Q3 2022 FINANCIAL RESULTS

$ million
Adj. Earnings ¹
Adj. EBITDA
CFFO
Cash capex
Integrated Gas
2,319
5,393
6,664
956
Upstream
5,896
12,539
8,343
1,733
Marketing
820
1,505
2,299
746
Mobility
645
1,150
501
Lubricants
103
230
55
Sectors & Decarbonisation
72
125
190
Chemicals & Products
772
1,797
3,385
828
Chemicals
(555)
(426)
527
Products
1,327
2,223
301
Renewables & Energy Solutions
383
530
(8,051)
1,086
Corporate
(571)
(251)
(100)
78
Less: Non-controlling interest
165
Shell
Q3 2022
9,454
21,512
12,539
5,426
Q2 2022
11,472
23,150
18,655
7,024

Income/(loss) attributable to shareholders for Q3 2022 is $6.7 billion. Reconciliation of non-GAAP measures can be found in the unaudited results, available on www.shell.com/investors.

QUARTERLY RESULTS PRESENTATION

Title: Third Quarter 2022 Results

Duration:  7:43

 

Description:

Video is about the Shell’s third Quarterly results.

 

Q3 2022 Results presentation Master YouTube Transcript

 

[Video Footage]

 

Many different light-yellow shapes moving in the background, three light yellow half circles interlocking each other that start to move in the background creating an abstract Shell. Transitions into a light grey background with 7 in-depth lines.

 

[Text Displays]

 

Third Quarter 2022 / Results Robust Results from A Resilient Portfolio. Shell Symbol is placed on the lower right corner and text on the lower left corner ‘Shell plc 27th October 2022 #PoweringProgress.

 

[Background music begins.]

 

Soothing instrumental music plays with a deep tempo and relaxing vibration with accompanied base of hard droplets. 

 

[Video Footage]

 

Standing centre left is Sinead Gorman CFO of Shell seen to be standing in front of a screen display of different shades of yellow geometric shapes on a white background.

 

[Text Displays]

 

Sinead Gorman CFO SHELL (on a grey rectangle with a yellow stripe to the left of the rectangle.)

 

Sinead Gorman CFO

 

Welcome to our Third Quarter Results Presentation.

 

[Video Footage]

 

White background with four groups of difference light yellow geometric abstract shapes that frame the centred grey box with a yellow border.

 

[Text Displays]

 

Key Developments and Strategy Delivery (on a grey rectangle with a yellow stripe border).

 

Sinead Gorman CFO

 

With winter coming for many people and energy prices high,

 

[Video Footage]

 

Head shot of Sinead Gorman CFO, centred in front of a white background with yellow geometric shapes.

 

Sinead Gorman CFO

 

Consumers and businesses have been trying to find solutions. This requires collaborations across all parts of our society.

 

[Video Footage]

 

The screen is split into a montage of three shots that show different important buildings, the left shot shows a clip of London. In the foreground you can see part of the river Thames peeping through which is framed by Westminster and Big Ben on a beautiful sunny day.

 

The shot in the middle is in the USA, of the Capitol building. Within the foreground there are red flowers that leads your eye up to the American flag which is placed in the centre of the building.

 

To the right of the montage shows European Parliament, within the foreground there is green foliage that reflects onto the glass of the building.

 

Each three of the buildings are shown in line and in harmony of the colours of the background.

 

Sinead Gorman CFO

 

So, we continue to engage with governments to help make their new policies effective.

 

[Video Footage]

 

Dark computer screen panning left that shows green and red graphs, seamlessly panning left to a man shown in front of many computer screens. He leans forwards and places his hand on the computer mouse.

 

Sinead Gorman CFO

 

And avoid unintended consequences

 

[Video Footage]

 

Head shot of Sinead Gorman CFO, centred in front of a white background with yellow geometric shapes.

 

Sinead Gorman CFO

 

in the energy markets. A good example of such collaboration is our gas storage agreements for the up coming Winter in Europe, particularly in Germany and Austria

 

[Video Footage]

 

Drone shot of a wind farm in the Netherlands, in the foreground you see a traditional windmill next to a house, that is framed by a modern wind farm.

 

Sinead Gorman CFO

 

and in the Netherlands, we have started to supply liquified natural gas

 

[Video Footage]

 

Drone shot zooming up and out of the LNG import hub which is right next to the ocean.

 

Sinead Gorman CFO

 

To the recently created LNG import hub

 

[Video Footage]

 

Head shot of Sinead Gorman CFO, centred in front of a white background with yellow geometric shapes.

