delivering innovative & competitive performance · q1 earnings $7.5 billion; eps +2% cffo $11.6...
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Copyright of Royal Dutch Shell plc 2 May, 2013 1
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DELIVERING INNOVATIVE & COMPETITIVE PERFORMANCE FIRST QUARTER 2013 RESULTS
ROYAL DUTCH SHELL PLC 2 MAY 2013
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DELIVERING INNOVATIVE & COMPETITIVE PERFORMANCE SIMON HENRY CHIEF FINANCIAL OFFICER ROYAL DUTCH SHELL PLC 2 MAY 2013
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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, 2012 (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, 2 May, 2013. 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.
DEFINITIONS AND CAUTIONARY NOTE
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Q1 2013 results Q1 earnings $7.5 billion; EPS +2% CFFO $11.6 billion Q1 2013 dividend increase +5% Growth delivery Performance from recent start-ups 4 final investment decisions Refreshing the portfolio Selective A&D Acquisitions: Upstream engine + integrated gas Divestments from Downstream engine
Q1 2013 OVERVIEW
Earnings CCS basis, Earnings and EPS excluding identified items. Dividends distributed in the quarter
Q1 2012
Q1 2013
$ billion UPSTREAM 6.3 5.7
DOWNSTREAM (CCS) 1.1 1.8
CORPORATE & MINORITIES -0.1 0
CCS NET EARNINGS 7.3 7.5
CCS EARNINGS, $ PER SHARE 1.17 1.19
CASH FROM OPERATIONS 13.4 11.6
SHARE BUY BACKS 0 0.5
DIVIDENDS 2.7 2.7
DIVIDEND, $ PER SHARE 0.43 0.45
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8
80
90
100
110
Q112 Q212 Q312 Q412 Q113 -2
0
2
4
6
8
10
12
Q112 Q212 Q312 Q412 Q113 0
200
400
600
800
1000
Q112 Q212 Q312 Q412 Q113
SHELL OIL & GAS REALISATIONS INDUSTRY REFINING MARGINS INDUSTRY CHEMICALS MARGINS
$/barrel $/barrel $/tonne $/mscf
Oil Gas (RHS)
US West Coast US Gulf Coast coking Rotterdam complex Singapore
US ethane Western Europe naphtha NE/SE Asia naphtha
PRICES & MARGINS
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EARNINGS Q1 2012 TO Q1 2013 $ billion
EARNINGS Q1 2012 TO Q1 2013
$ billion
Q1 2013 FINANCIAL HIGHLIGHTS
7.3 7.5
0.7 0.1 (0.6)
0
2
4
6
8
7.3 7.5
0.6 0.0
0.7
(0.2)
(0.4) (0.4)
0
2
4
6
8
Earnings CCS basis, Earnings excluding identified items
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GROUP UPSTREAM DOWNSTREAM
12 MONTHS CASH PERFORMANCE
0 15 30 45 0 15 30 45
$ billion $ billion $ billion
0 15 30 45
CFFO ex WC movements Acquisitions Dividend
Buybacks Capex Asset Sales
Working capital movements
BALANCING CASH GENERATION, INVESTMENT + PAYOUT
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3
5
7
75
80
85
90
95
100
Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013
0
2
4
6
0
2
4
Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013
OIL AND GAS PRODUCTION million boe/day million tonnes
Oil Gas
LNG Sales (RHS)
DOWNSTREAM AVAILABILITY AND SALES VOLUMES % availability volume
Refinery availability Chemicals availability
Oil products sales (mln bbl/d) Chemicals sales (million tonnes)
Q1 PERFORMANCE
UPSTREAM 3.6 million boe/d Growth from Pearl GTL, Pluto LNG and
Eagleford LRS Increased North Sea maintenance +
