Royal Dutch Shell plc second quarter 2018 results webcast presentation

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

Ben van Beurden
Chief Executive Officer
Royal Dutch Shell

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.
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. 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 prices (BEP) presented are 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 the projects are expected to be multi-decade
producing the 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, July 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
3
Definitions &
cautionary note

Royal Dutch Shell July 26, 2018 4
Summary
1 Divestments: headline, cash proceeds in 2016, 2017 and H1 2018: $23.8 billion (in CFFI), $2.1 billion related to Shell Midstream Partners, L.P. (in CFFF).
Key messages
 Confidence in free cash flow outlook
 Focus on capital discipline in line with financial framework
 $30 billion divestments1 completed or announced
 $25 billion share buyback programme launched
Q2 2018
 Strong results, momentum continues
 Portfolio reshaping and project delivery
Thrive in
the energy
transition
World-class
investment case
Strong
license
to operate

HSSE
performance Injuries – TRCF (per million working hours)
Goal Zero on safety
Million tonnes CO2e
Upstream flaring
Volume in thousand tonnes
Operational spills
Number of incidents
Process safety
 HSSE priority
 Performance and
transparency
million working hours #
0
300
600
900
0
1
2
2008 2010 2012 2014 2016 18H1
0
250
500
0
5
10
2008 2010 2012 2014 2016 18H1
0
5
10
15
2008 2010 2012 2014 2016 18H1
0
100
200
300
2013 2014 2015 2016 2017 18H1
Working hours (RHS)TRCF Volume of spills Number of spills (RHS)
Tier 1 incidents Tier 2 incidents
5

H1 2018
Financial summary
Earnings and ROACE on CCS basis, excluding identified items
10.1
18.9
Earnings ($ billion); EPS +34% versus H1 2017
Cash flow from operations ($ billion)
14.7
6.5
Free cash flow ($ billion)
ROACE (%)
23.6 Gearing (%)
Nanhi petrochemicals plant - China

Portfolio & projects
Recent portfolio
developments
 Whale and Dover discoveries in the Gulf of Mexico
 Bid rounds in Mexico and Brazil
 Entry into Mauritania
 FID: Gumusut Kakap Ph2, Vito, Penguins, Fram and Borssele 3/4
 Start-up: Kaikias and Nanhai petrochemicals facility
 Progress: Appomattox sail away and Prelude LNG import
 Downstream: Argentina
 Integrated Gas: Bongkot Thailand,
New Zealand, Malaysia LNG Tiga
 Upstream: Norway, West Qurna
Portfolio re-shaping
(A&D)
Project delivery
Exploration success
Divestments based on headline size, announced in H1 2018.
 Continue to grow &
high-grade portfolio
 >100kboe/d Shell
share new FIDs
Divestments: ~$4.0 billion
 First Utility
 Silicon Ranch
 Other
Acquisitions: ~$0.5 billion

Gulf of Mexico
 Leading position
 Growth and
longevity
operational excellence
Project delivery
Exploration success
Whale – discovery Dover – discovery
Bid round - Mexico
Appomattox on location Kaikias start-up Vito FID
Bid round – Mexico

Projects delivery
Nanhai petrochemicals expansion – start-up Prelude – progress towards start-up
 Floating LNG facility offshore Australia
 Final plant commissioning underway with start-up
expected in 2018
 LNG production 3.6 million tonnes per annum with
1.7 million tonnes per annum natural gas liquids
 Shell share 68%
 New ethylene cracker and derivatives unit in China
 Key component of growth and competitiveness in
chemicals strategic theme
 1.2 million tonnes per annum ethylene capacity
 Shell share 50%
Projects delivery
on track

0
10
20
30
40
- 5,000 10,000 15,000
Percentage of capital investment
0% 100%50%
Percentage of capital investment
10
High-quality
Upstream
growth options
Reserves and resources as per year end 2017 excluding Groningen; Break-even price charts as per November 2017 Management Day;
Unit development costs are defined as lifecycle capital expenditure divided by total production (Shell working interest share, present value).
Billion boe
Reserves & resources
Pre-FID funnel break-even price $ per barrel
Upstream – Conventional oil & gas
Pre-FID funnel break-even price $ per barrel
Upstream – Deepwater
Permian – break-even price $ per barrel
Upstream – Shales
Since 2014: >45%
reduction in expected
unit development cost
for major projects
0
20
40
60
80
0% 50% 100%
2014 2017
0
40
20
Net risked well count
260013000
<$40 $40-50
Reserves (SEC proved)
Discovered resources
(2P+2C development pending)
Conventional
oil & gas
Deep water Shales
0

Cash momentum
1 Pricing assumption 2019-21: $60 per barrel real term 2016. 2 At $71 per barrel.
$ billion
Total cash flow
 New projects cash
delivery on track
 Confidence in 2020
free cash flow
outlook
-10
0
10
20
30
40
50
60
2015 2016 2017 18Q2
4Q rolling
2019-21
5452 44 64
Cash flow from operations (excluding working capital movements)
Average Brent oil price ($/bbl)#
Organic free cash flow
0
10
20
2018E 2020E
$ billion cash flow per annum
Project start-ups 2014 to 2020
~$10 billion
CFFO1
2018 YTD estimate2
~651 $/bbl

