LONDON - November 2, 2023 - "Shell delivered another quarter of strong operational and financial performance, capturing opportunities in volatile commodity markets. We continue to simplify our portfolio while delivering more value with less emissions.
Shell is commencing a $3.5 billion buyback programme for the next three months, bringing the buybacks for the second half of 2023 to $6.5 billion, well in excess of the $5 billion announced at Capital Markets Day in June. This takes total announced shareholder distributions for 2023 to ~$23 billion."
Shell plc Chief Executive Officer, Wael Sawan
CONSISTENT PERFORMANCE, SUPPORTING ENHANCED DISTRIBUTIONS
- Q3 2023 Adjusted Earnings of $6.2 billion, reflecting robust operational performance and higher oil prices and refining margins. CFFO of $12.3 billion for the quarter, with a $0.4 billion working capital inflow, despite higher oil prices.
- Enhancing shareholder distributions with $3.5 billion share buybacks announced, expected to be completed by Q4 2023 results announcement. Total announced distributions for 2023 ~$23 billion, with dividend per share this quarter being 32% higher than in Q3 2022.
- Demonstrating capital discipline with cash capex outlook for 2023 of $23 - 25 billion.
| $ million | Adj. Earnings1 | Adj. EBITDA1 | CFFO | Cash capex | |
| Integrated Gas | 2,529 | 4,871 | 4,009 | 1,099 | |
| Upstream | 2,221 | 7,412 | 5,336 | 2,007 | |
| Marketing | 720 | 1,519 | 880 | 917 | |
| Mobility | 456 | 988 | 669 | ||
| Lubricants | 226 | 425 | 86 | ||
| Sectors & Decarbonisation | 38 | 106 | 163 | ||
| Chemicals & Products | 1,380 | 2,591 | 2,379 | 879 | |
| Chemicals | (329) | 34 | 486 | ||
| Products | 1,710 | 2,557 | 393 | ||
| Renewables & Energy Solutions | (67) | 79 | (34) | 659 | |
| Corporate | (482) | (136) | (238) | 87 | |
| Less: Non-controlling interest (NCI) | 77 | ||||
| Shell | Q3 2023 | 6,224 | 16,336 | 12,332 | 5,649 |
| Q2 2023 | 5,073 | 14,435 | 15,130 | 5,130 | |
1Income/(loss) attributable to shareholders for Q3 2023 is $7.0 billion. Reconciliation of non-GAAP measures can be found in the unaudited results, available on www.shell.com/investors.
- CFFO of $12.3 billion for Q3 2023 includes a working capital inflow of $0.4 billion, with the impact of higher prices on inventory offset by favourable timing effects of accounts payable/receivable. Stable net debt, $40.5 billion at the end of Q3 2023.
| $ billion | Q3 2022 | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 |
| Divestment proceeds | 0.3 | 0.2 | 1.7 | 0.5 | 0.3 |
| Free cash flow | 7.5 | 15.5 | 9.9 | 12.1 | 7.5 |
| Net debt | 48.3 | 44.8 | 44.2 | 40.3 | 40.5 |
Q3 2023 FINANCIAL PERFORMANCE DRIVERS
INTEGRATED GAS
| Key data | Q2 2023 | Q3 2023 | Q4 2023 outlook |
| Realised liquids price ($/bbl) | 60 | 63 | — |
| Realised gas price ($/mscf) | 8 | 8 | — |
| Production (kboe/d) | 985 | 900 | 870 - 930 |
| LNG liquefaction volumes (MT) | 7.2 | 6.9 | 6.7 - 7.3 |
| LNG sales volumes (MT) | 16.0 | 16.0 | — |
- Adjusted Earnings similar to Q2 2023, reflecting favourable trading and optimisation results combined with higher realised liquids prices offset by lower volumes. Trading and optimisation results were higher than in Q2 2023, benefiting from stable supply and capturing additional optimisation opportunities.
- Q4 2023 outlook reflects ongoing maintenance at Prelude and lower expected liquefaction volumes from Egypt.
UPSTREAM
| Key data | Q2 2023 | Q3 2023 | Q4 2023 outlook |
| Realised liquids price ($/bbl) | 72 | 79 | — |
| Realised gas price ($/mscf)* | 7 | 7 | — |
| Liquids production (kboe/d) | 1,283 | 1,311 | — |
| Gas production (mscf/d) | 2,425 | 2,564 | — |
| Total production (kboe/d) | 1,701 | 1,753 | 1,750 - 1,950 |
*With the completion of the 2022-2023 gas year at the end of September 2023, the Groningen gas field has been closed (subject to exceptional circumstances under which the Dutch government may instruct to re-open the field to a certain extent). Upstream realised gas prices have been restated for 2022 and 2023 to exclude the impact of GasTerra.
