Shell Plc · LSE:SHEL
Shell — Royal Dutch Shell — Q4 2013 Earnings Presentation
28 slides from Shell's earnings presentation, Jan 30, 2014
Slide 1: Fourth Quarter 2013 Results
FOURTH QUARTER 2013 RESULTS 30 JANUARY 2014 ROYAL DUTCH SHELL PLC Copyright of Royal Dutch Shell plc 30 January, 2014 1
Slide 2: Definitions and Cautionary Note
DEFINITIONS AND CAUTIONARY NOTE The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate entities. In this presentation “Shell”, “Shell group” and “Royal Dutch Shell” are sometimes used for convenience where references are made to Royal Dutch Shell plc and i
Slide 3: Ben van Beurden, Chief Executive Officer
BEN VAN BEURDEN CHIEF EXECUTIVE OFFICER ROYAL DUTCH SHELL PLC Copyright of Royal Dutch Shell plc 30 January, 2014 3
Slide 4: Unrelenting Focus on HSSE
UNRELENTING FOCUS ON HSSE ‘GOAL ZERO’ ON SAFETY injuries – TRCF/million working hours million working hours Working hours TRCF PERFORMANCE + TRANSPARENCY Copyright of Royal Dutch Shell plc 30 January, 2014 4
Slide 5: Shell Strategy
SHELL STRATEGY Unrelenting focus on HSE Technology, integration and scale Disciplined capital investment by strategic theme Growth in cash flow through-cycle Executing a consistent, long term strategy Competitive shareholder returns Prelude, November 2013 Copyright of Royal Dutch Shell p
Slide 6: 2011-2013 Delivery
2011-2013 DELIVERY EARNINGS CASH FLOW $ billion $ billion 2011 2012 2013 Upstream Corporate Cash flow from operations Capex Downstream Identified items Asset sales Acquisitions Dividend Buy-backs PRIORITY TO IMPROVE FINANCIAL PERFORMANCE Copyright of Royal Dutch Shell plc 30 January, 2014 6
Slide 7: Competitive Cash Flow + Returns
COMPETITIVE CASH FLOW + RETURNS CASH FLOW FROM OPERATIONS ROACE $ billion % Shell Shell peer group peer group DISCIPLINED THROUGH CYCLE INVESTMENT DRIVES FINANCIAL GROWTH COMPETITIVE CFFO BUILDUP + FURTHER POTENTIAL ROACE: reported earnings local GAAP, 3 year rolling average. Shell 2011-2013, pe
Slide 8: 2014 Priorities
2014 PRIORITIES Returns and cash flow Improve our financial Competitive returns for shareholders performance Hard choices on new projects Enhance our capital efficiency Increase divestment of non-core assets Reduce pace of growth investment Major deep water start-ups in 2014 Deliver new
Slide 9: Improve Our Financial Performance: Responding to Market Dynamics
IMPROVE OUR FINANCIAL PERFORMANCE: RESPONDING TO MARKET DYNAMICS IN OIL PRODUCTS + NORTH AMERICA ONSHORE RESOURCES PLAYS RESTRUCTURING OIL PRODUCTS RESTRUCTURING Northeast BC Deep Basin/Foxcreek LNG Foothills Canada US Rockies Gas-to-Chemicals Appalachia Mississippi Lime Permian Haynesville
Slide 10: Improve Our Capital Efficiency: Sharpening Our Focus
IMPROVE OUR CAPITAL EFFICIENCY: SHARPENING OUR FOCUS ASSET SALES $ billion Linnorm Mongstad/Pernis swap Fram Norway downstream reduction Harburg refinery Niobrara Czech refinery Sandwash Basin Ohio Utica Mississippi Lime Italy downstream reduction Eagle Ford Gulf Coast GTL Nigeria SPDC lease
Slide 11: Improve Capital Efficiency: 2014 Investment Priorities
IMPROVE CAPITAL EFFICIENCY: 2014 INVESTMENT PRIORITIES Engines Free cash flow plays Asset integrity + selective growth UPSTREAM DOWNSTREAM Growth Priority Global leadership Strong project flow INTEGRATED DEEP-WATER GAS Longer Term Major potential with surface challenges FUTURE1 Slower pa
Slide 12: Deliver New Projects: Top Start-ups 2014
DELIVER NEW PROJECTS: TOP 4 START-UPS 2014 Mars-B Preparing for start-up Subsea systems tie-in Gumusut-Kakap completed. H2 ‘14 start-up Auger facility upgrades Cardamom ongoing. H2 ’14 start-up Transaction completed Repsol LNG Mars-B, 100 kboe/d, Shell 72% Jan’14, integration ongoing Cardamo
Slide 13: Leading Dividend Track Record
LEADING DIVIDEND TRACK RECORD Indexed 2000=100, dividends paid in year Q1 2014 DIVIDEND $0.47/SHARE, > +4% SHARE BUY BACK RDS dividend per share in USD Inflation (US CPI, Annual Average) Excludes $1.7 billion payout to former shareholders of Royal Dutch as part of the 2005 unification. Copyright
Slide 14: Simon Henry, Chief Financial Officer
