ROYAL DUTCH SHELL PLC FIRST QUARTER 2021 UNAUDITED RESULTS
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ROYAL DUTCH SHELL PLC1ST QUARTER 2021 UNAUDITED RESULTS |
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SUMMARY OF
UNAUDITED RESULTS |
Quarters |
$ million |
|
Q1 2021 |
Q4 2020 |
Q1 2020 |
%¹ |
|
Reference |
5,660 |
|
(4,014) |
|
(24) |
|
+241 |
Income/(loss) attributable to shareholders |
|
4,345 |
|
(4,478) |
|
2,756 |
|
+197 |
CCS earnings
attributable to shareholders |
Note 2 |
3,234 |
|
393 |
|
2,860 |
|
+724 |
Adjusted
Earnings² |
A |
8,294 |
|
6,287 |
|
14,851 |
|
+32 |
Cash flow
from operating activities |
|
(590) |
|
(5,406) |
|
(2,718) |
|
|
Cash flow
from investing activities |
|
7,704 |
|
882 |
|
12,133 |
|
|
Free cash
flow |
G |
3,974 |
|
5,503 |
|
4,970 |
|
|
Cash
capital expenditure |
C |
9,436 |
|
9,652 |
|
8,618 |
|
-2 |
Operating
expenses |
F |
8,724 |
|
8,544 |
|
8,600 |
|
+2 |
Underlying
operating expenses |
F |
(4.7)% |
(6.8)% |
4.6% |
|
ROACE (Net
income basis) |
D |
3.0% |
2.9% |
6.1% |
|
ROACE (CCS basis
excluding identified items) |
D |
71,252 |
|
75,386 |
|
74,413 |
|
|
Net debt |
E |
29.9% |
32.2% |
28.9% |
|
Gearing |
E |
3,489 |
|
3,371 |
|
3,719 |
|
+4 |
Total
production available for sale (thousand boe/d) |
|
0.73 |
|
(0.52) |
|
0.00 |
+240 |
Basic earnings per
share ($) |
|
0.42 |
|
0.05 |
|
0.37 |
|
+740 |
Adjusted Earnings
per share ($) |
B |
0.1735 |
|
0.1665 |
|
0.16 |
|
+4 |
Dividend per share ($) |
|
1. Q1 on Q4 change.
2. Adjusted Earnings is defined as
income/(loss) attributable to shareholders plus cost of supplies
adjustment (see Note 2) and excluding identified items (see
Reference A).
First quarter 2021 income attributable to Royal Dutch Shell
plc shareholders was $5.7 billion, which included net gains on sale
of assets of $1.4 billion and gains of $0.4 billion due to the fair
value accounting of commodity derivatives, partly offset by
redundancy and restructuring charges of $0.5 billion, mainly
related to the restructuring plan named Reshape.
Adjusted Earnings for the quarter were $3.2 billion. Cost
of supplies adjustment attributable to Royal Dutch Shell plc
shareholders for the first quarter 2021 was negative $1.3 billion.
The Texas winter storm had an impact on our operations and had an
aggregate adverse impact of around $0.2 billion on Adjusted
Earnings.
Cash flow from operating activities for the first quarter 2021
was $8.3 billion, which included negative working capital
movements of $4.4 billion. Cash flow from investing activities
for the quarter was an outflow of $0.6 billion, driven mainly
by capital expenditure and partly offset by proceeds from sale of
property, plant and equipment and businesses.
Compared with the fourth quarter 2020, current quarter Adjusted
Earnings reflected higher realised oil and LNG prices, chemicals
and refining margins, Oil Products trading contributions and lower
depreciation.
Compared with the first quarter 2020, current quarter Adjusted
Earnings reflected higher realised oil prices and chemicals margins
partly offset by lower realised refining and marketing margins.
At the end of the first quarter 2021, net debt was $71.3
billion, compared with $75.4 billion at the end of the fourth
quarter 2020, mainly driven by free cash flow generation in the
quarter. Gearing was 29.9% at the end of the first quarter 2021,
compared with 32.2% at the end of the fourth quarter 2020, mainly
driven by net debt reduction, earnings and remeasurements of
pensions.
Dividends declared to Royal Dutch Shell plc shareholders for the
quarter amount to $0.1735 per share, an increase of around 4% from
the last quarter.
With effect from the first quarter 2021, business performance
analysis of the current quarter compared with the previous quarter
is introduced, which will replace, starting from the second quarter
2021, business performance
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ROYAL DUTCH SHELL PLC1ST QUARTER 2021 UNAUDITED
RESULTS |
analysis compared with the same quarter of the previous year.
This change is introduced to enable better understanding of our
business performance sequentially from quarter to quarter.
Supplementary financial and operational disclosure and a
separate press release for this quarter are available at
www.shell.com/investors1. With effect from the first quarter 2021,
new disclosures are included in these supplementary financial and
operational disclosures to improve understanding of our businesses.
See Reference J for reconciliations of new Additional Performance
(Non-GAAP) Measures introduced in these disclosures.
1. Not incorporated by reference.
FIRST QUARTER 2021 PORTFOLIO DEVELOPMENTS
Integrated Gas
In March 2021, QGC Common Facilities Company Pty Ltd, a
wholly-owned subsidiary of Shell, completed the sale of a 26.25%
interest in the Queensland Curtis LNG (QCLNG) Common Facilities to
Global Infrastructure Partners Australia for $2.5 billion,
following the receipt of regulatory approval.
Upstream
In January 2021, Shell completed the sale of its 30% interest in
Oil Mining Lease 17 in the Eastern Niger Delta, and associated
infrastructure, to TNOG Oil and Gas Limited, a related company of
Heirs Holdings Limited and Transnational Corporation of Nigeria
Plc, for a consideration of $533 million. A total of $453 million
was paid by completion with the balance to be paid over an agreed
period.
In February 2021, an agreement was reached with publicly listed
Canadian energy company Crescent Point Energy Corp. to sell the
Duvernay shale light oil position in Alberta, Canada. The
transaction completed on April 1, 2021. The consideration received
consisted of $533 million in cash and 50 million shares in Crescent
Point Energy common stock (TSX: CPG) valued at $208 million based
on the closing price on March 31, 2021.
In March 2021, Shell Egypt and one of its affiliates signed an
agreement with a consortium made up of subsidiaries of Cheiron
Petroleum Corporation and Cairn Energy plc to acquire Shell’s
upstream assets in Egypt’s Western Desert for a base consideration
of $646 million and additional payments of up to $280 million
between 2021 and 2024, contingent on the oil price and the results
of further exploration. The transaction is subject to government
and regulatory approvals and is expected to complete in the second
half of 2021.
Page 2
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ROYAL DUTCH SHELL PLC1ST QUARTER 2021 UNAUDITED
RESULTS |
PERFORMANCE BY SEGMENT
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INTEGRATED
GAS |
Quarters |
$ million |
Q1 2021 |
Q4 2020 |
Q1 2020 |
%¹ |
|
2,527 |
|
20 |
|
1,812 |
|
+12,638 |
Segment
earnings |
1,112 |
|
(1,089) |
|
(331) |
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Of which: Identified items (Reference A) |
1,415 |
|
1,109 |
|
2,143 |
|
+28 |
Adjusted
Earnings |
2,491 |
|
2,203 |
|
3,986 |
|
+13 |
Cash flow
from operating activities |
3,653 |
|
2,195 |
|
3,352 |
|
+66 |
Cash flow from
operating activities excluding working capital movements (Reference
H) |
1,015 |
|
1,664 |
|
882 |
|
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Cash
capital expenditure (Reference C) |
170 |
|
156 |
|
162 |
|
+9 |
Liquids
production available for sale (thousand b/d) |
4,621 |
|
4,555 |
|
4,596 |
|
+1 |
Natural gas
production available for sale (million scf/d) |
967 |
|
942 |
|
955 |
|
+3 |
Total
production available for sale (thousand boe/d) |
8.16 |
|
8.21 |
|
8.88 |
|
-1 |
LNG liquefaction
volumes (million tonnes) |
15.80 |
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16.89 |
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19.00 |
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-6 |
LNG sales volumes (million tonnes) |
1. Q1 on Q4 change.
First quarter segment earnings were $2,527 million. This
included gains on sale of assets of $997 million and gains of $263
million due to the fair value accounting of commodity derivatives.
These gains are part of identified items (see Reference A).
Adjusted Earnings for the quarter were $1,415 million. Net
financial impact from the Texas winter storm was limited as
positive trading margins were offset by higher operating expenses
($0.4 billion post-tax) related to provisions for counterparty
credit risk.
Cash flow from operating activities for the quarter was $2,491
million, primarily driven by Adjusted Earnings before non-cash
expenses including depreciation, as well as favourable commodity
derivatives impacts of $867 million. This was partly offset by
negative working capital movements of $1,162 million.
