TIDMBHP
RNS Number : 0801P
BHP Group PLC
14 October 2021
14 October 2021
To: Australian Securities Exchange cc: New York Stock Exchange
London Stock Exchange JSE Limited
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.
Authorised for lodgement by:
Stefanie Wilkinson
Group Company Secretary
BHP Group Limited ABN 49 004 BHP Group plc Registration
028 077 number 3196209
LEI WZE1WSENV6JSZFK0JC28 LEI 549300C116EOWV835768
Registered in Australia Registered in England and Wales
Registered Office: Level 18, Registered Office: Nova South,
171 Collins Street 160 Victoria Street
Melbourne Victoria 3000 Australia London SW1E 5LB United Kingdom
Tel +61 1300 55 4757 Fax +61 Tel +44 20 7802 4000 Fax +44
3 9609 3015 20 7802 4111
Members of the BHP Group which is headquartered in Australia
BHP Group Plc Annual General Meeting
Speeches by Ken MacKenzie, Chair
and
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
Priorities
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
Unification
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.
Portfolio
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 1.5degC 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-based
decision-making, will ensure we are well positioned to be at the
centre of global demand for key commodities into the future.
Climate Change
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.
We have:
-- 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.
Social Value
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
the virus, providing medical and sanitary supplies to strengthen
the public health network as well as supporting vulnerable people
through the sanitisation of public spaces.
The final area I wanted to talk about is our continued work with
Traditional Owner groups and other Indigenous representative
organisations to further strengthen our cultural heritage
management practices.
The long-term nature of our business gives BHP the opportunity
to establish lasting relationships with Indigenous peoples.
We understand that Indigenous peoples have a deep connection to
their natural environments and that these are tied to their
physical, spiritual, cultural and economic wellbeing.
BHP recognises and respects the significant contribution that
Indigenous peoples make to national and international economic
prosperity.
As one of many examples across the world, the journey of iron
ore from Banjima or Nyiyaparli Country in Western Australia is a
story in which an essential element of global growth is enabled by
two proud and culturally strong traditional owner communities.
We recognise our responsibility to respect and sustain the
cultural landscapes in which we operate and work in partnership to
ensure we respect the rights of the Indigenous peoples who are its
custodians.
This year in Australia we have worked closely with the First
Nations Heritage Protection Alliance to jointly develop a set of
Principles to guide BHP's approach to Indigenous cultural heritage
in Australia. I sincerely wish to thank those who have given their
support and guidance on this important work.
We have also set targets to increase Indigenous employment
within BHP and I am pleased to report our Indigenous people's
workforce participation rate has increased to 7.2 per cent in
Australia, 7.5 per cent in Chile and 13.7 per cent in Canada.
These are just some of the social and environmental programs we
have underway. Overall, in FY2021, we have invested approximately
US$175 million in social value initiatives.
Board renewal
Before I hand across to Mike Henry, I would like to acknowledge
our directors, Anita Frew and Susan Kilsby who will retire at the
conclusion of the 2021 Annual General Meetings. I would like to
sincerely thank Anita and Susan for their considerable contribution
to the Board and to the shareholders of BHP.
During the year we continued our focus on board renewal and
welcomed Xiaoqun Clever and Christine O'Reilly to the Board in
October 2020.
I am also pleased that Michelle Hinchliffe will join us as a
director in March. Michelle brings significant expertise in
financial risk management and strong global experience, and we look
forward to welcoming her early next year.
We will continue to focus on our board renewal process and will
seek to appoint another female independent Non-executive Director
in this financial year.
Conclusion
In conclusion, there is no doubt we continue to live in an
uncertain and challenging world. Despite this complexity, the good
news is BHP is in a strong and resilient position:
-- We have a clear strategy to deliver long-term value by
repositioning our portfolio towards future-facing commodities;
-- We have strength in our balance sheet, our people and performance culture; and
-- We have announced an important step towards redefining our
corporate structure for the opportunities that lie ahead.
In short, we believe the future is clear.
It has been a significant year for BHP - one that will transform
the company and unlock long-term value for our shareholders.
I wish to thank you for your ongoing support and it is now my
pleasure to invite Mike Henry to speak with you.
Mike Henry, Chief Executive Officer
Welcoming remarks
Thanks Ken.
It is a pleasure to be able to join some of our shareholders
here today in London.
And to those connecting virtually, I look forward to when we can
meet more of you in person.
