TIDMRDSA TIDMRDSB
ROYAL DUTCH SHELL PLC 1ST QUARTER
2021 UNAUDITED RESULTS
---------------------------------------
SUMMARY OF UNAUDITED RESULTS
Quarters $ million
Q1 2021 Q4 2020 Q1 2020 %(1) Reference
Income/(loss)
attributable to
5,660 (4,014) (24) +241 shareholders
CCS earnings
attributable to
4,345 (4,478) 2,756 +197 shareholders Note 2
3,234 393 2,860 +724 Adjusted Earnings(2) A
Cash flow from operating
8,294 6,287 14,851 +32 activities
Cash flow from investing
(590) (5,406) (2,718) activities
7,704 882 12,133 Free cash flow G
3,974 5,503 4,970 Cash capital expenditure C
9,436 9,652 8,618 -2 Operating expenses F
Underlying operating
8,724 8,544 8,600 +2 expenses F
(4.7)% (6.8)% 4.6% ROACE (Net income basis) D
ROACE (CCS basis
excluding identified
3.0% 2.9% 6.1% items) D
71,252 75,386 74,413 Net debt E
29.9% 32.2% 28.9% Gearing E
Total production
available for sale
3,489 3,371 3,719 +4 (thousand boe/d)
Basic earnings per share
0.73 (0.52) 0.00 +240 ($)
Adjusted Earnings per
0.42 0.05 0.37 +740 share ($) B
0.1735 0.1665 0.16 +4 Dividend per share ($)
----------- --------- --------- -------- ------------------------ -------------
1. Q1 on Q4 change.
2. Adjusted Earnings is defined as income/(loss) attributable to
shareholders plus cost of supplies adjustment (see Note 2) and excluding
identified items (see Reference A).
First quarter 2021 income attributable to Royal Dutch Shell plc
shareholders was $5.7 billion, which included net gains on sale of
assets of $1.4 billion and gains of $0.4 billion due to the fair value
accounting of commodity derivatives, partly offset by redundancy and
restructuring charges of $0.5 billion, mainly related to the
restructuring plan named Reshape.
Adjusted Earnings for the quarter were $3.2 billion. Cost of supplies
adjustment attributable to Royal Dutch Shell plc shareholders for the
first quarter 2021 was negative $1.3 billion. The Texas winter storm had
an impact on our operations and had an aggregate adverse impact of
around $0.2 billion on Adjusted Earnings.
Cash flow from operating activities for the first quarter 2021 was $8.3
billion, which included negative working capital movements of $4.4
billion. Cash flow from investing activities for the quarter was an
outflow of $0.6 billion, driven mainly by capital expenditure and partly
offset by proceeds from sale of property, plant and equipment and
businesses.
Compared with the fourth quarter 2020, current quarter Adjusted Earnings
reflected higher realised oil and LNG prices, chemicals and refining
margins, Oil Products trading contributions and lower depreciation.
Compared with the first quarter 2020, current quarter Adjusted Earnings
reflected higher realised oil prices and chemicals margins partly offset
by lower realised refining and marketing margins.
At the end of the first quarter 2021, net debt was $71.3 billion,
compared with $75.4 billion at the end of the fourth quarter 2020,
mainly driven by free cash flow generation in the quarter. Gearing was
29.9% at the end of the first quarter 2021, compared with 32.2% at the
end of the fourth quarter 2020, mainly driven by net debt reduction,
earnings and remeasurements of pensions.
Dividends declared to Royal Dutch Shell plc shareholders for the quarter
amount to $0.1735 per share, an increase of around 4% from the last
quarter.
With effect from the first quarter 2021, business performance analysis
of the current quarter compared with the previous quarter is introduced,
which will replace, starting from the second quarter 2021, business
performance
ROYAL DUTCH SHELL PLC 1ST QUARTER 2021
UNAUDITED RESULTS
---------------------------------------
analysis compared with the same quarter of the previous year. This
change is introduced to enable better understanding of our business
performance sequentially from quarter to quarter.
Supplementary financial and operational disclosure and a separate press
release for this quarter are available at www.shell.com/investors1. With
effect from the first quarter 2021, new disclosures are included in
these supplementary financial and operational disclosures to improve
understanding of our businesses. See Reference J for reconciliations of
new Additional Performance (Non-GAAP) Measures introduced in these
disclosures.
1. Not incorporated by reference.
FIRST QUARTER 2021 PORTFOLIO DEVELOPMENTS
Integrated Gas
In March 2021, QGC Common Facilities Company Pty Ltd, a wholly-owned
subsidiary of Shell, completed the sale of a 26.25% interest in the
Queensland Curtis LNG (QCLNG) Common Facilities to Global Infrastructure
Partners Australia for $2.5 billion, following the receipt of regulatory
approval.
Upstream
In January 2021, Shell completed the sale of its 30% interest in Oil
Mining Lease 17 in the Eastern Niger Delta, and associated
infrastructure, to TNOG Oil and Gas Limited, a related company of Heirs
Holdings Limited and Transnational Corporation of Nigeria Plc, for a
consideration of $533 million. A total of $453 million was paid by
completion with the balance to be paid over an agreed period.
In February 2021, an agreement was reached with publicly listed Canadian
energy company Crescent Point Energy Corp. to sell the Duvernay shale
light oil position in Alberta, Canada. The transaction completed on
April 1, 2021. The consideration received consisted of $533 million in
cash and 50 million shares in Crescent Point Energy common stock (TSX:
CPG) valued at $208 million based on the closing price on March 31,
2021.
In March 2021, Shell Egypt and one of its affiliates signed an agreement
with a consortium made up of subsidiaries of Cheiron Petroleum
Corporation and Cairn Energy plc to acquire Shell's upstream assets in
Egypt's Western Desert for a base consideration of $646 million and
additional payments of up to $280 million between 2021 and 2024,
contingent on the oil price and the results of further exploration. The
transaction is subject to government and regulatory approvals and is
expected to complete in the second half of 2021.
