Slide 1: Second quarter 2018 results
Second quarter 2018 results Delivering a world-class investment case Royal Dutch Shell plc July 26, 2018 #makethefuture Royal Dutch Shell July 26, 2018
Slide 2: Ben van Beurden, Chief Executive Officer
Ben van Beurden Chief Executive Officer Royal Dutch Shell Royal Dutch Shell July 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 Key messages Thrive in Confidence in free cash flow outlook the energy transition Focus on capital discipline in line with financial framework $30 billion divestments1 completed or announced $25 billion share buyback programme launched World-class investment case Q2 2018 Strong res
Slide 5: HSSE performance
HSSE Goal Zero on safety Operational spills1 performance Injuries – TRCF (per million working hours) million working hours Volume in thousand tonnes # TRCF Working hours (RHS) Volume of spills Number of spills (RHS) Upstream flaring Process safety Million tonnes CO2e Number of incidents HSSE prior
Slide 6: Financial summary
H1 2018 Financial summary 10.1 Earnings ($ billion); EPS +34% versus H1 2017 18.9 Cash flow from operations ($ billion) 14.7 Free cash flow ($ billion) 6.5 ROACE (%) 23.6 Gearing (%) Nanhi petrochemicals plant - China Earnings and ROACE on CCS basis, excluding identified items Royal Dutch Shell July
Slide 7: Recent portfolio developments
Portfolio & projects Whale and Dover discoveries in the Gulf of Mexico Recent portfolio Exploration success developments Bid rounds in Mexico and Brazil Entry into Mauritania FID: Gumusut Kakap Ph2, Vito, Penguins, Fram and Borssele 3/4 Project delivery Start-up: Kaikias and Nanhai petroch
Slide 8: Gulf of Mexico
Portfolio & projects Gulf of Mexico Exploration success Bid round - Mexico Whale – discovery Dover – discovery Bid round – Mexico Project delivery Appomattox on location Kaikias start-up Vito FID Leading position Growth and operational excellence longevity Royal Dutch Shell July 26, 2018 8
Slide 9: Projects delivery
Portfolio & projects Nanhai petrochemicals expansion – start-up Prelude – progress towards start-up Projects delivery New ethylene cracker and derivatives unit in China Floating LNG facility offshore Australia Key component of growth and competitiveness in Final plant commissioning underway
Slide 10: High-quality Upstream growth options
Portfolio & projects Reserves & resources Upstream – Deepwater High-quality Billion boe Pre-FID funnel break-even price $ per barrel Upstream growth options Conventional Deep water Shales oil & gas Percentage of capital investment Discovered resources Reserves (SEC proved) (2P+2C development pending
Slide 11: Cash momentum
Cash momentum Project start-ups 2014 to 2020 Total cash flow $ billion cash flow per annum $ billion 52 44 54 64 ~651 $/bbl ~$10 billion New projects cash delivery on track Confidence in 2020 free cash flow CFFO1 Cash flow from operations (excluding working capital movements) outlook 2018 YTD es
Slide 12: Capital discipline supporting growth
Financial framework Capital investment Capital investment Capital discipline $ billion (p.a.) 2018-20 $ billion supporting Oil products 4-5 -$12 billion growth Conventional 4-5 oil + gas 30 Integrated gas 4-5 25 Deep water 5-6 Chemicals 3-4 Shales 2-3 New energies 1-2 $25-30 billion Total 25-30 or
Slide 13: Shareholder returns
Shareholder Attractive dividend key to Total shareholder returns January 2016 to end June 2018 returns % total shareholder return and world-class investment case $25 billion share buyback by end 20201 First buyback tranche $2 billion in Q3 2018 Shell Delivering a world- class investment case 1
Slide 14: Jessica Uhl, Chief Financial Officer
Jessica Uhl Chief Financial Officer Royal Dutch Shell Royal Dutch Shell July 26, 2018
Slide 15: Foundation of the world-class investment case
Foundation of the world-class investment case Thrive in Key features the energy transition Maximising value for shareholders through cycle Focus on shareholder distributions World-class Multi-year timescales investment case Surplus free cash flow in up-cycle and dividends fully covered in do
Slide 16: Cash flow priorities
