Royal Dutch Shell plc first quarter 2018 results webcast presentation

Royal Dutch Shell April 26, 2018
Royal Dutch Shell plc
April 26, 2018
First quarter 2018 results
Delivering a world-class investment case
#makethefuture

Jessica Uhl
Chief Financial Officer
Royal Dutch Shell

Royal Dutch Shell April 26, 2018 3
Definitions &
cautionary note
Reserves: Our use of the term “reserves” in this presentation means SEC proved oil and gas reserves. Resources: Our use of the term “resources” in this presentation includes quantities of oil and gas not yet classified as SEC
proved oil and gas reserves. Resources are consistent with the Society of Petroleum Engineers (SPE) 2P + 2C definitions.
The Mountains and Oceans scenarios are based on plausible assumptions and quantification, and they are designed to stretch management thinking and even to consider events that may only be remotely possible. Scenarios
therefore, are not intended to be prediction of likely future events or outcomes. Accordingly, investors should not rely on them when making an investment decision with regard to Royal Dutch Shell plc securities.
Operating costs are defined as underlying operating expenses, which are operating expenses less identified items. Organic free cash flow is defined as free cash flow excluding inorganic capital investment and divestment
proceeds. Unit costs for Refining and Trading are defined as operating expenses divided by refinery intake volumes. Yield on costs for Marketing are defined as CCS earnings excluding identified items divided by operating
expenses. Integrated indicative margin is defined as a theoretical margin available to be captured by our integrated portfolio of Refining and Trading assets excluding portfolio impact. Breakeven margin is defined as minimum
integrated margin required for zero earnings in Refining and Trading. Gross margin is defined as net proceeds less cost of goods sold, on a CCS basis, and primary transport expenses. Income per site is defined as ratio of
CCS earnings excluding identified items to the total number of Retail branded sites. Sales by region is defined as sales volumes across each of the regions Americas, East and Europe & Africa. Earnings per FTE is defined as
ratio of CCS earnings excluding identified items to the number of employees in Lubricants, Aviation and Specialties. Clean CCS ROACE (Return on Average Capital Employed) is defined as defined as the sum of CCS earnings
attributable to shareholders excluding identified items for the current and previous three quarters, as a percentage of the average capital employed for the same period. Capital employed consists of total equity, current debt
and non-current debt. Capital investment comprises capital expenditure, exploration expense excluding well write-offs, new investments in joint ventures and associates, new finance leases and investments in Integrated Gas,
Upstream and Downstream equity securities, all of which on an accruals basis. Divestments comprises proceeds from sale of property, plant and equipment and businesses, joint ventures and associates, and other Integrated
Gas, Upstream and Downstream investments, reported in “Cash flow from investing activities (CFFI)”, adjusted onto an accruals basis and for any share consideration received or contingent consideration recognised upon
divestment, as well as proceeds from the sale of interests in entities while retaining control (for example, proceeds from sale of interest in Shell Midstream Partners, L.P.), This presentation contains the following forward-looking
Non-GAAP measures: Organic Free Cash Flow, Free Cash Flow, Capital Investment, CCS Earnings less identified items, Operating Expenses, ROACE, Capital Employed and Divestments. We are unable to provide a
reconciliation of the above forward-looking Non-GAAP measures to the most comparable GAAP financial measures because certain information needed to reconcile the above Non-GAAP measure to the most comparable
GAAP financial measure is dependent on future events some which are outside the control of the company, such as oil and gas prices, interest rates and exchange rates. Moreover, estimating such GAAP measures consistent
with the company accounting policies and the required precision necessary to provide a meaningful reconciliation is extremely difficult and could not be accomplished without unreasonable effort. Non-GAAP measures in
respect of future periods which cannot be reconciled to the most comparable GAAP financial measure are calculated in a manner which is consistent with the accounting policies applied in Royal Dutch Shell plc’s financial
statements. The forward-looking breakeven price (BEP) presented for Vito is calculated based on all forward-looking costs associated from FID. Accordingly, this typically excludes exploration and appraisal costs, lease
