Published on January 30, 2014
FOURTH QUARTER 2013 RESULTS 30 JANUARY 2014 ROYAL DUTCH SHELL PLC Copyright of Royal Dutch Shell plc 30 January, 2014 1
DEFINITIONS AND 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, 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, 30 January, 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. Copyright of Royal Dutch Shell plc 30 January, 2014 2
BEN VAN BEURDEN CHIEF EXECUTIVE OFFICER ROYAL DUTCH SHELL PLC Copyright of Royal Dutch Shell plc 30 January, 2014 3
UNRELENTING FOCUS ON HSSE ‘GOAL ZERO’ ON SAFETY injuries – TRCF/million working hours million working hours 5 900 4 800 3 700 2 600 1 500 0 400 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 Working hours TRCF PERFORMANCE + TRANSPARENCY Copyright of Royal Dutch Shell plc 30 January, 2014 4
SHELL STRATEGY Unrelenting focus on HSE Technology, integration and scale Disciplined capital investment by strategic theme Growth in cash flow through-cycle Executing a consistent, long term strategy Competitive shareholder returns Prelude, November 2013 Copyright of Royal Dutch Shell plc 30 January, 2014 5
2011-2013 DELIVERY EARNINGS CASH FLOW $ billion $ billion 30 60 20 40 10 20 0 0 2011 -10 Upstream Downstream 2012 2013 Corporate Identified items 2011 Cash flow from operations Asset sales 2012 2013 Capex Acquisitions Dividend Buy-backs PRIORITY TO IMPROVE FINANCIAL PERFORMANCE Copyright of Royal Dutch Shell plc 30 January, 2014 6
COMPETITIVE CASH FLOW + RETURNS CASH FLOW FROM OPERATIONS ROACE $ billion % 30% 60 50 20% 40 30 20 10% 10 - 0% 2010 2011 2012 Shell peer group 2013 Shell peer group DISCIPLINED THROUGH CYCLE INVESTMENT DRIVES FINANCIAL GROWTH COMPETITIVE CFFO BUILDUP + FURTHER POTENTIAL Shell full year 2013, peer group 2013 12-month rolling to 2013Q3 Copyright of Royal Dutch Shell plc 30 January, 2014 ROACE: reported earnings local GAAP, 3 year rolling average. Shell 2011-2013, peer group as 2011-2013Q3 12 months rolling basis 7
2014 PRIORITIES Improve our financial performance Returns and cash flow Competitive returns for shareholders Enhance our capital efficiency Hard choices on new projects Increase divestment of non-core assets Reduce pace of growth investment Major deep water start-ups in 2014 Integrate 2013 acquisitions Operational performance and project delivery Deliver new projects Copyright of Royal Dutch Shell plc 30 January, 2014 CHANGING EMPHASIS IN 2014 8
IMPROVE OUR FINANCIAL PERFORMANCE: RESPONDING TO MARKET DYNAMICS IN OIL PRODUCTS + NORTH AMERICA ONSHORE RESOURCES PLAYS RESTRUCTURING OIL PRODUCTS RESTRUCTURING Northeast BC Deep Basin/Foxcreek LNG Canada Foothills US Rockies Permian Mississippi Lime Gas-to-Chemicals Appalachia Haynesville Announced divestment Operating theatres Integration options Elba LNG Eagle Ford Portfolio reduction Regional refinery hubs 50% reduction in operating theatres Reorganising value chain accountability Gas focussed on to integrated plays Exit from non-core portfolio Growth liquids Growth chemicals PORTFOLIO RESTRUCTURING + POTENTIAL WRITE-DOWNS COST REDUCTION MORE SELECTIVE ON GROWTH OPPORTUNITIES Copyright of Royal Dutch Shell plc 30 January, 2014 9
