Shell Plc · LSE:SHEL
Shell — Q4 2023 Earnings Presentation
25 slides from Shell's earnings presentation, Feb 1, 2024
Slide 1: Fourth quarter and full year 2023 results
Fourth quarter and full year 2023 results Delivering strong results and shareholder distributions Shell plc February 1, 2024 Shell plc | February 1, 2024
Slide 2: Definitions & cautionary note
Definitions & cautionary note This presentation includes certain measures that are calculated and presented on the basis of methodologies other than in accordance with generally accepted accounting principles (GAAP) such as IFRS, including Adjusted Earnings, Adjusted EBITDA, CFFO excluding working c
Slide 3: Key messages
Fourth quarter and full year 2023 Key messages Robust operational performance with exceptional LNG $7.3 billion trading and optimisation results in Q4 2023 Q4 Adjusted Earnings1 Continued strong cash delivery, supported by working Performance capital release $12.6 billion Full year 2023: Q4 CFFO Adj
Slide 4: More value, enhancing shareholder returns
Progress on CMD 2023 targets More value, enhancing shareholder returns Shareholder distributions 30-40% of CFFO through the cycle Price-normalised FCF growth1 >6% p.a. through 2030 % $ billion 42% 30-40% 2022 2023 2022 2023 2030 Structural cost reduction $2-3 billion by end-2025 Price-normalised FCF
Slide 5: Disciplined structural cost reduction
Progress on CMD 2023 targets Disciplined structural cost reduction Underlying operating expenses $ billion Top-down: $0.8 billion reduction in 2023 through divestments (e.g., Aera Energy JV (California), Baram Delta (Malaysia), Shell home energy retail businesses (UK and Germany)) 1.0 and discipline
Slide 6: Robust financial performance
Financial results Robust financial performance Q4 2023 Full year 2023 $0.5 billion Income attributable to Shell plc shareholders $19.4 billion $7.3 billion Adjusted Earnings $28.3 billion $16.3 billion Adjusted EBITDA $68.5 billion $12.6 billion Cash flow from operations $54.2 billion $7.1 billion C
Slide 7: Strong results driven by LNG trading & optimisation
Financial results Q4 2023 Strong results driven by LNG trading & optimisation Adjusted Earnings Q3 2023 to Q4 2023 Cash conversion Q4 2023 $ billion Prices & margins1: $1.5 billion $ billion Working capital movement Volume & mix1: $0.3 billion 10 20 $3.3 billion Other: $(0.7) billion 0.9 0.2 2.2 8 1
Slide 8: Delivering in a volatile macro environment
Financial results 2023 Delivering in a volatile macro environment Adjusted Earnings 2022 to 2023 Cash conversion full year 2023 $ billion Prices & margins1: $(6.8) billion $ billion Working capital movement Volume & mix1: $(2.5) billion 50 80 $7.8 billion Other: $(2.3) billion 14.0 0.1 40 60 2.4 (6.
Slide 9: A pragmatic approach to capital allocation
Financial framework A pragmatic approach to capital allocation Balanced Capital Allocation Enhanced Disciplined Shareholder Distributions Investment 30–40% of CFFO Cash capex: through the cycle $22–25 billion p.a. ~4% progressive dividend annually1 for 2024 and 2025 Enhanced distributions 4% progr
Slide 10: Investing in the energy transition
Capital expenditure Investing in the energy transition Non-energy products [A] $10-15 billion in low-carbon energy solutions from 2023-2025 $2.3 billion Low-carbon energy solutions [B] LNG, gas and power marketing and trading [C] $24.4 $5.6 billion $4.0 billion billion Oil, oil products and other [D
Slide 11: Portfolio updates
2023 delivery For additional portfolio information visit Portfolio updates our investors page on shell.com High-grading Pierce redevelopment Nature Energy acquisition Shell home energy retail businesses (UK and FID to repurpose Rheinland Energy Germany) divestment and Chemicals Park Volta acquisitio
Slide 12: Upcoming events and useful links
Upcoming events: Useful links: Feb 14, 2024 Capital Markets Day Shell LNG Outlook 2024 Annual and Quarterly Databook Mar 14, 2024 Shell Energy Transition Strategy Publication of Energy Transition Strategy 2024 ESG performance data Mar 27, 2024 Annual ESG Update War in Ukraine: Shell’s Response May 2
