Shell PLC

Welcome to Shell's third quarter 2023 financial results announcement. Shell's CFO Sinead Gorman will present the results, then host a Q&A session along with Shell's CEO Wales Sawan. 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 to Shell's third quarter results presentation. During Capital Markets Day in June, we outlined how we will deliver more value with less emissions, guided by our principles of performance, discipline and simplification. These principles are driving our everyday decisions and actions with the ultimate aim of enhancing shareholder value. Nearly five months on and we are capturing opportunities that are delivering robust results and furthering our strategy. And there have been some great examples of performance this quarter. Take Pearl GTL in Qatar, which has one of its best operational performances with a controllable availability of 97%. or TIMI in Malaysia, where gas production has started. This unmanned platform is more cost efficient than a conventional platform because it is around 60% lighter in weight. TIMI is also powered by solar and wind energy. Overall, a great example of how we can reduce both costs and emissions from our operations. In our downstream business, we are seeing that our EV strategy is progressing in China. In Shenzhen, together with BYD, we have opened Shell's largest global charging site for electric vehicles. With 258 public fast charging points, it is already serving more than 3,300 EV customers a day. China is the world's largest EV market and our Shell recharge network of charge points in the country has grown to 25,000 and is already CFFO positive. This demonstrates a pathway to the profitable decarbonisation of our global mobility network. Another performance highlight comes from our joint venture Raizen in Brazil, which started producing biofuel made from sugarcane waste at its new second-generation ethanol plant, the world's largest. Raizen is helping customers to reduce their emissions and is already returning cash to Shell whilst continuing to invest in the energy transition. We continue to maintain discipline and have taken the decision to further lower our 2023 cash capex outlook to $23 to $25 billion. This already puts us ahead of schedule in terms of delivering the range targeted for 2024 and 2025. We are able to do this as we have kept the bar high for all opportunities, reflecting our strong commitment to capital discipline and value generation. And our journey of simplification continues to progress. We have agreed to sell our home energy business in the UK and in Germany, as well as our Shell Pakistan business. And following the strategic review we announced earlier this year, divestment is the priority focus for our Singapore refining and chemical assets at the moment. These have not been easy decisions, but these are necessary steps to further simplify and focus our portfolio and to move us closer to the targets we set at Capital Markets Day. and we will give you an update on our progress against our financial targets in our Q4 results presentation. Moving now to our results. In the third quarter, we delivered robust financial results. Our adjusted earnings were $6.2 billion and we delivered $12.3 billion of cash flow from operations. The improved results were driven by a better macro environment, including increased refining margins, coupled with higher production in upstream. This follows the successful completion of maintenance work in the Gulf of Mexico, where we produce higher value barrels. At the same time, we saw continued low margins in chemicals, where we keep seeking opportunities for economic optimization. Moving on to our financial framework. I've already shared with you our lower cash capex outlook for this year. And in terms of our net debt, it remains stable at around $40 billion. Now let's take a look at shareholder distributions. We continue to preferentially allocate capital to share buybacks as we believe that our shares are undervalued. And that's why today we are announcing a $3.5 billion share buyback program to be completed over the next three months. This brings our second half announced share buybacks to $6.5 billion, exceeding the target set at capital markets day by $1.5 billion. And with the step up we did in Q2, our dividend per share in Q3 is now 32% higher than in the same quarter last year. In summary, this quarter we have delivered robust results whilst providing the secure energy our customers need. And we continue our focus on performance, discipline and simplification. We have backed up our words with actions and we will continue to do so. At Capital Markets Day, we set out a path to increase shareholder value and that is exactly what we are doing. Today's announced share buyback programme elevates our total announced shareholder distributions to around $23 billion for the full year 2023. These returns mean we are delivering towards the top end of our shareholder distribution range, showcasing our strong commitment to be the investment case through the energy transition. Thank you.

We will now begin the question and answer session. People dialed in. If you have a question, please press star 1. If you wish to be removed from the queue, please press star 2. Phone callers are requested to mute the audio on their computer webcast and listen attentively to their telephone audio as we begin to progress through the telephone questions.