Shell Plc · LSE:SHEL
Shell — Q4 2021 Earnings Presentation
40 slides from Shell's earnings presentation, Feb 3, 2022
Slide 1: Fourth Quarter 2021 Results
#PoweringProgress FOURTH QUARTER 2021 RESULTS STRONG DELIVERY, ACCELERATED DISTRIBUTIONS Shell plc February 3, 2022
Slide 2: Definitions & Cautionary Note
DEFINITIONS & CAUTIONARY NOTE Adjusted Earnings is the income attributable to Shell 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. A
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: Q4 Key Messages
POWERING PROGRESS Q4 2 021 K EY M ES SAGES Powering Progress strategy delivery Very strong 2021 full year and Q4 results 2022 - Accelerated distributions Reshaped organisation and portfolio, Adjusted Earnings of $6.4 billion in Q4, up $8.5 billion buyback programme for H1, Simplified corporate
Slide 5: Building Strong Partnerships to Move to Net Zero
POWERING PROGRESS B U I L D I N G S T RO N G P A RTN E RSHI PS T O M OV E T O N E T Z E RO MoU signed to jointly produce First energy anchor partner in their Signed a broad strategic collaboration Collaborate and accelerate and supply hydrogen from renewable Catalyst programme. Backed by Bill agreem
Slide 6: Progress as of Strategy Day 2021
STRATEGY DAY 2021 P ROG RESS A S OF 2 02 1 Customer Growth Energy Transition 40 million 32 million 55,000 ~55 mtpa ~55% Halved crude Customers served at Shell-branded Reduction in Gas share of daily 46,000 capacity at ~45% retail service stations retail service stations traditional fuel hydrocarbon
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 Q4 progress examples New revenues 15,000 Serving ~2 million more customers daily at retail stations, added New convenience stores Convenience stores over 25,000 EV charge points and 400 convenience s
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 UTUR E R E T UR N S Targets Q4 progress examples Shell and ScottishPower win bids to develop 5 GW of floating wind Integrated Power Becoming a leading provider of clean >560 TWh power in the UK Power-as-a-
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 Q4 progress examples First liquefied biomethane (BioLNG) bunkering trial in Rotterdam, Lead the market together with CMA CGM container shipping Grow market footprint by creating new >20% markets and embracin
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 Q4 progress examples Progressing the right-sizing of refinery footprint: Transition to Energy and 5 Chemicals Parks Completed divestment of Shell Deer Park refinery
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 Q4 progress examples Completed the Permian divestment for $9.5 billion, accelerating Focusing the portfolio cash delivery and shareholder distributions Maximising value from lean position
Slide 12: Shell Energy and Chemicals Park Singapore
CHEMICALS AND PRODUCTS S H EL L EN ERG Y A N D CH EM I CAL S P A RK S I N G A P ORE A T T H E H EA RT OF A S I A - PACI F I C RE G I O N Crude processing capacity reduced by about half in 2021 at Bukom A 550,000 tpa biofuels facility* is being explored to produce low-carbon products USA Invest
Slide 13: Value Generation Through Integration
VALUE GENERATION THROUGH INTEGRATION P RO F I T ABL Y D ECA RB ON I SI N G WI T H O U R CU S T OMERS S E CT OR B Y S E CT OR Mobility offers on the go Fuel-efficient lubricants & E-fluids Carbon offsetting Telematics & Energy provision Energy-efficient digital solutions lubricants & maintenance solu
Slide 14: Becoming a Leading Provider of Clean Power-as-a-Service in Australia
