividends were paid in FY2004
Slide 16
Creating considerable wealth for shareholders
A holder of 1,000 BHP Billiton Ltd shares on 28 June 2001 would have seen the value of their total holding increase by 372%
BHP Billiton Ltd(a)
(A$)
60,000 50,000 40,000 30,000 20,000 10,000
Dividends/Distributions Reinvested(a) Value of BHP Billiton Ltd Shares
Value at
30 June 2002 A$10,561
Value at
30 June 2004 A$13,445
Value at
30 June 2006 A$32,318
Value at
18 April 2008
A$48,928
Value at
28 June 2001 A$10,372
Value at
30 June 2003 A$9,098
Value at
30 June 2005 A$19,848
Value at
30 June 2007 A$39,727
Jun-01 Dec-01 Jun-02 Dec-02 Jun-03 Dec-03 Jun-04 Dec-04 Jun-05 Dec-05 Jun-06 Dec-06 Jun-07 Dec-07
Source: Bloomberg, Iress. a) Dividends/distributions assumes that the dividends are reinvested in BHP Billiton Ltd. Includes the value of shares distributed in Bluescope Steel to BHP Billiton Ltd shareholders.
Slide 17
Our future: The outlook is exciting
Slide 18
Chinese growth is driving global materials demand
Change in global consumption
(%, 1997-2007(a))
64 %
50 %
88 %
16 %
96 %
| 7 |
|
% |
36 %
57 %
| 7 |
|
% |
(14)% Copper
(4)%
Nickel
(2)%
Seaborne Iron Ore
Energy
China USA Other
Notes: Seaborne iron ore demand based on import statistics—CRU data for 2007, IISI data for 1997. Energy consumption is all uses of coal, gas, oil and nuclear, expressed as millions tonnes of oil equivalent, 2007 data not yet available. Source: CRU, Brook Hunt, BP Statistical Review of World Energy (2007), IISI. a) Consumption growth calculated based on the change in annual consumption between years ended 1997 and 2007, expect for Energy consumption which is based on the period between 1995 and 2006.
Slide 19
.and industrialisation and urbanisation in China appears to have a long way to go
Finished steel consumption
(kg/capita)
China Germany India Japan Korea, Rep. United States Taiwan
1,200 1,000 800 600 400 200 0
0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000
GDP/Capita (Jan 2008 Constant US Dollars)
Source: World Bank; Government Statistics for Taiwan; IISI
Slide 20
Sales to China currently represent 20% of BHP Billiton’s revenue
BHP Billiton revenue from China
(US$m)
5,500 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0
FY02 H1 03 H2 03 H1 04 H2 04 H1 05 H2 05 H1 06 H2 06 H1 07 H2 07 H1 08
Base Metals Iron Ore SSM Other
371
431
785
1,075
1,357
1,588
2,407
2,946
3,611
3,999
5,293
5,013
BHP Billiton sales revenue geographical split (H1 08, US$bn)
ROW
Australia
China
Nth America
Other Asia
Japan
Europe
Slide 21
India – the journey has begun
GDP
(US$ billion)
BHP Billiton copper equivalent sales volume units(a)
(100=FY2002 sales to China)
[Graphic Appears Here]
China India 1996 2006
500 450 400 350 300 250 200 150 100 50 0
FY China 2002 FY India 2007
Traded 100% Basis
Equity Basis
Source: World Bank, Focus Economics, BHP Billiton. a) Note: Converted to copper equivalent units using BHP Billiton FY2007 average realised prices and BHP Billiton estimates.
