Analyst webcast presentation Royal Dutch Shell third quarter 2012 results
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Analyst webcast presentation Royal Dutch Shell third quarter 2012 results

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Simon Henry, Chief Financial Officer of Royal Dutch Shell plc hosted a webcast for analysts of the third quarter 2012 results on Thursday November 1, 2012.

Simon Henry, Chief Financial Officer of Royal Dutch Shell plc hosted a webcast for analysts of the third quarter 2012 results on Thursday November 1, 2012.

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Analyst webcast presentation Royal Dutch Shell third quarter 2012 results Presentation Transcript

  • 1. ROYAL DUTCH SHELL PLCTHIRD QUARTER 2012 RESULTSTHE HAGUENOVEMBER 1, 2012Copyright of Royal Dutch Shell plc 1 November, 2012 1
  • 2. ROYAL DUTCH SHELL PLCTHIRD QUARTER 2012 RESULTSSIMON HENRYCHIEF FINANCIAL OFFICERCopyright of Royal Dutch Shell plc 1 November, 2012 2
  • 3. DEFINITIONS AND CAUTIONARY NOTEThe 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, 2011 (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, 1 November 2012. Neither Royal Dutch Shell nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-lookingstatement 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 inferredfrom the forward-looking statements contained in this presentation. There can be no assurance that dividend payments will match or exceed those set out in thispresentation 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 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 these forms from the SEC by calling 1-800-SEC-0330.Copyright of Royal Dutch Shell plc 1 November, 2012 3
  • 4. SUMMARY Performance focus  Q3 earnings $6.6 billion; EPS -6 %  ~ $6 billion asset sales year-to-date CONTINUOUS IMPROVEMENT Growth delivery GROWTH DELIVERY  New projects ramping up  3 new Final Investment Decisions MATURE NEW OPTIONS New growth options PERFORMANCE FOCUS  Exploration + appraisal success  Selective acquisitions + new acreageCopyright of Royal Dutch Shell plc 1 November, 2012 4
  • 5. PRICES & MARGINSSHELL OIL & GAS REALISATIONS INDUSTRY REFINING MARGINS INDUSTRY CHEMICALS MARGINS$/barrel $/mscf $/barrel $/tonne 12 8 1000 10110 800 8 7 600100 6 400 4 6 200 90 2 0 0 80 5 -2 -200 Q311 Q411 Q112 Q212 Q312 Q311 Q411 Q112 Q212 Q312 Q311 Q411 Q112 Q212 Q312 Oil US West Coast US ethane Gas (RHS) US Gulf Coast coking Western Europe naphtha Rotterdam complex NE/SE Asia naphtha SingaporeCopyright of Royal Dutch Shell plc 1 November, 2012 5
  • 6. Q3 2012 FINANCIAL HIGHLIGHTSQ3 2011 TO Q3 2012$ billion Q3 2011 Q3 2012 UPSTREAM 5.4 4.9 DOWNSTREAM (CCS) 1.8 1.7 8 BUSINESS SEGMENTS TOTAL 7.2 6.6 CORPORATE & MINORITIES -0.2 0.0 6 CCS NET EARNINGS 7.0 6.6 CCS EARNINGS, $ PER SHARE 1.12 1.05 4 CASH FROM OPERATIONS 11.6 9.5 2 SHARE BUY BACKS 0.8 0.1 DIVIDENDS 2.6 2.8 DIVIDEND, $ PER SHARE 0.42 0.43 0Earnings CCS basis, earnings and EPS excluding identified itemsCopyright of Royal Dutch Shell plc 1 November, 2012 6
  • 7. UPSTREAM PERFORMANCEEARNINGS OIL AND GAS PRODUCTION$ billion million boe/day million tonnes 4 6 6 4 4 2 2 2 0 0 0 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Other Upstream Oil Integrated gas Gas LNG sales (RHS)Earnings excluding identified itemsCopyright of Royal Dutch Shell plc 1 November, 2012 7
