Shell Plc · LSE:SHEL
Shell — Royal Dutch 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 QUALITY PORTFOLIO DELIVERING RECORD CASH 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
GENERATING THE SHELL INVESTMENT CASE SHAREHOLDER VALUE Growing value through a dynamic portfolio and disciplined capital allocation POWERING PROGRESS R E S P E C T IN G N A T U R E Our strategy to accelerate the POWERING LIVES Protecting the environment, reducing waste and transition to net-zero emi
Slide 4: Q3 2021 Key Messages
POWERING PROGRESS Q3 2 02 1 K EY M ES SAGES 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: Delivering the Strategy
DELIVERING THE STRATEGY OU R V I S I O N F O R T H E F U T U RE O F E N E RG 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
Slide 6: Building Strong Customer Partnerships to Move to Net Zero
POWERING PROGRESS B U I L D I N G S T RO N G CU S T OME R P A RTN E RSHI PS T O M OV E T O N E T Z E RO 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
Slide 7: Marketing: Profitably Decarbonising with Our Customers
MARKETING P R O FITABLY DEC A R BON IS IN G WI TH O UR C US TOMERS 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 sup
Slide 8: Renewables and Energy Solutions: Integrated Clean Energy Systems
RENEWABLES AND ENERGY SOLUTIONS I N T E GR ATED C LEAN EN ER GY S Y S T EM S : H I GHE R F UT UR E R E T UR N 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 So
Slide 9: Integrated Gas: A World Leader in LNG
INTEGRATED GAS A WO R LD LEA DER I N LN G: R ES I LI EN T C A S H GEN ER A TI ON 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 embr
Slide 10: Chemicals and Products: Integrated Energy and Chemicals Parks
CHEMICALS AND PRODUCTS I N T E GR ATED EN ER GY AN D C H EMICALS P AR K S DE LI V E R I N G LO WE R - C A R BON P R O DUCTS Targets Q3 progress examples Transition to Energy and Progressing 1 mtpa of plastic waste processed: 5 Chemicals Parks Core energy and chemicals Invested in BlueAlp’s plast
Slide 11: Upstream: Delivering the Energy of Today
UPSTREAM DELI V ER I N G TH E EN ER GY O F TO DA Y WH I LE F UN DI N G TH E E N ER GY O F TO M 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 of $6 Billion in First Nine Months
PORTFOLIO D EL I V ERI N G D I V ES TMEN T P RO CE E D S O F $ 6 B I L L I ON I N T H E F I RS T N I N E M ON T HS 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 $9.5 billion De
Slide 13: Further Transforming Energy and Chemicals Park Rotterdam
CHEMICALS AND PRODUCTS F U RT HER T RA N S FORMI N G E N E RG Y A N D CH E M I CA LS P A RK ROT T E RD AM Transforming the Pernis refinery into the Energy and Chemicals Park Rotterdam to produce lower-carbon KEY fuels CO2 Integration of Hydrogen Holland 1 with Hollandse Power Kust (Noord) wind f
Slide 14: Biofuels Plant at Energy & Chemicals Park Rotterdam
CHEMICALS AND PRODUCTS B I O F U ELS P L A N T A T E N E RG Y & CH E M I CALS P A RK ROT T E RD AM Integrated Margin E&C Rotterdam Pre-treatment Unit filters feedstock and 100% prepares feedstock for Feedstock processing Waste & certified sustainable vegetable oils Biofuels Plant: conversion to lowe
Slide 15: Mobility Proves Resilient with Best-Ever Q3 YTD Earnings
MARKETING M O B I L I TY P RO V ES RE S I L I E NT WI T H B E S T - EVER Q3 Y T D EA RN I N G S Resilient growth through cycle; record Q3 YTD earnings Differentiated offerings + customer access create value Adjusted Earnings ($ billion) V-Power continues Shell V-Power™ penetration: branded sales gro
Slide 16: Convenience Retail: Growing Value in an Attractive Market
MARKETING CO N V EN I EN CE RET A I L – G ROWI N G V A L UE I N A N A T T RACTI VE M A RK ET 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 Gro
Slide 17: EV Charging: Profitably Extending Our Offer at Pace
MARKETING EV CH A RG I N G – P RO F I T ABLY E X T E N D I N G OU R OF F E R A T P A CE 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 ne
Slide 18: New Target to Halve Absolute Emissions