Compared with the fourth quarter 2020, Integrated Gas Adjusted
Earnings primarily reflected higher realised prices for oil and
LNG, partly offset by higher operating expenses related to credit
provisions.
Compared with the fourth quarter 2020, total oil and gas
production increased by 3% mainly due to the restart of production
at the Prelude floating LNG operations in Australia. LNG
liquefaction volumes decreased by 1% due to cargo timing, partly
offset by the restart of production at the Prelude floating LNG
operations in Australia.
Compared with the first quarter 2020, Integrated Gas Adjusted
Earnings primarily reflected higher operating expenses related to
credit provisions, lower contributions from marketing and trading
and favourable deferred tax movements in the first quarter
2020.
Compared with the first quarter 2020, total oil and gas
production increased by 1% mainly due to new fields and lower
maintenance. LNG liquefaction volumes decreased by 8% mainly as a
result of feedgas constraints and maintenance activities, partly
offset by higher production at the Prelude floating LNG operations
in Australia.
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ROYAL DUTCH SHELL PLC1ST QUARTER 2021 UNAUDITED
RESULTS |
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UPSTREAM |
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Quarters |
$ million |
Q1 2021 |
Q4 2020 |
Q1 2020 |
%¹ |
|
1,096 |
|
(2,091) |
|
(863) |
|
+152 |
Segment
earnings |
133 |
|
(1,344) |
|
(1,154) |
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Of which: Identified items (Reference A) |
963 |
|
(748) |
|
291 |
|
+229 |
Adjusted
Earnings |
4,108 |
|
2,010 |
|
5,607 |
|
+104 |
Cash flow
from operating activities |
4,702 |
|
2,890 |
|
3,718 |
|
+63 |
Cash flow from
operating activities excluding working capital movements (Reference
H) |
1,534 |
|
1,654 |
|
2,521 |
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Cash
capital expenditure (Reference C) |
1,579 |
|
1,537 |
|
1,730 |
|
+3 |
Liquids production
available for sale (thousand b/d) |
5,126 |
|
4,837 |
|
5,680 |
|
+6 |
Natural gas
production available for sale (million scf/d) |
2,462 |
|
2,371 |
|
2,710 |
|
+4 |
Total production available for sale (thousand boe/d) |
1. Q1 on Q4 change.
First quarter segment earnings were $1,096 million. This
included a net gain of $411 million related to the sale of assets,
and a charge of $232 million related to the impact of the weakening
Brazilian real on a deferred tax position. These net gains are part
of identified items (see Reference A). Adjusted Earnings were $963
million.
Cash flow from operating activities for the quarter was $4,108
million, primarily driven by Adjusted Earnings before non-cash
expenses including depreciation.
Compared with the fourth quarter 2020, Upstream Adjusted
Earnings reflected higher realised oil prices, lower depreciation,
and the absence of the unfavourable deferred tax movements which
impacted the fourth quarter 2020. These were partly offset by
comparative adverse currency effects.
Compared with the fourth quarter 2020, total production
increased by 4%, mainly due to favourable gas seasonal effects and
the impact of hurricanes in the US Gulf of Mexico in the fourth
quarter 2020.
Compared with the first quarter 2020, Upstream Adjusted Earnings
reflected higher realised oil prices, and lower depreciation.
Compared with the first quarter 2020, total production decreased
by 9%, mainly due to the impact of higher maintenance and
divestments. The impact of field declines was largely offset by
growth from new fields.
Page 4
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ROYAL DUTCH SHELL PLC1ST QUARTER 2021 UNAUDITED
RESULTS |
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OIL
PRODUCTS |
Quarters |
$ million |
Q1 2021 |
Q4 2020 |
Q1 2020 |
%¹ |
|
650 |
|
(1,775) |
|
2,211 |
|
+137 |
Segment
earnings² |
(227) |
|
(2,315) |
|
849 |
|
|
Of which: Identified items (Reference A) |
877 |
|
540 |
|
1,363 |
|
+62 |
Adjusted
Earnings² |
|
|
|
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Of which: |
(105) |
|
(287) |
|
158 |
|
+63 |
Refining & Trading³ |
982 |
|
828 |
|
1,205 |
|
+19 |
Marketing³ |
893 |
|
1,198 |
|
4,878 |
|
-25 |
Cash flow
from operating activities |
3,313 |
|
782 |
|
353 |
|
+324 |
Cash flow from
operating activities excluding working capital movements (Reference
H) |
668 |
|
1,310 |
|
580 |
|
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Cash
capital expenditure (Reference C) |
1,751 |
|
1,940 |
|
2,397 |
|
-10 |
Refinery
processing intake (thousand b/d) |
4,164 |
|
4,781 |
|
5,278 |
|
-13 |
Oil Products sales volumes (thousand b/d) |
1. Q1 on Q4 change.
2. Earnings are presented on a CCS basis
(see Note 2).
3. As of Q1 2021, changes in the cost and
activity allocation between Marketing and Refining & Trading
resulted in a net charge of $170 million to Refining & Trading,
with an offsetting amount in Marketing. This change does not impact
consolidated Oil Products Adjusted Earnings.
First quarter segment earnings were $650 million. This
included redundancy and restructuring costs of $284 million, which
are part of identified items (see Reference A). Adjusted Earnings
were $877 million.
Cash flow from operating activities for the first quarter 2021
was $893 million, primarily driven by Adjusted Earnings before
depreciation and by cost-of-sales adjustments, partly offset by
negative working capital movements of $2,420 million, and cash
outflows for commodity derivatives of $200 million.
Compared with the fourth quarter 2020, Oil Products Adjusted
Earnings reflected higher contributions from trading and
optimisation, higher realised refining margins, and lower operating
expenses. These were partly offset by the absence of the favourable
deferred tax movements in the fourth quarter 2020.
Oil Products sales volumes decreased due to the impact of
further lockdowns arising from COVID-19, and the Texas winter
storm, compared with the fourth quarter 2020.
▪Refining & Trading Adjusted Earnings reflected higher
realised refining margins, and higher contributions from trading
and optimisation. These were partly offset by the absence of the
favourable deferred tax movements in the fourth quarter 2020.
▪Marketing Adjusted Earnings reflected lower operating
expenses.
Refinery utilisation remained at 72% compared with the fourth
quarter 2020, with the impact of the Texas winter storm in the
first quarter 2021, offset by the comparative effect of the Convent
Refinery shutdown in the fourth quarter 2020.
Compared with the first quarter 2020, Oil Products Adjusted
Earnings reflected lower realised refining and marketing margins
due to a weaker macroeconomic environment and the COVID-19
pandemic.
▪Refining & Trading Adjusted Earnings reflected lower
realised refining margins, partly offset by lower depreciation.
▪Marketing Adjusted Earnings reflected lower margins.
Refinery utilisation was 72% compared with 81% in the first
quarter 2020, mainly due to lower demand and economic optimisation
of the plants, as well as the impact of the Texas winter storm.
Page 5
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ROYAL DUTCH SHELL PLC1ST QUARTER 2021 UNAUDITED
RESULTS |
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CHEMICALS |
Quarters |
$ million |
Q1 2021 |
Q4 2020 |
Q1 2020 |
%¹ |
|
689 |
|
367 |
|
146 |
|
+88 |
Segment
earnings² |
(41) |
|
(14) |
|
(2) |
|
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Of which: Identified items (Reference A) |
730 |
|
381 |
|
148 |
|
+92 |
Adjusted
Earnings² |
324 |
|
774 |
|
(178) |
|
-58 |
Cash flow
from operating activities |
1,045 |
|
775 |
|
189 |
|
+35 |
Cash flow from
operating activities excluding working capital movements (Reference
H) |
730 |
|
830 |
|
846 |
|
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Cash
capital expenditure (Reference C) |
3,583 |
|
3,718 |
|
3,871 |
|
-4 |
Chemicals sales volumes (thousand tonnes) |
1. Q1 on Q4 change.
2. Earnings are presented on a CCS basis
(see Note 2).
First quarter segment earnings were $689
million.
Cash flow from operating activities for the quarter was $324
million, primarily driven by Adjusted Earnings before depreciation
as well as negative working capital movements of $721 million.
Compared with the fourth quarter 2020, Chemicals
Adjusted Earnings reflected higher realised margins in base
chemicals and intermediates from a stronger price environment.
Chemicals manufacturing plant utilisation remained at 79%
compared with the fourth quarter 2020, with the impact of the Texas
winter storm at the Deer Park site offsetting comparatively fewer
maintenance activities.
Compared with the first quarter 2020, Chemicals Adjusted
Earnings reflected higher realised margins in base chemicals and
intermediates from a stronger price environment.
Chemicals manufacturing plant utilisation was 79% compared with
84% in the first quarter 2020, mainly due to the Texas winter
storm.
