Shell Plc · LSE:SHEL
Shell — Royal Dutch Shell — Q1 2019 Earnings Presentation
27 slides from Shell's earnings presentation, May 2, 2019
Slide 1: First quarter 2019 results: Delivering a world-class investment case
First quarter 2019 results Delivering a world-class investment case Royal Dutch Shell plc May 2, 2019 #makethefuture Royal Dutch Shell May 2, 2019
Slide 2: Jessica Uhl, Chief Financial Officer
Jessica Uhl Chief Financial Officer Royal Dutch Shell Royal Dutch Shell May 2, 2019
Slide 3: Definitions & cautionary note
Gearing is defined as net debt (current and noncurrent debt less cash and cash equivalents, adjusted for fair value of derivative financial instruments used to hedge foreign exchange and interest rate risks relating to debt, and associated collateral balances) as a percentage of total capital (net d
Slide 4: Summary
Summary Key messages Thrive in the energy ◼ Q1 2019 transition Strong results Cash flow from operations excl. working capital movements of $12.1 billion CCS earnings of $5.3 billion Confidence in delivery of 2020 commitments World-class investment case ◼ Portfolio reshaping Continued growth in Deep
Slide 5: Financial highlights: summary
Q1 2019 Cash flow Financial Cash from operations ◼ Strong cash generation across all businesses generation $12.1 billion highlights: excluding working capital ◼ Negative impact of working capital movements ($3.5) billion summary Free cash flow $4.0 billion ◼ Of which $3.4 billion organic free cash f
Slide 6: Competitive performance
Competitive CFFO excl. working capital – 4 quarters rolling Clean CCS ROACE – 4 quarters rolling performance $ billion 50 % 10 Thousands 40 8 30 6 20 4 10 2 0 0 16Q1 16Q3 17Q1 17Q3 18Q1 18Q3 19Q1 16Q1 16Q3 17Q1 17Q3 18Q1 18Q3 19Q1 Shell Peer group ◼ Sector-leading cash generation ◼ Improving ROACE o
Slide 7: Strong societal licence to operate
Strong societal licence to operate Shell has a long Good Trusted history of caring No harm products company Royal Dutch Shell May 2, 2019 7
Slide 8: Portfolio: Upstream and other portfolio developments
Portfolio Q3 2018 Upstream and ◼ P-67 FPSO – first production from Lula North in the Brazilian Santos Basin Other portfolio highlights Integrated Gas ◼ Basrah Gas Company – FID on growth programme; to increase capacity by 40% developments ◼ Blacktip – discovery in Deep water Gulf of Mexico with more
Slide 9: High-grading our refinery portfolio
Portfolio highlights Portfolio rationalisation – SASREF refinery Portfolio optimisation – Bukom refinery High-grading our refinery portfolio SASREF refinery, Saudi Arabia Pulau Bukom refinery, Singapore ◼ Shell to sell its full 50% interest in the SASREF refining ◼ Installation of two crude oil tank
Slide 10: Financial highlights: earnings
of which Q1 2019 $ billion Q1 2018 Q1 2019 IFRS 16 impact Earnings Q1 2018 to Q1 2019 Financial Integrated Gas 2.4 2.6 +0.06 $ billion highlights: 8 Upstream 1.6 1.7 earnings +0.04 Downstream (CCS) 1.8 1.8 +0.04 6 0.2 0.2 ~0 0.4 Corporate & (0.2) (0.4) (0.8) -0.18 ~(0) non-controlling interest (0.7)
Slide 11: Financial highlights: cash flow
of which Q1 2019 $ billion Q1 2018 Q1 2019 IFRS 16 impact CFFO excl. working capital Q1 2018 to Q1 2019 Financial Integrated Gas 2.6 4.2 +0.28 $ billion highlights: Upstream 3.6 5.3 +0.19 16 cash flow Downstream 3.1 (0.6) +0.45 0.8 0.3 Corporate 0.2 (0.3) +0.04 12 0.9 0.3 (0.5) ~(0) Cash flow from o
Slide 12: Financial highlights: IFRS 16
Post-IFRS 16 Pre-IFRS 16 Q1 2019 Cash flow Financial Cash from operations ◼ $0.8 billion, as lease payments now reported in generation $12.1 billion $11.3 billion CFFF highlights: excluding working capital ◼ Increase in payables of $0.1 billion (affecting working capital) IFRS 16 ◼ $1.1 billion, due
Slide 13: Summary
Summary Key messages Thrive in the energy ◼ Q1 2019 transition Strong results Cash flow from operations excl. working capital movements of $12.1 billion CCS earnings of $5.3 billion Confidence in delivery of 2020 commitments World-class investment case ◼ Portfolio reshaping Continued growth in Deep
Slide 14: Questions & Answers