Main Introduction
Following on from Ken, I'd like to talk a bit more about the
underlying business:
-- Our recent operational and financial performance;
-- How we are shaping the company to create value and returns
through meeting the world's resources needs;
-- And, our approach to our operations and engagement with those
around us in a way that maximises long term shareholder value and
generates value for others who depend on and support BHP.
Strong operational and financial results
Thanks to the resilience and commitment of BHP employees and
contractors, and support from our partners and communities, we
delivered a strong set of outcomes in the last financial year.
Most importantly, we improved overall underlying safety
performance and it has now been more than two and a half years
without a fatality in BHP operations. Safety remains priority
number one.
As Ken noted, our strong operational performance, coupled with
the tailwind of high commodity prices, saw us deliver record free
cash flow, an even stronger balance sheet, and of course a record
final dividend to shareholders.
In addition to seeking to maximise returns for every dollar
invested through running the base business very well - with a
strong focus on operational and cost discipline - we are also
seeking to grow value through ensuring that we have the right
portfolio and are able to capitalise on the opportunity to meet the
world's growing needs for certain resources.
Guided by our Capital Allocation Framework, last year we
invested US$2.3 billion in maintenance, in line with our intent to
ensure reliable operations.
We also invested more than US$5 billion in development, growth
and exploration across our business.
Creating significant value
Our focus on operational excellence shone through in:
-- Production and throughput records at Western Australian Iron Ore and Escondida.
-- Our highest ever copper production at Olympic Dam since BHP acquired it 16 years ago.
-- And delivery of four major projects on budget, and on or ahead of time.
This focus is unlocking further significant value for
shareholders and is supporting our ability to continue to grow
value for those others who benefit from BHP's presence.
In the year past we paid US$2.1 billion to local suppliers in
the communities where we operate.
We announced significant funding towards global response and
recovery efforts from the Covid-19 pandemic last year. More than
US$50 million was invested in community programs in areas where we
operate in Australia, North America, South America and Asia to
support greater access to local health services and relief
programs.
And the BHP Foundation is now working with 40 partner
organisations across 49 countries to advance solutions to some of
the world's most pressing sustainable development challenges. This
includes:
-- Working with Transparency International to identify
corruption risks in mining licensing and permitting processes.
-- Partnering with the United Nations Office of Women to provide
"second chance" education for marginalised women and girls to
re-enter formal learning environments.
-- And supporting Indigenous Australians in landscape-scale
conservation programs through the Ten Deserts project, covering a
vast area of the Australian continent.
Advancing decarbonisation
Now, in addition to the economic and social benefit our presence
brings to so many others, we are also very focused on ensuring that
the assets we run and our supply chains are operating
sustainably.
This includes a strong focus on showing leadership when it comes
to reducing the greenhouse gas emissions that accompany the
production and processing of our products.
We recently released our Climate Transition Action Plan, which
reflects our resolve in this regard. Shareholders are being asked
to vote on this today through the Say on Climate resolution.
Within this plan we outline our continuing commitment to net
zero operational emissions by no later than 2050, and our mid-term
target of at least 30 per cent emissions reduction by 2030 on 2020
levels. We've been taking action on this front for over two decades
now and our signing of multiple renewable energy contracts recently
will help accelerate this reduction in the near term.
Of course it is not just about operational emissions, or Scope 1
and 2 emissions. We also must focus on the emissions generated by
others in the value chain through the transport and processing of
our products, and the provision of goods and services to BHP. These
are our Scope 3 emissions.
While we can't determine the outcomes on that front alone, we
are working with our customers and suppliers to stimulate and
support their efforts to reduce emissions. This is in keeping with
our long-term goal to pursue net zero Scope 3 greenhouse gas
emissions by 2050 for our reshaped portfolio.
In the past year, we have entered into research and development
partnerships with companies covering 10 per cent of the world's
steel production to assist steelmaking decarbonisation efforts.
We undertook the world's first LNG-fuelled bulk carrier tender,
which will lower emissions of shipping our iron ore, and have
subsequently set a target of net zero emissions from the maritime
transport of our products by 2050.
We are also targeting net zero for our direct suppliers'
emissions from the provision of goods and services to BHP, also by
2050.
We continue to deliver strong operational and financial
performance, and ever more sustainable outcomes.
Reshaping our portfolio for a changing world
Our Company is in great shape and this is shining through in the
numbers.
