Shell PLC · LSE:SHEL
Shell — Royal Dutch Shell — Q1 2018 Earnings Presentation
26 slides from Shell's earnings presentation, Apr 26, 2018
Slide 1: First quarter 2018 results
First quarter 2018 results Delivering a world-class investment case Royal Dutch Shell plc April 26, 2018 #makethefuture Royal Dutch Shell April 26, 2018
Slide 2: Jessica Uhl, Chief Financial Officer
Jessica Uhl Chief Financial Officer Royal Dutch Shell Royal Dutch Shell April 26, 2018
Slide 3: 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 consistent with the Society of
Slide 4: Summary
Summary Q1 2018 Thrive in Strong results the energy transition Underlying growth continues Portfolio reshaping World-class Divestments: $26 billion completed (headline) investment case Resilience and growth Strong Financial framework license to operate Cash priorities unchanged Capital d
Slide 5: Financial highlights
Q1 2018 $ billion Q1 2017 Q1 2018 Earnings Q1 2017 to Q1 2018 Financial Upstream 0.5 1.6 $ billion highlights Integrated Gas 1.2 2.4 Downstream (CCS) 2.5 1.7 Corporate & ~(0.5) ~(0.4) non-controlling interest CCS earnings 3.8 5.3 CCS earnings, $ per share 0.46 0.64 Cash flow from 9.5 9.4 operations
Slide 6: Earnings and cash flow from operations
Q1 2018 $ billion $ billion Earnings and 86 48 49 57 cash flow from operations Cash flow from operations excluding working capital Cash flow from operations excluding working capital – 4 quarters rolling (RHS) Earnings # Average Brent oil price - 4 quarters rolling ($/bbl) Earnings on CCS basis, exc
Slide 7: Integrated Gas performance
Q1 2018 Earnings and ROACE Free cash flow and cash flow from operations Integrated Gas $ billion % $ billion performance Earnings ROACE (RHS) Cash flow from operations Free cash flow LNG liquefaction volumes LNG sales volumes Million tonnes +50% Million tonnes +75% Earnings and ROACE on CCS basis, e
Slide 8: Divestment headlines
Q1 2018 Completions – Q1 2018 + April 2018 Divestment $ billion headlines MLP cash proceeds ~0.7 Iraq West Qurna 1 ~0.6 Oman - Mukhaizna ~0.3 Others ~0.3 Announcements – Q1 2018 + April 2018 $ billion DS Argentina ~1.0 Bongkot - Thailand ~0.8 New Zealand ~0.6 Divestments: headline, cash proceeds in
Slide 9: RDS reporting
Leading in transparency 2018 progress RDS reporting Disclosures aligned to Task Force on Climate-related Financial Disclosures (TCFD) “Shell Energy Transition report” published Annual report: additional disclosures on climate change risk and strategy “Sky – meeting the goals of the Paris agr
Slide 10: Downstream portfolio reshaping
Portfolio reshaping Geographical exposure Chemicals – feedstock exposure Downstream Earnings per region % of feedstock 2025 2017 2021 2025 East Europe & Africa Americas Oil Gas Marketing – earnings growth to 2025 Refining & Trading – breakeven margin $ billion $ per barrel By 2025: Organic FCF: $9
Slide 11: Integrated Gas portfolio reshaping
Portfolio reshaping Baltic LNG Integrated Gas Sakhalin expansion Abadi LNG Canada Tanzania Mozambique GTL Nigeria LNG Lake Charles expansion Browse In-/Post-FEED Pre-FEED LNG supply/demand gap MTPA (DES) 2015-20: 50% supply capacity growth 50% of new supply capacity already in operation 2017:
Slide 12: Upstream Pre-FID options & recent FIDs
Jackdaw Pierce Depressurisation Troll Ph3 ▪ 40 kboe/d ▪ 25 kboe/d KGK expansion Ph1 Kashagan CC01 ▪ 255 kboe/d ▪ 40 kboe/d ▪ 100 kboe/d Portfolio reshaping ▪ Shell 74% ▪ Shell 92.52% ▪ Shell 8.1% ▪ Shell 29% ▪ Shell 17% Ormen Lange Late Life Upstream Clair South ▪ 60 kboe/d Penguins redevelopment ▪
