Q2 2022 FINANCIAL RESULTS

$ million
Adj. Earnings ¹
Adj. EBITDA
CFFO
Cash capex
Integrated Gas
3,758
6,529
8,176
919
Upstream
4,912
11,167
8,110
2,858
Marketing
751
1,452
(454)
1,620
Mobility
413
938
1,223
Lubricants
225
333
206
Sectors & Decarbonisation
113
181
191
Chemicals & Products
2,035
3,184
2,728
1,226
Chemicals
(158)
2
848
Products
2,193
3,182
378
Renewables & Energy Solutions
725
1,013
(558)
321
Corporate
(626)
(197)
652
81
Less: Non-controlling interest
82
Shell
Q2 2022
11,472
23,150
18,655
7,024
Q1 2022
9,130
19,028
14,815
5,064

1 Income/(loss) attributable to shareholders for Q2 2022 is $ 18.0 billon. Reconciliation of non-GAAP measures can be found in the unaudited results, available on www.shell.com/investors.

QUARTERLY RESULTS PRESENTATION

Title: Q2 2022 Results presentation Master

Duration:  7:01:21

Description:

Video is about the Shell’s Second Quarterly results.

 

Q2 2022 Results presentation Master YouTube Transcript


[Video Footage]

Many different shapes moving in the background, three light yellow half circles interlocking each other that start to move in the background.

[Background music begins.]

Soothing instrumental music plays with a deep tempo and relaxing vibration.

Title:  Shell Logo Fades in and Shell plc 28th July 2022 #PoweringProgress

[Video Footage]

Standing side by side are both presenters Ben Van Beurden on the left and Sinead Gorman on the right. Seen to be standing in front of a screen display of yellow geometric shapes on a white background.

Ben Van Beurden

Hello. Sinead and I welcome you to our

second quarter results presentation.

[Video Footage]

Text displays bold and white on a grey rectangle with a yellow boarder, surrounded by yellow geometric shapes

 

[text]

Key Developments and Strategy Delivery

[Video Footage]

Ben Van Beurden Speaks over the text that is displayed.

Ben Van Beurden

It was a turbulent quarter for the world and the global economy.

[Video Footage]

Ben Van Beurden - head shot centred with yellow geometric shapes in the background.

 

 Ben Van Beurden

The war in Ukraine continued, destroying lives and disrupting supplies of food and energy

[Text]

Ben Van Beurden CEO Shell

Ben Van Beurden

and aggravating the lives of so many more through high energy prices and the cost-of-living crisis.

[video footage]

Head shot of Ben moved to the left with yellow geometric shapes in the background

Ben Van Beurden

It all reinforces the importance of getting the balance right. We need a system that provides a secure supply of energy that is reliable and low-carbon and affordable.

[video footage]

Text displays in grey rectangle with yellow boarder

[text]

Reliable, Low-Carbon, Affordable

[Video footage]

Blowing in the wind flags from all over the globe whilst slowly panning out.

Ben Van Beurden

And governments play a crucial part in achieving this balance

Ben Van Beurden Head shot centred with yellow geometric shapes in the background.

Not least because their policies affect our long-term investment planning. And we need reliable policies that ensure a stable supply of energy products today and significant investments in the energy system of tomorrow.

[Video footage]

Boat driving through waves in the middle of an Ocean wind farm.

Ben Van Beurden

For example by speeding up reviews for offshore wind projects

[Video footage]

Singular shot of a wind turbine blowing in the wind, with boat moving with the waves of the sea.

Ben Van Beurden

and allowing the accelerated tax depreciation of renewable assets.

[Video footage]

Ben Van Beurden head shot centred with yellow geometric shapes in the background.

Ben Van Beurden

But we know we also have a significant role to play and Shell has been taking

[Video footage]

Of the Earth from space, with cities all over the world lighting up.

[Text]

displays in front of the Earth in white blocked text, ENERGY SECURITY AND ENERGY TRANSITION

Ben Van Beurden

Action in Q2 to deliver the energy the world needs today.

 

[Video footage]

waves from the ocean and a cloudy blue sky above

Ben Van Beurden

In the North Sea, in the short term

[Video footage]

still sea with two boats parallel to each other, one on the right larger than one on the left.

