Royal Dutch Shell plc 2019 Management Day: Shell, strongly positioned for the future of energy, provides strategy update and financial outlook to 2025

Title: Management Day 2019

Duration 4:01

 

Description:

Ben van Beurden and Jessica Uhl share their strategy and financial outlook for 2025, as part of Management Day 2019.

Accessibility Script

[Audio]

Theme music begins

[Vison]

Ben van Beurden and Jessica Uhl stand next to each other in front of a grey background with animated graphics around them.

[Two shot, Ben to Camera]

[Graphic on screen reads: Ben van Beurden Shell CEO]

Welcome. Jessica and I are excited to update you today on how we are positioning Shell

for the future of energy and as a world class investment case for many years to come.

[Two shot, Jessica to Camera]

[Graphic on screen reads: Jessica Uhl Shell CFO]

It is an important day for us as we share our strategy and financial outlook for 2025.

[Two shot, Ben to Camera]

So, over the last few years we have been transforming our company and have built a strong clear track record of delivery

[Ben to Camera]

We are well on track to generate $28 to 33 billion of organic free cash flow in 2020

[Text Animation]

Text animation ‘2020, $28-$33 Billion, organic free cash flow’ fades up onto screen and fades out

[Ben to Camera]

and deliver our $25 billion share buyback program.

[Text Animation]

Text animation ‘$25 Billion, share buyback program’ fades up onto screen and fades out

[Ben to Camera]

We are competitively positioned for the future thanks to our customer focus

and our deep value chain integration and we aim to further grow returns and cash flow.

[Text Animation]

Text animation fades up onto screen; ‘customer focus, deep value chain integration, further grow returns and cash flow’. Fades out.

[Ben to Camera]

Now if you look beyond 2020, we plan to deliver $35 billion of organic free cash flow in 2025

[Text Animation]

Text animation fades up onto screen; ‘2025, $35 Billion, organic free cash flow’. Fades out.

[Ben to Camera]

and we see a business that has the cash potential to return $125 billion or more

to our shareholders over the period from 2021 to the end of 2025.

[Text Animation]

Text animation fades up onto screen; ‘potential to distribute, $125+ Billion, 2021-2025. Fades out.

[Ben to Camera]

So, let me talk about the strategy we think that will achieve this.

If you look into the future we see a new, cleaner energy system emerging

a system reliant on an increasing level of electrification.

[Text Animation]

Text animation fades up onto screen; ‘cleaner energy, system emerging, an increasing level of electrification’. Fades out.

[Ben to Camera]

We are purposely building a resilient business portfolio

[Text Animation]

Text animation fades up onto screen; ‘resilient business portfolio’. Fades out.

[Ben to Camera]

that enables a low-carbon future with balanced cash generation.

[Text Animation]

Text animation fades up onto screen; ‘with balanced cash generation’. Fades out.

[Text Animation]

Upstream fades in

[Vision]

Wide shot Malikai positioned in the sea

[Ben van Beurden audio]

Our Upstream businesses will continue to generate strong cash flow and with an ongoing need for investment

[Vision]

Appomattox being sailed out of port with tugs

[Ben van Beurden audio]

we will fully sustain this business, well into the coming decades,

[Vision]

Appomattox worker looking around platform

[Vision]

Appomattox in silhouette

[Ben van Beurden audio]

with more than 20 major project start ups  in the first half of the next decade.

[Text Animation]

Text fades up; ‘20+ major project start-ups, 2021-2025’

[Vision]

Shot from Auger Deep water looking into sunset on horizon

[Ben van Beurden to camera]

At the same time we will grow our market-facing businesses

[Ben van Beurden audio]

So, Integrated Gas, Oil Products, Chemicals and Power.

[Vision]

Night shot of Pearl GTL

Aerial shot of Moerdijk

[Text animation]

Fade up; Integrated Gas, Oil Products, Chemicals and Power

[Ben van Beurden audio]

And, in these businesses we see strong and enduring demand growth

[Vision]

Malaysian forecourt worker with customer smiling

[Ben van Beurden audio]

giving us an opportunity to play to our natural strengths

[Ben van Beurden to camera]

Our emerging Power business will capture new sources of value from evolving customer demands for more electricity.

[Vision]

Aerial footage over wind farm

[Text animation]

Fade in; ‘evolving customer demands for more electricity’

[Ben van Beurden audio]

And, the returns we are able to deliver

[Vision]

Aerial footage over solar farm

[Ben van Beurden audio]

will drive the pace with which we will scale up this business.

[Vision]

Two shot, Ben and Jessica

[Ben van Beurden to camera]

Overall, Shell is well positioned to maximize returns through the energy transition. And Jessica will now talk you through the key numbers. Jessica...

[Jessica to camera]

Thank you Ben.

Our strong strategy comes with a very clear financial framework.

[Jessica to camera]

We plan to grow the value of the company by delivering around $35 billion

of organic free cash flow in 2025

[Text animation]

Fade in; ‘2025, $35 Billion, organic free cash flow’

[Jessica to camera]

and generating a return of more than 12% by end 2025

[Text animation]

Fade in; ‘>12%, ROACE’

[Jessica to camera]

You can also expect continued capital discipline from us on average,

we aim to spend some $30 billion of cash capex per year between 2021 and 2025.

[Text animation]

Fade in; ‘capital discipline, $30 Billion, cash capex p.a., average over 2021-2025

[Jessica to camera]

The second key element of the framework is financial resilience

[Text animation]

Fade in; ‘financial resilience’

[Jessica to camera]

This means maintaining a robust balance sheet through the cycle

aiming for gearing in the range of 15 to 25%.

[Text animation]

Fade in; ‘15%-25%, Gearing

[Jessica to camera]

Finally, we plan to increase shareholder distributions.

[Text animation]

Fade in; Increase shareholder distributions

[Jessica to camera]

We can see cash potential for shareholders in the form of

dividends and share buybacks of $125 billion or more in the period from 2021 to 2025

[Text animation]

Fade in; 2021-2025, potential to distribute, $125+ Billion

[Jessica to camera]

which underpins our world-class investment case.

We expect to be able to grow the dividend per share when there is line of sight

to completing our current $25 billion share buyback program.

[Vision]

Figures appear on screen summarizing the figures just spoken about

[Jessica audio]

This competitive financial outlook is the result of our differentiated strategy

and the strong portfolio

[Two shot Ben and Jessica, Jessica to camera]

Ben highlighted earlier

[Two shot, Ben to camera]

And, our track record of delivery gives me full confidence

that we can deliver this world class investment case well into the next decade.

[Ben to Jessica]

I think we nailed it

[vison]

Wide shot of studio with Ben and Jessica smiling and walking off

[Audio]

Theme music

[Graphic]

Shell logo

Shell.com/investors

#MakeTheFuture

©Shell International Limited 2019

[Graphic]

A graphic appears titled Cautionary note, relevant to the video.