Shell Plc · LSE:SHEL
Shell — Royal Dutch Shell — Q2 2006 Earnings Presentation
19 slides from Shell's earnings presentation, Sep 8, 2006
Slide 1: Delivery and growth - Portfolio update
Delivery and growth - Portfolio update Chief Executive Jeroen van der Veer Royal Dutch Shell plc
Slide 2: Disclaimer statement
Disclaimer statement This presentation contains forward-looking statements concerning the financial condition, results of operations and businesses of Royal Dutch Shell. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking s
Slide 3: Delivery and growth
Delivery and growth • Satisfactory Q2 2006 financial performance CCS net income $6.3 billion +36% Cash returned to shareholders $4.6 billion • Delivering on our strategy Good progress at major projects • Portfolio development Major chemicals and unconventionals projects launched
Slide 4: Strategy
Strategy Context More upstream, Growth energy demand profitable downstream • Cash generation + reinvestment • Portfolio choices • Environment + sustainability Competitive Returns • Unconventionals + renewables • Competition • Downstream includes chemicals Priorities Delivery + growth • Top quartile
Slide 5: New positions: 2006
New positions: 2006 SURE Northern JV Choren Draugen VW/Iogen Ukraine Energy BTL CO2/EOR biofuels study JV Turkey marketing BlackRock JV Iogen biofuels China Bitumen potential KPI MOU Potential Motiva ONGC MoU expansion Singapore Sonatrach Chemicals MoU BC-10 NWS-Ichthys; pre-emption Crux Qatar Pearl
Slide 6: Downstream - strategic growth in Singapore
Downstream - strategic growth in Singapore Building on strengths… • Largest Shell refinery – Bukom >460k barrels per day capacity • Largest Shell petrochemical production centre in Asia Pacific Bukom Refinery Growing with investments… • New world-scale ethylene cracker & mono ethylene glycol plant •
Slide 7: Growth potential in unconventionals
Growth potential in unconventionals • Integrated projects Bintulu • Shell technology • Oil sands • GTL • <5% of current production • ~10-15% of production by 2014
Slide 8: Gas-to-liquids Qatar: Pearl; Shell Canada: AOSP Expansion Phase 1
Gas-to-liquids Qatar: Pearl Shell Canada: AOSP Expansion Phase 1 • ~ 3 bln boe resources • > 1bln boe resources • 1.6bcf/day; 120 kboe/d NGLs • Expansion from 155kb/d to ~255kb/d • 2 x 70 kb/d GTL trains • Upgrader expansion plus pipelines • DPSA 100% Shell • 47% Royal Dutch Shell • Final investment
Slide 9: Pearl GTL
Pearl GTL Integrated Gas to Clean liquid Offshore gas Liquids Complex products North Field Ras Laffan GTL fuel blends Upstream Downstream Gas production, transport & treatment 140kb/d clean liquid products & fuels • Naphtha & GTL fuel • ~ 120kboe/d NGLs & ethane • Paraffin & kerosene • Dry gas feeds
Slide 10: Delivery and growth - Portfolio update
Delivery and growth - Portfolio update Chief Financial Officer Peter Voser Royal Dutch Shell plc
Slide 11: Q2 2006 results highlights
Q2 2006 results highlights Q2 2006 Q2 2005 $ bln $ bln CCS earnings 6.3 4.6 +36% Basic CCS earnings per share (US$) 0.98 0.69 +42% Cash from operations* 11.9 8.7 +37% Dividend per share (euro) 0.25 0.23 9% *Cash from operations excluding working capital, taxation and taxation paid
Slide 12: Oil prices and industry margins
Oil prices and industry margins Crude Oil Prices Refining Margins Cracker Margins $/bbl $/bbl $/t 75 24 700 70 20 600 65 500 60 16 55 400 12 50 300 45 8 200 40 4 100 35 30 0 0 Q205 Q305 Q405 Q106 Q206 Q205 Q305 Q405 Q106 Q206 Q205 Q305 Q405 Q106 Q206 WTI ANS USWC coking US Ethane Brent W Europe Napt
Slide 13: Q2 2006 earnings momentum
Q2 2006 earnings momentum $ bln 7.0 6.0 5.0 4.0 3.0 Q2 2005 Upstream Downstream OIS/ Minority Q2 2006 Corporate interest
Slide 14: Q2 2006 production change
Q2 2006 production change mboe/d 4.0 3.0 Controllable (0%) Uncontrollable (-8%) 2.0 Q2 2005 New Field Nigeria Hurricanes Price Q2 2006 production declines security impact & ramp up
Slide 15: Unit cash flow momentum
Unit cash flow momentum Upstream – unit cash flow*$/bbl Oil Products – unit cash flow** $/bbl Annual + rolling 4 quarters for 2006 Annual + rolling 4 quarters for 2006 Competitor range Competitor range Shell Shell ** * Upstream earnings plus depreciation & exploration Oil products earnings plus depr
Slide 16: ROACE development
ROACE development Average capital employed Rolling 4Q ROACE $ bln % Competitor range Competitor range Shell Shell Competitors are ExxonMobil, BP, Total, Chevron
Slide 17: Balanced use of cash
Balanced use of cash H1 2006 Cash In H1 2006 Cash Out $23.9 bln $23.9 bln Increase in Debt 1.5 Divestments 0.7 5.4 Working Capital 4.0 Buy backs 3.9 Dividends DACF 21.5 2.9 Deals Capital 7.6 Investment
Slide 18: Surplus cashflow returned to shareholders
Surplus cashflow returned to shareholders Dividends and buybacks $ bln • Dividend growth 20 – Dividend per share +9% H1 06 v. H1 05 Dividend phasing and RD minority – increase above long-term policy payment • Buybacks 10 – $4 bln year to date – to continue subject to oil prices and group capital req
Slide 19: Delivery and growth - Q&A
Delivery and growth - Q&A Royal Dutch Shell plc