Shell PLC · LSE:SHEL
Shell — Q3 2021 Earnings Presentation
35 slides from Shell's earnings presentation, Oct 28, 2021
Slide 1: Third Quarter 2021 Results
#PoweringProgress THIRD QUARTER 2021 RESULTS Q UA L I T Y P OR T F O L I O D EL I V ER I N G R EC O R D C A S H Royal Dutch Shell plc October 28, 2021
Slide 2: Definitions & Cautionary Note
DEFINITIONS & CAUTIONARY NOTE Adjusted Earnings is the income attributable to RDS plc shareholders for the period, adjusted for the after-tax effect of oil price changes on inventory and for identified items. In this presentation, “earnings” refers to “Adjusted Earnings” unless stated otherwise. Adj
Slide 3: The Shell Investment Case
G EN E R A T I N G THE SHELL INVESTMENT CASE SHAREHOLDER VALUE Growing value through a dynamic portfolio and disciplined capital allocation POW ERING PROGRESS R ES PE CT I N G N A T U R E POWERING LIVES Our strategy to accelerate the Protecting the environment, reducing waste and transition to net-z
Slide 4: Q3 2021 Key Messages
POWERING PROGRESS Q 3 20 21 K EY M ES S AGES Powering Progress strategy delivery Absolute emissions reduction target Strong Q3 performance Helping customers decarbonise while Halving Scope 1 and 2 absolute emissions Value over volume: strong cash delivery increasing returns by 2030 compared to
Slide 5: Our Vision for the Future of Energy
DELIVERING THE STRATEGY O UR VIS I ON F O R TH E F U TUR E O F EN ER G Y #POWERINGPROGRESS GROWTH PILLAR: TRANSITION PILLAR: UPSTREAM PILLAR: THE FUTURE OF ENERGY ENABLING OUR STRATEGY FUNDING OUR STRATEGY / Marketing / Renewables and Energy Solutions / Integrated Gas / Chemicals and Products MARKET
Slide 6: Building Strong Customer Partnerships to Move to Net Zero
POWERING PROGRESS B UI LDI N G S TR O NG C US TOMER P AR TN ER SHI PS TO M O VE TO N ET ZE R O Collaboration to study the feasibility Collaboration to accelerate the of jointly producing green and blue digitalisation and decarbonisation of hydrogen ITOCHU’s mining sites Partnership offering customer
Slide 7: Profitably Decarbonising with Our Customers
MARKETING PR OF IT ABLY D EC A R BONISIN G W I T H OU R C U S TOMER S Strategic levers 2025 targets Q3 progress examples New revenues 15,000 Acquisition of Texas-based Landmark including 248 company- New convenience stores Convenience stores operated fuel and convenience retail sites as well as
Slide 8: Integrated Clean Energy Systems: Higher Future Returns
RENEWABLES AND ENERGY SOLUTIONS I NT E GRA T ED C L EA N EN ER GY S YS T EM S : H IGH ER F U T UR E R ET URN S Targets Q3 progress examples Integrated Power JV with CoensHexicon to develop and operate a 1.4 gigawatt Becoming a leading provider of clean >560 TWh floating offshore wind farm in Sou
Slide 9: A World Leader in LNG: Resilient Cash Generation
INTEGRATED GAS A WOR LD L EAD ER IN L NG : R ES IL IE NT C A S H GEN ER A T ION Targets Q3 progress examples Helping customers to decarbonise the gas value chain Lead the market Grow market footprint by creating new >20% Created an integrated LNG supply chain in China – first markets and embra
Slide 10: Integrated Energy and Chemicals Parks Delivering Lower-Carbon Products
CHEMICALS AND PRODUCTS I NT E GRA T ED EN ER GY A N D C H EMICA L S PAR K S D EL IV ER IN G L OW ER - C AR BON PR OD UC TS Targets Q3 progress examples Transition to Energy and Progressing 1 mtpa of plastic waste processed: Chemicals Parks 5 Core energy and chemicals Invested in BlueAlp’s plasti
Slide 11: Delivering the Energy of Today While Funding the Energy of Tomorrow
UPSTREAM D EL IV ER ING T H E EN ER GY OF T OD A Y W H IL E F U N DI NG T H E EN ER GY OF T OM ORROW Targets Q3 progress examples Generated $16 billion CFFO excluding working capital (YTD) Focusing the portfolio Maximising value from lean positions: ~80% Further focusing the portfolio: Permian
Slide 12: Delivering Divestment Proceeds in First Nine Months of 2021
