14 October 2021
Australian Securities Exchange
cc: New York Stock Exchange
London Stock Exchange
BHP GROUP PLC ANNUAL GENERAL MEETING SPEECHES
Please find attached addresses to shareholders to be delivered by the Chair and the Chief Executive Officer at BHP Group Plc's Annual General Meeting today.
In accordance with the Dual Listed Company structure of the Group, all of the items of business to be conducted at BHP Group Plc's Annual General Meeting will be treated as joint electorate actions with BHP Group Limited and the poll results on these items will not be known until the conclusion of BHP Group Limited's Annual General Meeting on 11 November 2021. The results of the polls will be released to the market shortly after conclusion of the BHP Group Limited Annual General Meeting.
The meeting can be accessed at https://edge.media-server.com/mmc/p/8e2yermz.
Further information on BHP can be found at bhp.com.
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Members of the BHP Group which is headquartered in Australia
BHP Group Plc Annual General Meeting
Speeches by Ken MacKenzie, Chair
Mike Henry, Chief Executive Officer
14 October 2021
BHP Group Plc Annual General Meeting
14 October 2021
Ken MacKenzie, Chair
Global uncertainty and complexity
This year has been exceptionally challenging. The Covid-19 pandemic has continued to spread across the globe, and has tested all of us.
I have always felt honoured to serve as your Chair, however, never before have I been more proud of the performance of our company and people than in the past year.
During this period of global disruption, we have continued to produce the commodities the world requires, kept our world-class assets running safely and efficiently, and played a substantial role in global economic development. Importantly, we have been able to continue to make a valuable contribution to the communities where we operate - partnering with local businesses, regional and Indigenous communities, supporting local jobs and continuing to pay taxes and royalties to governments - an economic contribution of approximately US$41 billion for the year.
Throughout this time, we have been grateful for the support of all our partners - our customers, our suppliers and our communities.
We are also grateful for the support from you - our shareholders. I have always enjoyed the opportunity presented by the AGM to thank you in person for your ongoing support and to hear first-hand your thoughts and concerns. Unfortunately, virtual engagement is not the same - and the entire Board and management team look forward to a time when we can all meet again in person.
FY2021 Financial Highlights
Despite the complexity of our current world, BHP performed very strongly in FY21 under the leadership of our CEO Mike Henry and the hard work of our 80,000 team members around the globe.
Earnings were up 69% to US$37.4 billion
We generated record free cash flow of US$19.4 billion up 140%
Net debt finished down 66% for the year at US$4.1 billion
Return on capital employed strengthened to 32.5%.
On the back of these strong results, a record total dividend of US$3.01 was paid per share for FY2021, bringing BHP's returns to shareholders to more than US$15 billion for the full year, and more than US$38 billion over the past three years.
Driven by our purpose
Our performance is underpinned by our purpose - to bring people and resources together to build a better world.
Our five priorities - Safety, Portfolio, Capital Discipline, Capability and Culture, and Social Value - are the foundations that enable us to deliver now and into the future.
The safety and wellbeing of our people remains our top priority. It is pleasing that we have had over two and a half years without a fatality at our operated assets and key indicators continue to improve.
However, while improvements to traditional safety measures are positive, we know that our commitment to health and safety requires more work. Sexual harassment is a critical health and safety issue for BHP and for our industry. One incident at our sites is one too many - and we remain committed to working to ensure that all our people can go to work feeling safe and respected.
Unlocking value and positioning for the future
Moving to another of our priorities - portfolio and transformation.
At BHP, we are always looking to the future. As our world continues to evolve, we must be ready to position the organisation to capture future opportunities, and unlock value for our shareholders.
Given the strength of our position we believe now is the right time to make a number of strategic, transformative changes.
The first of these is our intention to unify BHP's corporate structure under BHP Group Limited.
The current Dual Listing structure was established to help facilitate the BHP and Billiton merger in 2001 and, although it has served us well, its suitability for our organisation has diminished over time.
Unification will offer a number of benefits due to the simplification of the company's structure. These include moving from two parent companies to one parent company, with one share register and one share price globally.
It would also enable BHP to be more efficient, and agile in responding to future opportunities.