bonuses, exploration seismic and exploration team overhead costs. The forward-looking breakeven price is calculated based on our estimate of resources volumes that are currently classified as 2p and 2c under the Society of
Petroleum Engineers’ Resource Classification System. As this project is expected to be multi-decade producing, the less than $35 per barrel projection will not be reflected either in earnings or cash flow in the next five years.
The financial measures provided by strategic themes represent a notional allocation of ROACE, capital employed, capital investment, free cash flow, organic free cash flow and underlying operating expenses of Shell’s strategic
themes. Shell’s segment reporting under IFRS 8 remains Integrated Gas, Upstream, Downstream and Corporate.
The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate legal entities. In this presentation “Shell”, “Shell group” and “Royal Dutch 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 Royal Dutch Shell plc and subsidiaries in general or to those who work for them.
These terms are also used where no useful purpose is served by identifying the particular entity or entities. ‘‘Subsidiaries’’, “Shell subsidiaries” and “Shell companies” as used in this presentation refer to entities over which
Royal Dutch Shell plc either directly or indirectly has control. Entities and unincorporated arrangements over which Shell has joint control are generally referred to as “joint ventures” and “joint operations”, respectively. Entities
over which Shell has significant influence but neither control nor joint control are referred to as “associates”. The term “Shell interest” is used for convenience to indicate the direct and/or indirect ownership interest held by Shell
in an entity or unincorporated joint arrangement, after exclusion of all third-party interest.
This presentation contains forward-looking statements (within the meaning of the U.S. Private Securities Litigation Reform Act of 1995) concerning the financial condition, results of operations and businesses of Royal Dutch
Shell. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management’s current
expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-
looking statements include, among other things, statements concerning the potential exposure of Royal Dutch Shell to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections
and assumptions. These forward-looking statements are identified by their use of terms and phrases such as “aim”, “ambition’, ‘‘anticipate’’, ‘‘believe’’, ‘‘could’’, ‘‘estimate’’, ‘‘expect’’, ‘‘goals’’, ‘‘intend’’, ‘‘may’’,
‘‘objectives’’, ‘‘outlook’’, ‘‘plan’’, ‘‘probably’’, ‘‘project’’, ‘‘risks’’, “schedule”, ‘‘seek’’, ‘‘should’’, ‘‘target’’, ‘‘will’’ and similar terms and phrases. There are 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 the forward-looking statements included in this presentation, including (without limitation): (a) price fluctuations in crude oil and natural gas;
(b) changes in demand for Shell’s products; (c) currency fluctuations; (d) drilling and production results; (e) reserves estimates; (f) loss of market share and industry competition; (g) environmental and physical risks; (h) risks
associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject
to international sanctions; (j) legislative, fiscal and regulatory developments including regulatory measures addressing climate change; (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 of projects and delays in the reimbursement for shared costs; and (m)
changes in trading conditions. No assurance is provided that future dividend payments will match or exceed previous dividend payments. All forward-looking statements contained in this presentation are expressly qualified in
their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Additional risk factors that may affect future results are contained in
Royal Dutch Shell’s 20-F for the year ended December 31, 2017 (available at www.shell.com/investor and www.sec.gov ). These risk factors also expressly qualify all forward looking statements contained in this presentation
and should be considered by the reader. Each forward-looking statement speaks only as of the date of this presentation, April 26, 2018. Neither Royal Dutch Shell plc nor any of its subsidiaries undertake any obligation to
publicly update or revise any forward-looking statement 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 inferred from the
forward-looking statements contained in this presentation. We may have used certain terms, such as resources, in this presentation that United States Securities and Exchange Commission (SEC) strictly prohibits us from
including in our 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 website www.sec.gov

