Shell Plc · LSE:SHEL
Shell — Investor Day (June 2023)
48 slides from Shell's investor day presentation, Jun 14, 2023
Slide 1: Delivering more value, with less emissions
Delivering more value, with less emissions Performance, Discipline, Simplification Capital Markets Day 2023
Slide 2: Agenda
Capital Markets Day 2023 Agenda In person and virtual (ET) 8:30 – 8:35 AM Welcome – Tjerk Huysinga – EVP Investor Relations 8:35 – 9:30 AM Wael Sawan – Chief Executive Officer Sinead Gorman – Chief Financial Officer 9:30 – 9:45 AM Break 9:45 – 10:15 AM Zoë Yujnovich – Integrated Gas and Upstream Dir
Slide 3: Cautionary note
Cautionary note The companies in which Shell plc directly and indirectly owns investments are separate legal entities. In this presentation “Shell”, “Shell Group” and “Group” are sometimes used for convenience where references are made to Shell plc and its subsidiaries in general. Likewise, the word
Slide 4: Operationalising Powering Progress
Operationalising Powering Progress Wael Sawan, Chief Executive Officer Sinead Gorman, Chief Financial Officer Capital Markets Day 2023 | June 14 4
Slide 5: Today's Speakers: Experienced leadership team
Today’s Speakers Experienced leadership team Wael Sawan Sinead Gorman - Chief Executive Officer - Chief Financial Officer - With Shell since 1997 - With Shell since 1999 Zoë Yujnovich Huibert Vigeveno - Integrated Gas and - Downstream and Renewables & Upstream Director1 Energy Solutions Director1 -
Slide 6: Performing with purpose
Shell Performing with purpose Generating Our purpose is to shareholder value power progress together by providing more and cleaner energy solutions Respecting Powering Powering nature Progress lives Underpinned by our core values and Achieving net-zero our focus on safety emissions Capital Markets D
Slide 7: Evolving global demand requires a balanced multi-energy transition
Shell Evolving global demand requires a balanced multi-energy transition World Primary Energy Mix 100% Hydrocarbons will be critical for energy security for the 90% foreseeable future Energy Demand (EJ/year) 80% 70% LNG will continue to grow and displace coal while 60% low-carbon solutions mature 50
Slide 8: Prioritise hard-to-abate sectors to capitalise on growth opportunities
Shell Prioritise hard-to-abate sectors to capitalise on growth opportunities Global Energy Demand Mix Today Growth in Shell Addressable Energy Market Others $10-12 trillion Residential Bio EV Commercial Industry1 $5-7 trillion Hydrogen3 Focus on ~70% of CCS Transport 2 global energy demand & majorit
Slide 9: The investment case through the energy transition
Shell The investment case through the energy transition Providing Energy Security Committed to oil and gas, with a focus on LNG growth Investing ~$40 billion1 in Leading Integrated Gas & Advantaged Upstream Enabling the Energy Transition Providing molecules to decarbonise the transport and industry
Slide 10: Our guiding principles
Shell Our guiding principles Performance Discipline Simplification Competitive and Deliver on Faster decision consistent execution, commitments and focus making and a high-graded driving returns on value creation portfolio Capital Markets Day 2023 | June 14 10
Slide 11: Well positioned through our world-leading portfolio
Shell Well positioned through our world-leading portfolio Leading Advantaged Differentiated Integrated Gas Upstream Downstream/R&ES Grow low-carbon Grow leading portfolio Ensure cash flow molecule sales to transport position longevity and industry sectors High-grade Mobility Focus on operational Val
Slide 12: Delivering more value, with less emissions
Shell Delivering more value, with less emissions Enhanced Distributions 30–40% of CFFO through the cycle Strong Financial Performance >10% p.a. FCF per share growth 1 $10–15 billion of investment in low-carbon 2 Less Emissions energy solutions 1 2 FCF 2022 – 2025, for price assumptions see appendix