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ROYAL DUTCH SHELL PLC 1ST QUARTER 2021
UNAUDITED RESULTS
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PERFORMANCE BY SEGMENT
INTEGRATED GAS
Quarters $ million
Q1 2021 Q4 2020 Q1 2020 %(1)
2,527 20 1,812 +12,638 Segment earnings
1,112 (1,089) (331) Of which: Identified items (Reference A)
1,415 1,109 2,143 +28 Adjusted Earnings
2,491 2,203 3,986 +13 Cash flow from operating activities
Cash flow from operating activities excluding working
3,653 2,195 3,352 +66 capital movements (Reference H)
1,015 1,664 882 Cash capital expenditure (Reference C)
170 156 162 +9 Liquids production available for sale (thousand b/d)
Natural gas production available for sale (million
4,621 4,555 4,596 +1 scf/d)
967 942 955 +3 Total production available for sale (thousand boe/d)
8.16 8.21 8.88 -1 LNG liquefaction volumes (million tonnes)
15.80 16.89 19.00 -6 LNG sales volumes (million tonnes)
------------ --------- --------- ----------- ---------------------------------------------------------
1. Q1 on Q4 change.
First quarter segment earnings were $2,527 million. This included gains
on sale of assets of $997 million and gains of $263 million due to the
fair value accounting of commodity derivatives. These gains are part of
identified items (see Reference A). Adjusted Earnings for the quarter
were $1,415 million. Net financial impact from the Texas winter storm
was limited as positive trading margins were offset by higher operating
expenses ($0.4 billion post-tax) related to provisions for counterparty
credit risk.
Cash flow from operating activities for the quarter was $2,491 million,
primarily driven by Adjusted Earnings before non-cash expenses including
depreciation, as well as favourable commodity derivatives impacts of
$867 million. This was partly offset by negative working capital
movements of $1,162 million.
Compared with the fourth quarter 2020, Integrated Gas Adjusted Earnings
primarily reflected higher realised prices for oil and LNG, partly
offset by higher operating expenses related to credit provisions.
Compared with the fourth quarter 2020, total oil and gas production
increased by 3% mainly due to the restart of production at the Prelude
floating LNG operations in Australia. LNG liquefaction volumes decreased
by 1% due to cargo timing, partly offset by the restart of production at
the Prelude floating LNG operations in Australia.
Compared with the first quarter 2020, Integrated Gas Adjusted Earnings
primarily reflected higher operating expenses related to credit
provisions, lower contributions from marketing and trading and
favourable deferred tax movements in the first quarter 2020.
Compared with the first quarter 2020, total oil and gas production
increased by 1% mainly due to new fields and lower maintenance. LNG
liquefaction volumes decreased by 8% mainly as a result of feedgas
constraints and maintenance activities, partly offset by higher
production at the Prelude floating LNG operations in Australia.
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ROYAL DUTCH SHELL PLC 1ST QUARTER 2021
UNAUDITED RESULTS
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UPSTREAM
Quarters $ million
Q1 2021 Q4 2020 Q1 2020 %(1)
1,096 (2,091) (863) +152 Segment earnings
133 (1,344) (1,154) Of which: Identified items (Reference A)
963 (748) 291 +229 Adjusted Earnings
4,108 2,010 5,607 +104 Cash flow from operating activities
Cash flow from operating activities excluding working
4,702 2,890 3,718 +63 capital movements (Reference H)
1,534 1,654 2,521 Cash capital expenditure (Reference C)
1,579 1,537 1,730 +3 Liquids production available for sale (thousand b/d)
5,126 4,837 5,680 +6 Natural gas production available for sale (million
scf/d)
2,462 2,371 2,710 +4 Total production available for sale (thousand boe/d)
---------- --------- --------- -------- ---------------------------------------------------------
1. Q1 on Q4 change.
First quarter segment earnings were $1,096 million. This included a net
gain of $411 million related to the sale of assets, and a charge of $232
million related to the impact of the weakening Brazilian real on a
deferred tax position. These net gains are part of identified items (see
Reference A). Adjusted Earnings were $963 million.
Cash flow from operating activities for the quarter was $4,108 million,
primarily driven by Adjusted Earnings before non-cash expenses including
depreciation.
Compared with the fourth quarter 2020, Upstream Adjusted Earnings
reflected higher realised oil prices, lower depreciation, and the
absence of the unfavourable deferred tax movements which impacted the
fourth quarter 2020. These were partly offset by comparative adverse
currency effects.
Compared with the fourth quarter 2020, total production increased by 4%,
mainly due to favourable gas seasonal effects and the impact of
hurricanes in the US Gulf of Mexico in the fourth quarter 2020.
Compared with the first quarter 2020, Upstream Adjusted Earnings
reflected higher realised oil prices, and lower depreciation.
Compared with the first quarter 2020, total production decreased by 9%,
mainly due to the impact of higher maintenance and divestments. The
impact of field declines was largely offset by growth from new fields.
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ROYAL DUTCH SHELL PLC 1ST QUARTER 2021
UNAUDITED RESULTS
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OIL PRODUCTS
Quarters $ million
Q1 2021 Q4 2020 Q1 2020 %(1)
650 (1,775) 2,211 +137 Segment earnings(2)
(227) (2,315) 849 Of which: Identified items (Reference A)
877 540 1,363 +62 Adjusted Earnings(2)
Of which:
(105) (287) 158 +63 Refining & Trading(3)
982 828 1,205 +19 Marketing(3)
893 1,198 4,878 -25 Cash flow from operating activities
Cash flow from operating activities excluding working
3,313 782 353 +324 capital movements (Reference H)
668 1,310 580 Cash capital expenditure (Reference C)
1,751 1,940 2,397 -10 Refinery processing intake (thousand b/d)
4,164 4,781 5,278 -13 Oil Products sales volumes (thousand b/d)
-------------- --------- --------- -------- ---------------------------------------------------------
1. Q1 on Q4 change.
2. Earnings are presented on a CCS basis (see Note 2).
3. As of Q1 2021, changes in the cost and activity allocation between
Marketing and Refining & Trading resulted in a net charge of $170
million to Refining & Trading, with an offsetting amount in Marketing.