Ben Van Beurden

We're adding vital gas production by completing the refit.

[Video footage]

Silhouette of a large boat with the sun beaming it’s reflection onto the ocean.

Ben Van Beurden

Of a floating production, storage and offloading vessel to produce natural gas from the Pierce oil field.

[Video footage]

Ben Van Beurden head shot centred with yellow geometric shapes in the background.

Ben Van Beurden

It is expected to start delivering gas as soon as this autumn.

[Video footage]

Oil rig on the sea, camera panning out.

[Background music]

Soothing instrumental music plays with a deep tempo and relaxing vibration.

Ben Van Beurden

And we have taken the final investment decision for the Jackdaw field

[Video footage]

The same oil rig on the sea, panning right whilst zooming out

Ben Van Beurden

Which has the potential to supply more than 6% of the UK's gas production in the years ahead.

[Video footage]

Ben Van Beurden in head shot centred with yellow geometric shapes in the background.

Ben Van Beurden

And for the medium to longer term, we've also taken a final investment

[Video footage]

Large vessel on the ocean.

Ben Van Beurden

Decision on the Crux field in Australia

[Video footage]

An even larger vessel on the ocean with different boats driving towards it]

Ben Van Beurden

which will provide gas for Prelude, our floating LNG facility.

[Video footage]

Stunning sunset over the sea with a full moon in the sky, with the large vessel in frame and camera panning round the vessel.

[Video footage]

From front of the vessel sped up as a time-laps of sailing on the sea.

Ben Van Beurden

And we see significant value to come from our investment

[Video footage]

LNG ship sailing over the Ocean with land shown on the horizon and two smaller boats in the distance.

Ben Van Beurden

in the North Field East expansion in Qatar.

[Video footage]

Head shot of Ben moved to the left with yellow geometric shapes in the background

Ben Van Beurden

But at the same time, we're also taking action to accelerate as an energy transition company

[Text]

 

To the right of Ben, in a grey rectangle with yellow boarder with the word accelerating in Yellow

ACCELERATING OUR ENERGY TRANSITION

[Video footage]

Zoom out of a roundabout with empty land whilst camera pans to the right a sketch of a building starts to appear that becomes more 3-D to eventually reveal the full structure…

Ben Van Beurden

so in the Netherlands, we’re building an electrolyser that makes hydrogen from wind power.

[Video footage]

Different view of the building

Ben Van Beurden

[Text]

Displays above the 3-D sketch in white with a yellow forward slash]

/Holland Hydrogen 1

Ben Van Beurden

Holland Hydrogen 1 will be one of Europe's largest renewable hydrogen plants, once operational in 2025.

[Video footage]

Ben Van Beurden in head shot centred with yellow geometric shapes in the background.

Ben Van Beurden

In fact, Shell owns and operates around 10% of global electrolyser capacity,

[Text]

A graphic table detailing strong funnel of Hydrogen projects which is a stretched yellow rectangle on a white background.

Ben Van Beurden

and we plan to add further capacity through a strong funnel of hydrogen projects.

[Video footage]

Ben Van Beurden in head shot centred with yellow geometric shapes in the background.

Ben Van Beurden

So our company is truly changing. It’s transforming for the future. And we are setting ourselves up for that success in that transformation. Just look at the foundations that we have built over the past decade.

[Video footage]

Head shot of Ben moved to the left with yellow geometric shapes in the background

[Text]  

A grey rectangle with bold white writing and a yellow forward slash.

/INCREASED DISCIPLINE

/IMPROVED RESILIENCE

/BETTER RESULTS

 

Ben Van Beurden

We have become more disciplined. We have become more resilient. And we have become a more profitable business.

[Video footage]

Ben Van Beurden in head shot centred with yellow geometric shapes in the background.

Ben Van Beurden

Now the key similarity between today and how our operating environment looked in 2013 is the oil price.

[Text]

Graph showing from 2012 – 2022 of the 6-month average price]

 

 

The average of 108 dollars a barrel for the first half of 2022 is almost what it was in the first half of 2013.

[Video footage]

Ben Van Beurden in head shot centred with yellow geometric shapes in the background.