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CORPORATE |
Quarters |
$ million |
Q1 2021 |
Q4 2020 |
Q1 2020 |
|
(531) |
|
(954) |
|
(453) |
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Segment earnings |
134 |
|
(118) |
|
535 |
|
Of which: Identified items (Reference A) |
(666) |
|
(836) |
|
(989) |
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Adjusted Earnings |
478 |
|
102 |
|
559 |
|
Cash flow from operating activities |
(30) |
|
(17) |
|
(239) |
|
Cash flow from operating activities excluding working capital
movements (Reference H) |
First quarter segment earnings were an expense of $531
million. This included a gain of $134 million from the deferred tax
impact of the weakening Brazilian real on financing positions,
which is part of identified items (see Reference A). Adjusted
earnings for the quarter were an expense of $666 million.
Compared with the fourth quarter 2020, Adjusted Earnings
reflected a favourable movement in tax credits partly offset by
adverse currency exchange rate effects.
Compared with the first quarter 2020, Adjusted Earnings
reflected favourable currency exchange rate effects and lower net
interest expense.
OUTLOOK FOR THE SECOND QUARTER 2021
As a result of the COVID-19 pandemic, there continues to be
significant uncertainty in the macroeconomic conditions with an
expected negative impact on demand for oil, gas and related
products. The second quarter 2021 outlook provides ranges for
operational and financial metrics based on current expectations,
but these are subject to change in the light of evolving market
conditions. Due to demand or regulatory requirements and/or
constraints in infrastructure, Shell may need
Page 6
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ROYAL DUTCH SHELL PLC1ST QUARTER 2021 UNAUDITED
RESULTS |
to take measures to curtail or reduce oil and/or gas production,
LNG liquefaction as well as utilisation of refining and chemicals
plants and similarly sales volumes could be impacted. Such measures
will likely have a variety of impacts on our operational and
financial metrics.
Integrated Gas production is expected to be approximately 880 -
940 thousand boe/d. LNG liquefaction volumes are expected to be
approximately 7.6 - 8.2 million tonnes.
Upstream production is expected to be approximately 2,150 -
2,350 thousand boe/d, reflecting lower seasonal gas demand and
divestment impacts.
Refinery utilisation is expected to be approximately 73% -
81%.
Oil Products sales volumes are expected to be approximately
4,000 - 5,000 thousand b/d.
Chemicals manufacturing plant utilisation is expected to be
approximately 76% - 84%.
Chemicals sales volumes are expected to be approximately 3,500 -
3,800 thousand tonnes.
Corporate Adjusted Earnings are expected to be a net expense of
approximately $600 - $700 million in the second
quarter 2021 and a net expense of approximately $2,400 -
$2,800 million for the full year 2021. This excludes the
impact of currency exchange rate effects.
Page 7
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ROYAL DUTCH SHELL PLC1ST QUARTER 2021 UNAUDITED
RESULTS |
UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
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CONSOLIDATED
STATEMENT OF INCOME |
Quarters |
$ million |
Q1 2021 |
Q4 2020 |
Q1 2020 |
|
55,665 |
|
43,989 |
|
60,029 |
|
Revenue¹ |
995 |
|
629 |
|
854 |
|
Share of profit of
joint ventures and associates |
2,455 |
|
411 |
|
76 |
|
Interest and other
income² |
59,115 |
|
45,028 |
|
60,959 |
|
Total
revenue and other income |
34,369 |
|
28,511 |
|
43,213 |
|
Purchases |
6,808 |
|
6,701 |
|
5,982 |
|
Production and
manufacturing expenses |
2,462 |
|
2,751 |
|
2,393 |
|
Selling,
distribution and administrative expenses |
166 |
|
199 |
|
243 |
|
Research and
development |
285 |
|
508 |
|
294 |
|
Exploration |
5,896 |
|
9,573 |
|
7,093 |
|
Depreciation,
depletion and amortisation² |
892 |
|
908 |
|
1,118 |
|
Interest
expense |
50,878 |
|
49,152 |
|
60,336 |
|
Total
expenditure |
8,237 |
|
(4,124) |
|
623 |
|
Income/(loss) before taxation |
2,453 |
|
(168) |
|
646 |
|
Taxation
charge/(credit) |
5,784 |
|
(3,956) |
|
(23) |
|
Income/(loss) for the period¹ |
124 |
|
58 |
|
1 |
|
Income/(loss)
attributable to non-controlling interest |
5,660 |
|
(4,014) |
|
(24) |
|
Income/(loss) attributable to Royal Dutch Shell plc
shareholders |
0.73 |
|
(0.52) |
|
0.00 |
|
Basic
earnings per share ($)³ |
0.72 |
|
(0.52) |
|
0.00 |
|
Diluted
earnings per share ($)³ |
1. See Note 2 “Segment information”.
2. See Note 7 “Other notes to the
Condensed Consolidated Interim Financial Statements”.
3. See Note 3 “Earnings per share”.
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CONSOLIDATED
STATEMENT OF COMPREHENSIVE INCOME |
Quarters |
$ million |
Q1 2021 |
Q4 2020 |
Q1 2020 |
|
5,784 |
|
(3,956) |
|
(23) |
|
Income/(loss) for the period |
|
|
|
Other
comprehensive income/(loss) net of tax: |
|
|
|
Items that may be reclassified to income in later periods: |
(852) |
|
2,280 |
|
(3,935) |
|
– Currency translation differences |
(14) |
|
3 |
|
(28) |
|
– Debt instruments remeasurements |
132 |
|
54 |
|
(152) |
|
– Cash flow hedging gains/(losses) |
171 |
|
(170) |
|
— |
|
– Net investment hedging gains/(losses) |
(34) |
|
3 |
|
101 |
|
– Deferred cost of hedging |
(56) |
|
39 |
|
(60) |
|
– Share of other comprehensive income/(loss) of joint ventures and
associates |
(652) |
|
2,208 |
|
(4,074) |
|
Total |
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|
|
Items that are not reclassified to income in later periods: |
4,628 |
|
1,045 |
|
1,756 |
|
– Retirement benefits remeasurements |
40 |
|
88 |
|
(137) |
|
– Equity instruments remeasurements |
(25) |
|
6 |
|
48 |
|
– Share of other comprehensive income/(loss) of joint ventures and
associates |
4,643 |
|
1,140 |
|
1,667 |
|
Total |
3,991 |
|
3,347 |
|
(2,407) |
|
Other
comprehensive income/(loss) for the period |
9,775 |
|
(609) |
|
(2,430) |
|
Comprehensive income/(loss) for the period |
121 |
|
134 |
|
(123) |
|
Comprehensive
income/(loss) attributable to non-controlling interest |
9,653 |
|
(743) |
|
(2,307) |
|
Comprehensive income/(loss) attributable to Royal Dutch Shell plc
shareholders |
Page 8
|
|
|
|
ROYAL DUTCH SHELL PLC1ST QUARTER 2021 UNAUDITED
RESULTS |
|
|
|
|
|
|
|
|
|
|
CONDENSED
CONSOLIDATED BALANCE SHEET |
$ million |
|
|
|
March 31, 2021 |
December 31, 2020 |
Assets |
|
|
Non-current
assets |
|
|
Intangible
assets |
22,872 |
|
22,822 |
|
Property, plant
and equipment |
208,298 |
|
210,847 |
|
Joint ventures and
associates |
22,537 |
|
22,451 |
|
Investments in
securities |
3,341 |
|
3,222 |
|
Deferred tax |
13,871 |
|
16,311 |
|
Retirement
benefits¹ |
5,845 |
|
2,474 |
|
Trade and other
receivables |
7,396 |
|
7,641 |
|
Derivative
financial instruments² |
1,681 |
|
2,805 |
|
|
285,841 |
|
288,573 |
|
Current
assets |
|
|
Inventories |
22,680 |
|
19,457 |
|
Trade and other
receivables |
40,142 |
|
33,625 |
|
Derivative
financial instruments² |
5,752 |
|
5,783 |
|
Cash and cash
equivalents |
30,985 |
|
31,830 |
|
|
99,559 |
|
90,695 |
|
Total
assets |
385,400 |
|
379,268 |
|
Liabilities |
|
|
Non-current
liabilities |
|
|
Debt |
87,828 |
|
91,115 |
|
Trade and other
payables |
2,670 |
|
2,304 |
|
Derivative
financial instruments² |
554 |
|
420 |
|
Deferred tax |
11,285 |
|
10,463 |
|
Retirement
benefits1,3 |
12,348 |
|
15,605 |
|
Decommissioning
and other provisions |
27,330 |
|
27,310 |
|
|
142,016 |
|
147,217 |
|
Current
liabilities |
|
|
Debt |
14,541 |
|
16,899 |
|
Trade and other
payables³ |
49,456 |
|
44,572 |
|
Derivative
financial instruments² |
5,260 |
|
5,308 |
|
Income taxes
payable³ |
3,372 |
|
3,111 |
|
Decommissioning
and other provisions |
3,802 |
|
3,624 |
|
|
76,431 |
|
73,514 |
|
Total
liabilities |
218,447 |
|
220,731 |
|
Equity
attributable to Royal Dutch Shell plc shareholders |
163,714 |
|
155,310 |
|
Non-controlling
interest |
3,239 |
|
3,227 |
|
Total
equity |
166,953 |
|
158,537 |
|
Total liabilities and equity |
385,400 |
|
379,268 |
|
1. See Note 7 "Other notes to the
Condensed Consolidated Interim Financial Statements".