Questions & Answers Reminder of key dates: ◼ Annual General Meeting May 21, 2019 ◼ Management Day 2019 June 4, 2019 London June 5, 2019 New York ◼ Q2 2019 Results August 1, 2019 Jessica Uhl Chief Financial Officer Royal Dutch Shell May 2, 2019 14
Slide 15: Royal Dutch Shell May 2, 2019
Royal Dutch Shell May 2, 2019
Slide 16: Q2 2019 outlook
Outlook Q2 2018 – Q2 2019 OUTLOOK: Year-ago baseline reflects Shell’s earnings seasonality Q2 2019 ◼ Integrated Gas outlook ◼ Production volumes: 10-50 thousand boe/d lower, mainly due to divestments, transfer of Salym into the Upstream segment, partly offset by new field ramp-ups and lower maintena
Slide 17: Financial highlights: improving year on year
Q1 2019 Earnings & ROACE Cash flow Gearing Financial $ billion % $ billion $ billion % 60 highlights: 25 10 100 30 20 8 improving 15 6 40 75 20 year on year 10 4 50 20 10 25 5 2 0 0 0 0 0 -5 -2 2015 2016 2017 2018 19Q1 2015 2016 2017 2018 19Q1 -20 2015 2016 2017 2018 19Q1 4QR 4QR Upstream Downstream
Slide 18: Outlook: Organic free cash flow normalisation
Outlook Organic free cash flow bridge to 2019-2021 outlook Organic free $ billion ◼ On track to deliver 2019-2021 outlook of cash flow 35 $25-30 billion organic free cash flow ~29 >5 25-30 30 25 ~24 ◼ Normalised organic free cash flow excludes (3) effects of IFRS 16 and working capital 20 movements
Slide 19: Prices & margins
Q1 2019 Shell oil & gas realisations Industry refining margins Industry chemicals margins Prices & margins $/barrel $/mscf $/barrel $/tonne 80 6 18 1000 5 15 800 60 4 12 600 40 3 9 400 2 6 20 200 1 3 0 0 0 0 18Q1 18Q2 18Q3 18Q4 19Q1 18Q1 18Q2 18Q3 18Q4 19Q1 18Q1 18Q2 18Q3 18Q4 19Q1 Oil US West Coast
Slide 20: Integrated Gas results
Q1 2019 Earnings Q1 2018 to Q1 2019 Integrated Gas $ billion results Environment Choice 3 0.3 0.1 ~0 0.2 (0.3) (0.1) (0.1) 2 2.6 2.4 1 0 Earnings on CCS basis, excluding identified items. Individual categories presented excluding IFRS 16 impact; IFRS 16 impact on individual categories: Prices & marg
Slide 21: Upstream results
Q1 2019 Earnings Q1 2018 to Q1 2019 Upstream $ billion results 3 Environment Choice 2 0.5 0.2 ~0 (0.3) (0.1) ~(0) ~(0) (0.1) 1 1.7 1.6 0 Earnings on CCS basis, excluding identified items. Individual categories presented excluding IFRS 16 impact; IFRS 16 impact on individual categories: Cost +$0.14bl
Slide 22: Downstream results
Q1 2019 Earnings Q1 2018 to Q1 2019 Earnings mix Downstream $ billion $ billion results 3 10 2 0.2 0.2 ~0 ~(0) ~(0) (0.3) 5 1 1.8 1.8 0 0 2016 2017 2018 Q1 2019 4Q rolling Marketing Refining & Trading Chemicals Earnings on CCS basis, excluding identified items. Individual categories presented exclud
Slide 23: Impact on financial metrics
IFRS 16 Outlook for 2019 Q1 2019 impact Impact on ~4%-5% 4.6% financial metrics Gearing increase increase ◼ Full impact recognised in Q1 2019, in line with guidance provided ◼ Q1 2019 impact lower than outlook Operating ~$2-3 billion $0.4 billion ◼ Full year impact expected at the lower end expenses
Slide 24: Projects under construction
Shell Peak Production LNG capacity Projects Start up Project Country share [A] % 100% kboe/d 100% mtpa Products Theme Shell operated under 2019 Appomattox Berbigão and Sururu SW (P-68) [B] United States Brazil 79 25 175 150 Deep water Deep water P construction Forcados Yokri Integrated Project (
Slide 25: Pre-FID options
Shell Peak Production LNG capacity Pre-FID Phase Project Country share [A] % 100% kboe/d 100% mtpa Products Theme Shell operated options Define Bonga South West Gbaran Ph3 Nigeria Nigeria 43 30 175 50 Deep water Conventional oil and gas P P Lake Charles LNG United States 50 16.8 Integrated Gas
Slide 26: Pre-FID options (continued)
Shell Peak Production LNG capacity Pre-FID Phase Project Country share [A] % 100% kboe/d 100% mtpa Products Theme Shell operated options Assess/ Select HA Development HI Development Nigeria Nigeria 30 40 60 75 Conventional oil and gas Conventional oil and gas P P (continued) Jackdaw United Kingd
Slide 27: Royal Dutch Shell May 2, 2019
Royal Dutch Shell May 2, 2019