- Adjusted Earnings higher in Q3 2023 due to higher oil prices and higher production volumes. Production was higher, with strong performance in Deep Water.
- Q4 2023 production outlook reflects the closure of the Groningen gas field.
MARKETING
| Key data | Q2 2023 | Q3 2023 | Q4 2023 outlook |
| Marketing sales volumes (kb/d) | 2,607 | 2,654 | 2,250 - 2,750 |
| Mobility (kb/d)* | 1,791 | 1,782 | — |
| Lubricants (kb/d)* | 83 | 82 | — |
| Sectors & Decarbonisation (kb/d)* | 733 | 790 | — |
*Comparative information has been revised - see Quarterly Databook
- Adjusted Earnings impacted by compressed fuels margins due to rising feedstock costs in Mobility, offset by improved margin performance in Sectors & Decarbonisation. Adjusted Earnings also reflect one-off tax charges.
CHEMICALS & PRODUCTS
| Key data | Q2 2023 | Q3 2023 | Q4 2023 outlook |
| Refining & Trading sales volumes (kb/d) | 1,466 | 1,548 | — |
| Chemicals sales volumes (kT) | 2,828 | 2,998 | — |
| Refinery utilisation (%) | 85 | 84 | 75 - 83 |
| Chemicals manufacturing plant utilisation (%) | 70 | 70 | 62 - 70 |
| Global indicative refining margin ($/bbl) | 9 | 16 | — |
| Global indicative chemical margin ($/t) | 153 | 115 | — |
- Higher refining margins in Q3 2023 driven by lower global product supply combined with higher demand. Chemicals margins continue to be impacted by weak demand. Trading and optimisation margins are higher than in Q2 2023.
- Q4 2023 Refinery utilisation outlook lower than Q3 2023 due to planned maintenance activities in North America.
RENEWABLES & ENERGY SOLUTIONS
| Key data | Q2 2023 | Q3 2023 |
| External power sales (TWh) | 67 | 76 |
| Sales of natural gas to end-use customers (TWh) | 172 | 170 |
| Renewables power generation capacity* | 7.1 | 7.4 |
| 2.5 | 2.5 |
| 4.6 | 4.9 |
*Excluding Shell's equity share of associates where information cannot be obtained
- Adjusted Earnings are lower than in Q2 2023 mainly driven by lower margins due to seasonal impacts, primarily in Europe, and lower trading and optimisation results.
Renewables and Energy Solutions includes renewable power generation, the marketing and trading and optimisation of power and pipeline gas, as well as carbon credits, and digitally enabled customer solutions. It also includes the production and marketing of hydrogen, development of commercial carbon capture and storage hubs, investment in nature-based projects that avoid or reduce carbon emissions, and Shell Ventures, which invests in companies that work to accelerate the energy and mobility transformation.
CORPORATE
| Key data | Q2 2023 | Q3 2023 | Q4 2023 outlook |
| Adjusted Earnings ($ billion) | (0.7) | (0.5) | (0.6) - (0.8) |
- The Adjusted Earnings outlook is a net expense of $2.8 - 3.0 billion for the full year 2023. This excludes the impact of currency exchange rate and fair value accounting effects.
UPCOMING INVESTOR EVENTS
| 1 February 2024 | Fourth quarter 2023 results and dividends |
| 2 May 2024 | First quarter 2024 results and dividends |
| 1 August 2024 | Second quarter 2024 results and dividends |
| 31 October 2024 | Third quarter 2024 results and dividends |
ALTERNATIVE PERFORMANCE (NON-GAAP) MEASURES
This announcement includes certain measures that are calculated and presented on the basis of methodologies other than in accordance with generally accepted accounting principles (GAAP) such as IFRS, including Adjusted Earnings, Adjusted EBITDA, CFFO excluding working capital movements, Cash capital expenditure, free cash flow, Divestment proceeds and Net debt. This information, along with comparable GAAP measures, is useful to investors because it provides a basis for measuring Shell plc’s operating performance and ability to retire debt and invest in new business opportunities. Shell plc’s management uses these financial measures, along with the most directly comparable GAAP financial measures, in evaluating the business performance.
This announcement contains a forward-looking non-GAAP measure for cash capital expenditure and divestments. We are unable to provide a reconciliation of this forward-looking non-GAAP measure to the most comparable GAAP financial measure because certain information needed to reconcile the non-GAAP measure to the most comparable GAAP financial measure is dependent on future events some of which are outside the control of the company, such as oil and gas prices, interest rates and exchange rates. Moreover, estimating such GAAP measure with 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 estimated in a manner which is consistent with the accounting policies applied in Shell plc’s consolidated financial statements.