Nigeria sabotage Q1-Q1 underlying growth +2% DOWNSTREAM Reduced availability due to planned
downtime: Gulf Coast + Germany Underlying volume decline
OPERATIONAL PERFORMANCE
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PORTFOLIO DEVELOPMENT Q1 2013
Acquisition / entry Notable discovery
/ project progress FID Start-ups Divestment / (Project re-framing)
Carmon Creek
regulatory approval
AOSP debottlenecking (10 kboe/d)
Basrah Gas Company
Erha North Ph2 (60 kboe/d)
Repsol LNG
Elba LNG JV
Australia: Kentish
Knock gas
Gulf Coast GTT
Great Lakes GTT
Prelude 5% dilution
(Browse FLNG)
Bab Sour Gas
Additional equity: Beryl & Schiehallion
Amal Steam (20 kboe/d) (Fram)
Singapore Chemicals
Geelong*
Italy*
3 START-UPS, 4 FIDs FURTHER PORTFOLIO PROGRESS
*announced intention to divest Geelong refinery in Australia and selected downstream marketing businesses in Italy
UPSTREAM ENGINE
INTEGRATED GAS
RESOURCES PLAYS
DEEP-WATER
FUTURE OPPORTUNITIES
DOWNSTREAM ENGINE
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INTEGRATED GAS PROGRESS Q1 2013
LNG FOR TRANSPORT Great Lakes Corridor and Gulf Coast Corridor Each for 0.25 mtpa Marine & road transport
ELBA LNG JV with Kinder Morgan Phase 1: 1.5 mtpa DoE FTA approval
LNG FOR TRANSPORT Agreement with Travelcentres
of America 2 LNG lanes at up to 100 TA
truck stop sites
ACQUISITION REPSOL LNG ASSETS 4.2 mtpa equity capacity 7.2 mtpa long term offtake agreements $4.4 billion cash + $1.8 billion finance
leases Expected to close end 2013/begin 2014 GOOD PROGRESS ON INTEGRATED GAS
PORTFOLIO
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0
10
20
30
40
50
$ billion %
-10
0
10
20
-10
0
10
20
2009 2010 2011 2012 13Q1 12 months
rolling
$ billion
CFFO Upstream CFFO Downstream
CFFI
FINANCIAL FRAMEWORK
2009 2011 2012 2010 13Q1 12 months
rolling
Free cash flow Gearing (RHS)
Dividend Buyback
CASH PERFORMANCE
INVESTMENT PAY-OUT
BALANCE SHEET
MANAGING CASH CYCLE OVER TIME
IMPROVED FREE CASH FLOW POSITION + CASH RETURNS
BUYBACK PACE INCREASING: ~$4-5 BILLION POTENTIAL 2013
Payout
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-20
0
20
40
60
0
20
40
60
0
4
8
12
2012 payout % 2009 2011 2013E
-10
-5
0
5
-60
-30
0
30
60
EARNINGS PER SHARE GROWTH % growth
2010-2012 2011-2012
EPS: CCS earnings
PRODUCTION GROWTH % growth
CASH FLOW PER SHARE GROWTH % growth
Payout ratio DPS declared/ LTIP EPS
PAYOUT dividend $ billion 2012 payout ratio %
COMPETITIVE PERFORMANCE SHELL + OTHER MAJORS
2012 2010
Shell
Shell
Shell Shell
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Q1 2013 results Q1 earnings $7.5 billion; EPS +2 % CFFO $11.6 billion Q1 2013 dividend increase +5%
Growth delivery Performance from recent start-ups 4 final investment decisions Refreshing the portfolio Selective A&D
Acquisitions: Upstream engine + integrated gas Divestments from Downstream engine
DELIVERING OUR STRATEGY
Earnings CCS basis, Earnings and EPS excluding identified items
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QUESTIONS & ANSWERS FIRST QUARTER 2013 RESULTS
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DELIVERING INNOVATIVE & COMPETITIVE PERFORMANCE FIRST QUARTER 2013 RESULTS
ROYAL DUTCH SHELL PLC 2 MAY 2013