2. See Note 6 “Derivative financial
instruments and debt excluding lease liabilities”.
3. As from January 1, 2021 the 'Retirement benefits'
liability has been classified under non-current liabilities
(previously partly presented within current liabilities) and taxes
payable not related to income tax are presented within 'Trade and
other payables' (previously 'Taxes payable'). Prior period
comparatives have been revised to conform with current year
presentation. See Note 7.
Page 9
|
|
|
|
ROYAL DUTCH SHELL PLC1ST QUARTER 2021 UNAUDITED
RESULTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED
STATEMENT OF CHANGES IN EQUITY |
|
Equity attributable to Royal Dutch Shell plc
shareholders |
|
|
$ million |
Share capital¹ |
Shares held in trust |
Other reserves² |
Retained earnings |
Total |
Non-controlling interest |
Total equity |
At
January 1, 2021 |
651 |
|
(709) |
|
12,752 |
|
142,616 |
|
155,310 |
|
3,227 |
|
158,537 |
|
Comprehensive
income/(loss) for the period |
— |
|
— |
|
3,994 |
|
5,660 |
|
9,653 |
|
121 |
|
9,775 |
|
Dividends³ |
— |
|
— |
|
— |
|
(1,289) |
|
(1,289) |
|
(125) |
|
(1,414) |
|
Share-based
compensation |
— |
|
356 |
|
(371) |
|
55 |
|
41 |
|
— |
|
41 |
|
Other changes in
non-controlling interest |
— |
|
— |
|
— |
|
(1) |
|
(1) |
|
15 |
|
15 |
|
At
March 31, 2021 |
651 |
|
(352) |
|
16,375 |
|
147,041 |
|
163,714 |
|
3,239 |
|
166,953 |
|
At
January 1, 2020 |
657 |
|
(1,063) |
|
14,451 |
|
172,431 |
|
186,476 |
|
3,987 |
|
190,463 |
|
Comprehensive
income/(loss) for the period |
— |
|
— |
|
(2,283) |
|
(24) |
|
(2,307) |
|
(123) |
|
(2,430) |
|
Transfer from
other comprehensive income |
— |
|
— |
|
(6) |
|
6 |
|
— |
|
— |
|
— |
|
Dividends3 |
— |
|
— |
|
— |
|
(3,482) |
|
(3,482) |
|
(110) |
|
(3,591) |
|
Repurchases of
shares |
(5) |
|
— |
|
5 |
|
(1,006) |
|
(1,006) |
|
— |
|
(1,006) |
|
Share-based
compensation |
— |
|
585 |
|
(374) |
|
(253) |
|
(43) |
|
— |
|
(43) |
|
Other changes in
non-controlling interest |
— |
|
— |
|
— |
|
1 |
|
1 |
|
(14) |
|
(14) |
|
At March 31, 2020 |
652 |
|
(479) |
|
11,794 |
|
167,672 |
|
179,639 |
|
3,740 |
|
183,379 |
|
1. See Note 4 “Share capital”.
2. See Note 5 “Other reserves”.
3. The amount charged to retained
earnings is based on prevailing exchange rates on payment date.
Page 10
|
|
|
|
ROYAL DUTCH SHELL PLC1ST QUARTER 2021 UNAUDITED
RESULTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED
STATEMENT OF CASH FLOWS |
Quarters |
$ million |
Q1 2021 |
Q4 2020 |
Q1 2020 |
|
8,237 |
|
(4,124) |
|
623 |
|
Income
before taxation for the period |
|
|
|
Adjustment
for: |
757 |
|
716 |
|
897 |
|
– Interest expense (net) |
5,896 |
|
9,573 |
|
7,093 |
|
– Depreciation, depletion and amortisation |
136 |
|
199 |
|
83 |
|
– Exploration well write-offs |
(2,073) |
|
(162) |
|
106 |
|
– Net (gains)/losses on sale and revaluation of non-current assets
and businesses |
(995) |
|
(629) |
|
(854) |
|
– Share of (profit)/loss of joint ventures and associates |
580 |
|
982 |
|
531 |
|
– Dividends received from joint ventures and associates |
(3,426) |
|
(1,809) |
|
9,594 |
|
– (Increase)/decrease in inventories |
(6,829) |
|
(107) |
|
6,314 |
|
– (Increase)/decrease in current receivables |
5,865 |
|
1,579 |
|
(8,430) |
|
– Increase/(decrease) in current payables |
185 |
|
78 |
|
(171) |
|
– Derivative financial instruments |
109 |
|
212 |
|
(91) |
|
– Retirement benefits |
77 |
|
771 |
|
(102) |
|
– Decommissioning and other provisions |
583 |
|
(355) |
|
579 |
|
– Other |
(809) |
|
(638) |
|
(1,321) |
|
Tax paid |
8,294 |
|
6,287 |
|
14,851 |
|
Cash
flow from operating activities |
(3,885) |
|
(5,206) |
|
(4,263) |
|
Capital
expenditure |
(69) |
|
(269) |
|
(559) |
|
Investments in
joint ventures and associates |
(21) |
|
(28) |
|
(147) |
|
Investments in
equity securities |
3,106 |
|
94 |
|
1,613 |
|
Proceeds from sale
of property, plant and equipment and businesses |
275 |
|
111 |
|
547 |
|
Proceeds from
joint ventures and associates from sale, capital reduction and
repayment of long-term loans² |
31 |
|
7 |
|
73 |
|
Proceeds from sale
of equity securities |
98 |
|
111 |
|
192 |
|
Interest
received |
711 |
|
622 |
|
855 |
|
Other investing
cash inflows |
(837) |
|
(848) |
|
(1,028) |
|
Other investing
cash outflows |
(590) |
|
(5,406) |
|
(2,718) |
|
Cash
flow from investing activities |
113 |
|
(299) |
|
321 |
|
Net
increase/(decrease) in debt with maturity period within three
months |
|
|
|
Other debt: |
109 |
|
2,048 |
|
1,003 |
|
– New borrowings |
(5,707) |
|
(4,862) |
|
(2,723) |
|
– Repayments |
(806) |
|
(1,153) |
|
(1,033) |
|
Interest paid |
(449) |
|
495 |
|
(81) |
|
Derivative
financial instruments |
15 |
|
(2) |
|
(8) |
|
Change in
non-controlling interest |
|
|
|
Cash dividends
paid to: |
(1,292) |
|
(1,307) |
|
(3,483) |
|
– Royal Dutch Shell plc shareholders¹ |
(125) |
|
(69) |
|
(110) |
|
– Non-controlling interest |
(216) |
|
— |
|
(1,486) |
|
Repurchases of
shares3 |
(63) |
|
(184) |
|
(182) |
|
Shares held in
trust: net sales/(purchases) and dividends received |
(8,420) |
|
(5,333) |
|
(7,781) |
|
Cash
flow from financing activities |
(128) |
|
567 |
|
(595) |
|
Effects of
exchange rate changes on cash and cash equivalents |
(844) |
|
(3,884) |
|
3,756 |
|
Increase/(decrease) in cash and cash equivalents |
31,830 |
|
35,714 |
|
18,055 |
|
Cash
and cash equivalents at beginning of period |
30,985 |
|
31,830 |
|
21,811 |
|
Cash and cash equivalents at end of period |
1. Cash dividends paid represents
the payment of net dividends (after deduction of withholding taxes
where applicable) and payment of withholding taxes on dividends
paid in the previous quarter.
2. As from 2021 renamed from 'Proceeds from sale of joint
ventures and associates'.
3. The amount in Q1 2021 represents a payment of
withholding taxes related to repurchases of shares in Q1 2020.
Page 11
|
|
|
|
ROYAL DUTCH SHELL PLC1ST QUARTER 2021 UNAUDITED
RESULTS |
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM
FINANCIAL STATEMENTS
1. Basis of preparation
These unaudited Condensed Consolidated Interim Financial
Statements ("Interim Statements") of Royal Dutch Shell plc (“the
Company”) and its subsidiaries (collectively referred to as
“Shell”) have been prepared in accordance with IAS 34 Interim
Financial Reporting as issued by the International Accounting
Standards Board ("IASB") and as adopted by the UK. For periods
beginning on or after January 1, 2021, Shell's (interim) financial
statements are prepared in accordance with UK-adopted international
accounting standards which were established as a result of the UK's
exit from the European Union. As applied to Shell there are no
material differences from International Financial Reporting
Standards as issued by the IASB. Except for the application of
UK-adopted international accounting standards these Interim
Statements have been prepared on the basis of the same accounting
principles as those used in the Annual Report and Accounts (pages
216 to 264) and Form 20-F (pages 164 to 211) for the year ended
December 31, 2020 as filed with the Registrar of Companies for
England and Wales and the US Securities and Exchange Commission,
respectively, and should be read in conjunction with these
filings.