Slide 13: Enhancing distributions through disciplined delivery
Shell Enhancing distributions through disciplined delivery Higher Shareholder Lower Capex Lower Cost Distributions DPS increase of 15% Cash capex: at Q2 2023 results 1 Structural cost reduction: $22–25 billion p.a. $2-3 billion by end-2025 for 2024 and 2025 a minimum of $5 billion buybacks for H2 20
Slide 14: Balanced, returns-focused investments driving cash flow growth
Shell Balanced, returns-focused investments driving cash flow growth Cash Capex Cash Capex Free Cash Flow 2022 – 2030 1 after power dilutions $ billion $ billion 25 23-27 22-25 ~(1-2) 21-23 30 20 Targeting >6%1 FCF growth p.a. 20 through 2030 10 10 0 0 2022 2023 2024-25 2024-25 2022 2025 2030 UP IG
Slide 15: Resilient distributions, underpinned by attractive growth
Shell Resilient distributions, underpinned by attractive growth Cash Generation and Uses at $50/bbl Brent Cash Generation and Uses at $65/bbl Brent 2 3 >10% FCF $ billion $ billion growth p.a. per share through 50 50 20251 Dividend Break-even at ~$40 25 25 per barrel Buybacks at ~$50 0 0 Sources Use
Slide 16: A pragmatic approach to capital allocation
Shell A pragmatic approach to capital allocation Balanced Capital Enhanced Allocation Disciplined Shareholder Distributions Investment 30–40% of CFFO Cash Capex: through the cycle $22–25 billion p.a. ~4% progressive dividend annually for 2024 and 2025 1 Strong Balance Sheet AA credit metrics through
Slide 17: On track with planned operational emissions reductions
Shell On track with planned operational emissions reductions Net Scope 1 & 2 Emissions (mtpa CO2e) Halving Scope 1 & 2 emissions by 2030 1 -30% -50% Achieving near-zero methane emissions by 2030 83 e.g. CCS Eliminating routine flaring from Upstream operations Electrification by 2025 2 Portfolio acti
Slide 18: Supporting customer decarbonisation to achieve net-zero
Shell Supporting customer decarbonisation to achieve net-zero Investing $10–15 billion Focusing on the hard- Advocating for policies 2022: 40%+ of R&D spend 1 in low-carbon energy to-abate Transport and supporting and enabling on proving and scaling solutions Industry sectors the energy transition i
Slide 19: Leveraging technical capabilities and an empowered workforce
Shell Leveraging technical capabilities and an empowered workforce Technology and Innovation Leadership Exceptional People Capital Markets Day 2023 | June 14 19
Slide 20: The investment case through the energy transition
Shell The investment case through the energy transition Providing Energy Security Committed to oil and gas, with a focus on LNG growth Investing ~$40 billion1 in Leading Integrated Gas & Advantaged Upstream Enabling the Energy Transition Providing molecules to decarbonise the transport and industry
Slide 21: Integrated Gas and Upstream
Integrated Gas and Upstream Zoë Yujnovich Capital Markets Day 2023 | June 14 21
Slide 22: Leading Integrated Gas and Advantaged Upstream
Integrated Gas and Upstream Leading Integrated Gas and Advantaged Upstream Global leader in LNG and GTL with Best-in-class Deepwater complemented Production longevity underpinned by strong cash generation through the cycle by resilient Conventional Oil & Gas stable liquids and growth in gas Shell to
Slide 23: Value over volume driving significant and resilient cash delivery
Integrated Gas and Upstream Global leader in LNG: continued growth until the 2030s Value over volume driving significant LNG sales (Liquefaction + Purchased Volumes)2 (mtpa) and resilient cash delivery 80 +20-30% 60 Consistently delivering highest unit CFFO excluding 40 working capital amongst peers
Slide 24: Longevity underpinned by strong resource base in high-margin Deepwater and LNG