IMPROVE OUR CAPITAL EFFICIENCY: SHARPENING OUR FOCUS ASSET SALES $ billion Linnorm Fram Niobrara Sandwash Basin Eagle Ford Ohio Utica Mississippi Lime Gulf Coast GTL Mongstad/Pernis swap Norway downstream reduction 10 Harburg refinery Czech refinery Italy downstream reduction Nigeria SPDC leases Prelude dilution Wheatstone Arrow LNG Browse LNG onshore FID postponed Upstream 2013+ divestments Downstream Option re-framing Exit Completed 5 } 2010 2011 2012 Upstream Downstream 2013 '14-'15 avg HARD PORTFOLIO CHOICES 0 $15 BILLION ASSET SALES 2014-15 Copyright of Royal Dutch Shell plc 30 January, 2014 10
IMPROVE CAPITAL EFFICIENCY: 2014 INVESTMENT PRIORITIES Engines Free cash flow plays Asset integrity + selective growth UPSTREAM DOWNSTREAM Growth Priority Global leadership Strong project flow INTEGRATED DEEP-WATER GAS Longer Term Major potential with surface challenges Slower pace + capital allocation INVESTMENT CHOICES DRIVEN ON A GLOBAL THEMATIC BASIS 1 Iraq, CREDIBLE, COMPETITIVE, AFFORDABLE FUTURE1 RESOURCES OPPORTUNITIES PLAYS REDUCED PACE OF GROWTH INVESTMENT Nigeria, Kazakhstan, heavy oil, Arctic Copyright of Royal Dutch Shell plc 30 January, 2014 11
DELIVER NEW PROJECTS: TOP 4 START-UPS 2014 Mars-B Preparing for start-up Gumusut-Kakap Subsea systems tie-in completed. H2 ‘14 start-up Cardamom Auger facility upgrades ongoing. H2 ’14 start-up Repsol LNG Transaction completed Jan’14, integration ongoing Mars-B, 100 kboe/d, Shell 72% Cardamom, 50 kboe/d, Shell 100% Gumusut-Kakap FPS, 135 kboe/d, Shell 33% Copyright of Royal Dutch Shell plc 30 January, 2014 12
LEADING DIVIDEND TRACK RECORD Indexed 2000=100, dividends paid in year 260 220 Q1 2014 DIVIDEND $0.47/SHARE, > +4% SHARE BUY BACK 180 140 100 2000 2005 2010 2013 RDS dividend per share in USD Inflation (US CPI, Annual Average) Excludes $1.7 billion payout to former shareholders of Royal Dutch as part of the 2005 unification. Copyright of Royal Dutch Shell plc 30 January, 2014 13
SIMON HENRY CHIEF FINANCIAL OFFICER ROYAL DUTCH SHELL PLC Copyright of Royal Dutch Shell plc 30 January, 2014 14
2013 PERFORMANCE 2013 delivery CCS earnings $19 bln; CFFO $40 bln 7 new start-ups Iraq oil & gas, BC-10 ph 2, North Rankin gas, others Acquisitions to enhance portfolio Repsol LNG, Libra, ‘engines’ bolt-ons Decisive on portfolio Non-core asset sales: Nigeria onshore Oil Products North America LRS US GTL cancelled Majnoon, July 2013 Earnings excluding identified items Copyright of Royal Dutch Shell plc 30 January, 2014 15
