Slide 1: Second quarter 2017 results
Second quarter 2017 results Re-shaping Shell, to create a world-class investment case Royal Dutch Shell plc July 27, 2017 #makethefuture Royal Dutch Shell July 27, 2017
Slide 2: Ben van Beurden, Chief Executive Officer
Ben van Beurden Chief Executive Officer Royal Dutch Shell Royal Dutch Shell July 27, 2017
Slide 3: Definitions & cautionary note
Definitions & Underlying operating expenses are defined as operating expenses less identified items. A reconciliation can be found in the quarterly results announcement. cautionary note The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate legal entities.
Slide 4: Summary
Summary Q2 2017 - cash momentum Underlying CCS earnings $3.6 billion CFFO $11.3 billion Q217 dividend $0.47 per share World-class investment case FCF/share + ROCE growth Re-shaping Shell - on track Leader: value Conservative financial + influence Divestments: >$25 billion completed, anno
Slide 5: Portfolio updates
Q2 2017 Portfolio updates Prelude – sail away Brazil – first replicant FPSO Schiehallion redevelopment – start of production V-Power now in >60 markets – differentiated fuels Royal Dutch Shell July 27, 2017 5
Slide 6: Divestments progress: >$25 billion
Reduce Reduce Deliver Divestments capital investment operating costs new projects Divestments progress: Divestments progress Completed in Q2’17 >$25 billion Completed in 2016 & 2017 $15 billion Vivo Energy Announced $7 billion April 26, 2017 Advanced progress >$4 billion Motiva May 1, 2017 Div
Slide 7: Capital discipline and efficiency
Reduce Reduce Deliver Divestments capital investment operating costs new projects Capital investment Capital $ billion discipline and -$20 billion efficiency Appomattox 20% saving compared to investment promise Shell interest 79% 175 kboe/d peak 30 Geismar 25 17% saved with respect to original p
Slide 8: Reduce operating costs: more than 20%
Reduce Reduce Deliver Divestments capital investment operating costs new projects Reduce Underlying operating expenses # FTE in SBOs (thousands) Shell Business Operations (SBOs) operating costs: 7 Shell operated centres $ billion more than 20% $ billion Standard processes, increasing capability
Slide 9: Deliver new projects: ~$10 billion
Reduce Reduce Deliver Divestments capital investment operating costs new projects Deliver new Shell project start-ups 2014 through 2018 Select key projects projects: Thousand boe per day / mtpa $ billion p.a. ~$10 billion / 15 Mars B Brazil FPSO 7-10 CFFO Brazil FPSO 11-13 by 2018 Stones Mal
Slide 10: Safety and operational excellence
Safety and Availability: Gulf of Mexico, USA Availability: Pernis, the Netherlands Availability: Gumusut, Malaysia operational excellence Use an appropriate Use an appropriate Use an appropriate picture picture picture Proactive integrated surveillance Availability improved by 6% over Goal-zer
Slide 11: Jessica Uhl, Chief Financial Officer
Jessica Uhl Chief Financial Officer Royal Dutch Shell Royal Dutch Shell July 27, 2017
Slide 12: Financial highlights
Q2 2017 CCS earnings $ billion Q2 2016 Q2 2017 Earnings Q2 2016 to Q2 2017 Financial Upstream (1.3) 0.3 $ billion highlights Integrated Gas 0.9 1.2 Downstream (CCS) 1.8 2.5 Corporate & non-controlling (0.3) (0.4) interest CCS net earnings 1.0 3.6 CCS earnings, $ per share 0.13 0.44 Cash flow from op
Slide 13: Cash momentum
Q2 2017 $ billion $ billion Cash momentum $99/bbl $43/bbl $50/bbl Strong cash flow momentum continued from 2016 into 2017 $38bln CFFO (4 quarters Cash flow from operations excluding working capital rolling) at <$50/bbl Cash flow from operations excluding working capital – 4 quarters rolling (RHS
Slide 14: Downstream financial performance
Downstream Earnings + ROACE Cash flow financial $ billion % $ billion performance CFFO excluding working capital Working Capital movement Capital employed $52.5 billion at end Q2’17 Strong cash generation Competitive returns Marketing Chemicals Refining & Trading Marketing Chemicals Earnings and
Slide 15: The world's largest fuel retailer
The world’s largest fuel retailer Most valuable oil and gas brand in the world* *Source: Brand Finance Global 500 Royal Dutch Shell July 27, 2017 15
Slide 16: Synergies