SIMON HENRY CHIEF FINANCIAL OFFICER ROYAL DUTCH SHELL PLC Copyright of Royal Dutch Shell plc 30 January, 2014 14
Slide 15: 2013 Performance
2013 PERFORMANCE 2013 delivery CCS earnings $19 bln; CFFO $40 bln 7 new start-ups Iraq oil & gas, BC-10 ph 2, North Rankin gas, others Acquisitions to enhance portfolio Repsol LNG, Libra, ‘engines’ bolt-ons Decisive on portfolio Non-core asset sales: Oil Products Nigeria onshore Nort
Slide 16: 2013 Financial Highlights
2013 FINANCIAL HIGHLIGHTS EARNINGS 2012 TO 2013 EARNINGS 2012 TO 2013 $ billion 2012 2013 $ billion UPSTREAM 20.1 15.1 DOWNSTREAM (CCS) 5.3 4.5 CORPORATE & MINORITIES (0.2) (0.1) CCS NET EARNINGS 25.3 19.5 CCS EARNINGS, $ PER SHARE 4.03 3.10 CASH FROM OPERATIONS 46.1 40.4 SHARE BUY BACKS 1.5 5.0 DIV
Slide 17: 2013 Financial Highlights
2013 FINANCIAL HIGHLIGHTS EARNINGS 2012 TO 2013 EARNINGS Q4 2012 TO Q4 2013 $ billion $ billion 0.0 Environment Choice Environment Choice Earnings CCS basis, Earnings excluding identified items Copyright of Royal Dutch Shell plc 30 January, 2014 17
Slide 18: Operational Performance + Outlook
OPERATIONAL PERFORMANCE + OUTLOOK UPSTREAM UPSTREAM million boe/day million tonnes Q4-Q4 underlying decline 3%1 Growth from NA LRS, Iraq, Malaysia 40 kboe/d Nigeria sabotage Q4-Q4 95 kboe/d maintenance Q4-Q4 DOWNSTREAM Oil LNG Sales (RHS) Q4-Q4 underlying OP volumes lower, Chemicals Gas vo
Slide 19: Cash Performance + Payout
CASH PERFORMANCE + PAYOUT GROUP 12 MONTHS CASH PERFORMANCE BUSINESS 12 MONTH CASH PERFORMANCE $ billion $ billion Sources Uses Sources Uses Sources Uses Upstream Downstream CFFO Capex Dividend Asset sales Acquisitions Buy-backs GEARING AND PAY OUT $ billion % 30 2013 ACQUISITION IMPACTS 15 2014
Slide 20: Financial Performance
FINANCIAL PERFORMANCE $ billion cumulative 2012-2013 CFFO impacted by macro, portfolio + choices + performance Net capital investment lifted by acquisitions Cash flow from operations Net capital investment Dividends distributed + buy-backs Previous target framework 2012-15 Previous outlook set i
Slide 21: Financial Framework and Priorities
FINANCIAL FRAMEWORK AND PRIORITIES Priorities for cash CASH PERFORMANCE 1. Debt service CFFO drives investment + payout 2. Dividends: growth policy PAY-OUT INVESTMENT 3. Capital investment: disciplined through cycle growth Affordability, Dividend linked to profitability, business results portfolio 4
Slide 22: Portfolio Development 2013
PORTFOLIO DEVELOPMENT 2013 Acquisition / Exit Final Investment Discovery Start-up entry Decision (completed) G/U Phase 2 AOSP debottlenecking Nigeria on-shore TNP loop-line Basrah Gas Company FUTURE asset sales Carmon Creek Majnoon OPPORTUNITIES Kashagan North America asset RESOUR
Slide 23: Repsol LNG Acquisition
REPSOL LNG ACQUISITION SHELL PORTFOLIO SHELL LNG LEADERSHIP Year end equity liquefaction capacity in mtpa Sakhalin Spain Cove Point Elba QG-4 Baja Hazira Altamira Nigeria Oman Atlantic LNG Malaysia Peru LNG + Brunei Prelude Pluto NWS Gorgon Shell: LNG supply Under construction Repsol portfolio Re-ga
Slide 24: Investing for Long Term Growth
INVESTING FOR LONG TERM GROWTH TOTAL CAPITAL INVESTMENT FY FY FY 2012 2013 2014E $ billion $ billion ORGANIC CAPEX 32 38 ~35 1 DOWNSTREAM ACQUISITIONS 5 8 2 ENGINES TOTAL CAPITAL INVESTMENT 37 46 37 UPSTREAM INTEGRATED GROWTH GAS PRIORITY DEEP-WATER 2013 -14 INVESTMENT LIFTED BY RESOURCES ACQUISIT
Slide 25: Ben van Beurden, Chief Executive Officer
BEN VAN BEURDEN CHIEF EXECUTIVE OFFICER ROYAL DUTCH SHELL PLC Copyright of Royal Dutch Shell plc 30 January, 2014 25
Slide 26: 2014 Priorities
2014 PRIORITIES Returns and cash flow Improve our financial Competitive returns for shareholders performance Hard choices on new projects Enhance our capital efficiency Increase divestment of non-core assets Reduce pace of growth investment Major deep water start-ups in 2014 Deliver new
Slide 27: Questions & Answers
QUESTIONS & ANSWERS FOURTH QUARTER 2013 RESULTS Copyright of Royal Dutch Shell plc 30 January, 2014 27
Slide 28: Fourth Quarter 2013 Results
FOURTH QUARTER 2013 RESULTS 30 JANUARY 2014 ROYAL DUTCH SHELL PLC Copyright of Royal Dutch Shell plc 30 January, 2014 28