Ben Van Beurden

But Shell has transformed since then, both financially and operationally. Over the first 6 months of this year,

[Text]

A large grey box over a white background with white writing and yellow accents.

FIRST HALF 2022 vs FIRST HALF 2013

+65% Adjusted Earnings, 3x Organic free cash flow, 2x shareholder distributions from $6.4 to $12.8 billion. 

 

Ben Van Beurden

our Adjusted Earnings are up 65%, compared with the first half of 2013. In the same period, comparatively,

our organic free cash flow tripled, and we have doubled our shareholder distributions.

[Video footage]

Ben Van Beurden in head shot centred with yellow geometric shapes in the background.

Ben Van Beurden

In fact, this quarter our cash distributions were the highest ever. And we have done all that safely and responsibly.

[Text]

A large grey box over a white background with white writing and yellow accents

83% DECREASE process safety incidents, 32% reduction Scope 1&2 emissions, 23% LOWER injuries (TRCF) per million working hours.

 

Ben Van Beurden

Our teams achieved 83% fewer process safety incidents and 32% lower Scope 1 and 2 carbon emissions.

that's emissions from our operations and the energy we use to run them.

[Video footage]

Ben Van Beurden in head shot centred with yellow geometric shapes in the background.

Ben Van Beurden

So what changed?

[Text]

A large grey box over a white background with white writing and yellow accents

 

~$80 BILLION divestments completed since 2013, 11% LOWER operating expenditure, 39% LOWER cash capex 4Q rolling

Ben Van Beurden

Well we have high-graded our portfolio, divested around $80 billion dollars of assets and doubled down on integrated value delivery.

Ben Van Beurden –  Head shot centred with yellow geometric shapes in the background.

As a result, in our Integrated Gas business

[Text]

Displays a large grey box over a white background with white writing and yellow accents]

 

FIRST HALF 2022 vs FIRST HALF 2013

IG: LEADING LNG &GTL BUSINESS

2.2 X

LNG sales

5.7X

cash flow from operations per barrel (boe)

 

Ben Van Beurden

we now sell over 2 times more LNG while our CFFO per barrel increased more than fivefold over the same period.

[Video footage]

Ben Van Beurden in head shot centred with yellow geometric shapes in the background.

Ben Van Beurden

And our Upstream portfolio is much more concentrated

[Text]

Displays a large grey box over a white background with white writing and yellow accents

FIRST HALF 2022 vs FIRST HALF 2013

UPSTREAM: VALUE OVER VOLUME

-21% production

+74% cash flow from operations per barrel (boe)

Ben Van Beurden

leading to 21% lower production, while our Upstream CFFO per barrel increased by 74%.

[Video footage]

Ben Van Beurden in head shot centred with yellow geometric shapes in the background.

Ben Van Beurden

So yes, energy prices are very high today, but they have been so before. And the real difference is that, today, we are performing much better in a similar price environment. And we are confident about the future because we have a strong capital framework, and an energy transition plan that our shareholders firmly supported at our Annual General Meeting in May. So we are increasing our shareholder distributions

[Text]

Displays a large grey box over a white background with white writing and yellow accents]

SHARE BUYBACKS

$6 BILLION

programme for Q3 2022

 

Ben Van Beurden

with a $6 billion share buyback programme for the next quarter.

 

[Video footage]

Ben Van Beurden in head shot centred with yellow geometric shapes in the background.

Ben Van Beurden

Now Sinead can tell you

[Video footage]

Standing side by side are both presenters, Ben Van Beruden on the left and Sinead Gorman, both stood in front of a white background with yellow geometric shapes.

Ben Van Beurden

more about our results and these distributions.

[Video footage]

Sinead Gorman in head shot centred with yellow geometric shapes in the background.

Sinead Gorman

Our performance in the second quarter was strong amid volatile energy prices

[Text]

Grey box to the bottom left of Sinead Gorman

Sinead Gorman CEO SHELL

[Text]

ADJUSTED EARNINGS Q1 2022 TO Q2 2022

from Q1 2022 – 9.1 up to Q2 2022 – 11.5

Integrated Gas – 0.3

Upstream – 1.5

Marketing – 0.0

Chemicals & Products – 0.9

Renewables & Energy Solutions – 0.5

Coporate & Non-controlling interest – 0.0

 

Sinead Gorman

 

Our Adjusted Earnings were $11.5 billion. We saw stronger performance in Upstream, Products and Renewables and Energy Solutions, or RES.

