balancing growth & returns · enhance our capital efficiency improve our financial performance...

1 Copyright of Royal Dutch Shell plc 30 April, 2014

BALANCING GROWTH & RETURNS FIRST QUARTER 2014 RESULTS

30 APRIL 2014 ROYAL DUTCH SHELL PLC


SIMON HENRY CHIEF FINANCIAL OFFICER

ROYAL DUTCH SHELL PLC


DEFINITIONS & CAUTIONARY NOTE

The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate entities. In this presentation “Shell”, “Shell group” and “Royal Dutch Shell” are sometimes used for convenience where references are made to Royal Dutch Shell plc and its subsidiaries in general. Likewise, the words “we”, “us” and “our” are also used to refer to subsidiaries in general or to those who work for them. These expressions are also used where no useful purpose is served by identifying the particular company or companies. ‘‘Subsidiaries’’, “Shell subsidiaries” and “Shell companies” as used in this presentation refer to companies in which Royal Dutch Shell either directly or indirectly has control, by having either a majority of the voting rights or the right to exercise a controlling influence. The companies in which Shell has significant influence but not control are referred to as “associated companies” or “associates” and companies in which Shell has joint control are referred to as “jointly controlled entities”. In this presentation, associates and jointly controlled entities are also referred to as “equity-accounted investments”. The term “Shell interest” is used for convenience to indicate the direct and/or indirect (for example, through our 23% shareholding in Woodside Petroleum Ltd.) ownership interest held by Shell in a venture, partnership or company, after exclusion of all third-party interest.

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 statements are statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Royal Dutch Shell to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as ‘‘anticipate’’, ‘‘believe’’, ‘‘could’’, ‘‘estimate’’, ‘‘expect’’, ‘‘intend’’, ‘‘may’’, ‘‘plan’’, ‘‘objectives’’, ‘‘outlook’’, ‘‘probably’’, ‘‘project’’, ‘‘will’’, ‘‘seek’’, ‘‘target’’, ‘‘risks’’, ‘‘goals’’, ‘‘should’’ and similar terms and phrases. There are a number of factors that could affect the future operations of Royal Dutch Shell and could cause those results to differ materially from those expressed in the forward-looking statements included in this presentation, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for Shell’s products; (c) currency fluctuations; (d) drilling and production results; (e) reserves estimates; (f) loss of market share and industry competition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, fiscal and regulatory developments including potential litigation and regulatory measures as a result of climate changes; (k) economic and financial market conditions in various countries and regions; (l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval of projects and delays in the reimbursement for shared costs; and (m) changes in trading conditions. All forward-looking statements contained in this presentation are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Additional factors that may affect future results are contained in Royal Dutch Shell’s 20-F for the year ended 31 December, 2013 (available at www.shell.com/investor and www.sec.gov ). These factors also should be considered by the reader. Each forward-looking statement speaks only as of the date of this presentation, 30 April, 2014. Neither Royal Dutch Shell nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this presentation. There can be no assurance that dividend payments will match or exceed those set out in this presentation in the future, or that they will be made at all.

We use certain terms in this presentation, such as discovery potential, that the United States Securities and Exchange Commission (SEC) guidelines strictly prohibit us from including in filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form 20-F, File No 1-32575, available on the SEC website www.sec.gov. You can also obtain this form from the SEC by calling 1-800-SEC-0330.


2014 PRIORITIES Q1 2014 DELIVERY

Earnings excluding identified items

Deliver new projects

Enhance our capital efficiency

Improve our financial performance

CCS earnings $7.3 billion

Cash flow from operations $14 billion

Increasing our dividend: Q1 2014 $0.47 per share, +4.4%

Taking hard choices on portfolio

$4.5 billion asset sales announced year-to-date

Mars B start-up

Majnoon ramp-up

Repsol LNG integration

Maturing new options: LNG, deep-water


PRICES & MARGINS

Shell oil & gas realisations

$/barrel

Industry refining margins $/barrel

Industry chemicals margins $/tonne $/mscf

5

6

7

8

80

90

100

110

Q113 Q213 Q313 Q413 Q114 -3

0

3

6

9

12

Q113 Q213 Q313 Q413 Q114 0

200

400

600

800

1000

Q113 Q213 Q313 Q413 Q114

Oil Gas (RHS)