RENEWABLES & ENERGY SOLUTIONS B E CO M I N G A L EA D I N G P RO V I D E R O F CL E A N P OW E R- AS-A- SERVI CE I N A U S TRALI A Offering integrated energy solutions Managing green electrons Targeted renewables assets strategy Powershop acquisition to broaden Shell’s Powershop transaction to a
Slide 15: Delivering Divestment Proceeds of $15 Billion in 2021
PORTFOLIO D EL I V ERI N G D I V ES TMEN T P RO CEED S OF $ 1 5 B I L L I ON I N 2 02 1 Gasnor Fredericia refinery Duvernay shales PCK Schwedt refinery Puget Sound Mobile refinery Permian Egypt Western Desert Deer Park refinery* Malampaya OML 17 QGC infrastructure Completed divestments Announced div
Slide 16: Target Shareholder Distributions of 20-30% of CFFO
CAPITAL ALLOCATION 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 per annum to sustain our strategy 1 st Base Cash capex Inorganic capex included in the range PRIORITY Ordinary p
Slide 17: Stepping Up Shareholder Distributions
CAPITAL ALLOCATION S T EP PI N G U P S H A REH OL D ER D I S T RI B UTI O N S $8.5 billion share buyback programme announced for H1 2022, Shareholder 2021 2022 including $5.5 billion from the Permian proceeds, with intended distributions announcements announcements completion by Q2 2022 results an
Slide 18: 2021 Delivery and Outlook
CAPITAL ALLOCATION – NEXT PHASE 2 02 1 D EL I V ERY A N D O U T L O OK GROWTH PILLAR: TRANSITION PILLAR: UPSTREAM PILLAR: THE FUTURE OF ENERGY ENABLING OUR STRATEGY FUNDING OUR STRATEGY Renewables Net debt end-2021: Integrated Chemicals and Shell Marketing and Energy Upstream $53 billion Gas Product
Slide 19: Energy Transition Spend
NON-ENERGY PRODUCTS & DECARBONISATION OF CUSTOMERS EN ERG Y T RA N S I TI ON S P EN D 2021 2021 2022 $55 bln total ~ 2/3rd of $55 bln ~ 1/3rd Energy expenditure in Opex Transition Spend Growth Transition Upstream Opex Capex ET Opex ET Capex Energy Transition Spend: Opex is an important value Expec
Slide 20: HSSE Performance
2021 H S S E P ERF ORMAN CE Goal Zero on safety Operational spills Injuries (TRCF) per million working hours Million working hours Thousand tonnes # of spills 2 800 3 300 2 200 1 400 1 100 0 0 0 0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 TRC
Slide 21: 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 22: Strong Results Driven by Robust Operations and Resilient Portfolio
Q4 2021 FINANCIAL RESULTS Q4 2021 average Brent price: S T RON G RES U LTS D RI V EN B Y RO B U S T $80/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 Shell plc Includes non-cash gains of $3.2 billion due to the fair value accounting of commodity derivatives, $11.5
Slide 23: Strong Cash Conversion
Q4 2021 FINANCIAL RESULTS S T RO N G CA S H CON V E RSI O N Adjusted Earnings Q3 2021 to Q4 2021 Cash conversion Q4 2021 $ billion $ billion 8 20 2.6 0.2 0.5 0.3 0.5 3.7 (0.0) 16 6 (0.3) (0.1) (0.6) 5.4 (2.7) 12 4 (3.3) 8 16.3 16.9 6.4 0.8 11.1 2 4.1 4 6.4 0 0 Left graph: information presented on a
Slide 24: Strong Cash Flow Generation Resulting in Net Debt Reduction
Q4 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 Q3 2021 to Q4 2021 Net debt 2016 to 2021 (incl. leases) $ billion $ billion Net debt before IFRS 16 Net debt post IFRS 16 Gearing (RHS) 100 40% 60 (11.1) 30% 80 (9.1) +$16 bi
Slide 25: 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 strong CFFO $ billion $ billion 60 60 50 50 40 40 30 30 20 20 10 10 0 0 2015 2016 2017 2018 2019 2020 2021 2015 2016 2017 2018 2019 2020 2021 Downstream Integrated G
Slide 26: Integrated Gas, Renewables and Energy Solutions
Q4 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 Q4 Q1 2022 outlook Production is expected to be approximately 760 - 820 thousand boe/d. LNG liquefaction volum