This change does not impact consolidated Oil Products Adjusted Earnings.
First quarter segment earnings were $650 million. This included
redundancy and restructuring costs of $284 million, which are part of
identified items (see Reference A). Adjusted Earnings were $877 million.
Cash flow from operating activities for the first quarter 2021 was $893
million, primarily driven by Adjusted Earnings before depreciation and
by cost-of-sales adjustments, partly offset by negative working capital
movements of $2,420 million, and cash outflows for commodity derivatives
of $200 million.
Compared with the fourth quarter 2020, Oil Products Adjusted Earnings
reflected higher contributions from trading and optimisation, higher
realised refining margins, and lower operating expenses. These were
partly offset by the absence of the favourable deferred tax movements in
the fourth quarter 2020.
Oil Products sales volumes decreased due to the impact of further
lockdowns arising from COVID-19, and the Texas winter storm, compared
with the fourth quarter 2020.
--Refining & Trading Adjusted Earnings reflected higher realised
refining margins, and higher contributions from trading and
optimisation. These were partly offset by the absence of the favourable
deferred tax movements in the fourth quarter 2020.
--Marketing Adjusted Earnings reflected lower operating expenses.
Refinery utilisation remained at 72% compared with the fourth quarter
2020, with the impact of the Texas winter storm in the first quarter
2021, offset by the comparative effect of the Convent Refinery shutdown
in the fourth quarter 2020.
Compared with the first quarter 2020, Oil Products Adjusted Earnings
reflected lower realised refining and marketing margins due to a weaker
macroeconomic environment and the COVID-19 pandemic.
--Refining & Trading Adjusted Earnings reflected lower realised refining
margins, partly offset by lower depreciation.
--Marketing Adjusted Earnings reflected lower margins.
Refinery utilisation was 72% compared with 81% in the first quarter
2020, mainly due to lower demand and economic optimisation of the plants,
as well as the impact of the Texas winter storm.
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ROYAL DUTCH SHELL PLC 1ST QUARTER 2021
UNAUDITED RESULTS
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CHEMICALS
Quarters $ million
Q1 2021 Q4 2020 Q1 2020 %(1)
689 367 146 +88 Segment earnings(2)
(41) (14) (2) Of which: Identified items (Reference A)
730 381 148 +92 Adjusted Earnings(2)
324 774 (178) -58 Cash flow from operating activities
Cash flow from operating activities excluding working
1,045 775 189 +35 capital movements (Reference H)
730 830 846 Cash capital expenditure (Reference C)
3,583 3,718 3,871 -4 Chemicals sales volumes (thousand tonnes)
----------- --------- --------- -------- ---------------------------------------------------------
1. Q1 on Q4 change.
2. Earnings are presented on a CCS basis (see Note 2).
First quarter segment earnings were $689 million.
Cash flow from operating activities for the quarter was $324 million,
primarily driven by Adjusted Earnings before depreciation as well as
negative working capital movements of $721 million.
Compared with the fourth quarter 2020, Chemicals Adjusted Earnings
reflected higher realised margins in base chemicals and intermediates
from a stronger price environment.
Chemicals manufacturing plant utilisation remained at 79% compared with
the fourth quarter 2020, with the impact of the Texas winter storm at
the Deer Park site offsetting comparatively fewer maintenance
activities.
Compared with the first quarter 2020, Chemicals Adjusted Earnings
reflected higher realised margins in base chemicals and intermediates
from a stronger price environment.
Chemicals manufacturing plant utilisation was 79% compared with 84% in
the first quarter 2020, mainly due to the Texas winter storm.
CORPORATE
Quarters $ million
Q1 2021 Q4 2020 Q1 2020
(531) (954) (453) Segment earnings
134 (118) 535 Of which: Identified items (Reference A)
(666) (836) (989) Adjusted Earnings
478 102 559 Cash flow from operating activities
(30) (17) (239) Cash flow from operating activities excluding working
capital movements (Reference H)
----------- --------- --------- -----------------------------------------------------------
First quarter segment earnings were an expense of $531 million. This
included a gain of $134 million from the deferred tax impact of the
weakening Brazilian real on financing positions, which is part of
identified items (see Reference A). Adjusted earnings for the quarter
were an expense of $666 million.
Compared with the fourth quarter 2020, Adjusted Earnings reflected a
favourable movement in tax credits partly offset by adverse currency
exchange rate effects.
Compared with the first quarter 2020, Adjusted Earnings reflected
favourable currency exchange rate effects and lower net interest
expense.
OUTLOOK FOR THE SECOND QUARTER 2021
As a result of the COVID-19 pandemic, there continues to be significant
uncertainty in the macroeconomic conditions with an expected negative
impact on demand for oil, gas and related products. The second quarter
2021 outlook provides ranges for operational and financial metrics based
on current expectations, but these are subject to change in the light of
evolving market conditions. Due to demand or regulatory requirements
and/or constraints in infrastructure, Shell may need
Page 6
ROYAL DUTCH SHELL PLC 1ST QUARTER 2021
UNAUDITED RESULTS
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to take measures to curtail or reduce oil and/or gas production, LNG
liquefaction as well as utilisation of refining and chemicals plants and
similarly sales volumes could be impacted. Such measures will likely
have a variety of impacts on our operational and financial metrics.
Integrated Gas production is expected to be approximately 880 - 940
thousand boe/d. LNG liquefaction volumes are expected to be
approximately 7.6 - 8.2 million tonnes.
Upstream production is expected to be approximately 2,150 - 2,350
thousand boe/d, reflecting lower seasonal gas demand and divestment
impacts.