PORTFOLIO DE LIVE RI NG DI V ES TMEN T P R O C EEDS O F $ 6 B IL LIO N IN THE F I R S T N IN E M O NTHS O F 2 02 1 Gasnor Fredericia refinery Duvernay shales PCK Schwedt refinery $741 million Puget Sound $350 million Mobile refinery Permian $75 million Egypt Western Desert $9.5 billion Deer Park ref
Slide 13: Further Transforming Energy and Chemicals Park Rotterdam
C H E M I C AL S A N D P R O D U C T S F U R THER TR AN SFOR MI NG EN E R G Y AN D C H EM ICALS PA R K R O TTE RDAM Transforming the Pernis refinery into the Energy and Chemicals Park Rotterdam to produce lower-carbon KEY fuels CO2 Integration of Hydrogen Holland 1 with Hollandse Power Kust (Noo
Slide 14: Biofuels Plant at Energy & Chemicals Park Rotterdam
C H E M I C AL S A N D P R O D U C T S B IO F UELS P LA N T A T EN ER G Y & CH EM IC ALS PA R K R O TTERD AM Integrated Margin E&C Rotterdam Pre-treatment Unit filters feedstock and prepares feedstock for Feedstock processing Waste & certified sustainable vegetable oils Biofuels Plant: conversion to
Slide 15: Mobility Proves Resilient with Best-Ever Q3 YTD Earnings
MARKETING M O BI LI TY P R O V ES R ES ILI EN T WI TH BE ST- EVER Q 3 YTD E AR NI NG S Resilient growth through cycle; record Q3 YTD earnings Differentiated offerings + customer access create value Adjusted Earnings ($ billion) V-Power continues Shell V-Power™ penetration: branded sales growing acro
Slide 16: Convenience Retail – Growing Value in an Attractive Market
MARKETING C O N VEN IENC E R ETA I L – G R O W I NG V ALU E I N A N A TTR ACTI VE M AR KET Convenience Retail (CR) an attractive ...and we are on track to grow it further with more opportunity with strong financial delivery… stores, new offers and direct US customer access In many core markets Growt
Slide 17: EV Charging – Profitably Extending Our Offer at Pace
MARKETING EV C H AR GI NG – P R O F I TAB LY EX TEN D IN G OU R O F F E R AT P AC E We are building the network to ...with material progress in becoming the leading branded public network; decarbonise mobility… globally leveraging our scale, capabilities and our customer access Shell charging networ
Slide 18: New Target to Halve Absolute Emissions
ACHIEVING NET ZERO EMISSIONS N E W TAR G ET TO HA LV E AB S OLUTE E MI S SION S An absolute emissions reduction target of 50% by 2030, compared to 2016 levels on a net basis, covers all Scope 1 and 2 emissions under Shell’s operational control. 83 80 ~69 ~ mtpa CO2e A range of levers enable achievem
Slide 19: Our Climate Targets
CARBON O UR CLI M ATE TAR G ETS UN PARIS AGREEMENT NET ZERO BY 2050 FROM 1.7 GTPA TO ZERO Strategy aligns with goal to limit the increase in Net-zero emissions energy business by 2050 We believe Shell’s total carbon emissions from the global average temperature to 1.5 degrees including all emissions
Slide 20: Strong Results Driven by Robust Operations and Resilient Portfolio
Q3 2021 FINANCIAL RESULTS Q3 2021 average Brent price: S TR O NG R ES ULTS D R I V EN B Y R O B US T $73/bbl O PE RATI ONS AN D R ESI LI EN T P O R TFO LIO Income attributable to Royal $(0.4) billion Includes a non-cash charge of $5.2 billion due to fair value accounting of commodity derivatives D
Slide 21: Strong Cash Conversion
Q3 2021 FINANCIAL RESULTS S TR O NG C AS H CO N V ER SIO N Adjusted Earnings Q2 2021 to Q3 2021 Cash conversion Q3 2021 $ billion $ billion 0.4 4.0 (0.5) (0.1) (0.1) (0.2) (0.7) 0.7 2.3 (0.9) (~0) (0.1) 6.3 0.7 Left graph: information presented on a CCS basis, excluding identified items and after ta
Slide 22: Strong Cash Flow Generation Resulting in Net Debt Reduction
Q3 2021 FINANCIAL RESULTS S TR O NG C AS H F LO W G EN E R ATI ON R ES ULTI N G IN N E T DEB T R ED UC TI ON Net debt Q2 2021 to Q3 2021 Working capital movements Q3 2021 $ billion $ billion 0.8 (1.3) (0.9) Royal Dutch Shell | October 28, 2021 *Dividend paid to RDS shareholders. 22
Slide 23: Integrated Gas, Renewables and Energy Solutions