Slide 27: Upstream
Q4 2021 FINANCIAL RESULTS Quarterly Databook available on U P S TREAM www.shell.com/investors Adjusted Earnings Cash conversion Q4 Q1 2022 outlook Production is expected to be approximately 2,000 - 2,200 thousand boe/d. *WWO = well write-offs Adjusted Earnings higher by $1.1 billion compared to
Slide 28: Oil Products
Q4 2021 FINANCIAL RESULTS Quarterly Databook available on OI L P ROD U CTS www.shell.com/investors Adjusted Earnings Cash conversion Q4 Q1 2022 outlook Refinery utilisation is expected to be approximately 71% - 79%. Sales volumes are expected to be approximately 4,100 - 5,400 thousand b/d of whi
Slide 29: Chemicals
Q4 2021 FINANCIAL RESULTS Quarterly Databook available on CH EM I CAL S www.shell.com/investors Adjusted Earnings Cash conversion Q4 Q1 2022 outlook Manufacturing plant utilisation is expected to be approximately 78% - 86%. Sales volumes are expected to be approximately 3,300 - 3,700 thousand to
Slide 30: SEC Proved Reserves Position
PRELIMINARY RESULTS S EC P ROV ED RES ERVE S P O S I T I O N Reserves performance Proved reserves 2021 vs 2020 billion boe 2021 RRR +120% 10 2021 RRR (excl. A&D) +138% 1.7 3-year average RRR +43% 8 (1.2) (0.2) Reserves/Production at end-2021 ~7.6 years 6 9.1 9.4 billion boe 2019 2020 2021 4
Slide 31: Share Simplification: Simpler. More Flexible. Faster.
SHARE SIMPLIFICATION S I M P LER. M ORE F L EX I BLE. F A S T ER. DELI V E R I N G TH E S TR A T EGY 2005 Unification: The dual-share structure of RDS January 2022: Name change, and assimilation of shares implemented. was created in 2005 with ACCELERATE SHARE BUYBACKS tax residency in the Euronext L
Slide 32: New Reporting Segments
ENHANCING DISCLOSURES AND IMPROVING TRANSPARENCY N EW REP O RTI N G S E G ME N TS Introduction of Quarterly Update Note Quarterly Press Release Enhanced quarterly disclosures New reporting segments Q3 Q2 Q1 Q1 2019 2020 2021 2022 Current segments Future segments Reporting scope Mobility Lubricants S
Slide 33: 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 2022-2023 Shell Bovarius USA 100 Renewable Fuels – RNG Shell Galloway USA 100 Renewable Fuels – RNG LanzaJet USA 15.4 Renewable Fuels Varennes Carbon Biofuels Plant Rotterd
Slide 34: 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 2022-2023 Arrow - Surat Gas Australia 50 backfill Colibri Trinidad & Tobago 87 backfill LNGC Gorgon - Jansz Australia 25
Slide 35: 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 2022 Pennsylvania Petrochemicals USA 100 1.5 mtpa Polyethylene Complex Under construction – Start-up 2023+ Moerdijk energy efficiency The Neth
Slide 36: 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 2022-2023 Mero 1 [A] Brazil 20 180 Mero 2 [A] Brazil 20 180 Timi Malaysia 75 50 Pierce post Depressurisation UK 93 30 Penguins Redevelopment UK
Slide 37: 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 38: Upcoming Events and Useful Links
Upcoming events Useful links: 21 Feb 2022 Integrated Gas Business Update Strategy Day 2021 5 May 2022 Q1 2022 results Annual and Quarterly Databook 10 May 2022 Annual ESG Update Shell Energy Transition Strategy 24 May 2022 Annual General Meeting Annual reports and publications Nigeria briefing notes
Slide 39: Additional Definitions
ADDITIONAL DEFINITIONS Metric Definition Break-even price The forward-looking breakeven price for a pre-FID project is calculated at FID based on all forward-looking costs associated with that project. Accordingly, this typically excludes exploration & appraisal costs, lease bonuses, exploration sei
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