Financial framework
Capital discipline
supporting
growth
Excludes BG acquisition in 2016; historical BG capital investment is based on BG’s published Annual Report.
$ billion
Capital investment
 $25-30 billion
organic & inorganic
 2018: lower part of
the range
Capital investment
$ billion (p.a.) 2018-20
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 0
20
40
2015 2016 2017 2018-20
avg p.a.
-$12 billion
30
25
Shell
BG

 Attractive dividend key to
total shareholder return and
world-class investment case
 $25 billion share buyback
by end 20201
 First buyback tranche
$2 billion in Q3 2018
13
Shareholder
returns
1 Subject to further progress with debt reduction and oil price conditions.
Total shareholder return calculated on a basis of 90-day average around period start and end dates.
%
Total shareholder returns January 2016 to end June 2018
Delivering a world-
class investment case
0
25
50
75
100
Shell

Jessica Uhl
Chief Financial Officer
Royal Dutch Shell

Foundation of
the world-class
investment case Key features
 Maximising value for shareholders through cycle
 Focus on shareholder distributions
 Multi-year timescales
 Surplus free cash flow in up-cycle and dividends fully covered
in down-cycle
 Gearing 0-30%; AA equivalent credit metrics
Thrive in
the energy
transition
World-class
investment case
Strong
license
to operate
 Conservative
financial
management
 FCF &
ROACE growth

Financial framework
Cash flow
priorities
Priorities
for cash
Debt reduction Dividends
Buybacks
& capital
investment
1 2 3
Continue to reduce gearing Cancel scrip dividend Buy back shares
Progress towards a world-class investment case
Increase shareholder distributions

%
17
Financial
summary
Earnings and ROACE on CCS basis, excluding identified items. Divestments: headline, cash proceeds in 2016, 2017 and H1 2018: $23.8 billion (in CFFI), $2.1 billion related to Shell Midstream Partners, L.P. (in CFFF).
$ billion
-5
5
15
25
-5
5
15
25
2014 2015 2016 2017 18Q2
4Q rolling
Earnings & ROACE
$ billion
Divestments
$ billion
-15
0
15
30
45
2014 2015 2016 2017 18Q2
4Q rolling
Cash flow
$ billion
Net debt & gearing
%
Upstream
ROACE (RHS)
Downstream
Integrated Gas Corporate + NCI
CFFO CFFI FCF
15
20
25
30
50
60
70
80
16Q1 16Q2 16Q3 16Q4 17Q1 17Q2 17Q3 17Q4 18Q1 18Q2
Net debt Gearing (RHS)
0
10
20
30
40
Completed Announced
or signed
In progress Total

Q2 2018
Financial
highlights
Earnings and ROACE on CCS basis, excluding identified items. Dividend distributed to RDS shareholders
$ billion
Earnings Q2 2017 to Q2 2018$ billion Q2 2017 Q2 2018
Upstream 0.3 1.5
Integrated Gas 1.2 2.3
Downstream (CCS) 2.5 1.7
Corporate &
non-controlling interest
(0.4) (0.7)
CCS earnings 3.6 4.7
CCS earnings, $ per share 0.44 0.56
Cash flow from
operations
11.3 9.5
Free cash flow 12.2 9.5
Dividend 3.9 3.9
ROACE (%) 4.2 6.5
3.6
4.7
2.2 0.1
0.1
(0.1)
(0.5)
(0.4)
(0.3)
0
2
4
6

Downstream
US Gulf Coast:
one year after
Motiva
Integration delivering
value
Shell terminals
Shell refineries
Deer Park: crude and
feedstock flexibility
integrated with trading
No rco
Co nvent
D eer P ark
Mo bile
Shell chemical plants
G eismar
Retail product supply:
end to end value
generation
Sewaren: integrated
operations
Mobile: retail, refining
& trading integration
Norco: hydrocracker
upgrade & integration
Convent: FCC reliability
& integration

Integrated Gas
LNG portfolio Million tonnes per annum (DES)
Emerging LNG Supply – Demand gap
0
100
200
300
400
500
600
2000 2005 2010 2015 2020 2025 2030 2035
LNG supply in operation
LNG supply under construction
Demand forecasts
LNG Market & outlook
 LNG is the fastest-growing gas supply source
 2017-18: continued supply/demand balance
 Early 2020s: supply gap
Shell response
 Globally balanced and resilient portfolio
 Competitive pre-FID opportunities in all supply
basins
Pre-FID opportunities – LNG Canada
 Attractive and differentiated position
 Decision criteria:
 Competitiveness
 Affordability
 Returns