Q3 2021 FINANCIAL RESULTS Quarterly Databook available on I NTEG R ATED G AS , www.shell.com/investors R EN EWAB LES AN D EN ER G Y S O LUTI ON S Adjusted Earnings Cash conversion Q3 Q4 2021 outlook Production is expected to be approximately 940 - 980 thousand boe/d. LNG liquefaction volumes are
Slide 24: Upstream
Q3 2021 FINANCIAL RESULTS Quarterly Databook available on UP S TR EAM www.shell.com/investors Adjusted Earnings Cash conversion Q3 Q4 2021 outlook Production is expected to be approximately 2,100 – 2,350 thousand boe/d. *WWO = well write-offs Adjusted Earnings benefited from higher prices, offse
Slide 25: Oil Products
Q3 2021 FINANCIAL RESULTS Quarterly Databook available on O I L PR O D UCTS www.shell.com/investors Adjusted Earnings Cash conversion Q3 Q4 2021 outlook Refinery utilisation is expected to be approximately 68% - 76%. Sales volumes are expected to be approximately 4,200 - 5,200 thousand b/d. St
Slide 26: Chemicals
Q3 2021 FINANCIAL RESULTS Quarterly Databook available on C HE MIC ALS www.shell.com/investors Adjusted Earnings Cash conversion Q3 Q4 2021 outlook Manufacturing plant utilisation is expected to be approximately 73% - 81%. Sales volumes are expected to be approximately 3,500 - 3,900 thousand ton
Slide 27: Integrated Business Model Delivering Value
CASH POTENTIAL I NTEG R ATED BU SI NE SS MO D EL DELI V ER IN G VA LUE Balanced CFFO excluding working capital Track record of sector-leading CFFO $ billion $ billion Downstream Integrated Gas Upstream Peer range Shell Royal Dutch Shell | October 28, 2021 Right graph: Peer range comprises ExxonMobil
Slide 28: Targeting Shareholder Distributions of 20-30% of CFFO
C A P I T A L A L L O C A T I ON – N E X T P H A S E TA R G ET S H AR EHOLDER DI STR I B UTI ON S O F 2 0 -30 % O F C F F O Clear capital allocation framework Operationalising the framework $19-22 billion Cash capex to sustain our strategy Marketing ~$3 billion; Renewables and Energy Solutions $
Slide 29: Marketing Major Projects
M AR KETING M AJ O R P R O J ECTS Shell Products Shell- Project Country share % operated Under construction – Start-up 2021-2022 Shell Bovarius USA 100 Renewable Fuels – RNG P Shell Galloway USA 100 Renewable Fuels – RNG P Under construction – Start-up 2023+ Varennes Carbon Biofuels Plant Rotterdam
Slide 30: Integrated Gas Portfolio & Major Projects
I NTEG R ATED G AS PO R TF OLI O & M AJ OR P R O J ECTS Peak LNG Shell Shell- Project Country production capacity share % operated kboe/d mtpa Under construction – Start-up 2021-2022 Arrow - Surat Gas Australia 50 backfill Colibri Trinidad & Tobago 87 backfill P LNGC Gorgon - Jansz Australia 25 back
Slide 31: Chemicals and Products Portfolio & Major Projects
C HE MIC ALS A ND PR OD UCTS P O R TF OLIO & M A J OR PR O J EC TS Shell Products Shell- Project Country share % operated Under construction – Start-up 2021-2022 Pennsylvania Petrochemicals USA 100 1.5 mtpa Polyethylene P Complex Under construction – Start-up 2023+ Moerdijk energy efficiency The Net
Slide 32: Upstream Portfolio & Major Projects
UP S TR EAM PO R TF OLI O & MA J OR PR O J EC TS Shell Peak production Shell- Project Country share % kboe/d operated Under construction – Start-up 2021-2022 Mero 1 [A] Brazil 20 180 Pierce post Depressurisation UK 93 30 P PowerNap USA 100 35 P Vito USA 63 100 P UK Under construction – Start-up 2023
Slide 33: A Customer-Led Integrated Energy Offering
A CU STO MER- LED I NTEG R ATE D UK EN ER G Y O F F E RIN G NL CO2 CO2 CO2 EUR OPE KEY Wind Solar ` CO2 Mobility Energy solutions Energy access CO2 CO2 CCS Nature-based solutions Power trading & marketing Hydrogen Biofuels Shell offers integrated solutions to customers – from biofuels, to hydrogen,
Slide 34: Upcoming Events, Past Events, Other Useful Links
Upcoming events Past events Other useful links: 3 February 2022 Q4 2021 results Annual ESG update Annual and Quarterly Databook LNG outlook and IG strategy Shell Energy Transition Strategy Strategy Day 2021 Annual reports and publications Enhanced Quarterly Disclosures Nigeria briefing notes 2021 Sh
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