Refinery utilisation is expected to be approximately 73% - 81%.
Oil Products sales volumes are expected to be approximately 4,000 -
5,000 thousand b/d.
Chemicals manufacturing plant utilisation is expected to be
approximately 76% - 84%.
Chemicals sales volumes are expected to be approximately 3,500 - 3,800
thousand tonnes.
Corporate Adjusted Earnings are expected to be a net expense of
approximately $600 - $700 million in the second quarter 2021 and a net
expense of approximately $2,400 - $2,800 million for the full year 2021.
This excludes the impact of currency exchange rate effects.
Page 7
ROYAL DUTCH SHELL PLC 1ST QUARTER 2021
UNAUDITED RESULTS
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UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF INCOME
Quarters $ million
Q1 2021 Q4 2020 Q1 2020
55,665 43,989 60,029 Revenue(1)
995 629 854 Share of profit of joint ventures and associates
2,455 411 76 Interest and other income(2)
59,115 45,028 60,959 Total revenue and other income
34,369 28,511 43,213 Purchases
6,808 6,701 5,982 Production and manufacturing expenses
2,462 2,751 2,393 Selling, distribution and administrative expenses
166 199 243 Research and development
285 508 294 Exploration
5,896 9,573 7,093 Depreciation, depletion and amortisation(2)
892 908 1,118 Interest expense
50,878 49,152 60,336 Total expenditure
8,237 (4,124) 623 Income/(loss) before taxation
2,453 (168) 646 Taxation charge/(credit)
5,784 (3,956) (23) Income/(loss) for the period(1)
124 58 1 Income/(loss) attributable to non-controlling interest
Income/(loss) attributable to Royal Dutch Shell plc
5,660 (4,014) (24) shareholders
0.73 (0.52) 0.00 Basic earnings per share ($)(3)
0.72 (0.52) 0.00 Diluted earnings per share ($)(3)
----------------------- --------- --------- -------------------------------------------------------
1. See Note 2 "Segment information".
2. See Note 7 "Other notes to the Condensed Consolidated Interim
Financial Statements".
3. See Note 3 "Earnings per share".
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Quarters $ million
Q1 2021 Q4 2020 Q1 2020
5,784 (3,956) (23) Income/(loss) for the period
Other comprehensive income/(loss) net of tax:
Items that may be reclassified to income in later
periods:
(852) 2,280 (3,935) -- Currency translation differences
(14) 3 (28) -- Debt instruments remeasurements
132 54 (152) -- Cash flow hedging gains/(losses)
171 (170) -- -- Net investment hedging gains/(losses)
(34) 3 101 -- Deferred cost of hedging
-- Share of other comprehensive income/(loss) of joint
(56) 39 (60) ventures and associates
(652) 2,208 (4,074) Total
Items that are not reclassified to income in later
periods:
4,628 1,045 1,756 -- Retirement benefits remeasurements
40 88 (137) -- Equity instruments remeasurements
-- Share of other comprehensive income/(loss) of joint
(25) 6 48 ventures and associates
4,643 1,140 1,667 Total
3,991 3,347 (2,407) Other comprehensive income/(loss) for the period
9,775 (609) (2,430) Comprehensive income/(loss) for the period
121 134 (123) Comprehensive income/(loss) attributable to non-controlling
interest
9,653 (743) (2,307) Comprehensive income/(loss) attributable to Royal
Dutch Shell plc shareholders
---------------------- --------- --------- ---------------------------------------------------------------
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ROYAL DUTCH SHELL PLC 1ST QUARTER 2021
UNAUDITED RESULTS
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CONDENSED CONSOLIDATED BALANCE SHEET
$ million
March 31, 2021 December 31, 2020
Assets
Non-current assets
Intangible assets 22,872 22,822
Property, plant and equipment 208,298 210,847
Joint ventures and associates 22,537 22,451
Investments in securities 3,341 3,222
Deferred tax 13,871 16,311
Retirement benefits(1) 5,845 2,474
Trade and other receivables 7,396 7,641
Derivative financial
instruments(2) 1,681 2,805
285,841 288,573
Current assets
Inventories 22,680 19,457
Trade and other receivables 40,142 33,625
Derivative financial
instruments(2) 5,752 5,783
Cash and cash equivalents 30,985 31,830
99,559 90,695
Total assets 385,400 379,268
Liabilities
Non-current liabilities
Debt 87,828 91,115
Trade and other payables 2,670 2,304
Derivative financial
instruments(2) 554 420
Deferred tax 11,285 10,463
Retirement benefits1,3 12,348 15,605
Decommissioning and other
provisions 27,330 27,310
142,016 147,217
Current liabilities
Debt 14,541 16,899
Trade and other payables(3) 49,456 44,572
Derivative financial
instruments(2) 5,260 5,308
Income taxes payable(3) 3,372 3,111
Decommissioning and other
provisions 3,802 3,624
76,431 73,514
Total liabilities 218,447 220,731
Equity attributable to Royal
Dutch Shell plc shareholders 163,714 155,310
Non-controlling interest 3,239 3,227
Total equity 166,953 158,537
Total liabilities and equity 385,400 379,268
------------------------------- -------------- -----------------
1. See Note 7 "Other notes to the Condensed Consolidated Interim
Financial Statements".
2. See Note 6 "Derivative financial instruments and debt excluding
lease liabilities".
3. As from January 1, 2021 the 'Retirement benefits' liability has been
classified under non-current liabilities (previously partly presented
within current liabilities) and taxes payable not related to income tax
are presented within 'Trade and other payables' (previously 'Taxes
payable'). Prior period comparatives have been revised to conform with
current year presentation. See Note 7.
