Slide 1: Second quarter 2016 results: Re-shaping Shell, to create a world-class investment case
Second quarter 2016 results Re-shaping Shell, to create a world-class investment case Royal Dutch Shell plc July 28, 2016 “Let’s make the future”
Slide 2: Ben van Beurden, Chief Executive Officer
Ben van Beurden Chief Executive Officer Royal Dutch Shell
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: “Let’s make the future”
Strategy “Let’s make the future” STRATEGIC Focus portfolio on resilient positions Invest in advantaged projects World-class investment case Value chain integration FCF/share + ROCE growth Leader: value + Conservative financial influence management OPERATIONAL Reducing our Shared value Re
Slide 5: Driving strategy in multiple time horizons
Re-shape Shell Driving strategy in multiple time horizons Cash engines: today Growth priorities: 2016+ Future opportunities: 2020+ Funds dividends + balance sheet Cash engines 2020+ Material value + upside Affordable growth in Competitive + resilient Path to profitability advantaged positions Strong
Slide 6: H1 2016 delivery
Re-shape Shell H1 2016 delivery Cash engines: today Growth priorities: 2016+ Future opportunities: 2020+ Conventional oil and gas Deep water Shales Unit costs $/boe Thousand boe/d Unit costs $/boe Thousand boe/d Unit costs $/boe Thousand boe/d Unit operating costs Production (RHS) Reducing costs +
Slide 7: Financial dashboard
Financial dashboard Gearing Free cash flow per share % $/share ROACE Total shareholder return % % 3 years to Q2 2016 12 months to Q2 2016 Shell Peer group Competitive financial data as published. Free cash flow: cash flow from operations less cash used in investing activities. $/ADR for European com
Slide 8: Simon Henry, Chief Financial Officer
Simon Henry Chief Financial Officer Royal Dutch Shell
Slide 9: Financial highlights
Q2 2016 Financial highlights $ billion Q2 2015 Q2 2016 Earnings Q2 2015 to Q2 2016 Upstream (0.5) (1.3) $ billion Integrated Gas 1.4 0.9 Downstream (CCS) 3.0 1.8 Corporate & minorities (0.1) (0.3) CCS net earnings 3.8 1.0 CCS earnings, $ per share 0.60 0.13 Cash flow from operations 6.1 2.3 ROACE (%
Slide 10: Financial highlights
Q2 2016 Financial highlights Earnings Q2 2015 to Q2 2016 $ billion Environment Choice Earnings on CCS basis, excluding identified items Royal Dutch Shell July 28, 2016 10
Slide 11: Cash performance + payout
Cash performance + payout Cash flow Cash generation $ billion $ billion $ billion, 2016 Q2 4Q rolling 43 ~20 CFFO CFFI CFFO Downstream + Corporate BG acquisition – cash element Cash investment Free cash flow (RHS) Integrated Gas Dividend and buyback Upstream Cash investment Dividend, buyback + geari
Slide 12: BG performance
Integration with BG BG performance Queensland LNG Synergies: BG T2 start up Thousand boe per day Nov 2015 # $ billion 4.5 4 1st LNG Train 1 Dec 2014 2.5 Production Costs Exploration Number of cargoes delivered in the quarter (RHS) Brazil pre-salt Thousand boe per day Cidade ItaguaíFPSO Cidade de Mar
Slide 13: Pulling levers to manage financial framework
Manage down-cycle Pulling levers to manage financial framework 2016-18 levers Reduce Reduce Deliver new Divestments capital operating projects investment costs 2015 baseline: 2017-2018 2016 $ billion Shell + BG potential Trend to 40 Reducing our cash break-even Operating costs 46 Multi-billion p.a
Slide 14: Divestments
Reduce capital Reduce Deliver new Divestments investment operating costs projects Manage down-cycle Divestments 2016-2018 completed + announced $ billion Divestment program Completed – MLP 0.8 $ billion – Denmark marketing 0.3 – N.Z.: Maui pipeline 0.2 – MGL IPO 0.1 – Others 0.1 Total completed 1.5