Slide 13: Slide 13
Slide 14: Performing with purpose
Performing with purpose Our purpose is to power progress together Generating shareholder value by providing more and cleaner energy solutions Respecting Powering Powering nature Progress lives Underpinned by our core values and Achieving net-zero our focus on safety emissions Shell plc | February 1,
Slide 15: The investment case through the energy transition
The investment case through the energy transition Providing Energy Security Committed to oil and gas, with a focus on LNG growth Investing ~$40 billion1 in Leading Integrated Gas & Advantaged Upstream Enabling the Energy Transition Providing molecules to decarbonise the transport and industry sector
Slide 16: Macro environment: Continued volatility
Macro environment Continued volatility Shell Indicative Refining Margin (IRM) Oil Gas and Indicative Chemical Margin (ICM) $/bbl $/MMBtu $/bbl $/tonne Brent JCC-3 Henry Hub EU TTF IRM ICM (RHS) 140 80 40 400 30 300 120 60 20 200 100 40 10 100 80 20 0 0 60 0 -10 -100 Brent: JCC-3: Henry Hub: EU TTF:
Slide 17: Fourth quarter 2023
Financial results Fourth quarter 2023 Adjusted Earnings Adjusted EBITDA CFFO $ billion Q4 2023 Q3 2023 Q4 2023 Q3 2023 Q4 2023 Q3 2023 Integrated Gas 4.0 2.5 6.6 4.9 3.6 4.0 Upstream 3.1 2.2 7.9 7.4 5.8 5.3 Marketing 0.7 0.7 1.3 1.5 2.7 0.9 Chemicals & 0.1 1.4 0.8 2.6 0.2 2.4 Products R&ES 0.2 (0.1)
Slide 18: Full year 2023
Financial results Full year 2023 Adjusted Earnings Adjusted EBITDA CFFO $ billion 2023 2022 2023 2022 2023 2022 Integrated Gas 13.9 16.1 23.8 26.6 17.5 27.7 Upstream 9.8 17.3 30.6 42.1 21.5 29.6 Marketing 3.2 2.8 6.0 5.3 6.1 2.4 Chemicals & 3.7 4.7 7.7 8.6 7.0 12.9 Products R&ES 0.7 1.7 1.4 2.5 3.0
Slide 19: HSSE performance
2023 HSSE performance Goal Zero on safety Process safety Operational spills Injuries (TRCF) per million working hours Million working hours Number of incidents Thousand tonnes Number of spills 2 700 200 2 150 1 350 100 1 75 0 0 0 0 0 TRCF Working hours (RHS) Tier 1 Tier 2 Volume of spills Number of
Slide 20: Significant progress on our path to net zero
Carbon Significant progress on our path to net zero 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 inc
Slide 21: SEC proved reserves position
Preliminary results SEC proved reserves position Reserves performance in 2023 Proved reserves 2023 vs 2022 billion boe RRR RRR 3-year average Reserves/Production 12 +120% +120% ~9.2 years 1.1 10 0.2 RRR RRR 3-year average (excl. A&D) (excl. A&D) +5% vs 2022 8 (1.1) +99% +90% 6 9.6 9.8 billion boe 20
Slide 22: Disciplined, value-focused capital allocation
CMD 2023 Disciplined, value-focused capital allocation Cash Capex after Cash Capex power dilutions FCF IRR hurdle rates 2022 2023 Power 24-25 24-25 2025 CMD 2023 1 $ billion actuals actuals dilutions Integrated Gas 4 4 ~5 ~5 ~8 11% Upstream 8 8 ~8 ~8 ~10 15% Integrated Gas 12 13 ~13 ~13 17-18 and Up
Slide 23: Deepwater: Decades of disciplined performance
Upstream Deepwater: Decades of disciplined performance Making the most of our heartlands today and tomorrow Sustaining liquids through 2030 Well positioned for 2030s+ Major projects and tie-backs delivering material volumes by 2025 Funnel of opportunities into the next decade Vito Rydberg Dover Go
Slide 24: Pipeline of major projects
Pipeline of major projects Projects under construction Peak production/Capacity/ Shell share % Country Products (100%) Q4 2023 updates: Start-up 2024-2025 Mero-2 start-up, Sparta FID Mero-3 [A] 180 kboe/d 19.3 Brazil Mero-4 [A] 180 kboe/d 19.3 Brazil Whale 100 kboe/d 60 USA LNG Canada T1-2 14 mtpa 4
Slide 25: Additional definitions
Appendix Additional definitions Metric Definition Price-normalised free cash flow (FCF) FCF 2022 has been normalised to prices of Brent $65/bbl, Henry Hub (and related gas markers) $4/MMBtu and historical average chemical and refining margins. FCF 2023 normalised to prices of $65/bbl Brent and $4/MM