US West Coast US Gulf Coast coking Rotterdam complex Singapore

US ethane Western Europe naphtha NE/SE Asia naphtha


Q1 2014 FINANCIAL HIGHLIGHTS

Earnings CCS basis, excluding identified items, ROACE reported FIFO

Earnings Q1 2013 to Q1 2014 $ billion

Earnings Q1 2013 to Q1 2014

7.5 7.3

0.1 (0.3) (0.0)

0

2

4

6

8

Q1 2013

Q1 2014

$ billion UPSTREAM 5.7 5.7

DOWNSTREAM (CCS) 1.8 1.6

CORPORATE & MINORITIES 0.0 0.0

CCS NET EARNINGS 7.5 7.3

CCS EARNINGS, $ PER SHARE 1.19 1.17

CASH FROM OPERATIONS 11.6 14.0

ROACE (%) 13.0 6.1 SHARE BUY BACKS 0.5 1.2

DIVIDENDS 2.7 2.8

DIVIDEND, $ PER SHARE 0.45 0.47


7.5 7.3

0.4 0.1 0.1 (0.3) (0.1)

(0.2) (0.2) (0.1)

4

6

8

Q1 2014 FINANCIAL DRIVERS

Earnings CCS basis, Earnings excluding identified items

Group earnings Q1 2013 to Q1 2014 $ billion Environment Choice

Underlying EPS -2%

Broadly similar environment Q1 – Q1


INTEGRATED GAS PERFORMANCE


Record earnings Q1 14

High operational availability + strong trading contribution

Repsol LNG business successfully integrated

Global LNG portfolio availability

%

Financial performance $ billion

LNG Peru

Altamira

Baja

Nigeria

Hazira

NWS Pluto

QG-4

Elba

Spain

Prelude Gorgon

Atlantic LNG

Oman

Sakhalin

Malaysia

Brunei

Cove Point

LNG supply

Under construction

Regasification

Trading flows

Shell’s LNG portfolio

85%

90%

95%

100%

2010 2011 2012 2013 Q114 0%

10%

20%

30%

0

5

10

15

2010 2011 2012 2013 Q114 rolling

Earnings CFFO ROACE (RHS) Availability


-2

2

6

10

-2

2

6

Q113 Q213 Q313 Q413 Q114 0

1

2

Q113 Q213 Q313 Q413 Q114

0

3,5

7

0

2

4

Q113 Q213 Q313 Q413 Q114

UPSTREAM PERFORMANCE Q1 2014

Earnings CCS basis, excluding identified items

Earnings + cash flow $ billion

Exploration expense

$ billion (pre-tax)

Oil and gas production

Million boe/day

Upstream International Upstream Americas

Upstream International Upstream Americas

Gas Oil LNG Sales volumes (RHS)

Q2 – Q2 OUTLOOK:

Production impact: LNG sales volumes uplift Atlantic + Peru LNG

ADCO licence expiry ~155 kboe/d

Lower maintenance +25 kboe/d

Nigeria operating challenges

Increased exploration costs + DD&A

Million tonnes

Cash flow from operations (RHS)


Updated view on macro:

Growth in LRS

Industry gasoline surplus

Industry refinery overbuild

~ $2.6 billion Q1 2014 impairment mainly on refinery portfolio

14% of refining asset base impaired

Announced divestments 2014 year to date:

Norway

Italy

Australia

Denmark

181,000 b/d refining capacity

300,000 b/d marketing

DOWNSTREAM – RESTRUCTURING OUR PORTFOLIO

CCS earnings excluding identified items

Resilience

Attr

activ

enes

s

Keep and grow

Fix or divest

Exit

Addressing underperforming portfolio

0

5

10

0

6

12

2009 2010 2011 2012 2013 Q114 rolling

CFFO + ROACE $ billion

CFFO ROACE (RHS)

%


-4

-2

0

2

4

Q113 Q213 Q313 Q413 Q114

3

4

5

6

7

80

85

90

95

100

Q113 Q213 Q313 Q413 Q114

0

1

2

Q113 Q213 Q313 Q413 Q114

DOWNSTREAM PERFORMANCE Q1 2014

Earnings CCS basis, excluding identified items

Earnings $ billion

Cash flow

Sales volume

Oil Products Chemicals

Refinery availability Chemicals availability Oil product (million bbls/d) Chemicals (million tonnes)