 

Sinead Gorman CFO

 

We have also been providing support for our customers

 

[Video Footage]

 

Red brick building with Shell Energy Logo on the side, sun shining down on the building with blue skies peeping through and camera zooming into the sign.

 

Sinead Gorman CFO

 

For example, we have increased the hardship fund for our

 

[Video Footage]

 

Two people hard at work in an office with headpieces on in front of computer screens.

 

Sinead Gorman CFO

 

Shell Energy Retail customers

[Video Footage]

Zoomed in of hands on a screwdriver and wires with two workers in boiler suits in shot in the back

Sinead Gorman CFO

 

And we will double the payments

 

[Video Footage]

 

A home setting with a father and son making scrambled eggs together

Sinead Gorman CFO

of the governments Warm Home Discount scheme

 

[Video Footage]

 

Drone shot of houses panning right.

Sinead Gorman CFO

To the account of more than 150,000 customers in the U.K

[Video Footage]

Zoomed in head shot of Sinead Gorman CFO, centred in front of a white background with yellow geometric shapes.

Sinead Gorman CFO

 

to address the short- and long-term energy needs, we must have a resilient portfolio of assets

[Text Displays]

Focused

Competitive

Disciplined

Sinead Gorman CFO

We will achieve this through focused and competitive investments in a discipline manner

[Video Footage]

Zoomed in head shot of Sinead Gorman CFO, centred in front of a white background with yellow geometric shapes.

 

Sinead Gorman CFO

For example, we are further growing our partnership with Qatar Energy with an involvement of the North Field South expansion, and we took a final investment decision on developing the Rosmari-Marjoram gas project in Malaysia

[Video Footage]

Truck with equipment on top driving past parked cars

Sinead Gorman CFO

Which will be primarily powered by renewable energy 

 

[Video Footage]

Oil rig out at Sea with four boats at each corner towed up to it

Sinead Gorman CFO

Once built, the offshore platform

 

[Video Footage]

 

Zoomed in of solar panels panning right

Sinead Gorman CFO

Will use power from 240 solar panels

[Video Footage]

In the foreground is a telephone pole that go off into the distance and meet with the clouds in the background. The background shows a dark forest and in the horizon are dark mountains framed by clouds.

Sinead Gorman CFO

Whilst the onshore plant will be connected to the

[Video Footage]

The scene shows a dam divided vertically the right side shows still blue water and the left side goes down a hill into a green forest area with a road that breaks the green colours up.

Sinead Gorman CFO

To the Sarawak grid system supplied from

[Video Footage]

Head shot of Sinead Gorman CFO, centred in front of a white background with yellow geometric shapes.

Sinead Gorman CFO

 

Hydroelectric plants. Also we announced the acquisitions of Shell

[Video Footage]

Blue sky with two silver tubes placed horizontally next to each other

Sinead Gorman CFO

Midstream Partners in the US to further simplify our organisation

[Video Footage]

 

Head shot of Sinead Gorman CFO, centred in front of a white background with yellow geometric shapes.

Sinead Gorman CFO

 

We are more disciplined and that sometimes mean taking tough decisions when activities don’t meet out investment criteria or don’t perfectly fit our strategy. For example, in the US, we have sold out majority interest in the oil and gas company Area Energy. We have ended our participation in the early-stage wind projects in Ireland.

[Video Footage]

 

Zoomed in head shot of Sinead Gorman CFO, centred in front of a white background with yellow geometric shapes.

Sinead Gorman CFO

And we have within drawn from a deal to take liquified natural gas from developer Tellurian. We don’t take these difficult decisions lightly.

[Video Footage]

 

Head shot of Sinead Gorman CFO, centred in front of a white background with yellow geometric shapes.

 

Sinead Gorman CFO

When I think about focus and competitiveness, I also think about our Marketing business Update earlier this month.

[Video Footage]

Grey screen with darker grey details vertically

 

 

[Text]

 

84 million loyalty members

Sinead Gorman CFO

Our Marketing Business reaches million of customers with a vast range of products and services

[Text]

1 million business customers

Sinead Gorman CFO

We are already number one in many areas and intend to be competitive in the emerging ones

[Text]

#1 Global Lubricant Supplier

[Video Footage]

 

Close up of liquid being poured

Sinead Gorman CFO

Such as e-fluids,

[Video Footage]

Close up of hands at a charging point

Sinead Gorman CFO

electric vehicle charging

[Video Footage]

Hay moving on a fast-paced belt

Sinead Gorman CFO

as well as biofuels.