Slide 13: Vito – final investment decision
Deep water Vito Vito – final ~100 kboe/day peak production1 investment ~300 mln boe current estimated Ram Powell decision NaKika Appomattox recoverable resources1 Mars Ursa Coulomb Enchilada Shell-operated (63.11%) Olympus Kaikias Auger Salsa VITO Sustained capital efficiency Perdido Whale Sto
Slide 14: Cash flow priorities
World-class investment case Cash flow priorities 1 2 3 Priorities Buybacks Debt reduction Dividends & capital for cash investment Continue to reduce Cancel scrip dividend Buy back shares gearing to 20% At least $25 billion* Progress towards a world-class investment case Increase shareholder di
Slide 15: Cash allocation
Financial framework Cash allocation Surplus Buybacks* Buyback intention unchanged: at least $25 billion CFFO over 2018-2020 Capital investment $25-30 billion p.a., organic + inorganic Lower part of the range in 2018 CFFO Dividend $4 billion cash payment in Q1’18 (Q4’17 dividend, no scr
Slide 16: Free cash flow performance and payout
Financial framework Distributions from free cash flow Free cash flow $ billion performance and $99/bbl $57/bbl $60/bbl* payout Financial transformation 2014-2017 2019-2021 average: FCF $30-35 billion At least $25 billion** 2014 18Q1 2019-2021 4Q rolling average buyback over Divestment proceeds
Slide 17: Capital discipline supporting growth
Financial framework Capital investment Capital investment Capital investment Capital discipline $ billion (p.a.) 2018 – 2020 $ billion $ billion supporting Oil products 4-5 growth Conventional 4-5 -$12 billion oil + gas 30 Integrated gas 4-5 25 Deep water 5-6 Chemicals 3-4 Shales 2-3 New energies 1-
Slide 18: Divestments + net debt
Financial framework Divestment headlines – since Q1 2016 Divestment + MLP cash proceeds – since Q1 2016 Divestments + $ billion $ billion net debt Cumulative cash proceeds Range Net debt + gearing $ billion -$13.4 billion % Rule of thumb: +/-$10/bbl Brent = +/-$6 billion CFFO Net debt Gearing (RHS
Slide 19: Summary
Summary Q1 2018 Thrive in Strong results the energy transition Underlying growth continues Portfolio reshaping World-class Divestments: $26 billion completed (headline) investment case Resilience and growth Strong Financial framework license to operate Cash priorities unchanged Capital d
Slide 20: Questions & Answers
Questions & Answers Jessica Uhl Chief Financial Officer Royal Dutch Shell April 26, 2018 20
Slide 21: Q2 2018 Outlook
Q2 2018 Q2 – Q2 Outlook: year-ago baseline reflects Shell’s earnings seasonality Outlook Integrated gas Production volumes: positive impact of ~140-160 thousand boe/d, mainly due to lower maintenance. Liquefaction volumes are expected to be at similar level Upstream Production volumes: red
Slide 22: Prices & margins
Q1 2018 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 April 26, 201
Slide 23: Integrated Gas results
Q1 2018 Earnings Q1 2017 to Q1 2018 Integrated Gas $ billion results Environment Choice Earnings on CCS basis, excluding identified items Royal Dutch Shell April 26, 2018 23
Slide 24: Upstream results
Q1 2018 Earnings Q1 2017 to Q1 2018 Upstream results $ billion Environment Choice Earnings on CCS basis, excluding identified items Royal Dutch Shell April 26, 2018 24
Slide 25: Downstream results
Q1 2018 Earnings Q1 2017 to Q1 2018 Earnings mix Downstream $ billion $ billion results Marketing Refining & Trading Chemicals Earnings on CCS basis, excluding identified items Royal Dutch Shell April 26, 2018 25
Slide 26: Royal Dutch Shell April 26, 2018
Royal Dutch Shell April 26, 2018