First quarter 2019 results – May 2, 2019
May 2, 2019
On Thursday May 2, 2019 at 07.00 BST (08.00 CEST and 02.00 EDT) Royal Dutch Shell plc released its first quarter results and first quarter interim dividend announcement for 2019.
On this page a summarised overview of the Royal Dutch Shell plc first quarter 2019 results and links to the full set of results documents and webcast.
CFO video comment
Title: Q1 Results April 2019
Duration 02:51
Description:
A video lead by Jessica Uhl summarising the Q1 April 2019 Results
Accessibility Script
[Audio]
Theme music begins
[Vison]
Jessica Uhl stands in front of an off-white background
[Animation footage]
Graphic on screen reads: Jessica Uhl Shell CFO
[Jessica to Camera]
Today we are announcing our results for the first quarter 2019. We’ve had a strong start to the year and the results show that our strategy is working. Let me share some highlights that demonstrate our performance.
[Animation footage]
A full frame graphics reads: Q1 2019 cash flow from operations $12.1 billion excluding working capital movements
[Audio from Jessica]
In the first quarter, we have delivered cash flow from operations excluding working capital
movements of $12.1 billion.
[Vision]
Jessica Uhl stands in front of an off-white background
[Jessica to Camera]
This financial performance shows the strength of our strategy and the quality of our portfolio of assets.
[Animation footage]
Graphics appear reading: Strength of our strategy
Quality of our portfolio of assets
[Vision]
Footage showing a Shell petrol station sign, followed by the exterior of a Shell petrol station as a customer is welcomed in, followed by the interior of a Shell petrol station as a customer walks by.
[Audio from Jessica]
The power of our brand and serving millions of customers every day, continue to be a differentiator.
[Animation footage]
Graphics appear reading: The power of our brand
Serving millions of customers every day
[Vision]
Jessica Uhl stands in front of an off-white background
[Jessica to Camera]
Our integrated value chain enabled our Downstream business to deliver robust results despite challenging market conditions. This consistent financial performance, across all of our businesses, provides confidence in meeting our 2020 outlook.
[Animation footage]
Graphics appear reading: Consistent financial performance
Confidence in meeting our 2020 outlook
[Jessica to Camera]
This quarter, we saw exciting developments in our portfolio. In February, we announced that production started at the Lula North deep-water field in Brazil.
[Animation footage]
Graphics appear reading: Lula North deep-water field in Brazil
[Vision]
A photograph of a Shell oil rig at sea followed by footage of the sea as seen from the oil rig.
[Audio from Jessica]
And in the US Gulf of Mexico, we made a significant discovery at the Blacktip prospect encountering more than 400 feet net oil pay.
[Animation footage]
Graphics appear reading: US Gulf of Mexico
Blacktip prospect encountering more than 400 feet net oil pay
[Vision]
Jessica Uhl stands in front of an off-white background
[Jessica to Camera]
Our Retail business is increasing its presence in key growth markets.
[Vision]
Footage showing the exterior of a Shell petrol station as a car is welcomed onto the forecourt, followed by Shell sales assistants working inside the petrol station, followed by a Shell oil truck being filled.
[Audio from Jessica]
In the last two quarters we opened some 250 sites across China, India, Mexico, Indonesia and Russia.
[Animation footage]
Graphics appear reading: In the last 2 quarters
250 sites across
China, India, Mexico, Indonesia and Russia.
[Vision]
Jessica Uhl stands in front of an off-white background
[Jessica to Camera]
Further acquisitions by our New Energies business...
[Vision]
Footage showing a father and daughter using a home energy system followed by a cityscape with solar panels in the foreground, followed by an offshore wind farm.
[Audio from Jessica]
...enables us to offer more and cleaner energy solutions to our customers. We aim to build a business that is both competitive and resilient.
[Animation footage]
Graphics appear reading: More and cleaner energy solutions
Competitive and resilient
[Vision]
Jessica Uhl stands in front of an off-white background
[Jessica to Camera]
We also continue to upgrade our existing portfolio with divestments of our Caesar-Tonga asset and the SASREF refining joint venture. Now let me highlight the key numbers for the first quarter all of which include the impact of the new accounting standard IFRS16.
[Animation footage]
A full frame graphics reads: Shell results summary Q1 2019 $12.1 billion cash flow from operations excluding working capital movements
[Audio from Jessica]
$12.1 billion of cash flow from operations excluding working capital movements.
[Animation footage]
A full frame graphics reads: Shell results summary Q1 2019 $4.0 billion free cash flow
[Audio from Jessica]
$4.0 billion of free cash flow
[Animation footage]
A full frame graphics reads: Shell results summary Q1 2019 $5.3 billion earnings on a
CCS basis
[Audio from Jessica]
$5.3 billion of earnings on a current cost of supplies basis excluding identified items. All of this at an average oil price of $63 per barrel this quarter.
[Animation footage]
A full frame graphics reads: Shell results summary Q1 2019 8.4% ROACE
[Audio from Jessica]
Return on average capital employed was 8.4%.
[Animation footage]
A full frame graphics reads: Shell results summary Q1 2019 26.5% GEARING
[Audio from Jessica]
Our gearing is now 26.5%, in line with our expected increase as a result of IFRS16.
[Animation footage]
A full frame graphics shows a recap of the figures featured in the 5 previous graphics
[Audio from Jessica]
This has been another good quarter for Shell. We continue to focus on consistent delivery.
[Vision]
Jessica Uhl stands in front of an off-white background
[Jessica to Camera]
We are confident in our 2020 outlook and our ability to generate resilient and profitable growth into the 2020s. I look forward to telling you more about Shell’s future at our Management Day event in June. Thank you.