Slide 15: Lower & more predictable capital investment
Reduce capital Reduce Deliver new Divestments investment operating costs projects Manage down-cycle Lower & more predictable capital investment Capital investment $ billion 58 53 47 43 41 -25% 37 36 33 31 29 ~29 25-30 ~26 Shell BG Shell + BG C.I. on a cash basis Planning for $25-$30 billion range
Slide 16: Reduce operating cost
Reduce capital Reduce Deliver new Divestments investment operating costs projects Manage down-cycle Reduce operating cost Operating cost Substantial reductions delivered $ billion 49 46 -$4 bn 44 “Lower for ever” mindset + BG synergies 42 ~40 Staff, supply chain + contractors Divestments, gr
Slide 17: 2016 investment decisions and planned start-ups
Reduce capital Reduce Deliver new Divestments investment operating costs projects Deliver new projects 2016 investment decisions and planned start-ups LNG Canada delay of FID FID 13 mtpa LNG Shell 50% Start-up Lake Charles delay of FID ~15 mtpa LNG Shell capacity interest 100% Stones 5
Slide 18: Conventional exploration: progress H1 2016
Reduce capital Reduce Deliver new Divestments investment operating costs projects Deliver new projects Conventional exploration: progress H1 2016 GoM: cumulative resources added (2010-2016) Fort Sumter discovery Million boe Appomattox Vicksburg future Appo TLP Kepler North Fort Sumter Shell lease Di
Slide 19: Ben van Beurden, Chief Executive Officer
Ben van Beurden Chief Executive Officer Royal Dutch Shell plc
Slide 20: Transformation
Transformation 2013-2015 2019-2021 average average ROACE 8% ~10% CREATE A WORLD CLASS Organic free cash flow $5 billion p.a. $20-25 billion p.a. INVESTMENT CASE Brent ~$90 ~$60 Improved capital Capital efficiency: Less cost + fewer Portfolio growth: efficiency: reduced 2013 spending people with BG t
Slide 21: Questions & Answers
Questions & Answers
Slide 22: Q3 2016 Outlook
Q3 2016 Outlook Q3 – Q3 OUTLOOK: Year-ago baseline reflects Shell’s earnings seasonality Upstream Nigeria SPDC security impact: ~-35 kboe/d Integrated gas Maintenance: ~-15 kboe/d Downstream Refinery availability marginally increase Chemicals availability increase Divestment impact M
Slide 23: Upstream results
Q2 2016 Upstream results Earnings Q2 2015 to Q2 2016 $ billion Environment Choice Earnings on CCS basis, excluding identified items Royal Dutch Shell July 28, 2016 23
Slide 24: Integrated gas results
Q2 2016 Integrated gas results Earnings Q2 2015 to Q2 2016 $ billion Environment Choice Earnings on CCS basis, excluding identified items Royal Dutch Shell July 28, 2016 24
Slide 25: Oil and gas production
Q2 2016 Oil and gas production Upstream + Integrated Gas – oil & gas LNG liquefaction volumes Million boe per day Million tonnes Choice: +30% 3.75 3.50 3.25 3.00 2.75 2.50 Royal Dutch Shell July 28, 2016 25
Slide 26: Downstream results
Q2 2016 Downstream results Earnings Q2 2015 to Q2 2016 Earnings mix $ billion $ billion Marketing Refining & Trading Chemicals Earnings on CCS basis, excluding identified items Royal Dutch Shell July 28, 2016 26
Slide 27: Prices & margins
Q2 2016 Prices & margins Shell oil & gas realisations Industry refining margins Industry chemicals margins $/barrel $/mmbtu $/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 28, 201
Slide 28: Second quarter 2016 results: Re-shaping Shell, to create a world-class investment case
Second quarter 2016 results Re-shaping Shell, to create a world-class investment case Royal Dutch Shell plc July 28, 2016 “Let’s make the future”
Slide 29: Royal Dutch Shell July 28, 2016
Royal Dutch Shell July 28, 2016