[Text]

SHELL Q2 2022 RESULTS

ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTISATION

$23.1 BILLION

Sinead Gorman

Our Adjusted EBITDA was more than $23 billion.

[Text]

SHELL Q2 2022 RESULTS

CASH FLOW FROM OPERATIONS

$18.7 BILLION

 

Sinead Gorman

And we delivered $18.7 billion of cash flow from operations.

[Video footage]

Sinead Gorman head shot centred with yellow geometric shapes in the background.

Sinead Gorman

Our trading and optimisation results across our businesses were strong overall, especially in gas and power in our RES business. That brings me to our financial framework.

[Text]

SHARE BUYBACKS

$6 BILLION

expected to be completed by Q3

 

Sinead Gorman

The $6 billion share buyback programme we announced today is expected to be completed by the time of

our Q3 results announcement.

[Text]

SHELL Q2 2022 RESULTS

SHAREHOLDER DISTRIBUTIONS

>30% CFFO

with current energy sector outlook

 

Sinead Gorman

And we expect our shareholder distributions to remain in excess of 30% of CFFO with the current energy sector outlook.

[Text]

SHELL Q2 2022 RESULTS

NET DEBT

$46.4 BILLION

 

Sinead Gorman

Our Net debt further decreased to $46.4 billion this quarter

[Video footage]

Sinead Gorman head shot centred with yellow geometric shapes in the background.

Sinead Gorman

and we will continue to strengthen our balance sheet given where we are in the cycle. We will be disciplined with the investment decisions we make and expect our cash capital expenditure to be in the

$23 to $27 billion range for 2022.

[Video footage]

Smooth transition from Sinead Gorman looking to her right and Ben Van Beurden looking to his left

[Video footage]

Ben Van Beurden head shot centred with yellow geometric shapes in the background.

Ben Van Beurden

So without doubt, our delivery this quarter reflects the macro-economic environment but even more so, it reflects the transformation of Shell into a more disciplined and more resilient company.

[Video footage]

Head shot of Ben moved to the left with yellow geometric shapes in the background

Ben Van Beurden

We are using our financial strength to benefit society through secure energy supplies

[Text]

Displays a grey box with white and yellow bold writing

INVESTING IN ENERGY SECURITY

INCREASING DISTRIBUTIONS

POSITIONING FOR THE FUTURE

Ben Van Beurden

and to benefit our shareholders through increased distributions and position the company for the future of energy.

[Video footage]

Standing side by side are both presenters, Ben Van Beruden on the left and Sinead Gorman, both stood in front of a white background with yellow geometric shapes.

Ben Van Beurden

Thank you.

[Text]

Displays white background with text and Shell logo on the bottom left]

Thank you for your interest in Shell plc. Please understand that an invest in Shell plc securities carries with it the risk that you could sustain losses as a result of your investment. Therefore, an investment in Shell plc securitise may not be appropriate for all investors. Accordingly, before investing in our securitises we urge you to red our Annual Report and Form 20-F and consider the risks discussed within. You can find out full disclaimer on the next slide in this presentation. You can download the full presentation slides, including the disclaimer, and our Annual Report and Form 20-F at www.shell.com/investors

 

[Background music begins.]

Soothing instrumental music plays with a deep tempo and relaxing vibration starts to fade.

[Text]

White background with text and Shell logo on the bottom left

DEFINITIONS & CAUTIONARY NOTE

[Audio.]

Shell jingle.

[Graphic.]

Shell Logo.

[Text]

Shell.eg. © Shell International Limited 2022

QUARTERLY RESULTS ANALYST Q&A SESSION

Ben van Beurden (CEO, Shell plc) and Sinead Gorman (CFO, Shell plc) hosted a results analyst webcast of the second quarter 2022 results on Thursday July 28th at 15:00 BST (16:00 CEST and 10:00 EDT).