Title:Simon Henry, CFO of Royal Dutch Shell, comments on the Q3 20
Duration: 3:46 minutes
Description:
A company update where Simon Henry, CFO of Shell, comments on the Third Quarter 2016 results.
Simon Henry, CFO of Royal Dutch Shell, comments on the Q3 20Transcript
[Graphic]
The Shell Pecten displays towards the top of frame-left against a white background, text displaying on the white background to the right of the graphic. The lower third of the frame is shaded in yellow, and a text quote displays in this area.
[Text displays]
Third quarter 2016 results / Re-shaping Shell, to create a world-class investment case
Royal Dutch Shell plc / November 1, 2016
“Let’s make the future”
Comments from Simon Henry
[Title]
Chief Financial Officer
[Text displays]
Simon Henry / Chief Financial Officer
[Simon Henry]
Hello. I’m Simon Henry, the Chief Financial Officer of Royal Dutch Shell. Today, we announced our quarterly financial results, so let me update you on that.
Shell delivered better results this quarter, reflecting strong operational and cost performance. However, lower oil prices continue to be a significant challenge across the business, and the outlook does remain uncertain.
[Video footage]
Close-up of Simon Henry, tree foliage visible through the window behind him.
[Simon Henry]
The integration of Shell and BG post the acquisition is now essentially done and has been completed well ahead of plan. The integration process has been an important catalyst as we make significant and lasting changes to the company’s working practices, to our cost structures and to our portfolio.
We originally announced synergy potential of $2.5 billion by 2018, which we’ve since updated to $4.5 billion by 2018. We will now deliver this $2.5 billion reduction in our total spend this year, two years early.
[Video footage]
Wide still shot of a vessel in the ocean alongside a refinery plant. Blue seas and skies form the background.
[Split-screen footage]
The screen splits into three, the previously described shot still filling frame right. Top of frame-left contains a shot of another plant. Bottom of frame-left contains a close-up of a set of six steel pulleys.
[Video footage]
The wide still shot of the vessel alongside the refinery plant again fills the screen.Point of view shot of an offshore oil platform surrounded by the ocean, taken from the pathway bridge leading to the platform.Bird’s eye view of another large vessel just offshore, a refinery plant in the background.
[Split-screen footage]
The screen splits into three, the previously described shot still filling the lower frame. Top of frame-left contains a low angle shot of two offshore platforms connected by a pathway bridge, blue seas and skies forming the background. Top of frame-right contains a wide shot of a large plant/facility, cloudy blue skies visible above the tall steel structures of the plant.
[Simon Henry]
Our total underlying operational costs this year, 2016, are already at an annualised run rate of $40 billion. That’s $9 billion lower than the Shell plus BG costs were in 2014.
[Video footage]
Close-up of Simon Henry, tree foliage visible through the window behind him.
[Text displays]
$9 billion lower than in 2014
[Simon Henry]
And they’re set to reduce further on a like for like basis as deal synergies and other improvements are delivered in full.
We are delivering on lower and more predictable investment plans. $29 billion this year of which around $3 billion is non-cash.
[Video footage]
Aerial still shot of a vessel anchored out at sea, connected by a pipeline jetty to the refinery plant at top of frame.Still shot of the dark bow of a vessel anchored alongside a refinery. Several lights aboard the vessel and around the refinery tanks in the background light up the evening sky. The water in the foreground and the sky at the top of frame are coloured in hues of pink, blue and orange.Low angle still shot of four smoke stacks against the evening sky, the lights of the plant burning below.
[Simon Henry]
Capital investment for 2017 is expected to be at the low end of our $25 to $30 billion projected range.
Now, we are actively working on 16 material asset sales as part of the $30 billion divestment plan. And we’re also delivering on profitable new projects.
Excluding identified items, our third quarter 2016 earnings were $2.8 billion on a current cost of supplies basis. That’s 18% higher than in the third quarter 2015.
[Video footage]
Close-up of Simon Henry, tree foliage visible through the window behind him.
[Text displays]
Third quarter 2016 CCS earnings $2.8 billion
18% higher than third quarter in 2015
[Simon Henry]
Our cash flow generated from operations was around $8.5 billion in the quarter. That was $17 billion for the last four quarters on a rolling basis.
Now, we continue to improve the operational performance of our assets and production volumes are up substantially. They’re 25% higher than 2015, benefiting, of course, from the BG acquisition.
Our 2016 new project start-ups are expected to add more than 250,000 barrels a day of production for Shell when they’re fully ramped up.
[Video footage]
Low angle still shot of two offshore platforms, blue seas below and a pale blue sky above forming the background.
[Split-screen footage]
The screen splits into four, the previously described shot still filling frame-left. Top of frame-right contains a low angle shot of plant or rigging structure, lit with numerous lights, towering against the dark background of a night sky. Middle of frame-right contains a diagonally side view of a vessel out at sea. Bottom of frame-right contains a still shot of a line of petrol pumps at a service station.
[Video footage]
The low angle shot of the two offshore platforms again fills the screen, dissolving to a wide side view of another large vessel in the ocean. Dark blue water below the vessel and light blue skies faintly streaked with clouds above the vessel form the background. Land is visible either side of the vessel in the background.
[Split-screen footage]
The screen splits into three. Frame-left contains a bird’s eye view of offshore platforms, blue seas forming the background. The middle screen contains a high angle shot of a series of parallel pipes running along the ground with steel structures and cloudy blue skies visible in the background. Frame-right contains a front view still shot of a vessel resting in dark waters, several small support vessels surrounding it, and cloudy blue skies forming the background.
[Video footage]
The split-screen wipes away to reveal a bird’s eye view still shot of a FPSO vessel, Turritella against a background of dark sea and dark, cloudy skies still streaked with some evening light. The vessel has numerous lights burning down the length of the vessel.
[Simon Henry]
So overall, looking through the cycle, our investment plans and our portfolio actions, they’re focused firmly on reshaping Shell into a world-class investment case. Now, this means stronger, sustained returns through cycle and growing our free cash flow per share.
Thank you for listening.
[Video footage]
Close-up of Simon Henry, tree foliage visible through the window behind him.
[Text displays]
Thank you for visiting our site. Please understand that an investment in Royal Dutch Shell plc securities carries with it the risk that you could sustain losses as a result of your investment. Therefore, an investment in Royal Dutch plc securities may not be appropriate for all investors. Accordingly, before investing in our securities we urge you to read our Annual Report and Form 20-F and consider the risks discussed within. You can find our Annual Report and Form 20-F on the link next to this presentation.
Again, thank you for your interest in Royal Dutch Shell plc.
[Graphic]
A small Shell Pecten displays on a white background at the bottom of frame-left with text filling the screen above.
[Text displays]
Definitions & Cautionary Note
[Illegible]
Royal Dutch Shell / November 1, 2016
[Audio]
Shell jingle.
[Graphic]
Shell Pecten centred on a white background with text displaying below.
[Text displays]
© Shell International Limited 2015