Transcript of "Webcast presentation Royal Dutch Shell plc first quarter 2013 results"
Copyright of Royal Dutch Shell plc 2 May, 2013 1DELIVERING INNOVATIVE &COMPETITIVE PERFORMANCEFIRST QUARTER 2013 RESULTSROYAL DUTCH SHELL PLC2 MAY 2013
Copyright of Royal Dutch Shell plc 2 May, 2013 2DELIVERING INNOVATIVE &COMPETITIVE PERFORMANCESIMON HENRYCHIEF FINANCIAL OFFICERROYAL DUTCH SHELL PLC2 MAY 2013
Copyright of Royal Dutch Shell plc 2 May, 2013 3The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate entities. In this presentation “Shell”, “Shell group” and “RoyalDutch 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 byidentifying the particular company or companies. ‘‘Subsidiaries’’, “Shell subsidiaries” and “Shell companies” as used in this presentation refer to companies in whichRoyal 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 companiesin which Shell has significant influence but not control are referred to as “associated companies” or “associates” and companies in which Shell has joint control arereferred 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.) ownershipinterest 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 otherthan statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that arebased on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance orevents to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning thepotential exposure of Royal Dutch Shell to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections andassumptions. 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. Thereare 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 theforward-looking statements included in this presentation, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand forShell’s products; (c) currency fluctuations; (d) drilling and production results; (e) reserves estimates; (f) loss of market share and industry competition; (g) environmentaland physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of suchtransactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, fiscal and regulatory developmentsincluding 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 ofprojects and delays in the reimbursement for shared costs; and (m) changes in trading conditions. All forward-looking statements contained in this presentation areexpressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-lookingstatements. Additional factors that may affect future results are contained in Royal Dutch Shell’s 20-F for the year ended 31 December, 2012 (available atwww.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 thispresentation, 2 May, 2013. Neither Royal Dutch Shell nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statementas 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 theforward-looking statements contained in this presentation. There can be no assurance that dividend payments will match or exceed those set out in this presentation inthe 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 usfrom 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 websitewww.sec.gov. You can also obtain this form from the SEC by calling 1-800-SEC-0330.DEFINITIONS AND CAUTIONARY NOTE
Copyright of Royal Dutch Shell plc 2 May, 2013 4Q1 2013 results Q1 earnings $7.5 billion; EPS +2% CFFO $11.6 billion Q1 2013 dividend increase +5%Growth delivery Performance from recent start-ups 4 final investment decisionsRefreshing the portfolio Selective A&D Acquisitions: Upstream engine + integrated gas Divestments from Downstream engineQ1 2013 OVERVIEWEarnings CCS basis, Earnings and EPS excluding identified items. Dividends distributed in the quarterQ12012Q12013$ billionUPSTREAM 6.3 5.7DOWNSTREAM (CCS) 1.1 1.8CORPORATE & MINORITIES -0.1 0CCS NET EARNINGS 7.3 7.5CCS EARNINGS, $ PER SHARE 1.17 1.19CASH FROM OPERATIONS 13.4 11.6SHARE BUY BACKS 0 0.5DIVIDENDS 2.7 2.7DIVIDEND, $ PER SHARE 0.43 0.45
Copyright of Royal Dutch Shell plc 2 May, 2013 556788090100110Q112 Q212 Q312 Q412 Q113-2024681012Q112 Q212 Q312 Q412 Q11302004006008001000Q112 Q212 Q312 Q412 Q113SHELL OIL & GAS REALISATIONS INDUSTRY REFINING MARGINS INDUSTRY CHEMICALS MARGINS$/barrel $/barrel $/tonne$/mscfOilGas (RHS)US West CoastUS Gulf Coast cokingRotterdam complexSingaporeUS ethaneWestern Europe naphthaNE/SE Asia naphthaPRICES & MARGINS