The financial information presented in the unaudited Interim
Statements does not constitute statutory accounts within the
meaning of section 434(3) of the Companies Act 2006 (“the Act”).
Statutory accounts for the year ended December 31, 2020 were
published in Shell’s Annual Report and Accounts, a copy of which
was delivered to the Registrar of Companies for England and Wales,
and in Shell's Form 20-F. The auditor’s report on those accounts
was unqualified, did not include a reference to any matters to
which the auditor drew attention by way of emphasis without
qualifying the report and did not contain a statement under
sections 498(2) or 498(3) of the Act.
Key accounting considerations, significant judgements and
estimates
Future commodity price assumptions and management's view on the
future development of refining margins represent a significant
estimate and both were subject to change in 2020, resulting in the
recognition of impairments in 2020. These assumptions continue to
apply for impairment testing purposes in the first quarter
2021.
2. Segment information
Segment earnings are presented on a current cost of supplies
basis (CCS earnings), which is the earnings measure used by the
Chief Executive Officer for the purposes of making decisions about
allocating resources and assessing performance. On this basis, the
purchase price of volumes sold during the period is based on the
current cost of supplies during the same period after making
allowance for the tax effect. CCS earnings therefore exclude the
effect of changes in the oil price on inventory carrying amounts.
Sales between segments are based on prices generally equivalent to
commercially available prices.
Page 12
|
|
|
|
ROYAL DUTCH SHELL PLC1ST QUARTER 2021 UNAUDITED
RESULTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
INFORMATION BY
SEGMENT |
Quarters |
$ million |
Q1 2021 |
Q4 2020 |
Q1 2020 |
|
|
|
|
Third-party revenue |
11,258 |
|
8,010 |
|
10,157 |
|
Integrated Gas |
1,941 |
|
1,576 |
|
2,344 |
|
Upstream |
38,382 |
|
31,001 |
|
44,297 |
|
Oil Products |
4,070 |
|
3,386 |
|
3,221 |
|
Chemicals |
14 |
|
16 |
|
11 |
|
Corporate |
55,665 |
|
43,989 |
|
60,029 |
|
Total
third-party revenue¹ |
|
|
|
Inter-segment revenue |
1,351 |
|
1,098 |
|
891 |
|
Integrated Gas |
7,254 |
|
5,860 |
|
6,476 |
|
Upstream |
2,457 |
|
1,733 |
|
1,851 |
|
Oil Products |
1,187 |
|
784 |
|
875 |
|
Chemicals |
— |
|
— |
|
— |
|
Corporate |
|
|
|
CCS
earnings |
2,527 |
|
20 |
|
1,812 |
|
Integrated Gas |
1,096 |
|
(2,091) |
|
(863) |
|
Upstream |
650 |
|
(1,775) |
|
2,211 |
|
Oil Products |
689 |
|
367 |
|
146 |
|
Chemicals |
(531) |
|
(954) |
|
(453) |
|
Corporate |
4,430 |
|
(4,434) |
|
2,854 |
|
Total CCS earnings |
1. Includes revenue from sources other
than from contracts with customers, which mainly comprises the
impact of fair value accounting of commodity derivatives. First
quarter 2021 included income of $1,211 million (Q4 2020: $114
million income; Q1 2020: $6,686 million income). This amount
includes both the reversal of prior losses of $385 million (Q4
2020: $147 million gains; Q1 2020: $317 million gains) related to
sales contracts and prior gains of $465 million (Q4 2020: $23
million gains; Q1 2020: $76 million losses) related to purchase
contracts that were previously recognised and where physical
settlement took place in the first quarter 2021.
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION
OF INCOME FOR THE PERIOD TO CCS EARNINGS |
Quarters |
$ million |
Q1 2021 |
Q4 2020 |
Q1 2020 |
|
5,660 |
|
(4,014) |
|
(24) |
|
Income/(loss) attributable to Royal Dutch Shell plc
shareholders |
124 |
|
58 |
|
1 |
|
Income/(loss)
attributable to non-controlling interest |
5,784 |
|
(3,956) |
|
(23) |
|
Income/(loss) for the period |
|
|
|
Current cost of
supplies adjustment: |
(1,631) |
|
(589) |
|
3,774 |
|
Purchases |
353 |
|
133 |
|
(916) |
|
Taxation |
(76) |
|
(23) |
|
19 |
|
Share of
profit/(loss) of joint ventures and associates |
(1,354) |
|
(479) |
|
2,876 |
|
Current
cost of supplies adjustment |
|
|
|
of which: |
(1,314) |
|
(465) |
|
2,780 |
|
Attributable to
Royal Dutch Shell plc shareholders |
(39) |
|
(14) |
|
96 |
Attributable to
non-controlling interest |
4,430 |
|
(4,434) |
|
2,854 |
|
CCS
earnings |
|
|
|
of which: |
4,345 |
|
(4,478) |
|
2,756 |
|
CCS earnings
attributable to Royal Dutch Shell plc shareholders |
85 |
|
44 |
|
97 |
|
CCS
earnings attributable to non-controlling interest |
Page 13
|
|
|
|
ROYAL DUTCH SHELL PLC1ST QUARTER 2021 UNAUDITED
RESULTS |
3. Earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS PER
SHARE |
Quarters |
|
Q1 2021 |
Q4 2020 |
Q1 2020 |
|
5,660 |
|
(4,014) |
|
(24) |
|
Income/(loss) attributable to Royal Dutch Shell plc shareholders ($
million) |
|
|
|
|
|
|
|
Weighted average
number of shares used as the basis for determining: |
7,782.1 |
|
7,784.4 |
|
7,819.8 |
|
Basic earnings per share (million) |
7,832.3 |
|
7,784.4 |
|
7,819.8 |
|
Diluted earnings per share (million) |
4. Share capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ISSUED AND
FULLY PAID ORDINARY SHARES OF €0.07 EACH1 |
|
Number of shares |
Nominal value ($ million) |
|
A |
B |
A |
B |
Total |
At
January 1, 2021 |
4,101,239,499 |
|
3,706,183,836 |
|
345 |
306 |
651 |
At
March 31, 2021 |
4,101,239,499 |
|
3,706,183,836 |
|
345 |
306 |
651 |
At
January 1, 2020 |
4,151,787,517 |
|
3,729,407,107 |
|
349 |
308 |
657 |
Repurchases of
shares |
(46,143,892) |
|
(15,422,859) |
|
(4) |
(1) |
(5) |
At March 31, 2020 |
4,105,643,625 |
|
3,713,984,248 |
|
345 |
307 |
652 |
1. Share capital at March 31, 2021 also
included 50,000 issued and fully paid sterling deferred shares of
£1 each.
At Royal Dutch Shell plc’s Annual General Meeting on
May 19, 2020, the Board was authorised to allot ordinary
shares in Royal Dutch Shell plc, and to grant rights to subscribe
for, or to convert, any security into ordinary shares in Royal
Dutch Shell plc, up to an aggregate nominal amount of €182.7
million (representing 2,611 million ordinary shares of €0.07 each),
and to list such shares or rights on any stock exchange. This
authority expires at the earlier of the close of business on
August 19, 2021, and the end of the Annual General Meeting to
be held in 2021, unless previously renewed, revoked or varied by
Royal Dutch Shell plc in a general meeting.