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UNAUDITED RESULTS
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Equity attributable to Royal Dutch Shell plc
shareholders
Shares
Share held in Other Retained Non-controlling Total
$ million capital(1) trust reserves(2) earnings Total interest equity
At January 1, 2021 651 (709) 12,752 142,616 155,310 3,227 158,537
Comprehensive
income/(loss) for
the period -- -- 3,994 5,660 9,653 121 9,775
Dividends(3) -- -- -- (1,289) (1,289) (125) (1,414)
Share-based
compensation -- 356 (371) 55 41 -- 41
Other changes in
non-controlling
interest -- -- -- (1) (1) 15 15
At March 31, 2021 651 (352) 16,375 147,041 163,714 3,239 166,953
At January 1, 2020 657 (1,063) 14,451 172,431 186,476 3,987 190,463
Comprehensive
income/(loss) for
the period -- -- (2,283) (24) (2,307) (123) (2,430)
Transfer from
other
comprehensive
income -- -- (6) 6 -- -- --
Dividends3 -- -- -- (3,482) (3,482) (110) (3,591)
Repurchases of
shares (5) -- 5 (1,006) (1,006) -- (1,006)
Share-based
compensation -- 585 (374) (253) (43) -- (43)
Other changes in
non-controlling
interest -- -- -- 1 1 (14) (14)
At March 31, 2020 652 (479) 11,794 167,672 179,639 3,740 183,379
------------------ ---------- ------- ----------- -------- ------- --------------- -------
1. See Note 4 "Share capital".
2. See Note 5 "Other reserves".
3. The amount charged to retained earnings is based on prevailing
exchange rates on payment date.
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UNAUDITED RESULTS
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CONSOLIDATED STATEMENT OF CASH FLOWS
Quarters $ million
Q1 2021 Q4 2020 Q1 2020
8,237 (4,124) 623 Income before taxation for the period
Adjustment for:
757 716 897 -- Interest expense (net)
5,896 9,573 7,093 -- Depreciation, depletion and amortisation
136 199 83 -- Exploration well write-offs
-- Net (gains)/losses on sale and revaluation of non-current
(2,073) (162) 106 assets and businesses
(995) (629) (854) -- Share of (profit)/loss of joint ventures and associates
580 982 531 -- Dividends received from joint ventures and associates
(3,426) (1,809) 9,594 -- (Increase)/decrease in inventories
(6,829) (107) 6,314 -- (Increase)/decrease in current receivables
5,865 1,579 (8,430) -- Increase/(decrease) in current payables
185 78 (171) -- Derivative financial instruments
109 212 (91) -- Retirement benefits
77 771 (102) -- Decommissioning and other provisions
583 (355) 579 -- Other
(809) (638) (1,321) Tax paid
8,294 6,287 14,851 Cash flow from operating activities
(3,885) (5,206) (4,263) Capital expenditure
(69) (269) (559) Investments in joint ventures and associates
(21) (28) (147) Investments in equity securities
Proceeds from sale of property, plant and equipment
3,106 94 1,613 and businesses
Proceeds from joint ventures and associates from sale,
275 111 547 capital reduction and repayment of long-term loans(2)
31 7 73 Proceeds from sale of equity securities
98 111 192 Interest received
711 622 855 Other investing cash inflows
(837) (848) (1,028) Other investing cash outflows
(590) (5,406) (2,718) Cash flow from investing activities
Net increase/(decrease) in debt with maturity period
113 (299) 321 within three months
Other debt:
109 2,048 1,003 -- New borrowings
(5,707) (4,862) (2,723) -- Repayments
(806) (1,153) (1,033) Interest paid
(449) 495 (81) Derivative financial instruments
15 (2) (8) Change in non-controlling interest
Cash dividends paid to:
(1,292) (1,307) (3,483) -- Royal Dutch Shell plc shareholders(1)
(125) (69) (110) -- Non-controlling interest
(216) -- (1,486) Repurchases of shares3
Shares held in trust: net sales/(purchases) and dividends
(63) (184) (182) received
(8,420) (5,333) (7,781) Cash flow from financing activities
(128) 567 (595) Effects of exchange rate changes on cash and cash
equivalents
(844) (3,884) 3,756 Increase/(decrease) in cash and cash equivalents
31,830 35,714 18,055 Cash and cash equivalents at beginning of period
30,985 31,830 21,811 Cash and cash equivalents at end of period
--------------------- --------- --------- --------------------------------------------------------------------
1. Cash dividends paid represents the payment of net dividends
(after deduction of withholding taxes where applicable) and payment of
withholding taxes on dividends paid in the previous quarter.
2. As from 2021 renamed from 'Proceeds from sale of joint ventures and
associates'.
3. The amount in Q1 2021 represents a payment of withholding taxes
related to repurchases of shares in Q1 2020.
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UNAUDITED RESULTS
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NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
1. Basis of preparation
These unaudited Condensed Consolidated Interim Financial Statements
("Interim Statements") of Royal Dutch Shell plc ("the Company") and its
subsidiaries (collectively referred to as "Shell") have been prepared in
accordance with IAS 34 Interim Financial Reporting as issued by the
International Accounting Standards Board ("IASB") and as adopted by the
UK. For periods beginning on or after January 1, 2021, Shell's (interim)
financial statements are prepared in accordance with UK-adopted
international accounting standards which were established as a result of
the UK's exit from the European Union. As applied to Shell there are no
material differences from International Financial Reporting Standards as
issued by the IASB. Except for the application of UK-adopted
international accounting standards these Interim Statements have been
prepared on the basis of the same accounting principles as those used in
the Annual Report and Accounts (pages 216 to 264) and Form 20-F (pages
164 to 211) for the year ended December 31, 2020 as filed with the
Registrar of Companies for England and Wales and the US Securities and
Exchange Commission, respectively, and should be read in conjunction
with these filings.
The financial information presented in the unaudited Interim Statements
does not constitute statutory accounts within the meaning of section
434(3) of the Companies Act 2006 ("the Act"). Statutory accounts for the
year ended December 31, 2020 were published in Shell's Annual Report and
Accounts, a copy of which was delivered to the Registrar of Companies
for England and Wales, and in Shell's Form 20-F. The auditor's report on
those accounts was unqualified, did not include a reference to any
matters to which the auditor drew attention by way of emphasis without
qualifying the report and did not contain a statement under sections
498(2) or 498(3) of the Act.