[Video Footage]

Van driving on highway next to green fields

Sinead Gorman CFO

 

These solutions will especially

[Video Footage]

Plane on front shot flying towards the camera to land

Sinead Gorman CFO

help sectors that are hard to

[Video Footage]

Drone shot of a big boat out at sea

Sinead Gorman CFO

Decarbonise

[Video Footage]

 

Head shot of Sinead Gorman CFO, centred in front of a white background with yellow geometric shapes.

 

Sinead Gorman CFO

Over the past 3 years, around half of Marketing’s combined capital and operational expenditure went towards activities that generate

[Video Footage]

Shows a green graph on a white background

[Text]

Focusing on Low Carbon Products and Services

Low carbon includes lubricants, convenience retails, E-mobility, biofuels, agriculture and forestry, construction and road.

Low carbon expenditure

Low carbon earnings

Sinead Gorman CFO

low-carbon products. Impressively, these activities contributed almost 60% to Marketing earnings during the same period.

[Video Footage]

 

Head shot of Sinead Gorman CFO, centred in front of a white background with yellow geometric shapes.

Sinead Gorman CFO

With all these offerings Marketing has that perfect combination of strong growth and returns diversifying our portfolio

[Video Footage]

 

White background with four groups of difference light yellow geometric abstract shapes that frame the centred grey box with a yellow border.

[Text]

Shareholder Distributions

[Video Footage]

 

Head shot of Sinead Gorman CFO, centred in front of a white background with yellow geometric shapes.

Sinead Gorman CFO

Is it the quality of our portfolio together with our strong operational delivery that has allowed us to significantly increase our shareholder distributions this year. We have now completed $6 billion of share buybacks for the third quarter. And today, we are increasing our shareholder distributions even further.

Sinead Gorman CFO

 

We have announced

[Video Footage]

 

Grey background with darker grey detailed lines with a dark grey box with text

[Text]

Share Buybacks

$4 Billion

Programme for Q4 2022

Sinead Gorman CFO

a new $4 billion share buyback programme, which we expect to complete by our Q4 results.

 

[Video Footage]

 

Head shot of Sinead Gorman CFO, centred in front of a white background with yellow geometric shapes.

Sinead Gorman CFO

This is expected to bring our total shareholder distributions for 2022 to $26 billion – in excess of 30% of our CFFO for the last four quarters.

[Video Footage]

 

Grey background with darker grey detailed lines with a dark grey box with text

[Text]

Shareholder Distributions

$26 Billion in total for 2022

[Video Footage]

 

Head shot of Sinead Gorman CFO, centred in front of a white background with yellow geometric shapes.

 

Sinead Gorman CFO

 

Through our share buybacks announced in 2022, we expect to repurchase some 10% of our share capital. And as indicated before, the reduction in share count allows us to increase our dividend in the future.

[Video Footage]

 

Zoomed in head shot of Sinead Gorman CFO, centred in front of a white background with yellow geometric shapes.

Sinead Gorman CFO

 

So today, we have also announced our plan to increase our dividend

[Video Footage]

 

Grey background with darker grey detailed lines with a dark grey box with text

[Text]

Dividend Increase 15% Per Share at the Q4 results to be paid March 2023

Sinead Gorman CFO

 

per share by an expected 15% at Q4 results, reflecting our progressive dividend policy subject to Board approval.

[Video Footage]

 

Zoomed in head shot of Sinead Gorman CFO, centred in front of a white background with yellow geometric shapes.

Sinead Gorman CFO

These increased distributions show our confidence in our business its ability to fund both our energy transitions and our shareholder distributions. Now let’s see the results for the quarter

 

[Video Footage]

Of a Shell charging station

[Text]

 

Q3 2022 Performance

Sinead Gorman CFO

In the third quarter, we delivered

[Video Footage]

 

Head shot of Sinead Gorman CFO, centred in front of a white background with yellow geometric shapes.

Sinead Gorman CFO

robust results in a volatile market environment

[Video Footage]

White background with a dark grey graph

[Text]

Adjusted earnings Q2 2022 to Q3 2022

Sinead Gorman CFO

Our adjusted earnings were $9.5 billion

 

[Video Footage]

 

Head shot of Sinead Gorman CFO, centred in front of a white background with yellow geometric shapes.

Sinead Gorman CFO

In Integrated Gas, after a strong first half of the year, Adjusted Earning were lower compared with the second quarter, primarily driven by trading and optimisation. Due to increasing market volatility, there was a significant dislocation in historically correlated gas markers.