Slide 22
Our deep diversified inventory of growth options, many of which are brown field expansions
CMSA Heap Worsley NWS Nth Angola CMSA Heap WA Iron Ore DRC Leach 2 Olympic Dam E&G Rankin B B
| 2 |
|
& DRC Macedon Leach 1 1 Quantum 1 Smelter Expansion 1 1 & |
| 1 |
|
WA Iron Ore Caroona Daunia Knotty Perseverance RGP 4 4 Kipper Cannington Canadian Deeps NWS |
NWS NWS CP Shenzi Head
Life Ext Potash Angel NWS WFG Thebe Nth Yabulu Boffa/Santou Ekati Maruwai T5 T5 Neptune Refinery Peak Downs GEMCO
Stage 2 Nth Nimba Exp Exp Cerrejon
CMSA MKO Navajo Klipspruit Shenzi Pyro Expansion Olympic Dam Talc Kennedy Opt Exp KNS Sth Expansion 2 2 SA Mn Exp Samarco 4 4 Neptune Ore Exp Browse WA Iron Ore Bakhuis GEMCO
LNG Quantum 2 Gabon Angostura Samarco Mad Dog WA Iron Ore 2 Scarborough Gas Maruwai Newcastle
SWR RGP 5 Stage 1 Zamzama
5 Wards Kipper Eastern Third Port Phase 2 Blackwater Well Ph 2 2 Indonesian Corridor Atlantis Goonyella UG Facility Sands II Guinea North Alumar Puma Olympic Dam Expansions Red Hill Alumina Cliffs CW Africa Expansion 3 3 Resolution Douglas-UG -Exploration Corridor Escondida Middelburg Hallmark Turrum Mt Arthur RBM Maya Sands II II Saraji 3rd Conc Coal UG Pyrenees Nickel
2013 2010 2008
Future Options Feasibility Execution
As at 29 February 2008 Proposed capital expenditure
< <$ $500m
$ $501m—$ $2bn
$ $2bn+
CSG
Aluminium
Energy Coal
Met Coal
Base Metals
Iron Ore
Petroleum
D&SP
Manganese
SSM
Slide 23
Example: Exposure to steel demand growth
• BHP Billiton has leading global positions in the three core raw materials for steel production
– #1 global supplier of seaborne traded metallurgical coal
– #3 global supplier of seaborne iron ore
– #1 global supplier of seaborne manganese ore
• With significant future production growth expected
Indexed historical commodity price movement
(100 = JFY2003)
700 600 500 400 300 200 100 0
JFY2003 JFY2004 JFY2005 JFY2006 JFY2007 JFY2008
Metallurgical Coal(a) JFY2008: +206-240% Manganese(b) JFY2008: +408%
Iron Ore(c) JFY2008: +65-71%
Note: Historical nominal prices based on Japanese financial year benchmarks beginning April of relevant year. Lines shown in graph represent the low of the percentage increase over JFY2007 prices. a) Metallurgical coal based on Peak Downs Hay Point FOB. JFY2008 forecast prices calculated based on 206-240% increase above JFY2007 benchmark – per BHP Billiton announcement 9-Apr-2008. b) Manganese based on GEMCO lump ore contract FOB. JFY2008 prices based on recent manganese spot price settlement reported in the Tex Report on 12-Feb-2008. c) Iron ore based on benchmark FOB prices. JFY2008 forecast prices calculated based on 65-71% increase above JFY2007 benchmark – per Vale settlement for Itabira fines.
Slide 24
The offer for Rio Tinto
Slide 25
Overlapping mineral basin positions. US$3.7bn of synergies
Ekati and Diavik
Resolution, Pinto Valley and Kennecott
Mineral Sands
WA Iron Ore
Hunter Valley Coal
Queensland Coal
BHP Billiton
Rio Tinto
Joint
Selected existing BHP Billiton and Rio Tinto assets, projects and concessions.
Slide 26
Summary of the offer for Rio Tinto
BHP Billiton has made a pre-conditional offer for Rio Tinto, it will be capable of acceptance by shareholders following regulatory approvals
The offer is being made direct to the shareholders of Rio Tinto
Rio Tinto shareholders are being offered 3.4 BHP Billiton shares for every Rio Tinto share held
The 3.4:1 offer represents a material 45%(a) premium
The offer is conditional on more than 50% acceptances of the publicly held shares in Rio Tinto plc and Rio Tinto Ltd BHP Billiton has conducted global roadshows speaking to the major shareholders of BHP Billiton and Rio Tinto which has confirmed that shareholders have a clear understanding of the compelling industrial logic of the deal
BHP Billiton believes this offer is compelling for Rio Tinto shareholders, and value enhancing for BHP Billiton shareholders – and it makes even more sense if you own both
Notes: a) Based on the volume weighted average market capitalisation of Rio Tinto and BHP Billiton for the month prior to BHP Billiton’s approach to the Rio Tinto Board on 1-Nov-2007.