Financial framework Cash flow priorities 1 2 3 Priorities Buybacks Debt reduction Dividends & capital for cash investment Continue to reduce gearing Cancel scrip dividend Buy back shares Progress towards a world-class investment case Increase shareholder distributions Royal Dutch Shell July 26, 2018
Slide 17: Financial summary
Financial Earnings & ROACE Cash flow summary $ billion % $ billion Upstream Downstream CFFO CFFI FCF Integrated Gas Corporate + NCI ROACE (RHS) Divestments Net debt & gearing $ billion $ billion % Net debt Gearing (RHS) Earnings and ROACE on CCS basis, excluding identified items. Divestments: headli
Slide 18: Financial highlights
Q2 2018 $ billion Q2 2017 Q2 2018 Earnings Q2 2017 to Q2 2018 Financial Upstream 0.3 1.5 $ billion highlights Integrated Gas 1.2 2.3 Downstream (CCS) 2.5 1.7 Corporate & (0.4) (0.7) non-controlling interest CCS earnings 3.6 4.7 CCS earnings, $ per share 0.44 0.56 Cash flow from 11.3 9.5 operations F
Slide 19: US Gulf Coast: one year after Motiva
Downstream US Gulf Coast: Shell terminals Retail product supply: one year after Shell refineries Shell chemical plants end to end value generation Motiva Sewaren: integrated operations Mobile: retail, refining & trading integration Mobile Norco Convent Norco: hydrocracker Deer Park upgrade & integra
Slide 20: LNG portfolio
Integrated Gas Emerging LNG Supply – Demand gap LNG Market & outlook LNG portfolio Million tonnes per annum (DES) LNG is the fastest-growing gas supply source 2017-18: continued supply/demand balance Early 2020s: supply gap Shell response Globally balanced and resilient portfolio Competiti
Slide 21: Permian Performance
Upstream Production growth Permian Thousand boe per day ~260,000 net acres with ongoing efforts to Performance +160% consolidate footprint through swaps Strong delivery to date and more than 30% annual production growth through 2020 +85% Growth plans not impacted by infrastructure bottlenecks
Slide 22: Strategic themes delivery: on track
Q2 2018 4Q rolling ~$64 2019-21 ~$60 Strategic themes delivery: Strategic Capital Free ROACE Capital Free ROACE on track themes employed ($ bln end 2017) cash flow ($ bln p.a) (%) employed ($ bln) cash flow ($ bln p.a) (%) Cash engines ~60% ~10 ~10 ~70% 25-30 >10 Growth ~28% ~4 ~5 ~20% 1-2 ~5 priori
Slide 23: Ben van Beurden, Chief Executive Officer
Ben van Beurden Chief Executive Officer Royal Dutch Shell Royal Dutch Shell July 26, 2018
Slide 24: Summary
Summary Key messages Thrive in Confidence in free cash flow outlook the energy transition Focus on capital discipline in line with financial framework $30 billion divestments1 completed or announced $25 billion share buyback programme launched World-class investment case Q2 2018 Strong res
Slide 25: Questions & Answers
Questions & Answers Ben van Beurden Jessica Uhl Chief Executive Officer Chief Financial Officer Royal Dutch Shell July 26, 2018 25
Slide 26: Q3 2018 Outlook
Q3 2018 Q3 – Q3 OUTLOOK: Year-ago baseline reflects Shell’s earnings seasonality Outlook Integrated gas Production volumes: negative impact of 40-70 thousand boe/d, mainly due to divestments and higher maintenance Liquefaction volumes: at similar level Upstream Production volumes: negative
Slide 27: Prices & margins
Q2 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 July 26, 2018
Slide 28: Financial highlights
Q2 2018 $ billion Q2 2017 Q2 2018 Earnings Q2 2017 to Q2 2018 Financial Upstream 0.3 1.5 $ billion highlights Integrated Gas 1.2 2.3 Downstream (CCS) 2.5 1.7 Corporate & (0.4) (0.7) non-controlling interest CCS earnings 3.6 4.7 CCS earnings, $ per share 0.44 0.56 Cash flow from 11.3 9.5 operations F
Slide 29: Integrated Gas results
Q2 2018 Earnings Q2 2017 to Q2 2018 Integrated Gas $ billion results Environment Choice Earnings on CCS basis, excluding identified items Royal Dutch Shell July 26, 2018 29
Slide 30: Upstream results
Q2 2018 Earnings Q2 2017 to Q2 2018 Upstream $ billion results Environment Choice Earnings on CCS basis, excluding identified items Royal Dutch Shell July 26, 2018 30
Slide 31: Downstream results
Q2 2018 Earnings Q2 2017 to Q2 2018 Earnings mix Downstream $ billion $ billion results Marketing Refining & Trading Chemicals Earnings on CCS basis, excluding identified items Royal Dutch Shell July 26, 2018 31
Slide 32: Royal Dutch Shell July 26, 2018
Royal Dutch Shell July 26, 2018