[Audio]
Theme music
[Graphic]
Shell logo
#ShellResults
©Shell International Limited 2019
[Graphic]
Graphic appears reading: Thank you for visiting our site. Please understand that an
investment in Royal Dutch Shell plc securities carries with it the risk that you could sustain
losses as a result of your investment. Therefore, an investment in Royal Dutch Shell plc
securities may not be appropriate for all investors. Accordingly, before investing in our
securities we urge you to read our Annual Report and Form 20-F and consider the risks
discussed within. You can find our Annual report and Form 20-F on the link next to this
presentation. Again, thank you for your interest in Royal Dutch Shell plc.
[Graphic]
A graphic appears titled Definitions and cautionary note, relevant to the video.
Summary of unaudited results
$ million
| Q1 2019 (1) | Q4 2018 | Q1 2018 | % (2) | | Reference |
|---|---|---|---|---|---|
| 6,001 | 5,590 | 5,899 | +2 | Income/(loss) attributable to shareholders | |
| 5,293 | 7,334 | 5,703 | -7 | CCS earnings attributable to shareholders | Note 2 |
| (8) | 1,646 | 302 | | Of which: Identified items | A |
| 5,301 | 5,688 | 5,401 | -2 | CCS earnings attributable to shareholders excluding identified items | |
| 131 | 120 | 121 | | Add: CCS earnings attributable to non-controlling interest | |
| 5,432 | 5,808 | 5,522 | -2 | CCS earnings excluding identified items | |
| | | | | Of which: | |
| 2,569 | 2,363 | 2,439 | | Integrated Gas | |
| 1,725 | 1,881 | 1,551 | | Upstream | |
| 1,822 | 2,131 | 1,766 | | Downstream | |
| (684) | (567) | (234) | | Corporate | |
| 8,630 | 22,021 | 9,472 | -9 | Cash flow from operating activities | |
| (4,622) | (5,312) | (4,294) | | Cash flow from investing activities | |
| 4,008 | 16,709 | 5,178 | | Free cash flow | H |
| 0.74 | 0.68 | 0.71 | +4 | Basic earnings per share ($) | |
| 0.65 | 0.89 | 0.69 | -6 | Basic CCS earnings per share ($) | B |
| 0.65 | 0.69 | 0.65 | - | Basic CCS earnings per share excl. identified items ($) | |
| 0.47 | 0.47 | 0.47 | - | Dividend per share ($) | |
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(1) IFRS 16 Leases (IFRS 16) was adopted with effect from January 1, 2019. See Note 8 “Adoption of IFRS 16 Leases”.
(2) Q1 on Q1 change.
Please refer to the full quarterly results announcement for Notes 1 through 8 and Alternative performance measures A through I.
CCS earnings attributable to shareholders excluding identified items were $5.3 billion, reflecting lower realised chemicals and refining margins, decreased realised oil prices and lower tax credits, partly offset by stronger contributions from trading as well as increased realised LNG and gas prices compared with the first quarter 2018. In addition, there was a negative impact of $43 million related to the implementation of IFRS 16.
Cash flow from operating activities for the first quarter 2019 of $8.6 billion included negative working capital movements of $3.5 billion, leading to cash flow from operating activities excluding working capital movements of $12.1 billion. Excluding working capital movements and a positive impact of $949 million related to the implementation of IFRS 16, cash flow from operating activities increased to $11.3 billion compared with $10.4 billion in the first quarter 2018, mainly due to a higher cash-generative portfolio of assets.
Total dividends distributed to shareholders in the quarter were $3.9 billion. Today, Shell launches the next tranche of the share buyback programme, with a maximum aggregate consideration of $2.75 billion in the period up to and including July 29, 2019. In aggregate, since the launch of the share buyback programme, 215.7 million A ordinary shares were bought back for cancellation for a consideration of $6.75 billion.
Additional performance measures
$ million
| Q1 2019 | Q4 2018 | Q1 2018 | % (1) | | Reference |
|---|---|---|---|---|---|
| 6,685 | 7,879 | 5,532 | | Capital investment (2) | C |
| 3,752 | 3,788 | 3,839 | -2 | Total production available for sale (thousand boe/d) | |
| 57.42 | 59.89 | 60.74 | -5 | Global liquids realised price ($/b) | |
| 5.37 | 5.75 | 4.95 | +8 | Global natural gas realised price ($/thousand scf) | |
| 8,917 | 10,279 | 9,719 | -8 | Operating expenses | G |
| 8,865 | 10,147 | 9,786 | -9 | Underlying operating expenses | G |
| 9.2% | 9.4% | 6.4% | | ROACE (Net income basis) | E |
| 8.4% | 8.7% | 7.1% | | ROACE (CCS basis excluding identified items) (3) | E |
| 26.5% | 20.3% | 24.7% | | Gearing | F |
(1) Q1 on Q1 change.
(2) With effect from 2019, the definition has been amended (see Reference C). Comparative information has been revised.
(3) With effect from 2019, the definition has been amended (see Reference E). Comparative information has been revised.
Please refer to the full quarterly results announcement for Notes 1 through 8 and Alternative performance measures A through I.
Supplementary financial and operational disclosure for this quarter is available at www.shell.com/investor.
As a result of the implementation of IFRS 16, net debt increased by $16,170 million. First quarter 2019 reported Gearing increased to 26.5% on an IFRS 16 basis, from 21.9% on an IAS17 basis.
CEO statement
Royal Dutch Shell Chief Executive Officer Ben van Beurden commented:
“Shell has made a strong start to 2019, with the first quarter financial performance demonstrating the strength of our strategy and the quality of our portfolio of assets. The power of our brand, serving millions of customers every day, continues to be a differentiator. Our integrated value chain enabled our Downstream business to deliver robust results despite challenging market conditions.The consistent financial performance across all our businesses provides confidence in meeting our 2020 outlook.”