Q2 – Q2 OUTLOOK:

Reduced refinery availability

Higher chemicals availability

Refining margin outlook remains bearish

Availability and sales volumes %

$ billion

CFFO excl w/c movements Working capital movements

CFFO


0

20

40

60

0

5

10

15

0

10

20

30

40

50

Q113 Q213 Q313 Q413 Q114

0

10

20

30

0

10

20

2010 2011 2012 2013 Q114 Rolling

CASH PERFORMANCE + PAYOUT

FCF = Net cash from operating activities – Net cash used in investing activities

CFFO 12 months rolling

$ billion

Group 12 months cash performance

$ billion

Gearing and pay out

$ billion

CFFO Capex

Sources Uses

Asset sales Acquisitions

%

Dividend Buy-backs

Dividend Buyback Gearing (RHS)

$ billion

Upstream Downstream

Corporate Free cashflow (RHS)

Free cashflow Q114 (RHS)

Improving free cash flow

CFFO growth

2013 acquisitions impacts

$17 bn dividends distributed + buy-backs 12 months


(10)

0

10

20

30

40

50

60

2010 2011 2012 2013 Q114 -

10

20

30

40

50

60

2010 2011 2012 2013 Q114

-10%

0%

10%

20%

30%

2010 2011 2012 2013 Q114 0%

10%

20%

30%

2010 2011 2012 2013 Q114

COMPETITIVE PERFORMANCE: BALANCING GROWTH AND RETURNS 4Q ROLLING

Cash flow from operations $ billion, 4Q rolling

Free cash flow $ billion

ROACE – reported %

ROACE – underlying %

Free cashflow: Cashflow from operations less cash used in investing activities; ROACE underlying: CCS basis, excludes indentified items, gains on asset sales

Shell Peer group


PORTFOLIO DEVELOPMENT Q1 2014

Exploration/ option progress FID Start-ups Divestment / (Project re-framing)

Engi

nes

Norway Italy Australia Denmark

ML South

Gro

wth

Prio

ritie

s

LNG Canada – FEED (12 mtpa) Lympstone gas Rosmari-1 Pegaga gas


Wheatstone LNG (Arrow LNG)

Appomatox – FEED (150 kboed) Limbayong oil

Mars-B (100 kboe/d) Petai (30kboe/d)

BC-10 Brazil 23%

Long

er T

erm

Eagle Ford Niobrara and Sandwash Mississippi Lime

UK Peterhead CCS - FEED

Nigeria SPDC reduction

4 discoveries 3 FEEDS 1 FID 3 start-ups $4.5 billion

announced ytd

FUTURE OPPORTUNITIES

RESOURCES PLAYS

DEEP-WATER

INTEGRATED GAS

UPSTREAM ENGINE

DOWNSTREAM ENGINE

divestment complete


DELIVER NEW PROJECTS: START-UPS 2014

Start-up in Q3 2013 - currently producing >200 kboe/d

Cost recovery triggered, following test run

CFFO contribution expected from Q2 2014

First oil more than 6 months ahead of schedule

Two subsea wells on-line in Q1 currently producing ~30 kboe/d

Expected 100 kboe/d by 2016

Majnoon (Shell 45%) Mars B – February 2014 start-up (Shell 71.5%)

M F J A

kboed

0

10

20

30

40

kboed 0

75

150

225

Oct-13

Nov-13

Dec-13

Jan-14 Feb-14 M

ar-14 A

pr-14

kboed


2014 PRIORITIES Q1 2014 DELIVERY


Deliver new projects

Enhance our capital efficiency

Improve our financial performance

CCS earnings $7.3 billion

Cash flow from operations $14 billion

Increasing our dividend: Q1 2014 $0.47 per share, +4.4%

Taking hard choices on portfolio

$4.5 billion asset sales announced year-to-date

Mars B start-up

Majnoon ramp-up


Maturing new options: LNG, deep-water


QUESTIONS & ANSWERS FIRST QUARTER 2014 RESULTS


BALANCING GROWTH & RETURNS FIRST QUARTER 2014 RESULTS

30 APRIL 2014 ROYAL DUTCH SHELL PLC

balancing growth & returns · enhance our capital efficiency improve our financial performance...

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