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.
BHP Billiton – Strength, Stability and Growth
April 2008
bhpbilliton
Disclaimer
This document has been prepared by BHP Billiton Limited and BHP Billiton Plc (“BHP Billiton”) and comprises the written materials/slides for a presentation concerning BHP Billiton’s offers for Rio Tinto Limited and Rio Tinto plc (“Rio Tinto”). By reviewing/attending this presentation you agree to be bound by the following conditions.
The directors of 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.
This presentation is for information purposes only and does not constitute or form part of any offer or invitation to acquire, sell or otherwise dispose of, or issue, or any solicitation of any offer to sell or otherwise dispose of, purchase or subscribe for, any securities, nor does it constitute investment advice, nor shall it or any part of it nor the fact of its distribution form the basis of, or 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 document 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.
Information about Rio Tinto is based on public information which has not been independently verified.
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. The forward-looking statements include 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 forward-looking statements speak only as at the date of this presentation. These statements are based on current expectations and beliefs 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 from any expected future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements are based on 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 may or may not prove to be correct.
There are a number of factors that could cause actual results or performance to differ materially from those expressed or implied in the forward-looking statements. Factors that could cause actual results or performance to differ materially from those described 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 Tinto’s willingness to enter into any proposed transaction, the successful completion of any transaction, as well as additional factors such as changes in global, political, economic, business, competitive, market or regulatory forces, future exchange and interest rates, changes in tax rates, future business combinations or dispositions and the outcome of litigation and government actions. Additional risks and factors that could cause BHP Billiton results to differ materially from those described in the forward-looking statements can be found in BHP Billiton’s filings with the US Securities and Exchange Commission (the “SEC”), including BHP Billiton’s Annual Report on Form 20-F for the fiscal year-ended June 30, 2007, and Rio Tinto’s filings with the SEC, including Rio Tinto’s Annual Report on Form 20-F for the fiscal year-ended December 31, 2007, which are available at the SEC’s website (http://www.sec.gov). Other unknown or unpredictable factors could cause actual results to differ materially from those in the forward-looking statements. The information and opinions expressed in this presentation are subject to change without notice and BHP Billiton expressly disclaims any obligation (except 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) or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in BHP Billiton’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
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Disclaimer (continued)
None of the statements 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.
References in this presentation to “$” are to United States dollars unless otherwise specified.
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BHP Billiton – Strength, Stability and Growth
• Today: The world’s leading diversified mining company
• Our past: A proven track record
• Our future: The outlook is exciting
• The offer for Rio Tinto
Slide 4
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Today: The world’s leading diversified mining company
Slide 5
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A diversified global portfolio
Metallurgical Coal
#1 global supplier of seaborne traded metallurgical coal
Base Metals
#3 global producer of copper, silver and lead
Manganese
#1 global supplier of seaborne manganese ore
Energy Coal
#4 global supplier of seaborne export thermal coal
Iron Ore
#3 global supplier of seaborne iron ore
Stainless Steel Materials
#3 global nickel producer
Petroleum
A significant oil and gas exploration and production business
Aluminium
#4 global producer of bauxite and #4 aluminium company based on net third party sales
Diamonds & Specialty Products
EKATI Diamond Mine is one of the world’s largest gem quality diamond producers.
Aluminium
Base
Metals
Diamonds & Specialty Products
Energy Coal
Iron Ore
Manganese
Metallurgical Coal
Petroleum
Stainless Steel Materials
Offices
Slide 6
Note: Location of dots indicative only
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The world’s largest diversified natural resources company
Top 10 metals and mining companies
(Market capitalisation as at 18-Apr-2008, US$bn)
240
180
120
60
0
BHP Billiton
Vale
Rio Tinto (a)
China Shenhua
Anglo American
Xstrata
Norilsk Nickel
Freeport McMoRan
Anglo Platinum
Barrick Gold
Australian head office
Non-Australian head office
Sources: Bloomberg, Datastream.
a) Rio Tinto undisturbed market cap as at 31-Oct-2007.
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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
Alberto Calderon
Chief Commercial Officer
• 9 years resources experience
• 2 years at BHP Billiton
Karen Wood
Chief People Officer
• 7 years resources experience
• 7 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
Michael Yeager
Chief Executive Petroleum
• 27 years resources experience
• 2 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
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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
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A unique diversified portfolio balanced across high margin commodities
Underlying EBITDA
(CY2007, 12 months, US$bn)
24,000 23,623 Diamond & Specialty Products Energy Coal
18,000 Petroleum Energy (21%)
12,000 Aluminum Stainless Steel Materials Non Ferrous (56%)
6,000 4,677 Base Metals
0 Metallurgical Coal Manganese Iron Ore Carbon Steel Materials (22%)
FY2002 CY2007
Underlying EBITDA Margin(a)
(CY2007, 12 months)
Diamond & Specialty Products 34%
Energy Coal 23%
Petroleum 75%
Aluminum 43%
Stainless Steel Materials 52%
Base Materials 70%
Metallurgical Coal 36%
Manganese 40%
Iron Ore 52%
Note: Historical financial information has been restated for comparative purposes per note 1 of BHP Billiton’s half-year financial report for the half-year ended 31-Dec-2007. CY2007 represents the 12 months ending 31-Dec-2007. a) EBITDA margin excludes third party sales.