Building upon this solid base, as we look to the future, we will
seek to grow value through positioning the BHP portfolio to benefit
from the big trends unfolding in the world around us. These include
population growth, rising living standards, electrification and
decarbonisation. We want to grow in those commodities that stand to
benefit greatest from these trends.
Against that backdrop:
-- we took the decision to proceed with Jansen, which will
contribute to more sustainable farming;
-- we announced the intent to merge our petroleum business with
Woodside, creating a large, more resilient company, better able to
navigate the energy transition and grow value while doing so;
and
-- we intend to continue to grow our already strong positions in nickel and copper.
In copper, we have some solid growth ahead over the next five
years, thanks to the recently commissioned Spence Growth project,
improving grades at Escondida and more reliable production out of
Olympic Dam.
We have increased our exploration effort and have work underway
in Ecuador, Peru, Chile, Mexico, the US and Australia.
And we are currently looking at targeted investment in early
stage development options - as we did with SolGold in Ecuador and
the Elliot copper project in Australia.
In nickel, we have established agreements with Midland
Exploration in Canada and made an offer to acquire Noront
Resources.
This combination of exploration, targeted early stage
investments, and unlocking significant organic growth in our
existing operated assets sets us up to deliver more of our products
to meet the world's needs.
Creating competitive advantage through our people and
culture
Now, everything I've spoken about - safety, strong operational
and financial performance, growth - only happens with great people
and culture.
This is something that I am really passionate about.
We need to continue to build capability and have a number of
efforts underway to do so.
We are strengthening our organisational capability as a
competitive advantage.
We're recruiting new talent as well as developing even greater
technical and operational capability through our Centres of
Excellence.
We are investing in building skills through the BHP FutureFit
Academy, where we trained more than 500 apprentices and trainees in
the past year, with a commitment to 2,500 over five years.
We are enabling our people and improving the way we work through
the BHP Operating System, which makes continuous improvement part
of what we do in our business every day.
Our plans to unify the BHP corporate structure and provide a
single share register will make us simpler and more agile - which
is in line with our broader drive for a high performance, inclusive
workforce and culture.
We are not yet fully where we want to be, and perhaps there will
always be more to do, but we are making some strong progress.
Female participation at BHP has increased by more than two
thirds since we set our aspirational gender goal in 2016 and we are
a better performing company for it. We remain wholeheartedly
committed to the important effort underway towards gender
balance.
Indigenous representation in our Australian workforce has risen
to 7.2 per cent and 7.5 per cent in Chile. We remain focused on
partnering with Indigenous and First Nations peoples in all the
regions in which we work.
Our proximity to Indigenous communities makes them critical
partners, whose rights, connection to land and cultural heritage we
respect. Understanding these rights and working with Indigenous
peoples is integral to our exploration and mine planning
processes.
At our Jansen Stage 1 Project, our goal is for First Nations
employees to make up 20 per cent of the workforce and we have
Opportunity Agreements in place with six First Nations communities
around the site. These are both firsts in the potash industry.
We remain frustrated that we continue to experience instances of
sexual harassment and assault in our camps and operations. This
conduct is completely unacceptable and we are absolutely committed
to eliminating it from BHP.
This year, we introduced a policy to limit alcohol consumption
at our Australian camps and launched a dedicated support service
providing assistance to anyone in our workforce impacted by sexual
assault or harassment. We've focused initiatives on education and
on-site security, with a further AU$300 million committed for
security improvements in 2022. We also continue to take an approach
to ensuring consequences for those that behave badly that is
designed to send a clear message that there is simply no place for
this conduct in our workplaces.
We are determined to create and maintain an environment at BHP
where we attract and retain the best talent and empower our people
to make the daily decisions that make us safer, more productive and
more capable of meeting the needs of our customers, communities and
nations.
Conclusion
The future for BHP is clear.
We are shaping our Company to meet the world's needs, and we are
shaping our teams to get the very best out of our assets.
We are doing so because it drives results and fosters high
performance. It enables us to get the most out of ourselves, and
out of the commodities we produce.
And importantly, we are doing it because it adds value: to the
world, to the communities we work in, and of course to our
shareholders.
The plans we have announced and the strategy underpinning them
will allow us to continue to create even greater value now and into
the future.
It is an exciting time for the Company.
I want to thank everyone - our stakeholders and especially our
shareholders - for your ongoing support for our Company.
The Chair then conducted the formal items of business.
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