Summary
Divestments: headline, cash proceeds in 2016 + 2017 + Q1 2018: $18.1 billion (in CFFI), $2.1 billion related to Shell Midstream Partners, L.P. (in CFFF)
Q1 2018
 Strong results
 Underlying growth continues
Portfolio reshaping
 Divestments: $26 billion completed (headline)
 Resilience and growth
Financial framework
 Cash priorities unchanged
 Capital discipline unchanged
Thrive in
the energy
transition
World-class
investment case
Strong
license
to operate

Q1 2018
Financial
highlights
Earnings and ROACE on CCS basis, excluding identified items. Dividend distributed to RDS shareholders
$ billion
Earnings Q1 2017 to Q1 2018$ billion Q1 2017 Q1 2018
Upstream 0.5 1.6
Integrated Gas 1.2 2.4
Downstream (CCS) 2.5 1.7
Corporate &
non-controlling interest
~(0.5) ~(0.4)
CCS earnings 3.8 5.3
CCS earnings, $ per share 0.46 0.64
Cash flow from
operations
9.5 9.4
Free cash flow 5.2 5.2
Dividend 3.9 4.0
ROACE (%) 3.3 6.0

Q1 2018
Earnings and
cash flow from
operations
Earnings on CCS basis, excluding identified items
Cash flow from operations excluding working capital
Cash flow from operations excluding working capital – 4 quarters rolling (RHS)
Average Brent oil price - 4 quarters rolling ($/bbl)
Earnings
$ billion $ billion
86 48 49 57
#

Q1 2018
Integrated Gas
performance
Earnings and ROACE on CCS basis, excluding identified items. 2016 Free cash flow excludes cash element of BG acquisition
$ billion
Earnings and ROACE
Million tonnes
LNG liquefaction volumes
$ billion
Free cash flow and cash flow from operations
Million tonnes
LNG sales volumes
ROACE (RHS)Earnings Free cash flowCash flow from operations
%
+50%
+75%

$ billion
MLP cash proceeds ~0.7
Iraq West Qurna 1 ~0.6
Oman - Mukhaizna ~0.3
Others ~0.3
8
Q1 2018
Divestment
headlines
Divestments: headline, cash proceeds in Q1 2018: $0.8 billion (in CFFI), $0.7 billion related to Shell Midstream Partners, L.P. (in CFFF)
Completions – Q1 2018 + April 2018
$ billion
DS Argentina ~1.0
Bongkot - Thailand ~0.8
New Zealand ~0.6
Announcements – Q1 2018 + April 2018

Leading in transparency
RDS reporting
2018 progress
 Disclosures aligned to Task Force on Climate-related Financial Disclosures (TCFD)
 “Shell Energy Transition report” published
 Annual report: additional disclosures on climate change risk and strategy
 “Sky – meeting the goals of the Paris agreement” scenario published
Strategic ambition –
Thrive in the energy
transition
9

Portfolio reshaping
Downstream
Earnings per region
Geographical exposure
$ billion
Marketing – earnings growth to 2025
% of feedstock
Chemicals – feedstock exposure
$ per barrel
Refining & Trading – breakeven margin
2025
East Europe & Africa Americas
2017 2021 2025
Oil Gas
By 2025:
 Organic FCF:
$9-12 billion (+50%)
 Capital employed:
+30%
 ROACE >15%
Global commercialRetail

 2015-20: 50% supply capacity growth
 50% of new supply capacity already in operation
 2017: supply growth matched by solid demand
 Supply/demand gap emerging early 2020’s
 Industry FIDs challenged
11
Portfolio reshaping
Integrated Gas
Source: Shell interpretation of IHS Markit, Wood Mackenzie, FGE, BNEF and Poten & Partners Q4 2017 data
MTPA (DES)
LNG supply/demand gap
LNG Canada
Lake Charles
Abadi
Browse
Tanzania
Sakhalin
expansion
Nigeria LNG
expansion
Baltic LNG
Mozambique GTL
In-/Post-FEED
Pre-FEED
LNG supply in operation
LNG supply under construction
Demand forecasts
Competitive pre-FID
opportunities in all
supply basins