Key accounting considerations, significant judgements and estimates
Future commodity price assumptions and management's view on the future
development of refining margins represent a significant estimate and
both were subject to change in 2020, resulting in the recognition of
impairments in 2020. These assumptions continue to apply for impairment
testing purposes in the first quarter 2021.
2. Segment information
Segment earnings are presented on a current cost of supplies basis (CCS
earnings), which is the earnings measure used by the Chief Executive
Officer for the purposes of making decisions about allocating resources
and assessing performance. On this basis, the purchase price of volumes
sold during the period is based on the current cost of supplies during
the same period after making allowance for the tax effect. CCS earnings
therefore exclude the effect of changes in the oil price on inventory
carrying amounts. Sales between segments are based on prices generally
equivalent to commercially available prices.
Page 12
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INFORMATION BY SEGMENT
Quarters $ million
Q1 2021 Q4 2020 Q1 2020
Third-party revenue
11,258 8,010 10,157 Integrated Gas
1,941 1,576 2,344 Upstream
38,382 31,001 44,297 Oil Products
4,070 3,386 3,221 Chemicals
14 16 11 Corporate
Total third-party
55,665 43,989 60,029 revenue(1)
Inter-segment revenue
1,351 1,098 891 Integrated Gas
7,254 5,860 6,476 Upstream
2,457 1,733 1,851 Oil Products
1,187 784 875 Chemicals
-- -- -- Corporate
CCS earnings
2,527 20 1,812 Integrated Gas
1,096 (2,091) (863) Upstream
650 (1,775) 2,211 Oil Products
689 367 146 Chemicals
(531) (954) (453) Corporate
4,430 (4,434) 2,854 Total CCS earnings
----------------------- --------- --------- -------------------------
1. Includes revenue from sources other than from contracts with
customers, which mainly comprises the impact of fair value accounting of
commodity derivatives. First quarter 2021 included income of $1,211
million (Q4 2020: $114 million income; Q1 2020: $6,686 million income).
This amount includes both the reversal of prior losses of $385 million
(Q4 2020: $147 million gains; Q1 2020: $317 million gains) related to
sales contracts and prior gains of $465 million (Q4 2020: $23 million
gains; Q1 2020: $76 million losses) related to purchase contracts that
were previously recognised and where physical settlement took place in
the first quarter 2021.
RECONCILIATION OF INCOME FOR THE PERIOD TO CCS EARNINGS
Quarters $ million
Q1 2021 Q4 2020 Q1 2020
Income/(loss) attributable to Royal Dutch Shell plc
5,660 (4,014) (24) shareholders
124 58 1 Income/(loss) attributable to non-controlling interest
5,784 (3,956) (23) Income/(loss) for the period
Current cost of supplies adjustment:
(1,631) (589) 3,774 Purchases
353 133 (916) Taxation
(76) (23) 19 Share of profit/(loss) of joint ventures and associates
(1,354) (479) 2,876 Current cost of supplies adjustment
of which:
(1,314) (465) 2,780 Attributable to Royal Dutch Shell plc shareholders
(39) (14) 96 Attributable to non-controlling interest
4,430 (4,434) 2,854 CCS earnings
of which:
4,345 (4,478) 2,756 CCS earnings attributable to Royal Dutch Shell plc
shareholders
85 44 97 CCS earnings attributable to non-controlling interest
----------------------- --------- --------- -------------------------------------------------------
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ROYAL DUTCH SHELL PLC 1ST QUARTER 2021
UNAUDITED RESULTS
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3. Earnings per share
EARNINGS PER SHARE
Quarters
Q1 2021 Q4 2020 Q1 2020
Income/(loss) attributable to Royal Dutch Shell plc
5,660 (4,014) (24) shareholders ($ million)
Weighted average number of shares used as the basis for
determining:
7,782.1 7,784.4 7,819.8 Basic earnings per share (million)
7,832.3 7,784.4 7,819.8 Diluted earnings per share (million)
-------------------- --------- --------- -------------------------------------------------------
4. Share capital
ISSUED AND FULLY PAID ORDINARY SHARES OF EUR0.07 EACH1
Nominal value ($
Number of shares million)
A B A B Total
At January 1,
2021 4,101,239,499 3,706,183,836 345 306 651
At March 31,
2021 4,101,239,499 3,706,183,836 345 306 651
At January 1,
2020 4,151,787,517 3,729,407,107 349 308 657
Repurchases of
shares (46,143,892) (15,422,859) (4) (1) (5)
At March 31,
2020 4,105,643,625 3,713,984,248 345 307 652
-------------- ------------- ------------- -------- --- -----
1. Share capital at March 31, 2021 also included 50,000 issued and
fully paid sterling deferred shares of GBP1 each.
At Royal Dutch Shell plc's Annual General Meeting on May 19, 2020, the
Board was authorised to allot ordinary shares in Royal Dutch Shell plc,
and to grant rights to subscribe for, or to convert, any security into
ordinary shares in Royal Dutch Shell plc, up to an aggregate nominal
amount of EUR182.7 million (representing 2,611 million ordinary shares
of EUR0.07 each), and to list such shares or rights on any stock
exchange. This authority expires at the earlier of the close of business
on August 19, 2021, and the end of the Annual General Meeting to be held
in 2021, unless previously renewed, revoked or varied by Royal Dutch
Shell plc in a general meeting.