Slide 27
BHP Billiton and Rio Tinto’s share prices have been strongly correlated, with BHP Billiton outperforming
BHP Billiton Ltd and Rio Tinto Ltd TSR(a)
(Index: Jun-2001 = 100)
600 500 400 300 200 100 0
Jun-01 May-02 Apr-03 Mar-04 Jan-05 Dec-05 Nov-06 Oct-07
BHP Billiton CAGR 30%
Rio Tinto CAGR 24%
BHP Billiton Ltd vs Rio Tinto Ltd relative performance(b)
(Price performance relative to Jun-2001 = 100)
500 400 300 200 100 0
BHP Billiton Indexed Share Price Performance
0 100 200 300 400 500
Rio Tinto Indexed Share Price Performance
Source: IRESS. a) For the period 29-Jun-2001 to 31-Oct-2007. Total Shareholder Return (“TSR”) calculated as the increase in share value including dividends reinvested at the date of receipt. Assumes Bluescope Steel shares received by BHP Billiton Ltd shareholders in July 2002 were immediately sold with proceeds reinvested in BHP Billiton Ltd. b) For the period 29-Jun-2001 to 31-Oct-2007.
Slide 28
3.4:1 represents a 45% premium
Rio Tinto vs BHP Billiton historical share exchange ratio(a)
06-Feb-2008
BHP Billiton’s offer for Rio Tinto
12-Nov-2007
BHP Billiton’s proposal
45% premium (c)
Pre approach fair value exchange ratio(b)
3.6 : 1 3.4 : 1 3.2 : 1 3.0 : 1 2.8 : 1 2.6 : 1 2.4 : 1 2.2 : 1
Jul-2007 Aug-2007 Sep-2007 Oct-2007 Nov-2007 Dec-2007 Jan-2008 Feb-2008 Mar-2008 Apr-2008
Source: Datastream (as of 18-Apr-08). a) Exchange ratio assumes 100% BHP Billiton Ltd shares for each Rio Tinto Ltd share and BHP Billiton shares for each Rio Tinto plc share consisting of 80% BHP Billiton Plc shares and 20% BHP Billiton Ltd shares. b) Pre-approach share exchange ratio represents the period between Rio Tinto offer for Alcan (12-Jul-2007) and BHP Billiton’s approach to the Rio Tinto Board (01-Nov-2007). Shares outstanding as of 31-Oct-2007. c) Based on the volume weighted average market capitalisation of Rio Tinto and BHP Billiton for the month prior to BHP Billiton’s approach to the Rio Tinto Board on 1-Nov-2007.