Portfolio reshaping
Upstream
Pre-FID options
& recent FIDs
Individual project volumes are Shell’s current estimates of total gross peak production; sum is estimate of Shell share production at peak excluding shales
Pre-FID options for 2018-2022. Brazil FPSOs: production shown is FPSO oil capacity as per operator
Penguins redevelopment
▪ 45 kboe/d
▪ Shell 50%
WDDM 9B
▪ 60 kboe/d
▪ Shell 50%
Gumusut-Kakap Ph2
▪ 50 kboe/d
▪ Shell 30.4%
Tyra future
▪ 75 kboe/d
▪ Shell 37%
Pegaga
▪ 95 kboe/d
▪ Shell 20%
Vito
▪ 100 kboe/d
▪ Shell 63.11%
Mero (Libra) 1
▪ 180 kboe/d
▪ Shell 20%
Mero (Libra) 2
▪ ~180 kboe/d
▪ Shell 20%
Argentina
shales options
North America
shales options
Bonga South West
▪ 175 kboe/d
▪ Shell 42.95%
Val D’Agri Ph2
▪ 65 kboe/d
▪ Shell 39%
Pierce Depressurisation
▪ 25 kboe/d
▪ Shell 92.52%
HI development
▪ 75 kboe/d
▪ Shell 40%
Gbaran Ph3
▪ 50 kboe/d
▪ Shell 30%
Marjoram/Rosmari
▪ 60 kboe/d
▪ Shell 75%
Bonga main life extension
▪ 90 kboe/d
▪ Shell 55%
Clair South
▪ 60 kboe/d
▪ Shell 28%
Ormen Lange Late Life
recovery
▪ 60 kboe/d
▪ Shell 18%
Assa North
▪ 60 kboe/d
▪ Shell 30%
Uzu development
▪ 45 kboe/d
▪ Shell 30%
Kashagan CC01
▪ 100 kboe/d
▪ Shell 17%
KGK expansion Ph1
▪ 40 kboe/d
▪ Shell 29%
Pearls Khazar
▪ 40 kboe/d
▪ Shell 55%
Kalamkas
▪ 55 kboe/d
▪ Shell 17%
Jackdaw
▪ 40 kboe/d
▪ Shell 74%
Troll Ph3
▪ 255 kboe/d
▪ Shell 8.1%
SK408
▪ 75 kboe/d
▪ Shell 30%
✓ FID taken since Nov 2017 Management Day
✓
✓
✓
✓
Mexico bid round
Brazil bid round
Potential:
 Recent FIDs:
>200 kboe/d
 pre-FID options:
>550 kboe/d
 2 successful bid
rounds
Whale discovery
✓
✓
✓
✓
Jerun
▪ 95 kboe/d
▪ Shell 30%
Mero (Libra) 3+4
▪ ~TBD kboe/d
▪ Shell 20%

Deep water
Vito – final
investment
decision
Vito
 ~100 kboe/day peak production1
 ~300 mln boe current estimated
recoverable resources1
 Shell-operated (63.11%)
Sustained capital efficiency
 Economically resilient: <$35 per barrel
forward-looking break-even price
 Simpler, smaller, and safer to operate
 Supply chain collaboration
A leading IOC position
 Strong capabilities and advantaged portfolio
 Delivering competitive growth
Targeting Vito
first oil in 2021
Perdido
Stones
Auger
Ram Powell
Appomattox
Coulomb
NaKika
Olympus
Mars
Ursa
Kaikias
Whale
VITO
Enchilada
Salsa
Operating
Under Construction
Exploration
1: 100% total gross

World-class investment case
Cash flow
priorities
*subject to further progress with debt reduction and oil price conditions
Priorities
for cash
Debt reduction Dividends
Buybacks
& capital
investment
1 2 3
 Continue to reduce
gearing to 20%
 Cancel scrip dividend  Buy back shares
Progress towards a world-class investment case
Increase shareholder distributions
At least $25 billion*
buyback over
2018 - 2020

 Capital investment
 Dividend
 Interest
 Net debt reduction
to 20% gearing
 Buybacks*
Divestment
proceeds
CFFO
Surplus
CFFO
15
Financial framework
Cash allocation
*subject to further progress with debt reduction and oil price conditions. 20% as a proxy for AA equivalent credit metrics
Delivering on the BG post-
offer intention statements
 Buyback intention unchanged: at least $25 billion
over 2018-2020
 $25-30 billion p.a., organic + inorganic
 Lower part of the range in 2018
 $3.5-4 billion expected in 2018
 24.7% as of Q1’18
 $4 billion cash payment in Q1’18 (Q4’17 dividend, no scrip)