5. Other reserves
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER
RESERVES |
$ million |
Merger reserve |
Share premium reserve |
Capital redemption reserve |
Share plan reserve |
Accumulated other comprehensive income |
Total |
At
January 1, 2021 |
37,298 |
|
154 |
|
129 |
|
906 |
|
(25,735) |
|
12,752 |
|
Other
comprehensive income/(loss) attributable to Royal Dutch Shell plc
shareholders |
— |
|
— |
|
— |
|
— |
|
3,994 |
|
3,994 |
|
Share-based
compensation |
— |
|
— |
|
— |
|
(371) |
|
— |
|
(371) |
|
At
March 31, 2021 |
37,298 |
|
154 |
|
129 |
|
535 |
|
(21,742) |
|
16,375 |
|
At
January 1, 2020 |
37,298 |
|
154 |
|
123 |
|
1,049 |
|
(24,173) |
|
14,451 |
|
Other
comprehensive income/(loss) attributable to Royal Dutch Shell plc
shareholders |
— |
|
— |
|
— |
|
— |
|
(2,283) |
|
(2,283) |
|
Transfer from
other comprehensive income |
— |
|
— |
|
— |
|
— |
|
(6) |
|
(6) |
|
Repurchases of
shares |
— |
|
— |
|
5 |
|
— |
|
— |
|
5 |
|
Share-based
compensation |
— |
|
— |
|
— |
|
(374) |
|
— |
|
(374) |
|
At March 31, 2020 |
37,298 |
|
154 |
|
128 |
|
675 |
|
(26,462) |
|
11,794 |
|
Page 14
|
|
|
|
ROYAL DUTCH SHELL PLC1ST QUARTER 2021 UNAUDITED
RESULTS |
The merger reserve and share premium reserve were established as
a consequence of Royal Dutch Shell plc becoming the single parent
company of Royal Dutch Petroleum Company and The “Shell” Transport
and Trading Company, p.l.c., now The Shell Transport and Trading
Company Limited, in 2005. The merger reserve increased in 2016
following the issuance of shares for the acquisition of BG Group
plc. The capital redemption reserve was established in connection
with repurchases of shares of Royal Dutch Shell plc. The share plan
reserve is in respect of equity-settled share-based compensation
plans.
6. Derivative financial instruments and debt
excluding lease liabilities
As disclosed in the Consolidated Financial Statements for the
year ended December 31, 2020, presented in the Annual Report
and Accounts and Form 20-F for that year, Shell is exposed to the
risks of changes in fair value of its financial assets and
liabilities. The fair values of the financial assets and
liabilities are defined as the price that would be received to sell
an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. Methods and
assumptions used to estimate the fair values at March 31, 2021, are
consistent with those used in the year ended December 31,
2020, though the carrying amounts of derivative financial
instruments measured using predominantly unobservable inputs have
changed since that date.
The table below provides the comparison of the fair value with
the carrying amount of debt excluding lease liabilities, disclosed
in accordance with IFRS 7 Financial Instruments:
Disclosures.
|
|
|
|
|
|
|
|
|
|
DEBT EXCLUDING
LEASE LIABILITIES |
$ million |
March 31, 2021 |
December 31, 2020 |
Carrying
amount |
74,192 |
|
79,594 |
|
Fair
value¹ |
79,603 |
|
88,294 |
|
1. Mainly determined from the prices
quoted for these securities.
7. Other notes to the unaudited Condensed Consolidated
Interim Financial Statements
Consolidated Statement of Income
Interest and other income
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters |
$ million |
Q1 2021 |
Q4 2020 |
Q1 2020 |
|
2,455 |
|
411 |
|
76 |
|
Interest and other income |
|
|
|
of which: |
134 |
|
168 |
|
199 |
|
Interest
income |
1 |
|
2 |
|
2 |
|
Dividend income
(from investments in equity securities) |
2,073 |
|
162 |
|
(106) |
|
Net gains on sales
and revaluation of non-current assets and businesses |
85 |
|
(35) |
|
(82) |
|
Net foreign
exchange (losses)/gains on financing activities |
161 |
|
113 |
|
63 |
|
Other |
Depreciation, depletion and amortisation
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters |
$ million |
Q1 2021 |
Q4 2020 |
Q1 2020 |
|
5,896 |
|
9,573 |
|
7,093 |
|
Depreciation, depletion and amortisation |
Depreciation, depletion and amortisation in Q1 2021 includes $84
million of impairments (Q4 2020: $3,318 million; Q1 2020: $749
million).
Page 15
|
|
|
|
ROYAL DUTCH SHELL PLC1ST QUARTER 2021 UNAUDITED
RESULTS |
Condensed Consolidated Balance Sheet
Retirement benefits
|
|
|
|
|
|
|
|
|
|
$ million |
|
|
|
March 31, 2021 |
December 31, 2020 |
Non-current assets |
|
|
Retirement
benefits |
5,845 |
|
2,474 |
|
Non-current liabilities |
|
|
Retirement
benefits¹ |
12,348 |
|
15,605 |
|
Deficit |
6,503 |
|
13,131 |
|
1.As from January 1, 2021 the 'Retirement benefits' liability
has been classified under non-current liabilities (previously
partly presented within current liabilities). Prior period
comparatives have been revised by $437 million to conform with
current year presentation.
The decrease in the net retirement benefit liability is mainly
driven by an increase of the market yield on high-quality corporate
bonds in the US, the UK and Eurozone, partly offset by an increase
in expected inflation in the UK and Eurozone. Amounts recognised in
the balance sheet in relation to defined benefit plans include both
plan assets and obligations that are presented on a net basis on a
plan-by-plan basis.
Income taxes payable
|
|
|
|
|
|
|
|
|
|
$ million |
|
|
|
March 31, 2021 |
December 31, 2020 |
Income
taxes payable |
3,372 |
|
3,111 |
|
As from January 1, 2021 taxes payable not related to income tax
are presented within 'Trade and other payables' (previously within
'Taxes payable') and 'Taxes payable' has been renamed into 'Income
taxes payable'. Prior period comparatives have been revised by
$2,895 million to conform with current year presentation.
8. Post-Balance Sheet Events
In February 2021, an agreement was reached with publicly listed
Canadian energy company Crescent Point Energy Corp. to sell the
Duvernay shale light oil position in Alberta, Canada. The
transaction completed on April 1, 2021. The consideration received
was comprised of $533 million in cash and 50 million shares in
Crescent Point Energy common stock (TSX: CPG) valued at $208
million based on the closing price on March 31, 2021.
Page 16
|
|
|
|
ROYAL DUTCH SHELL PLC1ST QUARTER 2021 UNAUDITED
RESULTS |
ALTERNATIVE PERFORMANCE (NON-GAAP) MEASURES
A.Adjusted Earnings
The “Adjusted Earnings” measure aims to facilitate a comparative
understanding of Shell’s financial performance from period to
period by removing the effects of oil price changes on inventory
carrying amounts and removing the effects of identified items.
These items are in some cases driven by external factors and may,
either individually or collectively, hinder the comparative
understanding of Shell’s financial results from period to period.
This measure excludes earnings attributable to non-controlling
interest.
|
|
|
|
|
|
|
|
|
|
|
|
|
ADJUSTED
EARNINGS |
Quarters |
$ million |
Q1 2021 |
Q4 2020 |
Q1 2020 |
|
5,660 |
|
(4,014) |
|
(24) |
|
Income/(loss) attributable to Royal Dutch Shell plc
shareholders |
(1,314) |
|
(465) |
|
2,780 |
|
Add: Current cost
of supplies adjustment attributable to Royal Dutch Shell plc
shareholders (Note 2) |
1,112 |
|
(4,871) |
|
(104) |
|
Less: Identified
items attributable to Royal Dutch Shell plc shareholders |
3,234 |
|
393 |
|
2,860 |
|
Adjusted Earnings |
Identified items
Identified items comprise: divestment gains and losses,
impairments, redundancy and restructuring, provisions for onerous
contracts, fair value accounting of commodity derivatives and
certain gas contracts and the impact of exchange rate movements on
certain deferred tax balances, and other items.
|
|
|
|
|
|
|
|
|
|
|
|
|
IDENTIFIED
ITEMS |
Quarters |
$ million |
Q1 2021 |
Q4 2020 |
Q1 2020 |
|
|
|
|
Identified items before tax |
2,073 |
|
162 |
|
(76) |
|
Divestment gains/(losses) |
(84) |
|
(3,344) |
|
(749) |
|
Impairments |
(748) |
|
(372) |
|
(18) |
|
Redundancy and restructuring |
— |
|
(1,259) |
|
— |
|
Provisions for onerous contracts |
388 |
|
(957) |
|
968 |
|
Fair value accounting of commodity derivatives and certain gas
contracts |
31 |
|
(145) |
|
— |
|
Other |
1,661 |
|
(5,914) |
|
125 |
|
Total
identified items before tax |
(549) |
|
1,033 |
|
(228) |
|
Total
tax impact of identified items |
|
|
|
Identified items after tax |
1,410 |
|
(20) |
|
(32) |
|
Divestment gains/(losses) |
(94) |
|
(2,746) |
|
(536) |
|
Impairments |
(486) |
|
(267) |
|
(7) |
|
Redundancy and restructuring |
— |
|
(994) |
|
— |
|
Provisions for onerous contracts |
365 |
|
(864) |
|
838 |
|
Fair value accounting of commodity derivatives and certain gas
contracts |
(110) |
|
157 |
|
(366) |
|
Impact of exchange rate movements on tax balances |
25 |
|
(147) |
|
— |
|
Other |
1,112 |
|
(4,881) |
|
(104) |
|
Impact
on CCS earnings |
|
|
|
Of which: |
1,112 |
|
(1,089) |
|
(331) |
|
Integrated Gas |
133 |
|
(1,344) |
|
(1,154) |
|
Upstream |
(227) |
|
(2,315) |
|
849 |
|
Oil Products |
(41) |
|
(14) |
|
(2) |
|
Chemicals |
134 |
|
(118) |
|
535 |
|
Corporate |
1,112 |
|
(4,871) |
|
(104) |
|
Impact on
CCS earnings attributable to shareholders |
— |
|
(10) |
|
— |
|
Impact on CCS earnings attributable to non-controlling
interest |
Page 17
|
|
|
|
ROYAL DUTCH SHELL PLC1ST QUARTER 2021 UNAUDITED
RESULTS |
The identified items categories above may include after-tax
impacts of identified items of joint ventures and associates which
are fully reported within "Share of profit of joint ventures and
associates" in the Consolidated Statement of Income, and fully
reported as identified items before tax in the table above.
