Shell PLC · LSE:SHEL
Shell — Royal Dutch Shell — Q2 2014 Earnings Presentation
24 slides from Shell's earnings presentation, Jul 31, 2014
Slide 1: Balancing Growth & Returns: Second Quarter 2014 Results
BALANCING GROWTH & RETURNS SECOND QUARTER 2014 RESULTS 31 JULY 2014 ROYAL DUTCH SHELL PLC Copyright of Royal Dutch Shell plc 31 July, 2014 1
Slide 2: Ben van Beurden, Chief Executive Officer
BEN VAN BEURDEN CHIEF EXECUTIVE OFFICER ROYAL DUTCH SHELL PLC Copyright of Royal Dutch Shell plc 31 July, 2014 2
Slide 3: Definitions & Cautionary Note
DEFINITIONS & CAUTIONARY NOTE Reserves: Our use of the term “reserves” in this presentation means SEC proved oil and gas reserves. Resources: Our use of the term “resources” in this presentation includes quantities of oil and gas not yet classified as SEC proved oil and gas reserves. Resources are c
Slide 4: 2014 Priorities
2014 PRIORITIES Returns and cash flow Improve our financial Competitive returns for shareholders performance Take hard choices on new options Enhance our capital efficiency Increase asset sales Reduce pace of growth investment Major deep-water start-ups in 2014 Deliver new projects Int
Slide 5: Driving Performance in Shell
DRIVING PERFORMANCE IN SHELL Performance units New shareholding requirements Drive bottom line focus Credible, competitive and affordable plans CEO 7 x base pay Drives decisions on spending + divestment Individual performance management Stronger accountability for outcomes CFO 4 x base p
Slide 6: Improve Financial Performance
IMPROVE FINANCIAL PERFORMANCE H1 2014 OUTCOME Earnings + ROACE Cash flow $ billion % $ billion $ billion Upstream Corporate/Other Downstream ROACE (RHS) CFFO CFFI Free cash flow (RHS) Dividend + buy-back $ billion Balancing returns + growth Competitive shareholder returns Expecting >$30 billio
Slide 7: Improve Financial Performance: Oil Products
IMPROVE FINANCIAL PERFORMANCE OIL PRODUCTS Addressing underperforming portfolio Downstream CFFO + ROACE $ billion % Selective Growth: Chemicals China LNG for transport Premium fuels + lubes Refinery crude flexibility others Fix: Motiva Attractiveness Singapore fuels CFFO ROACE (RHS)
Slide 8: Improve Financial Performance: North America Resources Plays
IMPROVE FINANCIAL PERFORMANCE NORTH AMERICA RESOURCES PLAYS Liquids rich shales (LRS) Redefining growth + reducing cost Dry gas Gas/LRS Maintain / Grow: Groundbirch Gas monetization options W. Canada gas + Deep Basin/Kaybob integration plays LNG Foothills/Pembina W. Canada LRS Canada Permian L
Slide 9: Enhance Capital Efficiency
ENHANCE CAPITAL EFFICIENCY Take hard choices on new options 2014+ Asset sales / license expiry More selectivity: FIDs > $500 million require CEO approval at FEED Wheatstone LNG BC-10 dilution Maturing new projects: LNG, deep-water North America LRS Increase asset sales Italy Downst
Slide 10: Deliver New Projects: 2014 Start-ups
DELIVER NEW PROJECTS 2014 START-UPS Mars B – February 2014 start-up Mars B production ramp-up progress kboed Shell 72%, 100 kboe/d Cardamom: H2 2014 start-up Gumusut-Kakap: H2 2014 start-up Shell 100%, 50 kboe/d Shell 33%, 135 kboe/d Copyright of Royal Dutch Shell plc 31 July, 2014 10
Slide 11: Conventional Exploration Portfolio + Themes
CONVENTIONAL EXPLORATION PORTFOLIO + THEMES Conventional Exploration spend 2014 Time to Prospect ~ $ 4 billion development Size (years) (million boe) 15+ >500 Arctic Frontier 10+ >250 Under explored basins Heartlands 3+ 50-250 New plays in Shell producing basins Arctic/Frontier Near field exploratio
Slide 12: Conventional Exploration Progress