Copyright of Royal Dutch Shell plc 2 May, 2013 6EARNINGS Q1 2012 TO Q1 2013$ billionEARNINGS Q1 2012 TO Q1 2013$ billionQ1 2013 FINANCIAL HIGHLIGHTS7.3 7.50.7 0.1(0.6)024687.3 7.50.6 0.00.7(0.2)(0.4)(0.4)02468Earnings CCS basis, Earnings excluding identified items
Copyright of Royal Dutch Shell plc 2 May, 2013 7GROUP UPSTREAM DOWNSTREAM12 MONTHS CASH PERFORMANCE0 15 30 45 0 15 30 45$ billion $ billion $ billion0 15 30 45CFFO ex WC movements AcquisitionsDividendBuybacksCapexAsset SalesWorking capital movementsBALANCING CASH GENERATION,INVESTMENT + PAYOUT
Copyright of Royal Dutch Shell plc 2 May, 2013 83577580859095100Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 20130246024Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013OIL AND GAS PRODUCTIONmillion boe/day million tonnesOilGasLNG Sales (RHS)DOWNSTREAM AVAILABILITY AND SALES VOLUMES% availability volumeRefinery availabilityChemicals availabilityOil products sales (mln bbl/d)Chemicals sales (million tonnes)Q1 PERFORMANCEUPSTREAM 3.6 million boe/d Growth from Pearl GTL, Pluto LNG andEagleford LRS Increased North Sea maintenance +Nigeria sabotage Q1-Q1 underlying growth +2%DOWNSTREAM Reduced availability due to planneddowntime: Gulf Coast + Germany Underlying volume declineOPERATIONAL PERFORMANCE
Copyright of Royal Dutch Shell plc 2 May, 2013 9PORTFOLIO DEVELOPMENT Q1 2013Acquisition / entryNotable discovery/ project progressFID Start-upsDivestment /(Project re-framing)Carmon CreekregulatoryapprovalAOSP debottlenecking(10 kboe/d)Basrah Gas CompanyErha North Ph2(60 kboe/d)Repsol LNGElba LNG JVAustralia: KentishKnock gasGulf Coast GTTGreat Lakes GTTPrelude 5%dilution(Browse FLNG)Bab Sour GasAdditional equity:Beryl & SchiehallionAmal Steam (20kboe/d)(Fram)SingaporeChemicalsGeelong*Italy*3 START-UPS, 4 FIDsFURTHER PORTFOLIO PROGRESS*announced intention to divest Geelong refinery in Australia and selected downstream marketing businesses in ItalyUPSTREAMENGINEINTEGRATEDGASRESOURCESPLAYSDEEP-WATERFUTUREOPPORTUNITIESDOWNSTREAMENGINE
Copyright of Royal Dutch Shell plc 2 May, 2013 10INTEGRATED GASPROGRESS Q1 2013LNG FOR TRANSPORT Great Lakes Corridor and Gulf Coast Corridor Each for 0.25 mtpa Marine & road transportELBA LNG JV with Kinder Morgan Phase 1: 1.5 mtpa DoE FTA approvalLNG FOR TRANSPORT Agreement with Travelcentresof America 2 LNG lanes at up to 100 TAtruck stop sitesACQUISITION REPSOL LNG ASSETS 4.2 mtpa equity capacity 7.2 mtpa long term offtake agreements $4.4 billion cash + $1.8 billion financeleases Expected to close end 2013/begin 2014 GOOD PROGRESS ON INTEGRATED GASPORTFOLIO
Copyright of Royal Dutch Shell plc 2 May, 2013 1101020304050$ billion %-1001020-10010202009 2010 2011 2012 13Q112 monthsrolling$ billionCFFO UpstreamCFFO DownstreamCFFIFINANCIAL FRAMEWORK2009 2011 2012201013Q112 monthsrollingFree cash flowGearing (RHS)DividendBuybackCASHPERFORMANCEINVESTMENTPAY-OUTBALANCE SHEETMANAGING CASH CYCLE OVER TIMEIMPROVED FREE CASH FLOWPOSITION + CASH RETURNSBUYBACK PACE INCREASING: ~$4-5BILLION POTENTIAL 2013Payout
Copyright of Royal Dutch Shell plc 2 May, 2013 12-2002040600204060048122012 payout %2009 2011 2013E-10-505-60-3003060EARNINGS PER SHARE GROWTH% growth2010-2012 2011-2012EPS: CCS earningsPRODUCTION GROWTH% growthCASH FLOW PER SHARE GROWTH% growthPayout ratio DPS declared/ LTIP EPSPAYOUTdividend $ billion 2012 payout ratio %COMPETITIVE PERFORMANCESHELL + OTHER MAJORS20122010ShellShellShell Shell
Copyright of Royal Dutch Shell plc 2 May, 2013 13Q1 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 decisionsRefreshing the portfolio Selective A&D Acquisitions: Upstream engine + integrated gas Divestments from Downstream engineDELIVERING OUR STRATEGYEarnings CCS basis, Earnings and EPS excluding identified items
Copyright of Royal Dutch Shell plc 2 May, 2013 14QUESTIONS & ANSWERSFIRST QUARTER 2013 RESULTS
Copyright of Royal Dutch Shell plc 2 May, 2013 15DELIVERING INNOVATIVE &COMPETITIVE PERFORMANCEFIRST QUARTER 2013 RESULTSROYAL DUTCH SHELL PLC2 MAY 2013
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