Financial framework
Free cash flow
performance and
payout
* 2016 RT $60 per barrel, mid-cycle Downstream **subject to further progress with debt reduction and oil price conditions
2014 cash dividend includes $3.3bln share buy backs, more than offsetting scrip issuance of $2.4bln.
$ billion
Distributions from free cash flow
Organic FCF
Divestment proceeds less acquisitions
Cash dividend
Scrip dividend Interest paid
$99/bbl $57/bbl $60/bbl*
2014 18Q1
4Q rolling
2019-2021
average
 Financial
transformation
2014-2017
 2019-2021 average:
FCF $30-35 billion
 At least $25 billion**
buyback over
2018 - 2020

Financial framework
Capital discipline
supporting
growth
Excludes BG acquisition in 2016; historical BG capital investment is based on BG’s published Annual Report
Capital investment
$ billion
Capital investment
$ billion
Capital investment
$ billion (p.a.) 2018 – 2020
Oil products 4-5
Conventional
oil + gas
4-5
Integrated gas 4-5
Deep water 5-6
Chemicals 3-4
Shales 2-3
New energies 1-2
Total 25-30
17
-$12 billion
Shell
BG
30
25
 $25 – 30 billion
organic + inorganic
 2018: lower part of
the range
Non- and little discretionary spend
Small scale and large value growth options
Capital investment
p.a. 2018-’20
Cash engines
Growth priorities
Emerging opportunities

$ billion
18
Financial framework
Divestments +
net debt
$ billion
Divestment headlines – since Q1 2016
Net debt + gearing
$ billion
Divestment + MLP cash proceeds – since Q1 2016
Net debt Gearing (RHS)
Cumulative cash proceeds Range
%
Rule of thumb:
 +/-$10/bbl Brent =
+/-$6 billion CFFO
-$13.4 billion

Summary
Q1 2018
 Strong results
 Underlying growth continues
Portfolio reshaping
 Divestments: $26 billion completed (headline)
 Resilience and growth
Financial framework
 Cash priorities unchanged
 Capital discipline unchanged
Thrive in
the energy
transition
World-class
investment case
Strong
license
to operate

Questions & Answers
Jessica Uhl
Chief Financial Officer

Q2 2018
Outlook
Q2 – Q2 Outlook: year-ago baseline reflects Shell’s earnings seasonality
 Integrated gas
 Production volumes: positive impact of ~140-160 thousand boe/d, mainly due to lower maintenance.
 Liquefaction volumes are expected to be at similar level
 Upstream
 Production volumes: reduction of ~230-260 thousand boe/d, mainly due to portfolio impacts, higher maintenance, lower
production at NAM in the Netherlands and field decline more than offsetting project start-ups
 Downstream
 Oil products sales volumes increase of ~70 thousand boe/d as result of separation of Motiva, partly offset by completed
divestments
 Refinery availability to decrease
 Chemicals availability to increase
2018 OUTLOOK:
 Corporate segment: net charge of $300 – 350 million in Q2; $1.4 – 1.6 billion for the full year, excluding the impact of
currency exchange rate effects and interest rate movements
21

Q1 2018
Prices & margins $/barrel
Shell oil & gas realisations
$/barrel
Industry refining margins
$/tonne
Industry chemicals margins
US ethane
Western Europe naphtha
NE/SE Asia naphtha
US West Coast
US Gulf Coast coking
Rotterdam complex
Singapore
Oil
Gas (RHS)
22
$/mscf

Q1 2018
Integrated Gas
results
$ billion
Earnings Q1 2017 to Q1 2018
Environment Choice

Q1 2018
Upstream results $ billion
Environment Choice

Q1 2018
Downstream
results
$ billion
$ billion
Earnings mix
Marketing
Refining & Trading
Chemicals

Royal Dutch Shell plc first quarter 2018 results webcast presentation

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