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Overriding commitment to ethics, safety, environmental practice and community engagement
Sustainable development is fundamental to our success
Our licence to operate depends on responsibly operating our business:
A track record of being valued by our communities will contribute to us being considered a ‘company of choice’ by governments, business partners and communities
Improves the ability to attract and retain a skilled and motivated workforce
Our reputation as an ethical, responsible business will assist in our ability to attract capital
2007 sustainability report available on our website
www.bhpbilliton.com/bb/sustainableDevelopment.jsp
We aim to be a business that creates a positive legacy
A+
GRI REPORT
GRI CHECKED
BEST IN CLASS
environmental and social performance
STOREBRAND SRI
Dow Jones
Sustainability Indexes
Member 2007/08
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Our past: A proven track record
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BHP Billiton invested in growth early to meet demand
Completed projects
(US$bn)
FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008
Antamina Escondida Phase IV WAIO - Area C NWS Train 4 Escondida Norte Spence Genghis Khan
Typhoon San Juan UG Mt Arthur North ROD Paranam BMA Phase 2 Atlantis South
Tintaya Oxide Bream Gas Pipeline Hillside 3 GOM Worsley DCP Blackwater Coal Pinto Valley
Mozal 2 Ohanet WAIO RGP1 Escondida Sulphide Stybarrow
Zamzama Cerrejon Zona Norte Mad Dog WAIO RGP2 Koala UG
WAIO - Prod & Cap Exp Minerva WAIO RGP3
WAIO Acc Exp Angostura Ravensthorpe
Panda UG Yabulu
Dendrobium
BMA Phase 1
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
Source: BHP Billiton annual and half-yearly reports.
Note: Total represents capital expenditure on completed projects.
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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 Phase IV
Escondida Norte
Escondida Sulphide
Spence
Mount Arthur North
MAC & PACE
WAIO RGP1
WAIO RGP2
WAIO RGP3
Ravensthorpe
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.
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Delivering superior EPS growth for shareholder...
Earnings per share
(US$ per share)
US$ 0.31
US$ 0.31
50% CAGR
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.
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... 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
13.0
14.5
29% CAGR
26.0
28.0
36.0
47.0
29.0
45% increase in interim dividend
6.5
7.0
16.5
13.5
17.5
20.0
FY2002
FY2003
FY2004
FY2005
FY2006
FY2007
FY2008
Note: Two interim dividends were paid in FY2004
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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
0
Dividends/Distributions Reinvested(a)
Value of BHP Billiton Ltd Shares
Value at
18 April 2008
A$48,928
Value at
30 June 2006
A$32,318
Value at
30 June 2007
A$39,727
Value at
30 June 2004
A$13,445
Value at
30 June 2002
A$10,561
Value at
30 June 2005
A$19,848
Value at
28 June 2001
A$10,372
Value at
30 June 2003
A$9,098
Jun-01 Dec-01 Jun-02 Dec-02 Jun-03 Dec-03 Jun-04 Dec-04 Jun-05 Dec-05 Jun-06 Dec-06 Jun-07 Dec-07
Source: Bloomberg, Iress.
a) Dividends/distributions assumes that the dividends are reinvested in BHP Billiton Ltd. Includes the value of shares distributed in Bluescope Steel to BHP Billiton Ltd shareholders.
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Our future: The outlook is exciting
Slide 18
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Chinese growth is driving global materials demand
Change in global consumption
(%, 1997-2007(a))
64 %
36 %
88 %
96 %
57 %
50 %
16 %
7 %
7 %
(4)%
(2)%
(14)%
Copper Nickel Seaborne Iron Ore Energy
China USA Other
Notes: Seaborne iron ore demand based on import statistics - CRU data for 2007, IISI data for 1997. Energy consumption is all uses of coal, gas, oil and nuclear, expressed as millions tonnes of oil equivalent, 2007 data not yet available. Source: CRU, Brook Hunt, BP Statistical Review of World Energy (2007), IISI. a) Consumption growth calculated based on the change in annual consumption between years ended 1997 and 2007, expect for Energy consumption which is based on the period between 1995 and 2006.