[Video Footage]

White background with grey and blue graph

[Text]

 

Volatile and Dislocated Market

Sinead Gorman CFO

This dislocation arose as a result of Russia’s invasion of Ukraine and the subsequent impact on the energy markets and regional gas prices.

[Video Footage]

 

Head shot of Sinead Gorman CFO, centred in front of a white background with yellow geometric shapes.

Sinead Gorman CFO

Our trading and optimisation organisation manages risk through hedging our physical volumes. Due to a breakdown in correlations, some hedges were less effective. LNG trading and optimisation were also impacted

[Video Footage]

 

White background with grey and red graph

 

[Text]

 

Seasonality effect and supply chain Issues

Sinead Gorman CFO

By a combination of seasonality and supply constraints, where the business is geared towards supplying the northern hemisphere during the winter.

[Video Footage]

 

Head shot of Sinead Gorman CFO, centred left in front of a white background with yellow geometric shapes.

 

Sinead Gorman CFO

Our upstream business performed extremely well, delivering $5.9 billion, despite a decrease in Brent prices since the previous quarter.

[Text]

 

Value over volume

Sinead Gorman CFO

Our focus on value over volume as well as operational excellence continues to deliver strong cash flows and earnings.

[Video Footage]

Oil rig silhouette with sunset in the background

Sinead Gorman CFO

To give you an example this quarter, in operated assets

[Video Footage]

Oil rig with boat next to it with a choppy sea

Sinead Gorman CFO

in the Gulf of Mexico, we achieved the highest production in a decade

[Video Footage]

Two figures’ head to toe in PPE walking with backs to the camera

[Video Footage]

 

Head shot of Sinead Gorman CFO, centred in front of a white background with yellow geometric shapes.

Sinead Gorman CFO

This quarter, we delivered a very strong Adjusted EBITDA of $21.5 billion.

[Video Footage]

 

Grey, red and green graph.

[Text]

 

Cash Conversions Q3 2022

*Earnings before interest, taxes, depreciation and amortization

Sinead Gorman CFO

And our cash flow from operations was $12.5 billion, Working capital outflows were mainly due to seasonal gas inventory built-up as well as higher initial margin requirements in Renewables and Energy Solutions

[Text]

 

(4.2) working capital movement

[Video Footage]

 

Head shot of Sinead Gorman CFO, centred left in front of a white background with yellow geometric shapes.

Sinead Gorman CFO

That brings me to our financial framework. Our capital allocation priorities are unchanged – we will remain disciplined and invest in opportunities that align with our return’s framework.

[Text]

Strategic Opportunities Returns Framework

[Video Footage]

 

Grey background with darker grey lines

[Text]

Cash Capex 2022 $23-27 Billion

Sinead Gorman CFO

This year, we expect our cash capital expenditure to be in the range of $23 to $27 billion

[Video Footage]

 

Head shot of Sinead Gorman CFO, centred left in front of a white background with yellow geometric shapes.

Sinead Gorman CFO

Another important aspect of our financial framework is Net debt.

[Video Footage]

 

Grey background with darker grey lines

[Text]

Net Debt $48.3 billion

Sinead Gorman CFO

It is now around $48 billion, which is slightly higher than last quarter

[Video Footage]

 

Head shot of Sinead Gorman CFO, centred left in front of a white background with yellow geometric shapes.

Sinead Gorman CFO

Having a strong balance sheet and maintaining AA credit rating remains one of our priorities. So, this quarter clearly shows our financial framework in action. And we have demonstrated discipline and focus in managing our investments and financial position.

[Text]

Disciplined and focused investments balance sheet

Sinead Gorman CFO

We have confidence in our business and its delivery, which is why we are enhancing our shareholder

[Text]

 

$4 Billion new share buybacks for Q4 2022, + 15% dividend per share expectation at the Q4 2022

Sinead Gorman CFO

Distributions with new share buybacks and planned divided increase for the fourth quarter. As we transform our business, we will continue to deliver the secure supply of energy that the world needs today and, in the decades, ahead. Thank you.

 

 

[Text]

Thank you for your interest in Shell plc. Please understand that an investment 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 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 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

Definitions & Cautionary Note

[Background music ends]

 

Shell’s jingle

[Text]

 

#ShellResults

 

Shell International Limited 2022

QUARTERLY RESULTS ANALYST Q&A SESSION

Ben van Beurden (CEO, Shell plc) and Sinead Gorman (CFO, Shell plc) will host a results analyst webcast of the third quarter 2022 results on Thursday October 27th at 14:30 BST (15:30 CEST and 09:30 EDT).