5. Other reserves
OTHER RESERVES
Accumulated
Share Capital Share other
Merger premium redemption plan comprehensive
$ million reserve reserve reserve reserve income Total
At January 1, 2021 37,298 154 129 906 (25,735) 12,752
Other comprehensive income/(loss) attributable to
Royal Dutch Shell plc shareholders -- -- -- -- 3,994 3,994
Share-based compensation -- -- -- (371) -- (371)
At March 31, 2021 37,298 154 129 535 (21,742) 16,375
At January 1, 2020 37,298 154 123 1,049 (24,173) 14,451
Other comprehensive income/(loss) attributable to
Royal Dutch Shell plc shareholders -- -- -- -- (2,283) (2,283)
Transfer from other comprehensive income -- -- -- -- (6) (6)
Repurchases of shares -- -- 5 -- -- 5
Share-based compensation -- -- -- (374) -- (374)
At March 31, 2020 37,298 154 128 675 (26,462) 11,794
---------------------------------------------------- ------- ------- ---------- ------- ------------- -------
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The merger reserve and share premium reserve were established as a
consequence of Royal Dutch Shell plc becoming the single parent company
of Royal Dutch Petroleum Company and The "Shell" Transport and Trading
Company, p.l.c., now The Shell Transport and Trading Company Limited, in
2005. The merger reserve increased in 2016 following the issuance of
shares for the acquisition of BG Group plc. The capital redemption
reserve was established in connection with repurchases of shares of
Royal Dutch Shell plc. The share plan reserve is in respect of
equity-settled share-based compensation plans.
6. Derivative financial instruments and debt excluding lease liabilities
As disclosed in the Consolidated Financial Statements for the year ended
December 31, 2020, presented in the Annual Report and Accounts and Form
20-F for that year, Shell is exposed to the risks of changes in fair
value of its financial assets and liabilities. The fair values of the
financial assets and liabilities are defined as the price that would be
received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. Methods
and assumptions used to estimate the fair values at March 31, 2021, are
consistent with those used in the year ended December 31, 2020, though
the carrying amounts of derivative financial instruments measured using
predominantly unobservable inputs have changed since that date.
The table below provides the comparison of the fair value with the
carrying amount of debt excluding lease liabilities, disclosed in
accordance with IFRS 7 Financial Instruments: Disclosures.
DEBT EXCLUDING LEASE LIABILITIES
$ million March 31, 2021 December 31, 2020
Carrying amount 74,192 79,594
Fair value(1) 79,603 88,294
------------------------------- -------------- -----------------
1. Mainly determined from the prices quoted for these securities.
7. Other notes to the unaudited Condensed Consolidated Interim Financial
Statements
Consolidated Statement of Income
Interest and other income
Quarters $ million
Q1 2021 Q4 2020 Q1 2020
2,455 411 76 Interest and other income
of which:
134 168 199 Interest income
Dividend income (from investments in equity
1 2 2 securities)
Net gains on sales and revaluation of non-current
2,073 162 (106) assets and businesses
Net foreign exchange (losses)/gains on financing
85 (35) (82) activities
161 113 63 Other
---------- --------- --------- -----------------------------------------------------
Depreciation, depletion and amortisation
Quarters $ million
Q1 2021 Q4 2020 Q1 2020
Depreciation, depletion and
5,896 9,573 7,093 amortisation
---------- --------- --------- --------------------------------------
Depreciation, depletion and amortisation in Q1 2021 includes $84 million
of impairments (Q4 2020: $3,318 million; Q1 2020: $749 million).
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ROYAL DUTCH SHELL PLC 1ST QUARTER 2021
UNAUDITED RESULTS
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Condensed Consolidated Balance Sheet
Retirement benefits
$ million
March 31, 2021 December 31, 2020
Non-current assets
Retirement benefits 5,845 2,474
Non-current liabilities
Retirement benefits(1) 12,348 15,605
Deficit 6,503 13,131
-------------------------- -------------- -----------------
1.As from January 1, 2021 the 'Retirement benefits' liability has been
classified under non-current liabilities (previously partly presented
within current liabilities). Prior period comparatives have been revised
by $437 million to conform with current year presentation.
The decrease in the net retirement benefit liability is mainly driven by
an increase of the market yield on high-quality corporate bonds in the
US, the UK and Eurozone, partly offset by an increase in expected
inflation in the UK and Eurozone. Amounts recognised in the balance
sheet in relation to defined benefit plans include both plan assets and
obligations that are presented on a net basis on a plan-by-plan basis.
Income taxes payable
$ million
March 31, 2021 December 31, 2020
Income taxes payable 3,372 3,111
As from January 1, 2021 taxes payable not related to income tax are
presented within 'Trade and other payables' (previously within 'Taxes
payable') and 'Taxes payable' has been renamed into 'Income taxes
payable'. Prior period comparatives have been revised by $2,895 million
to conform with current year presentation.
8. Post-Balance Sheet Events
In February 2021, an agreement was reached with publicly listed Canadian
energy company Crescent Point Energy Corp. to sell the Duvernay shale
light oil position in Alberta, Canada. The transaction completed on
April 1, 2021. The consideration received was comprised of $533 million
in cash and 50 million shares in Crescent Point Energy common stock
(TSX: CPG) valued at $208 million based on the closing price on March
31, 2021.
Page 16
ROYAL DUTCH SHELL PLC 1ST QUARTER 2021
UNAUDITED RESULTS
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ALTERNATIVE PERFORMANCE (NON-GAAP) MEASURES
A.Adjusted Earnings
The "Adjusted Earnings" measure aims to facilitate a comparative
understanding of Shell's financial performance from period to period by
removing the effects of oil price changes on inventory carrying amounts
and removing the effects of identified items. These items are in some
cases driven by external factors and may, either individually or
collectively, hinder the comparative understanding of Shell's financial
results from period to period. This measure excludes earnings
attributable to non-controlling interest.