Integrated Gas and Upstream Exploring where we have differentiated capabilities Longevity underpinned by strong Focused on heartlands with no frontier exploration entries after 2025 resource base in high-margin Deepwater and LNG De-risking Namibia Most resources in high-margin LNG and Deepwater at p
Slide 25: Integrated Gas value chain generates significant value
Integrated Gas and Upstream Integrated Gas value chain generates significant value Optimising portfolio for demand in IG Adjusted Earnings trending with Managing cross-commodity Northern Hemisphere winter LNG price markers exposure for value Net term volumes1 $ billion $/boe LNG sales in 2022 (mtpa)
Slide 26: Integrated Gas volumes will grow through end of decade
Integrated Gas and Upstream Integrated Gas volumes will grow through end of decade Growing equity volumes through selective investment Contracting for reliable and competitive offtake Liquefaction volumes (mtpa) Purchased volumes1 (mtpa) +25-30% 40 40 +15-25% 30 30 20 20 10 10 0 0 2022 2025 2030 202
Slide 27: Progressing on LNG feedgas supply and operational excellence
Integrated Gas and Upstream Progressing on LNG feedgas supply and operational excellence Securing feedgas supply by investing $2 billion p.a. on backfill Increasing Prelude availability 1 Controllable midstream availability % 100% 80% Egypt LNG Atlantic LNG Brunei LNG 60% Nigeria LNG Prelude Gorgon
Slide 28: Deepwater: Competitive delivery through advantaged capabilities
Integrated Gas and Upstream Deepwater: Competitive delivery through advantaged capabilities Leading operator in the Gulf of Mexico Simplifying and replicating projects Top foreign producer in Brazil Mars Norphlet Vito Perdido Whale 3 Sparta > 25 % >14 % ~ 70 % 80 > % ~ 400 kboe/d 3 FPSOs IRRs for br
Slide 29: Leading Integrated Gas and Advantaged Upstream
Integrated Gas and Upstream Leading Integrated Gas and Advantaged Upstream Value over volume driving significant Leading positions in high-margin LNG and Deepwater and resilient cash delivery Average break-even price of $30 per bbl Sustain liquids production of ~1.4 mboe/d through 2030 Longevity of
Slide 30: Downstream and Renewables & Energy Solutions
Downstream and Renewables & Energy Solutions Huibert Vigeveno Capital Markets Day 2023 | June 14 30
Slide 31: Profitably decarbonising our customers
Downstream and Renewables & Energy Solutions Profitably decarbonising our customers Trading + Optimisation Tomorrow The Future Today + 2025+ 2030+ Repurposed Chemicals Energy & EV Charging Hydrogen & Products Renewables Chemicals Parks Marketing & Energy Mobility & Solutions Marketing Low Carbon Fue
Slide 32: Today: Repurposing Energy & Chemicals Parks to help decarbonise customers
Downstream and Renewables & Energy Solutions Today: Repurposing Energy & Chemicals Parks to help decarbonise customers Portfolio high-grading Strengthen financial delivery Adjusted Earnings $ billion Shell Polymers Monaca 5 3 year rolling average Canada 4 Europe United States China 3 Singapore 2 1 S
Slide 33: Today: Delivering improved Marketing performance
Downstream and Renewables & Energy Solutions Today: Delivering improved Marketing performance Adjusted Earnings $ billion 6 ~$4-5 billion High-grade network Disposing of ~500 sites1 annually 4 Paced growth ~$3 billion cash capex p.a. 2024-2025 2 IRR hurdle rate of 15%2 0 Grow premium margin 2018 201
Slide 34: Tomorrow: Positioned for profitable growth in EV charging
Downstream and Renewables & Energy Solutions Tomorrow: Positioned for profitable growth in EV charging Progressing EV charging growth Convenience retail complements EV Thousand public charge points1 ~200 ~$0.5 billion Americas Europe Cash capex p.a. 2024–2025 Number of visits per Asia China ~2x mont
Slide 35: Tomorrow: Growing our Low Carbon Fuels business