Upstream
Permian
Performance
Thousand boe per day
0
50
100
150
200
250
2016 2017 18Q2 4Q
rolling
2018E 2019E 2020E
 ~260,000 net acres with ongoing efforts to
consolidate footprint through swaps
 Strong delivery to date and more than 30%
annual production growth through 2020
 Growth plans not impacted by infrastructure
bottlenecks
 Free cash flow growth well into the next decade
 Continue to reduce costs despite supply chain
pressure
Production growth
$ per boe
Direct field unit operating costs
Continued strong
delivery of organic
growth and improved
cost performance
+160%
+85%
0
2
4
6
8
2016 2017 2018E Ambition
-18%

Capital
employed
($ bln)
Free
cash flow
($ bln p.a)
ROACE
(%)
~70% 25-30 >10
~20% 1-2 ~5
~5% (2) - (1) ~5
25-30
>5
~290 30-35 ~10
22
Strategic themes
delivery:
on track
2019-21: 2016 RT $60 per barrel, mid-cycle Downstream; includes Deepwater in cash engines and Shales in growth priorities by 2020.
2019-21 ~$60Q2 2018 4Q rolling ~$64
Strategic
themes
Cash engines
Growth
priorities
Emerging
opportunities
Organic FCF
Divestments &
acquisitions
Total (incl.
Corporate)
Capital
employed
($ bln end 2017)
Free
cash flow
($ bln p.a)
ROACE
(%)
~60% ~10 ~10
~28% ~4 ~5
~6% ~(2) ~(4)
~13
~12
284 ~25 ~6Price sensitivity:
+/- $10 Brent =
+/- ~$6 billion CFFO

Summary
1 Divestments: headline, cash proceeds in 2016, 2017 and H1 2018: $23.8 billion (in CFFI), $2.1 billion related to Shell Midstream Partners, L.P. (in CFFF)
Key messages
 Confidence in free cash flow outlook
 Focus on capital discipline in line with financial framework
 $30 billion divestments1 completed or announced
 $25 billion share buyback programme launched
Q2 2018
 Strong results, momentum continues
 Portfolio reshaping and project delivery
Thrive in
the energy
transition
World-class
investment case
Strong
license
to operate

Questions & Answers
Ben van Beurden
Chief Executive Officer
Jessica Uhl
Chief Financial Officer

Q3 2018
Outlook
Q3 – Q3 OUTLOOK: Year-ago baseline reflects Shell’s earnings seasonality
 Integrated gas
 Production volumes: negative impact of 40-70 thousand boe/d, mainly due to divestments and higher maintenance
 Liquefaction volumes: at similar level
 Upstream
 Production volumes: negative impact of 210-240 thousand boe/d, mainly due to divestments, field decline and higher
maintenance, partly offset by volumes from new fields
 Downstream
 Refinery availability to increase: given unplanned downtime events in Q3 2017, partly offset by higher planned
maintenance in Q3 2018
 Chemicals availability to increase: given unplanned downtime events in Q3 2017, partly offset by higher planned
maintenance in Q3 2018
 Oil products sales volumes: at similar level
2018 OUTLOOK:
 Corporate segment: net charge of $400-450 million in Q3; $1.4-1.6 billion for the full year, excluding the impact of
currency exchange rate effects.
26

Q2 2018
Prices & margins $/barrel
Shell oil & gas realisations
$/barrel
Industry refining margins
$/tonne
Industry chemicals margins
0
1
2
3
4
5
6
0
20
40
60
80
17Q2 17Q3 17Q4 18Q1 18Q2
0
3
6
9
12
15
18
17Q2 17Q3 17Q4 18Q1 18Q2
0
200
400
600
800
1000
17Q2 17Q3 17Q4 18Q1 18Q2
US ethane
Western Europe naphtha
NE/SE Asia naphtha
US West Coast
US Gulf Coast coking
Rotterdam complex
Singapore
Oil
Gas (RHS)
27
$/mscf

Q2 2018
Financial
highlights
Earnings and ROACE on CCS basis, excluding identified items
$ billion
Earnings Q2 2017 to Q2 2018
3.6
4.7
1.1
1.1
(0.9)
(0.3)
0
1
2
3
4
5
6
7
$ billion Q2 2017 Q2 2018
Upstream 0.3 1.5
Integrated Gas 1.2 2.3
Downstream (CCS) 2.5 1.7
Corporate &
non-controlling interest
(0.4) (0.7)
CCS earnings 3.6 4.7
CCS earnings, $ per share 0.44 0.56
Cash flow from
operations
11.3 9.5
Free cash flow 12.2 9.5
Dividend 3.9 3.9
ROACE (%) 4.2 6.5

1.2
2.3
1.0
0.3 ~0
~0
(0.2)
0
1
2
3
29
Q2 2018
Integrated Gas
results
$ billion
Environment Choice
Earnings on CCS basis, excluding identified items

0.3
1.5
1.5
0.1 ~0
0.1
0.1
(0.4)
(0.3)
0
1
2
30
Q2 2018
Upstream
results
$ billion
Environment Choice

2.5
1.7
~0
~0
(0.3) ~(0)
(0.6)
(0.2)
0
1
2
3
31
Q2 2018
Downstream
results
$ billion
$ billion
Earnings mix
0
5
10
2015 2016 2017 18Q2
4Q rolling
Marketing
Refining & Trading
Chemicals

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