Identified items related to subsidiaries are consolidated and
reported across appropriate lines of the Consolidated Statement of
Income. Only pre-tax identified items reported by subsidiaries are
taken into account in the calculation of underlying operating
expenses (Reference F).
Provisions for onerous contracts: Provisions for
onerous contracts that relate to businesses that Shell has exited
or to redundant assets or assets that cannot be used.
Fair value accounting of commodity derivatives and certain gas
contracts: In the ordinary course of business, Shell enters
into contracts to supply or purchase oil and gas products, as well
as power and environmental products. Shell also enters into
contracts for tolling, pipeline and storage capacity. Derivative
contracts are entered into for mitigation of resulting economic
exposures (generally price exposure) and these derivative contracts
are carried at period-end market price (fair value), with movements
in fair value recognised in income for the period. Supply and
purchase contracts entered into for operational purposes, as well
as contracts for tolling, pipeline and storage capacity, are, by
contrast, recognised when the transaction occurs; furthermore,
inventory is carried at historical cost or net realisable value,
whichever is lower. As a consequence, accounting mismatches occur
because: (a) the supply or purchase transaction is recognised in a
different period, or (b) the inventory is measured on a different
basis. In addition, certain contracts are, due to pricing or
delivery conditions, deemed to contain embedded derivatives or
written options and are also required to be carried at fair value
even though they are entered into for operational purposes. The
accounting impacts are reported as identified items.
Impacts of exchange rate movements on tax
balances represent the impact on tax balances of exchange
rate movements arising on (a) the conversion to dollars of the
local currency tax base of non-monetary assets and liabilities, as
well as losses (this primarily impacts the Upstream and Integrated
Gas segments) and (b) the conversion of dollar-denominated
inter-segment loans to local currency, leading to taxable exchange
rate gains or losses (this primarily impacts the Corporate
segment).
Other identified items represent other credits or
charges that based on Shell management's assessment hinder the
comparative understanding of Shell's financial results from period
to period.
B. Adjusted Earnings per share
Adjusted Earnings per share is calculated as Adjusted Earnings
(see Reference A), divided by the weighted average number of shares
used as the basis for basic earnings per share (see Note 3).
C. Cash capital expenditure
Cash capital expenditure represents cash spent on maintaining
and developing assets as well as on investments in the period.
Management regularly monitors this measure as a key lever to
delivering sustainable cash flows. Cash capital expenditure is the
sum of the following lines from the Consolidated Statement of Cash
flows: Capital expenditure, Investments in joint ventures and
associates and Investments in equity securities.
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters |
$ million |
Q1 2021 |
Q4 2020 |
Q1 2020 |
|
3,885 |
|
5,206 |
|
4,263 |
|
Capital
expenditure |
69 |
|
269 |
|
559 |
|
Investments in
joint ventures and associates |
21 |
|
28 |
|
147 |
|
Investments in
equity securities |
3,974 |
|
5,503 |
|
4,970 |
|
Cash
capital expenditure |
|
|
|
Of which: |
1,015 |
|
1,664 |
|
882 |
|
Integrated Gas |
1,534 |
|
1,654 |
|
2,521 |
|
Upstream |
668 |
|
1,310 |
|
580 |
|
Oil Products |
730 |
|
830 |
|
846 |
|
Chemicals |
28 |
|
46 |
|
141 |
|
Corporate |
Page 18
|
|
|
|
ROYAL DUTCH SHELL PLC1ST QUARTER 2021 UNAUDITED
RESULTS |
D. Return on average capital employed
Return on average capital employed ("ROACE") measures the
efficiency of Shell’s utilisation of the capital that it employs.
Shell uses two ROACE measures: ROACE on a Net income basis and
ROACE on a CCS basis excluding identified items, both adjusted for
after-tax interest expense. With effect from the second quarter
2020, the after-tax interest expense adjustment is calculated using
an applicable blended statutory tax rate. This change is
implemented to eliminate the distorting volatility effects of the
effective tax rate. There is no significant impact on prior periods
comparatives, which therefore have not been revised.
Both measures refer to Capital employed which consists of total
equity, current debt and non-current debt.
ROACE on a Net income basis
In this calculation, the sum of income for the current and
previous three quarters, adjusted for after-tax interest expense,
is expressed as a percentage of the average capital employed for
the same period.
|
|
|
|
|
|
|
|
|
|
|
|
|
$ million |
Quarters |
|
Q1 2021 |
Q4 2020 |
Q1 2020 |
Income -
current and previous three quarters |
(15,727) |
(21,534) |
10,252 |
Interest expense
after tax - current and previous three quarters |
2,728 |
2,822 |
2,854 |
Income
before interest expense - current and previous three
quarters |
(12,999) |
(18,712) |
13,106 |
Capital
employed – opening |
278,444 |
286,887 |
292,797 |
Capital employed –
closing |
269,323 |
266,551 |
278,444 |
Capital
employed – average |
273,883 |
276,719 |
285,620 |
ROACE on a Net income basis |
(4.7)% |
(6.8)% |
4.6% |
ROACE on a CCS basis excluding identified items
In this calculation, the sum of CCS earnings excluding
identified items for the current and previous three quarters,
adjusted for after-tax interest expense, is expressed as a
percentage of the average capital employed for the same period.
|
|
|
|
|
|
|
|
|
|
|
|
|
$ million |
Quarters |
|
Q1 2021 |
Q4 2020 |
Q1 2020 |
CCS
earnings - current and previous three quarters |
(18,125) |
(19,702) |
13,256 |
Identified
items - current and previous three quarters |
(23,562) |
(24,777) |
(1,266) |
Interest expense
after tax – current and previous three quarters |
2,728 |
2,822 |
2,854 |
CCS
earnings excluding identified items before interest expense -
current and previous three quarters |
8,165 |
7,898 |
17,376 |
Capital
employed – average |
273,883 |
276,719 |
285,620 |
ROACE on a CCS basis excluding identified items |
3.0% |
2.9% |
6.1% |
E. Gearing
Gearing is a measure of Shell’s capital structure and is defined
as net debt as a percentage of total capital. Net debt is defined
as the sum of current and non-current debt, less cash and cash
equivalents, adjusted for the fair value of derivative financial
instruments used to hedge foreign exchange and interest rate risks
relating to debt, and associated collateral balances. Management
considers this adjustment useful because it reduces the volatility
of net debt caused by fluctuations in foreign exchange and interest
rates, and eliminates the potential impact of related collateral
payments or receipts. Debt-related derivative financial instruments
are a subset of the derivative financial instrument assets and
liabilities presented on the balance sheet. Collateral balances are
reported under “Trade and other receivables” or “Trade and other
payables” as appropriate.
Page 19
|
|
|
|
ROYAL DUTCH SHELL PLC1ST QUARTER 2021 UNAUDITED
RESULTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ million |
Quarters |
|
March 31, 2021 |
December 31, 2020 |
March 31, 2020 |
Current
debt |
14,541 |
16,899 |
15,767 |
Non-current
debt |
87,828 |
91,115 |
79,298 |
Total
debt |
102,369 |
108,014 |
95,065 |
Of which lease liabilities |
28,177 |
28,419 |
29,290 |
Add:
Debt-related derivative financial instruments: net
liability/(asset) |
(864) |
(1,979) |
1,218 |
Add:
Collateral on debt-related derivatives: net liability/(asset) |
732 |
1,181 |
(58) |
Less: Cash
and cash equivalents |
(30,985) |
(31,830) |
(21,811) |
Net
debt |
71,252 |
75,386 |
74,413 |
Add: Total
equity |
166,953 |
158,537 |
183,379 |
Total
capital |
238,205 |
233,923 |
257,792 |
Gearing |
29.9 |
% |
32.2 |
% |
28.9 |
% |
F. Operating expenses
Operating expenses is a measure of Shell’s cost management
performance, comprising the following items from the Consolidated
Statement of Income: production and manufacturing expenses;
selling, distribution and administrative expenses; and research and
development expenses.