Downstream and Renewables & Energy Solutions Tomorrow: Growing our Low Carbon Fuels business Building on a market-leading position Shell and raízen partnership Sales (mboe per annum) 200 raízen joint venture 2 ~$1 billion #1 second generation ethanol producer globally3 Cash capex p.a. 2024–2025 #1 s
Slide 36: Future: Hydrogen and CCS
Downstream and Renewables & Energy Solutions Future: Hydrogen and CCS Rotterdam Clean Energy Hub Potential to leverage the Inflation Reduction Act Hollandse Kust Data Centres (Noord) Wind Farm 759 MW Aramis CCS 5 mtpa Store Porthos CCS 2.5 mtpa Store Industrial Shell Holland Shell Energy & Shell Hyd
Slide 37: Power: Enabling growth today, tomorrow, and in the future
Downstream and Renewables & Energy Solutions Power: Enabling growth today, tomorrow, and in the future Strong gas & power Growing value Seeding options for platform for today for tomorrow the future Top 3 gas & power Focusing on select markets: Supply renewable power for wholesaler in the USA1 USA,
Slide 38: Profitably decarbonising our customers
Downstream and Renewables & Energy Solutions Profitably decarbonising our customers Repurpose, simplify and high-grade Chemicals & Products business Value over volume Resetting Marketing guidance on Adjusted Earnings to $4-5 billion p.a. by 2025 Accessing green electrons enabling low-carbon molecule
Slide 39: Key Takeaways and Q&A
Key Takeaways and Q&A Wael Sawan, Chief Executive Officer Capital Markets Day 2023 | June 14 39
Slide 40: The investment case through the energy transition
Shell The investment case through the energy transition Providing Energy Security Committed to oil and gas, with a focus on LNG growth Investing ~$40 billion1 in Leading Integrated Gas & Advantaged Upstream Enabling the Energy Transition Providing molecules to decarbonise the transport and industry
Slide 41: Appendix
Appendix Capital Markets Day 2023 | June 14 41
Slide 42: Targets
Shell Capital Markets Day 2023 Targets Shareholder distributions of 30-40% of CFFO through the cycle >6% p.a. absolute free cash flow growth through 20301 Grow FCF/share >10% p.a. through 20251 Structural cost reduction $2–3 billion by end-2025 Net-zero emissions by 2050 (Scopes 1, 2 and 3) Halving
Slide 43: Disciplined, value-focused capital allocation
Appendix Disciplined, value-focused capital allocation Cash Capex after Cash Capex power dilutions FCF IRR hurdle rates Power 2022 2023 24-25 24-25 2025 1 $ billion dilutions IG 4 ~5 ~5 ~5 ~8 11% UP 8 ~8 ~8 ~8 ~10 15% IGU 12 ~13 ~13 ~13 17-18 2 MKT ex. LCF/EV 15% MKT 5 ~6 ~3 ~3 ~4 LCF 12% EV 12% C&P
Slide 44: Pipeline of major projects
Peak Appendix Projects under construction production/Capacity/ Shell Country share % Pipeline of major projects Products (100%) Start-up 2023-2024 Mero 2 [A] 180 kboe/d 19.3 Brazil 2023 updates: Mero 3 [A] 180 kboe/d 19.3 Brazil Vito (USA) and Pierce (UK) start-ups, driving resource longevity Whale
Slide 45: Definitions
Appendix Definitions Metric Definition 2P+2C Proved and probable (2P) reserves + best estimate of contingent resources (2C), under the society of Petroleum Engineers Resource Classification System. Adjusted Earnings Income attributable to Shell plc shareholders for the period, adjusted for the after
Slide 46: Definitions and price assumptions
Appendix Definitions Metric Definition Frontier entry A frontier entry refers to Shell participating in new exploration activities (seismic activities, exploratory drilling) outside countries where hydrocarbons have been discovered already (by Shell or other companies). Low-carbon energy E-Mobility
Slide 47: Abbreviations
Appendix Abbreviations B2C Business to consumer E&C Parks Energy and Chemicals Parks LCF Low Carbon Fuels boe Barrels of oil equivalent Earnings before interest, tax, LNG Liquefied natural gas EBITDA depreciation and BEP Break-even price amortisation mtpa Million tonnes per annum Compounded annual g
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