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...and industrialisation and urbanisation in China appears to have a long way to go
Finished steel consumption
(kg/capita)
China Germany India Japan Korea, Rep. United States Taiwan
1,200
1,000
800
600
400
200
0
0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000
GDP/Capita (Jan 2008 Constant US Dollars)
Source: World Bank; Government Statistics for Taiwan; IISI
Slide 20
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Sales to China currently represent 20% of BHP Billiton’s revenue
BHP Billiton revenue from China
(US$m)
5,500
5,000
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
BHP Billiton sales revenue geographical split
(H1 08, US$bn)
ROW
Australia
China
Nth America
Other Asia
Japan
Europe
5,293
5,013
3,999
3,611
2,946
2,407
1,588
1,357
1,075
785
431
371
FY02 H1 03 H2 03 H1 04 H2 04 H1 05 H2 05 H1 06 H2 06 H1 07 H2 07 H1 08
Base Metals Iron Ore SSM Other
Slide 21
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India – the journey has begun
GDP BHP Billiton copper equivalent sales volume units(a)
(US$ billion) (100=FY2002 sales to China)
1,000
800
600
400
200
0
500
450
400
350
300
250
200
150
100
50
0
100% Basis
Equity Basis
China India China India
1996 2006 FY 2002 FY 2007
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.
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Our deep diversified inventory of growth options, many of which are brown field expansions
WA Iron ore Quantum 1 DRC Smelter CMSA Heap Leach 2 Olympic Dam Expansion 1 Angola & DRC Macedon CMSA Heap Leach 1 Worsley E&G NWS Nth Rankin B
NWS WFG Thebe Cannington Life Ext Canadian Potash NWS CP Caroona Daunia Knotty Head Perseverance Deeps WA Iron Ore RGP 4
CMSA Pyro Expansion Olympic Dam Expansion 2 Neptune Nth Nimba Boffa/Santou Refinery Shenzi Nth Ekati Maruwai Stage 2 NWS Angel Yabulu NWS T5 Kipper
Mad Dog SWR WA Iron Ore RGP 5 Wards Well Scarborough SA Mn Ore Exp MKO Talc Browse LNG Kennedy WA Iron Ore Quantum 2 Peak Downs Exp KNS Exp GEMCO Exp Samarco 4 Cerrejon Opt Exp Navajo Sth Bakhuis Neptune Klipspruit Shenzi
Blackwater UG Puma CW Africa Exploration Olympic Dam Espansion 3 Goonyella Expansions Kipper Ph 2 Eastern Indonesian Facility Gabon Corridor Sands I Angostura Guinea Alumina Maruwai Stage 1 Newcastle Third Port Atlantis North Samarco GEMCO Alumar Zamzama Phase 2
Hallmark RBM Maya Nickel Corridor Sands II Saraji Resolution Turrum Red Hill UG Escondida 3rd Conc Mt Arthur Coal UG Douglas-Middleburg Pyrenees Cliffs
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
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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
Metallurgical Coal(a)
JFY2008: +206-240%
Manganese(b)
JFY2008: +408%
Iron Ore(c)
JFY2008: +65-71%
JFY2003 JFY2004 JFY2005 JFY2006 JFY2007 JFY2008
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.
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The offer for Rio Tinto
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Overlapping mineral basin positions. US$3.7bn of synergies
Ekati Diavik Ekati and Diavik Kennecott Pinto Valley Resolution Resolution, Pinto Valley and Kennecott Corridor Sands RBM QMM Mineral Sands Pilbara Cape Lambert Dampier Port Hedland Robe River Hamersley IO Mt Goldsworthy Yandi Mt Newman Mining Area C WA Iron Ore Hunter Valley Coal Mt Pleasant Bengalla Hunter Valley Ops Warkworth Mt Thorley Mt Arthur Coal Queensland Coal Hail Creek Goonyella Riverside Broadmeadow Peak Downs Saraji Blair Athol Kestrel South Water Creek Poitrel Norwich Park Gregory Blackwater Dalrymple Hay Point Gladstone
BHP Billiton Rio Tinto Joint
Selected existing BHP Billiton and Rio Tinto assets, projects and concessions.
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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.
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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
0
100
200
300
400
500
Rio Tinto Indexed Share Price Performance
BHP Billiton 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. Correlation calculated based on a 5-day rolling basis.
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3.4:1 represents a 45% premium
Rio Tinto vs BHP Billiton historical share exchange ratio(a)
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
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)
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.
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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
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Q&A’s
Slide 31
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Senior Executive Profiles
Slide 32
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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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Appendix: Marcus Randolph Profile
Marcus Randolph – Chief Executive Ferrous and Coal
Age: 52
Professional qualifications: MBA (Harvard Business School)
Bachelor of Science (Colorado School of Mines)
Previous BHP Billiton positions:
Chief Organisation Development Officer
President Diamonds and Specialty Products
Chief Development Officer Minerals
Prior to the formation of BHP Billiton, other positions held included:
Chief Strategic Officer Minerals
Other work experience:
Chief Executive Officer, First Dynasty Mines
Mining and Minerals Executive, Rio Tinto Plc
Director of Acquisitions and Strategy, Kennecott Inc.
General Manager, Corporacion Minera Nor Peru (Asarco)
Mine Operating Positions in the US, Asarco Inc.
Residence:
Melbourne, Australia
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