Slide 29
Conclusion – Strength, stability and growth
• The core strategy remains unchanged
• Focused on producing volumes from low cost assets
• BHP Billiton on a standalone basis has a bright future
• A combination of BHP Billiton and Rio Tinto can generate substantial additional value for shareholders – we are a natural fit
• In addition to the synergies, combining the two would create a company that is:
? Unique in character;
? Capable of delivering superior returns for its shareholders; and
? An Australian champion on the global stage
• BHP Billiton believes the terms of the Rio Tinto offer reflect a good deal for both companies’ shareholders
• The process has a long time to run – an offer document is not expected to be posted to shareholders until late 2008
• The support of retail shareholders will be critical for the offer to succeed
Slide 30
Questions and Answers
Slide 31
Senior Executive Profiles
Slide 32
Appendix: Don Argus Profile
Don Argus – Chairman
Term of office: • Chairman of BHP Billiton Limited and BHP Billiton Plc since June 2001
• Chairman of BHP Limited since April 1999
• Director of BHP Limited since November 1996
Other directorships and offices • Director of Australian Foundation Investment Company Ltd
(current and recent): • Board Member International Monetary Conference
• Member of Advisory Committee to Australian Securities Commission
• Member of Financial Sector Advisory Council
• Member of the International Advisory Board of Allianz AG
• Member of International Advisory Committee to the New York Stock Exchange Board of
Directors
• Former Chairman of Brambles Ltd (1999—2008) and Former Director (1999—2008)
• Former Director of Southcorp Limited (1999—2003)
• Former Director Melbourne 2006 Commonwealth Games Pty Ltd (2000—2001)
• Former Managing Director and CEO of the National Australia Bank Group (1991—1999)
• Former Chairman Australian Bankers Association and Australian Institute of Bankers
Distinctions and Awards • Officer of the Order of Australia (1998) in recognition of his services to banking and
finance, and his contributions to community and sporting organisations
• Awarded the Centenary Medal (2003) for service to Australian society through business
• Honorary Degrees:—Monash University (Doctor of Laws)
—Griffiths University (Doctor of the University)
• Harvard University Advanced Management Program Alumni
Other: • Senior Fellow of the Financial Services Institute of Australasia
• Fellow of Certified Practising Accountants
• Co-Patron of Vision Australia
Slide 33
Appendix: Marius Kloppers Profile
Marius Kloppers – Chief Executive Officer
Age: 46
Professional qualifications: • BE (Chem), MBA, PhD (Materials Science)
• Bachelor of Chemical Engineering (University of Pretoria (South Africa))
• PhD from Massachusetts Institute of Technology (MIT) (USA)
• MBA from Insead (France)
Previous BHP Billiton positions: • Group President, Non-Ferrous Materials
• Chief Commercial Officer
• Chief Marketing Officer
• Prior to the formation of BHP Billiton, other positions held included:
– Group Executive of Billiton Plc (coal and manganese)
– Chief Executive Samancor Manganese
– Chief Operating Officer, Aluminium
– General Manager, Hillside Aluminium
– Variety of operating and functional roles in the Aluminium business Other BHP Billiton roles: • Played a central role in the merger of BHP and Billiton
• Led the team working on BHP Billiton’s acquisition of WMC
Other work experience: • McKinsey & Co – management consultant (The Netherlands)
• Sasol – petrochemicals (South Africa)
• Mintek – materials research (South Africa) Residence: • Melbourne, Australia
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Backup Slides
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The 3.4:1 offer represents a 45% premium
Rio Tinto Limited share price vs offer price (A$)
Rio Tinto vs BHP Billiton historical share exchange ratio(a)
06-Feb-2008
BHP Billiton’s offer for Rio Tinto
3.6 : 1 3.4 : 1 3.2 : 1 3.0 : 1 2.8 : 1 2.6 : 1 2.4 : 1 2.2 : 1
Jul-2007 Aug-2007 Sep-2007 Oct-2007 Nov-2007 Dec-2007 Jan-2008 Feb-2008 Mar-2008 Apr-2008
12-Nov-2007
BHP Billiton’s proposal
45% premium (c)
Pre approach fair value exchange ratio(b)
Rio Tinto Limited discount to offer price: 6.3%
155 150 145 140 135 130 125 120 115 110
Feb-2008 Mar-2008 Apr-2008 May-2008
$147.63
$138.2
Rio Tinto Limited share price Offer price
Source: Datastream (as of 18-Apr-08), IRESS (as of 2-May-08). a) Exchange ratio assumes 100% BHP Billiton Ltd shares for each Rio Tinto Limited share and BHP Billiton shares for each Rio Tinto plc share consisting of 80% BHP Billiton Plc shares and 20% BHP Billiton Ltd shares. b) Pre-approach share exchange ratio represents the period between Rio Tinto offer for Alcan (12-Jul-2007) and BHP Billiton’s approach to the Rio Tinto Board (01-Nov-2007). Shares outstanding as of 31-Oct-2007. c) Based on the volume weighted average market capitalisation of Rio Tinto and BHP Billiton for the month prior to BHP Billiton’s approach to the Rio Tinto Board on 1-Nov-2007.
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