Shell PLC

Welcome to Shell's second quarter 2023 financial results announcement. Shell's CEO Wael Sawan and CFO Sinead Gorman will present the results, then host a Q&A session. If you would like to ask a question, please press star 1. If you wish to be removed from the queue, please press star 2. We will now begin the presentation.

Welcome, everyone. Today, Sinead and I will be presenting our second quarter results for 2023. During Capital Markets Day, we reiterated our commitment to our Powering Progress Strategy, including net zero emissions by 2050. We also outlined our plans over the coming years to deliver more value with less emissions. I'm pleased with the progress that we are making on our journey. In the first half of this year, we delivered our second highest adjusted earnings in a decade, better than in the same period in 2014, when the average Brent oil price stood at some $110 per barrel, compared with $80 per barrel this year. and we continue to help our customers cut their carbon emissions while reducing emissions from our own operations. For instance, in the first half of this year, we removed 0.4 million tonnes of greenhouse gas emissions through abatement projects. This removal is equivalent to taking more than 160,000 cars off of Europe's roads for a year. Performance, discipline and simplification continue to be our guiding principles. And in the second quarter, we demonstrated strong operational performance across our portfolio. Take Prelude, our floating LNG facility in Australia, which delivered its highest quarterly production since startup in 2018. In renewables and energy solutions, our Crosswind JV produced its first green electricity in June. This is an exciting ongoing project that, when completed, is expected to produce around 3% of the Netherlands' total demand for electricity. In the Gulf of Mexico, our turnaround operations at Appomattox, Perdido and Olympus were safely completed ahead of schedule and below budget. And in downstream, our improved Shell V-Power formulation, which can clean up to 100% of deposits on vital engine parts, delivered strong volume and margin growth. However, despite the strong operational performance, our financial results were impacted by lower commodity prices, planned maintenance, and the skew of our LNG portfolio towards a northern hemisphere winter. Our four-quarter business and financial delivery has been strong, enabling us to responsibly invest in our businesses, reduce debt, all while enhancing shareholder distributions. At our capital markets day, we announced a 15% step up in the dividend and a plan to buy back a minimum of $5 billion of shares in the second half of 2023, subject to board approval. we continue to believe our shares represent significant value. And so today, in addition to delivering on the dividend increase, we are commencing a buyback program of $3 billion for the next three months. With that, let me hand over to Sinead to tell us more about our financial results in the quarter.

Thank you, Wael. We delivered resilient financial results in the second quarter. Our adjusted earnings were $5.1 billion and we delivered $15.1 billion of cash flow from operations, including a working capital inflow of $4.8 billion. The working capital inflow was mainly due to lower prices, inflows from initial margin and a reduction in accounts receivable. In integrated gas and upstream, we saw lower prices, fewer trading and optimisation opportunities due to seasonality, and lower production due to planned maintenance, which included higher value barrels in the Gulf of Mexico. As Wael mentioned, and as we outlined during Capital Markets Day, our LNG portfolio is geared towards a northern hemisphere winter, making Q1 and Q4 typically stronger than Q2 and Q3. In our downstream and res businesses, marketing achieved one of its highest mobility unit margins in recent years, largely due to a combination of the driving season in the US and an improving macro environment. In chemicals and products, the products business was impacted by fewer trading and optimization opportunities than in the first quarter, whilst chemicals margins remain below historical averages, despite a slight improvement quarter on quarter. Moving on to our financial framework. Today, we are lowering our 2023 cash capex outlook to $23 to $26 billion, as we continue to demonstrate discipline in our capital spend. We have brought down our net debt to around $40 billion, which is almost half of what it was in 2019. And finally, we are delivering on the 15% dividend increase that we announced at Capital Markets Day, whilst also today announcing a $3 billion buyback program for the next three months. As we continue to believe our shares represent significant value, we will commence a program of at least $2.5 billion at the Q3 results, subject to Board approval. Together, this means we are meeting our target shareholder distributions of 30% to 40% of our CFFO through the cycle. And with that, I'll hand back over to Wael.