Q2 2017 Synergies update FTE reductions Synergies $ billion # of FTE (thousands) Additional synergies Shell BG Contracting and Procurement savings $ billion 2016 2017E 2018E Costs and corporate synergies Synergies target as per BG Exploration synergies prospectus More synergies, delivered faster t
Slide 17: Cash performance and distributions
Q2 2017 Sources and uses of cash – 4 quarters rolling Dividend + gearing Cash $ billion $ billion % performance and distributions DOWNSTREAM /CORPORATE IG 26.4 UPSTREAM 4 quarters rolling: Cash dividend covered at oil price below $50/bbl Gearing reduced to 25.3% Interest paid Debt repayments & D
Slide 18: Cash flow priorities 2016-18
Cash flow priorities 2016-18 1 2 3 Priorities Buy-backs Debt reduction Dividends for cash & capital investment Reduce capital Reduce Deliver new Divestments investment operating costs projects Royal Dutch Shell July 27, 2017 18
Slide 19: Q3 2017 Outlook
Q3 2017 Q3 – Q3 OUTLOOK: Year-ago baseline reflects Shell’s earnings seasonality Outlook Integrated gas Gorgon start-up partly offset by higher maintenance: positive impact of ~60 kboe/d Upstream Divestment impact: reduction of ~190 kboe/d Production in the Netherlands (NAM): reduction of
Slide 20: Ben van Beurden, Chief Executive Officer
Ben van Beurden Chief Executive Officer Royal Dutch Shell Royal Dutch Shell July 27, 2017
Slide 21: Transformation: World-class investment case
World-class investment case Transformation 2013-2015 Q2’17 2019-2021 average 4Q rolling average ROACE 8% 4.2% ~10% Organic free cash flow $5 billion p.a. $16.6 billion $20-25 billion p.a. Brent ~$90 ~$50 ~$60 Strategy is working Implementation is on track ROACE on CCS basis, excluding identified
Slide 22: Questions & Answers
Questions & Answers Ben van Beurden Jessica Uhl Chief Executive Officer Chief Financial Officer Royal Dutch Shell July 27, 2017 22
Slide 23: Second quarter 2017 results
Second quarter 2017 results Re-shaping Shell, to create a world-class investment case Royal Dutch Shell plc July 27, 2017 #makethefuture Royal Dutch Shell July 27, 2017
Slide 24: Prices & margins
Q2 2017 Shell oil & gas realisations Industry refining margins Industry chemicals margins Prices & margins $/barrel $/mscf $/barrel $/tonne Oil US West Coast US ethane Gas (RHS) US Gulf Coast coking Western Europe naphtha Rotterdam complex NE/SE Asia naphtha Singapore Royal Dutch Shell July 27, 2017
Slide 25: Upstream results
Q2 2017 Earnings Q2 2016 to Q2 2017 Upstream results $ billion Environment Choice Royal Dutch Shell July 27, 2017 25
Slide 26: Integrated Gas results
Q2 2017 Earnings Q2 2016 to Q2 2017 Integrated Gas $ billion Environment Choice results Royal Dutch Shell July 27, 2017 26
Slide 27: Downstream results
Q2 2017 Earnings Q2 2016 to Q2 2017 Earnings mix Downstream $ billion $ billion results Marketing Chemicals Refining & Trading Earnings on CCS basis, excluding identified items. Royal Dutch Shell July 27, 2017 27
Slide 28: Oil and gas production
Q2 2017 Upstream + Integrated Gas – oil & gas LNG liquefaction volumes Oil and gas Million boe per day Million tonnes production Choice Royal Dutch Shell July 27, 2017 28
Slide 29: Projects under construction
Projects under Start up Project Country Shell share Peak LNG 100% Products Legend Theme Shell construction (direct & Production Capacity mtpa Operated indirect) % 100% kboe/d 2017-18 Baronia / Tukau Timur Malaysia 40 65 Conventional oil + gas Berbigão** Brazil 25 150 Deep water Clair Ph2 United
Slide 30: Pre-FID options
Pre-FID options Phase Project Country Shell share Peak LNG 100% Products Legend Theme Shell (direct & Production Capacity mtpa Operated indirect) % 100% kboe/d Select Bonga Main Integrated Redevelopment Nigeria 55 112 Deep water P KGK Expansion Project (KEP 1A) Kazakhstan 29 TBD Conventional oil
Slide 31: Divestments progress: >$25 billion
Reduce Reduce Deliver Divestments capital investment operating costs new projects Divestments Divestments progress Divestments impact progress: Completed in 2016 & 2017: $15 billion UK North Sea assets: announced January 2017 1 >$25 billion Announced: $7 billion Production -116 kboe/d CFFO -$1.2 bil
Slide 32: Royal Dutch Shell July 27, 2017
Royal Dutch Shell July 27, 2017