If unification is implemented, BHP Group Plc shareholders will have their shares exchanged for BHP Group Limited shares on a one-for-one basis. There will be no change for BHP Group Limited shareholders. In addition, BHP's Board, management, strategy, and dividend policy will remain the same.
I want to be clear that London is and will remain a vital location for BHP. We value our partnerships and relationships in the UK, and intend to maintain our London corporate office. Further, I have committed to continuing my annual engagement with retail shareholders in the UK, through ShareSoc and the UKSA.
The unification proposal is subject to a number of approvals including shareholder meetings and votes in the first half of 2022. I look forward to discussing the proposal with you at that time.
In addition to unification, we have also announced a number of strategic steps towards transforming our portfolio for the future.
In 2020, we conducted our own scenario analysis which indicated that a world aligned to the Paris Agreement 1.5°C outcome was the most beneficial to BHP shareholders and illustrated the important role BHP has to play in the global energy transition.
Under this scenario, we expect demand for many of our commodities to be driven by continued economic growth, decarbonisation and electrification. For example copper, nickel and steel will play a vital role in supporting the global energy transition, while we expect that demand for potash will continue to increase to support the dietary requirements of growing populations.
And at the same time, we continue to assess our portfolio to determine the right mix of attractive commodities and assets to create shareholder value.
It is against these dimensions of value and decarbonisation that we have announced changes to our portfolio that will position us to capture these future-facing opportunities, and unlock long-term value for shareholders.
We have invested in the Jansen Stage 1 potash project in Canada located in the world's best potash basin, providing significant exposure to this future-facing commodity with strong demand and potential growth.
We have also announced the proposed merger of our petroleum business with Woodside. We believe this transaction will unlock value for BHP shareholders as the combined business will be better positioned to navigate the energy transition.
We are confident these changes, alongside our commitments to climate leadership, and our financial and social value-baseddecision-making, will ensure we are well positioned to be at the centre of global demand for key commodities into the future.
Now moving to climate change. As I mentioned earlier, our scenario analysis shows that the more the world decarbonises, the more valuable BHP becomes. So our business agenda is aligned with our climate-change agenda.
This year we have made strong progress towards meeting our commitments including initiatives focused on reducing our operational and value-chain emissions.
established a substantial pipeline of decarbonisation projects at our operated assets to achieve our emissions reduction target of at least 30% by FY2030;
our best estimate of the capital expenditure to implement these projects is US$2-4 billion; and
we have also committed a further US$75 million to partnerships focused on steel decarbonisation with four of our major steelmaking customers.
Importantly, we have also aligned a component of executive remuneration to performance against our climate goals and targets.
Last year we also published our Climate Change Report and in September, we published the BHP Climate Transition Action Plan, which sets out the steps BHP intends to take towards net zero Scopes 1, 2 and 3 emissions.
Our Plan was welcomed by leading investors engaging with us through the Climate Action 100+ initiative.
As you know, at this year's AGMs, we have asked our shareholders to vote on our new Climate Transition Action Plan. We believe it is important that all of our shareholders have an opportunity to engage with us on our climate strategy and actions, and this advisory vote is intended to provide a forum for discussion and feedback on the Plan. Responsibility for our strategy, of course, remains with the Directors, however we will take into account the feedback we receive as part of the vote.
We look forward to hearing your views on this important topic.
Today I have spoken a lot about our climate change position, however it represents only one aspect of our priority to create social value for our stakeholders.
Social value focuses on our commitment to make a positive contribution to society - to our people, partners, economy, environment and local communities. Its principles are embedded in both our business planning and our decision-making.
This year we have continued our work to create social value across the jurisdictions in which we operate.
There are three key areas I particularly want to reference today.
First, is our work towards building a more diverse workforce. Since 2016, we've increased female representation across the business by more than two thirds - to over 30 per cent. This is an important milestone as we continue to progress on our aspirational goal of gender balance by 2025.
The second area I want to highlight is our focus on supporting the economic recovery of communities due to the Covid-19 crisis. One example of this is our work in Chile. BHP has created the 'Vamos Juntos'/ Forward together' program to support local communities where we operate, to have the resources and capabilities to cope with the health, social and economic impacts of Covid-19. The program includes increased testing capability for
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