ACHIEVING NET ZERO EMISSIONS N EW T A RG ET T O H A L VE A B S O LUT E E M I S SI ON 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 Scope 1 Scope 2 11 10 ~69 ~8 41 mtpa CO2e
Slide 19: Our Climate Targets
CARBON O U R CL I M A TE T A RG 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 emiss
Slide 20: Strong Results Driven by Robust Operations and Resilient Portfolio
Q3 2021 FINANCIAL RESULTS Q3 2021 average Brent price: S T RON G RES U LTS D RI V EN B Y RO B U S T $73/bbl OP ERA TI O N S A N D RE S I L I E NT P O RT F O LI O Income attributable to Royal $(0.4) billion Includes a non-cash charge of $5.2 billion due to fair value accounting of commodity derivativ
Slide 21: Strong Cash Conversion
Q3 2021 FINANCIAL RESULTS S T RO N G CA S H CON V E RSI O N Adjusted Earnings Q2 2021 to Q3 2021 Cash conversion Q3 2021 $ billion $ billion 0.4 6 20 4.0 (0.5) (0.1) (0.1) 16 (0.7) (0.2) 0.7 2.3 4 (0.9) (~0) (0.1) 12 6.3 5.5 17.5 8 2 4.1 13.5 14.2 0.7 4 4.1 0 0 Left graph: information presented on a
Slide 22: Strong Cash Flow Generation Resulting in Net Debt Reduction
Q3 2021 FINANCIAL RESULTS S T RO N G CA S H F L OW G E N E RA TI O N RE S U LTI N G I N N E T D E B T RED U CT I O N Net debt Q2 2021 to Q3 2021 Working capital movements Q3 2021 $ billion $ billion 80 0 0.8 (1.4) 60 0.8 1.0 0.7 -1 4.8 1.8 1.4 (1.3) (0.9) (17.5) (1.3) 40 -2 65.7 57.5 20 -3 0 -4 Roya
Slide 23: Integrated Gas, Renewables and Energy Solutions
Q3 2021 FINANCIAL RESULTS Quarterly Databook available on I N T EG RATED G A S , www.shell.com/investors REN EWABL ES A N D E N E RG Y S O L U TI O N S Adjusted Earnings Cash conversion Q3 Q4 2021 outlook Production is expected to be approximately 940 - 980 thousand boe/d. LNG liquefaction volum
Slide 24: Upstream
Q3 2021 FINANCIAL RESULTS Quarterly Databook available on U P S TREAM 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 OI L P ROD U CTS 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. Str
Slide 26: Chemicals
Q3 2021 FINANCIAL RESULTS Quarterly Databook available on CH EM I CAL S 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 to
Slide 27: Integrated Business Model Delivering Value
CASH POTENTIAL I N T EG RATED B U S I N ESS M O D EL D EL I V ERI N G V A L UE Balanced CFFO excluding working capital Track record of sector-leading CFFO $ billion $ billion 50 60 50 40 40 30 30 20 20 10 10 0 0 2015 2016 2017 2018 2019 2020 Q3 2021 2015 2016 2017 2018 2019 2020 Q3 2021 4Q-rolling 4
Slide 28: Target Shareholder Distributions of 20-30% of CFFO
CAPITAL ALLOCATION – NEXT PHASE T A RG ET S H A REHO LD ER D I S T RI BUT I ONS O F 2 0 - 3 0% OF CF 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 $2-3 billion; Integr
Slide 29: Marketing Major Projects
M A RK ETI N G M A J O R P RO J E CT S Shell Products Shell- Project Country share % operated Under construction – Start-up 2021-2022 Shell Bovarius USA 100 Renewable Fuels – RNG Shell Galloway USA 100 Renewable Fuels – RNG Under construction – Start-up 2023+ Varennes Carbon Biofuels Plant Rotte
Slide 30: Integrated Gas Portfolio & Major Projects
I N T EG RATED G A S P O RT F O LI O & M A J O R P ROJE CT S 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 LNGC Gorgon - Jansz Australia 25
Slide 31: Chemicals and Products Portfolio & Major Projects
CH EM I CAL S A N D P RO D U CT S P O RT FO LI O & M A JOR P ROJE CT S Shell Products Shell- Project Country share % operated Under construction – Start-up 2021-2022 Pennsylvania Petrochemicals USA 100 1.5 mtpa Polyethylene Complex Under construction – Start-up 2023+ Moerdijk energy efficiency The
Slide 32: Upstream Portfolio & Major Projects
U P S TREAM P O RT F O LI O & M A J O R P RO JE CT S 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 PowerNap USA 100 35 Vito USA 63 100 UK Under construction – Start-up
Slide 33: A Customer-Led Integrated Energy Offering
A CU S T OMER- LED I N T EG RATED UK EN ERG Y O F F ERI N G NL CO2 CO2 CO2 EUROPE K EY 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 and 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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