2013 FINANCIAL HIGHLIGHTS EARNINGS 2012 TO 2013 EARNINGS 2012 TO 2013 $ billion 2012 2013 $ billion UPSTREAM 20.1 15.1 DOWNSTREAM (CCS) 5.3 4.5 CORPORATE & MINORITIES (0.2) (0.1) CCS NET EARNINGS 25.3 19.5 CCS EARNINGS, $ PER SHARE 4.03 3.10 30 46.1 40.4 ~0.9 20 0.1 15 25.3 10 CASH FROM OPERATIONS 5.0 25 19.5 5 0 SHARE BUY BACKS 1.5 5.0 DIVIDENDS 11.0 11.3 DIVIDEND, $ PER SHARE 1.72 1.80 Earnings CCS basis, Earnings excluding identified items Copyright of Royal Dutch Shell plc 30 January, 2014 16
2013 FINANCIAL HIGHLIGHTS EARNINGS 2012 TO 2013 EARNINGS Q4 2012 TO Q4 2013 $ billion $ billion 0.8 0.2 0.7 0.8 0.7 0.1 1.6 1.6 0.0 0.4 2.4 20 0.1 0.3 0.5 0.5 4 0.7 5.6 10 25.3 19.5 Environment 0 2 Environment Choice Choice 2.9 0 Earnings CCS basis, Earnings excluding identified items Copyright of Royal Dutch Shell plc 30 January, 2014 17
OPERATIONAL PERFORMANCE + OUTLOOK UPSTREAM UPSTREAM million tonnes Q4-Q4 underlying decline 3%1 6 Growth from NA LRS, Iraq, Malaysia 40 kboe/d Nigeria sabotage Q4-Q4 million boe/day 95 kboe/d maintenance Q4-Q4 4.000 4 2.000 2 0.000 0 Q4 2012 Q1 2013 Q2 2013 Oil Gas Q3 2013 Q4 2013 LNG Sales (RHS) DOWNSTREAM DOWNSTREAM % availability Q4-Q4 underlying OP volumes lower, Chemicals volumes similar Q1 – Q1 OUTLOOK volume 7 95 Nigeria operating challenges 100 Production impact: 5 85 80 75 Q1 2013 Refinery availability Chemicals availability Q2 2013 Q3 2013 Increased exploration charges Increased Upstream DD&A Oil products sales (million b/d) Chemicals sales (million tonnes) 30 January, 2014 Maintenance 50 kboe/d Q4 2013 1 Copyright of Royal Dutch Shell plc NAM curtailment 60 kboe/d 3 Q4 2012 ADCO licence expiry 155 kboe/d 90 Reduced refinery availability Excludes Nigeria security , PSC price effect + asset sales 18
CASH PERFORMANCE + PAYOUT GROUP 12 MONTHS CASH PERFORMANCE BUSINESS 12 MONTH CASH PERFORMANCE $ billion $ billion 60 40 Uses Sources Sources Uses 30 40 20 20 0 Sources 10 0 Upstream Capex Downstream Dividend Acquisitions CFFO Asset sales Uses Buy-backs GEARING AND PAY OUT $ billion % 20 30 10 15 0 2009 2010 2011 2012 2013 2013 ACQUISITION IMPACTS 2014 FCF EXPANSION POTENTIAL 0 -10 Free cash flow (FCF) Gearing (RHS) Copyright of Royal Dutch Shell plc Dividend Buyback 30 January, 2014 19
FINANCIAL PERFORMANCE $ billion cumulative 2012-2013 100 50 CFFO impacted by macro, portfolio + choices + performance Net capital investment lifted by acquisitions 0 2012 2013 Cash flow from operations Net capital investment Dividends distributed + buy-backs Previous target framework 2012-15 Previous outlook set in 2012 for 2012-15: CFFO $175-$200 billion; net capital investment $120-$130 billion @ $80-$100 oil prices Copyright of Royal Dutch Shell plc 30 January, 2014 20
FINANCIAL FRAMEWORK AND PRIORITIES Priorities for cash CASH PERFORMANCE CFFO drives investment + payout PAY-OUT INVESTMENT Affordability, profitability, portfolio Dividend linked to business results BALANCE SHEET 0 – 30% gearing through cycle Copyright of Royal Dutch Shell plc 30 January, 2014 1. Debt service 2. Dividends: growth policy 3. Capital investment: disciplined through cycle growth 4. Return surplus cash: buy-backs CONSERVATIVE BALANCE SHEET UNDERPINS FINANCIAL FRAMEWORK 21
