BHP Group Limited- Results for the Half-Year Ended 31st December 2021

BHP RESULTS FOR THE HALF YEAR ENDED 31 DECEMBER 2021

Note: All guidance is subject to further potential impacts from COVID-19 during the 2022 financial year.

Keeping our people and communities safe

• We achieved our third consecutive year fatality free.
• Our focus on safety and health has helped us to mitigate the impacts of COVID-19 and deliver continued strong operational performance.

Margin of 64%, higher realised prices, disciplined cost performance and near record production at Western Australia Iron Ore (WAIO)

• Profit from operations of US$14.8 billion, up 50%. Underlying EBITDA⁽ⁱ⁾of US$18.5 billion at a margin⁽ⁱ⁾ of 64% for continuing operations. Disciplined cost performance, with unit cost guidance reiterated (at guidance exchange rates⁽ⁱⁱ⁾) with the exception of Queensland Coal which has increased, reflecting lower expected volumes for the full year as a result of significant wet weather and labour constraints.
• Attributable profit of US$9.4 billion and Underlying attributable profit⁽ⁱ⁾of US$10.7 billion up 77% from the prior period for total operations.
• Net operating cash flow of US$11.5 billion and free cash flow⁽ⁱ⁾of US$8.5 billion for continuing operations reflects higher realised prices across our major commodities and reliable operational performance.

Disciplined capital allocation and a revised net debt target to between US$5 and US$15 billion

• Capital and exploration expenditure⁽ⁱ⁾of US$2.9 billion for continuing operations. Guidance for minerals capital and exploration expenditure for the full year has decreased by US$0.2 billion to US$6.5 billion as a result of favourable exchange rate movements.
• Our potash developments are tracking to plan. The Jansen shaft project is 98% complete and the Jansen Stage 1 project has commenced contract awards.
• We have added to our early stage growth options in future facing commodities by executing agreements for interests in additional Australian copper projects in October 2021, including the Elliott project in the Northern Territory, and investing in the Kabanga Nickel Project in Tanzania in December 2021.
• Our commitment to a strong balance sheet remains. We have revised our net debt target range to between US$5 and US$15 billion. The revised range will support a resilient balance sheet and retain the flexibility to allocate capital towards shareholder returns and future organic and inorganic investment opportunities. Net debt⁽ⁱ⁾at 31 December 2021 was US$6.1 billion.

Value and returns: Record interim dividend of US$1.50 per share and Underlying ROCE up to 39.5%

• We will pay a record interim dividend of US$1.50 per share or US$7.6 billion, equivalent to a 78% payout ratio⁽ⁱⁱⁱ⁾.
• Underlying return on capital employed⁽ⁱ⁾strengthened further to 39.5% for total operations.

Strategic actions progressing to plan

• In January 2022, BHP completed the unification of BHP's dual listed corporate structure.
• The Cerrejón divestment to Glencore completed in January 2022 and the announced share sale agreement to divest BHP Mitsui Coal (BMC) is expected to complete in the middle of the 2022 calendar year. The review process for New South Wales Energy Coal (NSWEC) is progressing, in line with the two-year timeframe we set last year.

1

• Completion of the proposed merger of our Petroleum business with Woodside is expected in the June 2022 quarter subject to satisfaction of conditions precedent including approval by Woodside shareholders.

Results for the half year ended 31 December 2021

The December 2021 half year financial results have been prepared on the basis that the BHP Petroleum business is a discontinued operation. The financial contribution of Petroleum entities impacted has been disclosed as separate line items, “Discontinued operations”, in the BHP Group's Consolidated Income statement and Consolidated Cash flow statement, and has not been included when calculating the minimum dividend payout. BMC will continue to be consolidated with Queensland Coal as a continuing operation until the expected completion in the middle of the 2022 calendar year. On the Consolidated Balance Sheet, both BMC and BHP Petroleum have been reclassified as assets held for sale and excluded from net operating assets.

BHP Chief Executive Officer, Mike Henry:

“BHP had a strong first half. We achieved our third consecutive fatality free calendar year. We mitigated the impacts of COVID-19 and significant adverse weather events to turn in a solid operational performance, particularly from our flagship Western Australian Iron Ore business.

We have announced an interim dividend of US$1.50 per share, bringing total shareholder returns to more than US$22 billion over the past 18 months.

Our record interim dividend was supported by our reliable operating performance and continued strong markets for a number of our products.

We have made strong progress on the execution of our strategy. We unified the BHP corporate structure with strong support from shareholders, we announced and advanced the proposed merger of our petroleum business with Woodside, we progressed our divestments of certain coal assets and we announced the final investment decision for our Jansen Stage 1 potash project.  We have also secured further growth options in future facing commodities.

BHP is well positioned for the future. We are building on our strong foundations and capital discipline to reshape our business and grow long-term value for shareholders and other stakeholders.”