CONVENTIONAL EXPLORATION PROGRESS DELIVERY H1 2014: EXAMPLES Malaysia, Block SK318 Malaysia, Block SK408 GOM, Rydberg Deep Doo Sung rig Gorek-1 3D Noble Globetrotter 1 Rosmari gas discovery 4 near field gas discoveries in Deep-water oil discovery 16 km ~110 million boe 2014 (100% success rat
Slide 13: Simon Henry, Chief Financial Officer
SIMON HENRY CHIEF FINANCIAL OFFICER ROYAL DUTCH SHELL PLC Copyright of Royal Dutch Shell plc 31 July, 2014 13
Slide 14: Q2 2014 Financial Highlights
Q2 2014 FINANCIAL HIGHLIGHTS Earnings Q2 2013 to Q2 2014 Earnings Q2 2013 to Q2 2014 $ billion Q2 Q2 Environment Choice 2013 2014 $ billion UPSTREAM 3.5 4.7 DOWNSTREAM (CCS) 1.2 1.3 CORPORATE & MINORITIES -0.1 0.1 CCS NET EARNINGS 4.6 6.1 CCS EARNINGS, $ PER SHARE 0.73 0.97 CASH FROM OPERATIONS 12.4
Slide 15: Upstream Performance Q2 2014
UPSTREAM PERFORMANCE Q2 2014 Earnings + cash flow Exploration expense $ billion $ billion (pre-tax) Upstream International Upstream Americas Upstream International Upstream Americas Cash flow from operations (RHS) Oil and gas production Q3 – Q3 OUTLOOK: Million boe/day Million tonnes Production im
Slide 16: Downstream Performance Q2 2014
DOWNSTREAM PERFORMANCE Q2 2014 Earnings Cash flow $ billion $ billion Oil Products Chemicals CFFO excl w/c movements CFFO Working capital movements Availability and sales volumes % Sales volume Q3 – Q3 OUTLOOK: Similar refinery availability Lower chemicals availability Refining margin outlook
Slide 17: Cash Flow and Pay-out
CASH FLOW AND PAY-OUT Cash generation Dividend track record $ billion, Q214 4Q rolling $ billion DOWN STREAM UP STREAM Cash flow from Dividend and buy back 12 months Dividends declared rolling operations Net cash used in investing activities Gearing + balance sheet $ billion Gearing range Scrip di
Slide 18: Financial Framework – Key Drivers
FINANCIAL FRAMEWORK – KEY DRIVERS Organic free cash flow drives dividend A+D supports portfolio growth $ billion (cash basis) $ billion (cash basis) Organic free cash flow Cumulative organic FCF surplus (deficit) Divestments Cumulative cash surplus (deficit) over dividend declared of divestments ove
Slide 19: Financial Framework – Track Record
FINANCIAL FRAMEWORK – TRACK RECORD Balancing financial framework over time $ billion Free cash flow Cumulative surplus (deficit) of free cash flow over dividend and buybacks Cash dividend and buybacks Free cash flow: cash flow from operations less cash used in investing activities Copyright of Royal
Slide 20: Competitive Performance: Balancing Growth and Returns
COMPETITIVE PERFORMANCE: BALANCING GROWTH AND RETURNS 4Q ROLLING Q2 2014 Cash flow from operations Free cash flow $ billion $ billion Q2 2014 2014 Shell Peer group ROACE – underlying % Tracking Shell’s competitive performance 2014 Free cash flow: cash flow from operations less cash used in investi
Slide 21: Ben van Beurden, Chief Executive Officer
BEN VAN BEURDEN CHIEF EXECUTIVE OFFICER ROYAL DUTCH SHELL PLC Copyright of Royal Dutch Shell plc 31 July, 2014 21
Slide 22: 2014 Priorities: Q2 2014 Delivery
2014 PRIORITIES Q2 2014 DELIVERY Q214 CCS earnings $6.1 billion; CFFO 8.6 billion Improve our financial Restructuring in Oil Products + North America resources plays performance Expecting > $30 billion distributions to shareholders 2014-15 More selectivity on new projects Enhance our capital
Slide 23: Questions & Answers
QUESTIONS & ANSWERS SECOND QUARTER 2014 RESULTS Copyright of Royal Dutch Shell plc 31 July, 2014 23
Slide 24: Balancing Growth & Returns: Second Quarter 2014 Results
BALANCING GROWTH & RETURNS SECOND QUARTER 2014 RESULTS 31 JULY 2014 ROYAL DUTCH SHELL PLC Copyright of Royal Dutch Shell plc 31 July, 2014 24