PORTFOLIO DEVELOPMENT 2013 Acquisition / entry Exit Discovery (completed) G/U Phase 2 TNP loop-line Carmon Creek Nigeria on-shore asset sales FUTURE OPPORTUNITIES Coulomb North BC-10 pre-emption Libra entry DEEP-WATER UPSTREAM ENGINE DOWNSTREAM ENGINE Group delivery Start-up AOSP debottlenecking Basrah Gas Company Majnoon Kashagan North America asset sales RESOURCES PLAYS INTEGRATED GAS Final Investment Decision Erha North Ph2 Vicksburg discovery Stones BC-10 Phase 2 Zabazaba-4 appraisal BC-10 Massa Ph3 Repsol LNG Elba LNG JV Abadi LNG Prelude dilution Browse onshore Gulf Coast GTL Wheatstone LNG Kentish Knock gas discovery Beryl & Schiehallion Bab Sour gas $8 billion Copyright of Royal Dutch Shell plc Amal Steam Albania Shpiraq-2 Poland: retail North Rankin Redevelopment Geelong Italy Harburg refinery Pernis/Mongstad swap $2 billion 30 January, 2014 Singapore Chemicals Gulf Coast GTT Great Lakes GTT 4 discoveries 9 FIDs 7 start-ups 22
REPSOL LNG ACQUISITION SHELL PORTFOLIO SHELL LNG LEADERSHIP Year end equity liquefaction capacity in mtpa Sakhalin Cove Point Baja Spain Elba QG-4 Altamira Nigeria Atlantic LNG Shell: LNG supply Under construction Re-gasification Hazira Oman 20 Malaysia + Brunei Peru LNG Prelude Pluto Gorgon NWS 10 Repsol portfolio Trading flows INCREASING SHELL’S MANAGED SALES + TRADING OPTIONS total LNG volumes in mtpa 30 2014 0 Shell XOM CVX TOT BG BP 2013 Repsol acquisition (2014+) 2013 2017 >25 mtpa Copyright of Royal Dutch Shell plc >30 mtpa 30 January, 2014 Shell directly managed Joint venture marketed 23
INVESTING FOR LONG TERM GROWTH TOTAL CAPITAL INVESTMENT FY 2012 ENGINES FY 2014E ORGANIC CAPEX 32 38 ~35 ACQUISITIONS 5 8 2 TOTAL CAPITAL INVESTMENT $ billion FY 2013 37 46 37 $ billion 40 DOWNSTREAM 1 UPSTREAM 30 INTEGRATED GAS GROWTH PRIORITY 20 DEEP-WATER 2013 -14 INVESTMENT LIFTED BY ACQUISITIONS 10 ORGANIC SPENDING REDUCTION 2014 RESOURCES PLAYS LONGER TERM 0 FUTURE OPPORTUNITIES 2013 2014 1 Announced Copyright of Royal Dutch Shell plc 30 January, 2014 acquisitions (Repsol, Basrah Gas capital injection) 24
BEN VAN BEURDEN CHIEF EXECUTIVE OFFICER ROYAL DUTCH SHELL PLC Copyright of Royal Dutch Shell plc 30 January, 2014 25
2014 PRIORITIES Improve our financial performance Returns and cash flow Competitive returns for shareholders Enhance our capital efficiency Hard choices on new projects Increase divestment of non-core assets Reduce pace of growth investment Major deep water start-ups in 2014 Integrate 2013 acquisitions Operational performance and project delivery Deliver new projects Copyright of Royal Dutch Shell plc 30 January, 2014 CHANGING EMPHASIS IN 2014 26
QUESTIONS & ANSWERS FOURTH QUARTER 2013 RESULTS Copyright of Royal Dutch Shell plc 30 January, 2014 27
FOURTH QUARTER 2013 RESULTS 30 JANUARY 2014 ROYAL DUTCH SHELL PLC Copyright of Royal Dutch Shell plc 30 January, 2014 28
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