Underlying operating expenses is a measure aimed at facilitating
a comparative understanding of performance from period to period by
removing the effects of identified items, which, either
individually or collectively, can cause volatility, in some cases
driven by external factors.
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters |
$ million |
Q1 2021 |
Q4 2020 |
Q1 2020 |
|
6,808 |
|
6,701 |
|
5,982 |
|
Production
and manufacturing expenses |
2,462 |
|
2,751 |
|
2,393 |
|
Selling,
distribution and administrative expenses |
166 |
|
199 |
|
243 |
|
Research and
development |
9,436 |
|
9,652 |
|
8,618 |
|
Operating expenses |
|
|
|
Of which
identified items: |
(747) |
|
(371) |
|
(18) |
|
Redundancy and restructuring (charges)/reversal |
— |
|
(737) |
|
— |
|
(Provisions)/reversal |
35 |
|
— |
|
— |
|
Other |
(712) |
|
(1,108) |
|
(18) |
|
|
8,724 |
|
8,544 |
|
8,600 |
|
Underlying operating expenses |
G. Free cash flow
Free cash flow is used to evaluate cash available for financing
activities, including dividend payments and debt servicing, after
investment in maintaining and growing the business. It is defined
as the sum of “Cash flow from operating activities” and “Cash flow
from investing activities”.
Cash flows from acquisition and divestment activities are
removed from Free cash flow to arrive at the Organic free cash
flow, a measure used by management to evaluate the generation of
free cash flow without these activities.
Page 20
|
|
|
|
ROYAL DUTCH SHELL PLC1ST QUARTER 2021 UNAUDITED
RESULTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters |
$ million |
Q1 2021 |
Q4 2020 |
Q1 2020 |
|
8,294 |
|
6,287 |
|
14,851 |
|
Cash flow
from operating activities |
(590) |
|
(5,406) |
|
(2,718) |
|
Cash flow from
investing activities |
7,704 |
|
882 |
|
12,133 |
|
Free
cash flow |
3,412 |
|
212 |
|
2,233 |
|
Less:
Divestment proceeds (Reference I) |
— |
|
— |
|
— |
|
Add: Tax
paid on divestments (reported under "Other investing cash
outflows") |
89 |
|
202 |
|
404 |
|
Add: Cash
outflows related to inorganic capital expenditure1 |
4,381 |
|
871 |
|
10,304 |
|
Organic free cash flow2 |
1.Cash outflows related to inorganic capital expenditure
includes portfolio actions which expand Shell's activities through
acquisitions and restructuring activities as reported in capital
expenditure lines in the Consolidated Statement of Cash Flows.
2.Free cash flow less divestment proceeds, adding back outflows
related to inorganic expenditure.
H. Cash flow from operating activities
excluding working capital movements
Working capital movements are defined as the sum of the
following items in the Consolidated Statement of Cash
Flows: (i) (increase)/decrease in
inventories, (ii) (increase)/decrease in current receivables, and
(iii) increase/(decrease) in current payables.
Cash flow from operating activities excluding working capital
movements is a measure used by Shell to analyse its operating cash
generation over time excluding the timing effects of changes in
inventories and operating receivables and payables from period to
period.
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters |
$ million |
Q1 2021 |
Q4 2020 |
Q1 2020 |
|
8,294 |
|
6,287 |
|
14,851 |
|
Cash
flow from operating activities |
(3,426) |
|
(1,809) |
|
9,594 |
|
(Increase)/decrease in inventories |
(6,829) |
|
(107) |
|
6,314 |
|
(Increase)/decrease in current receivables |
5,865 |
|
1,579 |
|
(8,430) |
|
Increase/(decrease) in current payables |
(4,390) |
|
(337) |
|
7,478 |
|
(Increase)/decrease in working capital |
12,683 |
|
6,624 |
|
7,373 |
|
Cash
flow from operating activities excluding working capital
movements |
|
|
|
Of
which: |
3,653 |
|
2,195 |
|
3,352 |
|
Integrated Gas |
4,702 |
|
2,890 |
|
3,718 |
|
Upstream |
3,313 |
|
782 |
|
353 |
|
Oil Products |
1,045 |
|
775 |
|
189 |
|
Chemicals |
(30) |
|
(17) |
|
(239) |
|
Corporate |
I. Divestment proceeds
Divestment proceeds represent cash received from divestment
activities in the period. Management regularly monitors this
measure as a key lever to deliver sustainable cash flow.
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters |
$ million |
Q1 2021 |
Q4 2020 |
Q1 2020 |
|
3,106 |
|
94 |
1,613 |
Proceeds
from sale of property, plant and equipment and businesses |
275 |
|
111 |
547 |
Proceeds from
joint ventures and associates from sale, capital reduction and
repayment of long-term loans¹ |
31 |
|
7 |
73 |
Proceeds from sale
of equity securities |
3,412 |
|
212 |
2,233 |
Divestment proceeds |
1.As from 2021 renamed from 'Proceeds from sale of joint
ventures and associates'.
Page 21
|
|
|
|
ROYAL DUTCH SHELL PLC1ST QUARTER 2021 UNAUDITED
RESULTS |
J. Earnings before interest, taxes,
depreciation and amortisation
The “Adjusted EBITDA (FIFO basis)” and “Adjusted EBITDA (CCS
basis)” measures are introduced with effect from January 1, 2021.
Management uses both measures to evaluate Shell’s performance in
the period and over time.
We define “Adjusted EBITDA (FIFO basis)” as “Income/(loss)
attributable to Royal Dutch Shell plc shareholders” adjusted for
identified items; tax charge/(credit); depreciation, amortisation
and depletion; exploration well write-offs and net interest
expense. We also use “Adjusted EBITDA” on a CCS basis as
the current cost of supplies adjustment aims to remove the impact
of price changes on our inventories in our Oil Products and
Chemicals segments, therefore enabling comparisons over time.
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters |
$ million |
Q1 2021 |
Q4 2020 |
Q1 2020 |
|
5,660 |
(4,014) |
(24) |
Income/(loss) attributable to Royal Dutch Shell plc
shareholders |
1,112 |
(4,871) |
(104) |
Less: Identified
items attributable to Royal Dutch Shell plc shareholders |
1,903 |
865 |
417 |
Add: Taxation
charge/(credit) excluding tax impact of identified items |
5,812 |
6,255 |
6,344 |
Add: Depreciation,
depletion and amortisation excluding impairments |
136 |
199 |
83 |
Add: Exploration well write-offs |
892 |
908 |
1,118 |
Add: Interest expense excluding identified items |
134 |
168 |
199 |
Less: Interest income |
13,157 |
|
8,916 |
|
7,843 |
Adjusted EBITDA (FIFO basis) |
(1,314) |
(465) |
2,780 |
Add: Current cost of supplies adjustment attributable to Royal
Dutch Shell plc shareholders |
(353) |
(133) |
916 |
Add: Current cost of supplies adjustment to taxation
charge/(credit) |
11,490 |
8,319 |
11,540 |
Adjusted EBITDA (CCS basis) |
Page 22
|
|
|
|
ROYAL DUTCH SHELL PLC1ST QUARTER 2021 UNAUDITED
RESULTS |
CAUTIONARY STATEMENT
All amounts shown throughout this announcement are unaudited.
All peak production figures in Portfolio Developments are quoted at
100% expected production. The numbers presented throughout this
announcement may not sum precisely to the totals provided and
percentages may not precisely reflect the absolute figures, due to
rounding.
The companies in which Royal Dutch Shell plc directly and
indirectly owns investments are separate legal entities. In this
announcement “Shell”, “Shell Group” and “Group” 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 its
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 announcement 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 announcement 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 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 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 Shell and could cause those results to differ
materially from those expressed in the forward-looking statements
included in this announcement, 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; (m)
risks associated with the impact of pandemics, such as the COVID-19
(coronavirus) outbreak; and (n) 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 announcement 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 plc's Form 20-F
for the year ended December 31, 2020 (available at
www.shell.com/investor and www.sec.gov). These risk factors also
expressly qualify all forward-looking statements contained in this
announcement and should be considered by the reader. Each
forward-looking statement speaks only as of the date of this
announcement, April 29, 2021. 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
announcement.
The content of websites referred to in this announcement do not
form part of this announcement.
We may have used certain terms, such as resources, in this
announcement that the United States Securities and Exchange
Commission (SEC) strictly prohibits us from including in our
filings with the SEC. 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.
This announcement contains inside information.
April 29, 2021
|
|
|
The information in this announcement reflects the unaudited
consolidated financial position and results of Royal Dutch Shell
plc. Company No. 4366849, Registered Office: Shell Centre, London,
SE1 7NA, England, UK. |
Contacts:
- Linda M. Coulter, Company Secretary
- Media: International +44 (0) 207 934 5550; USA +1 832 337
4355
LEI number of Royal Dutch Shell plc: 21380068P1DRHMJ8KU70
Classification: Inside Information
Page 23