  • 8. DOWNSTREAM PERFORMANCEEARNINGS AVAILABILITY AND SALES VOLUMES$ billion % availability volume 2 100 7 95 1 90 5 85 0 80-1 75 3 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Oil Products Refinery availability Chemicals Chemicals availability Oil Product sales (mln bbl/d) Chemicals sales (mln tonnes)Earnings excluding identified itemsCopyright of Royal Dutch Shell plc 1 November, 2012 8
  • 9. DELIVERING GROWTHPROGRESS H2 2012 FRAM FID  UKCS   FPSO development   35 kboed  Shell 32% (operator) EAGLE FORD  1st oil &gas processing facility on-stream (23 TEMPA ROSSA FID QUEST CCS FID >1 mtpa carbon  kboed capacity)  Italy onshore oil  45 kboed CHANGBEI  PSC amendment capture + storage at  Development continuing  Shell 25%  Expansion of onshore Scotford gas Appomattox SW NEW GAS DISCOVERIES QATAR CHEMICALS  FEED for ethylene  MALAYSIA + AUSTRALIA  Tukau Timur Deep cracker and 1.5  Satyr-2/4 mtpa MEG CRUX CONSOLIDATION AGREEMENT  JV Nexus Energy, Shell, Osaka gas  Shell 80% (operator) Upstream Downstream FEED 3 FIDs, 1 PROJECT INTO FEED FID Exploration/Appraisal success 2 DISCOVERIES; 1 APPRAISALCopyright of Royal Dutch Shell plc 1 November, 2012 9
  • 10. REFRESHING THE PORTFOLIO: A&D + NEW ACREAGEACQUISITIONS + DIVESTMENTS H2 2012 DRAUGEN + BERYL  North Sea heartland  $0.8 billion acquisition  Increased Shell stakes UKRAINE GASNOR  new exploration  LNG for transport CHINA  Yinggehai offshore exploration Holstein exit (5 kboed) NIGERIA SPDC ONSHORE JV  OML40/34 exit PERMIAN BASIN  $0.5 billion divestment  $1.9 billion acquisition  20 kboed production  618,000 acres LRS GABON DEEPWATER  26 kboed production  Exploration acreage  Growth potential  25% dilution to CNOOC  Shell 75% BROWSE  Pre-FID LNG opportunity  Increased Shell stake  $0.5 bn + asset swap Acquisition YEAR-TO-DATE $6 BILLION ACQUISITIONS, New acreage Divestment/Dilution $6 BILLION DIVESTMENTSCopyright of Royal Dutch Shell plc 1 November, 2012 10
  • 11. FINANCIAL FRAMEWORKBUSINESS 12 MONTH CASH PERFORMANCE GROUP 12 MONTHS CASH PERFORMANCE$ billion $ billion 40 Sources 60 50 Sources Uses 30 Uses 40 20 30 20 10 Sources Uses 10 0 - Upstream Downstream Cash flow from Operations excl. net movements in working capital Capex (excl. acquisitions) + Equity Acc. Investments Asset sales Dividend Acquisitions Buy-backsNET DEBT AND GEARING $ billion30% Gearing range 3020% 20 CASH GENERATION + POTENTIAL10% 10 PRUDENT BALANCE SHEET SELECTIVE A&D 0% - 2009 2010 2011 2012 Q3 Gearing (LHS) Net Debt (RHS)Copyright of Royal Dutch Shell plc 1 November, 2012 11
  • 12. SUMMARY Performance focus  Q3 earnings $6.6 billion; EPS -6 %  ~ $6 billion asset sales year-to-date CONTINUOUS IMPROVEMENT Growth delivery GROWTH DELIVERY  New projects ramping up  3 new Final Investment Decisions MATURE NEW OPTIONS New growth options PERFORMANCE FOCUS  Exploration + appraisal success  Selective acquisitions + new acreageCopyright of Royal Dutch Shell plc 1 November, 2012 12
  • 13. THIRD QUARTER 2012 RESULTSQUESTIONS & ANSWERSCopyright of Royal Dutch Shell plc 1 November, 2012 13
  • 14. ROYAL DUTCH SHELL PLCTHIRD QUARTER 2012 RESULTSTHE HAGUENOVEMBER 1, 2012Copyright of Royal Dutch Shell plc 1 November, 2012 14