ADJUSTED EARNINGS
Quarters $ million
Q1 2021 Q4 2020 Q1 2020
Income/(loss) attributable to Royal Dutch Shell plc
5,660 (4,014) (24) shareholders
Add: Current cost of supplies adjustment attributable to
(1,314) (465) 2,780 Royal Dutch Shell plc shareholders (Note 2)
Less: Identified items attributable to Royal Dutch
1,112 (4,871) (104) Shell plc shareholders
3,234 393 2,860 Adjusted Earnings
------------------- --------- --------- ---------------------------------------------------------
Identified items
Identified items comprise: divestment gains and losses, impairments,
redundancy and restructuring, provisions for onerous contracts, fair
value accounting of commodity derivatives and certain gas contracts and
the impact of exchange rate movements on certain deferred tax balances,
and other items.
IDENTIFIED ITEMS
Quarters $ million
Q1 2021 Q4 2020 Q1 2020
Identified items before tax
2,073 162 (76) Divestment gains/(losses)
(84) (3,344) (749) Impairments
(748) (372) (18) Redundancy and restructuring
-- (1,259) -- Provisions for onerous contracts
Fair value accounting of commodity derivatives and
388 (957) 968 certain gas contracts
31 (145) -- Other
1,661 (5,914) 125 Total identified items before tax
(549) 1,033 (228) Total tax impact of identified items
Identified items after tax
1,410 (20) (32) Divestment gains/(losses)
(94) (2,746) (536) Impairments
(486) (267) (7) Redundancy and restructuring
-- (994) -- Provisions for onerous contracts
Fair value accounting of commodity derivatives and
365 (864) 838 certain gas contracts
(110) 157 (366) Impact of exchange rate movements on tax balances
25 (147) -- Other
1,112 (4,881) (104) Impact on CCS earnings
Of which:
1,112 (1,089) (331) Integrated Gas
133 (1,344) (1,154) Upstream
(227) (2,315) 849 Oil Products
(41) (14) (2) Chemicals
134 (118) 535 Corporate
1,112 (4,871) (104) Impact on CCS earnings attributable to shareholders
-- (10) -- Impact on CCS earnings attributable to non-controlling
interest
------------------ --------- --------- -----------------------------------------------------------
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UNAUDITED RESULTS
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The identified items categories above may include after-tax impacts of
identified items of joint ventures and associates which are fully
reported within "Share of profit of joint ventures and associates" in
the Consolidated Statement of Income, and fully reported as identified
items before tax in the table above. Identified items related to
subsidiaries are consolidated and reported across appropriate lines of
the Consolidated Statement of Income. Only pre-tax identified items
reported by subsidiaries are taken into account in the calculation of
underlying operating expenses (Reference F).
Provisions for onerous contracts: Provisions for onerous contracts that
relate to businesses that Shell has exited or to redundant assets or
assets that cannot be used.
Fair value accounting of commodity derivatives and certain gas
contracts: In the ordinary course of business, Shell enters into
contracts to supply or purchase oil and gas products, as well as power
and environmental products. Shell also enters into contracts for tolling,
pipeline and storage capacity. Derivative contracts are entered into for
mitigation of resulting economic exposures (generally price exposure)
and these derivative contracts are carried at period-end market price
(fair value), with movements in fair value recognised in income for the
period. Supply and purchase contracts entered into for operational
purposes, as well as contracts for tolling, pipeline and storage
capacity, are, by contrast, recognised when the transaction occurs;
furthermore, inventory is carried at historical cost or net realisable
value, whichever is lower. As a consequence, accounting mismatches occur
because: (a) the supply or purchase transaction is recognised in a
different period, or (b) the inventory is measured on a different basis.
In addition, certain contracts are, due to pricing or delivery
conditions, deemed to contain embedded derivatives or written options
and are also required to be carried at fair value even though they are
entered into for operational purposes. The accounting impacts are
reported as identified items.
Impacts of exchange rate movements on tax balances represent the impact
on tax balances of exchange rate movements arising on (a) the conversion
to dollars of the local currency tax base of non-monetary assets and
liabilities, as well as losses (this primarily impacts the Upstream and
Integrated Gas segments) and (b) the conversion of dollar-denominated
inter-segment loans to local currency, leading to taxable exchange rate
gains or losses (this primarily impacts the Corporate segment).
Other identified items represent other credits or charges that based on
Shell management's assessment hinder the comparative understanding of
Shell's financial results from period to period.
B. Adjusted Earnings per share
Adjusted Earnings per share is calculated as Adjusted Earnings (see
Reference A), divided by the weighted average number of shares used as
the basis for basic earnings per share (see Note 3).
C. Cash capital expenditure
Cash capital expenditure represents cash spent on maintaining and
developing assets as well as on investments in the period. Management
regularly monitors this measure as a key lever to delivering sustainable
cash flows. Cash capital expenditure is the sum of the following lines
from the Consolidated Statement of Cash flows: Capital expenditure,
Investments in joint ventures and associates and Investments in equity
securities.
Quarters $ million
Q1 2021 Q4 2020 Q1 2020
3,885 5,206 4,263 Capital expenditure
Investments in joint ventures and
69 269 559 associates
21 28 147 Investments in equity securities
3,974 5,503 4,970 Cash capital expenditure
Of which:
1,015 1,664 882 Integrated Gas
1,534 1,654 2,521 Upstream
668 1,310 580 Oil Products
730 830 846 Chemicals
28 46 141 Corporate
---------- --------- --------- --------------------------------------
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ROYAL DUTCH SHELL PLC 1ST QUARTER 2021
UNAUDITED RESULTS
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D. Return on average capital employed
Return on average capital employed ("ROACE") measures the efficiency of
Shell's utilisation of the capital that it employs. Shell uses two ROACE
measures: ROACE on a Net income basis and ROACE on a CCS basis excluding
identified items, both adjusted for after-tax interest expense. With
effect from the second quarter 2020, the after-tax interest expense
adjustment is calculated using an applicable blended statutory tax rate.
This change is implemented to eliminate the distorting volatility
effects of the effective tax rate. There is no significant impact on
prior periods comparatives, which therefore have not been revised.
Both measures refer to Capital employed which consists of total equity,
current debt and non-current debt.
ROACE on a Net income basis
In this calculation, the sum of income for the current and previous
three quarters, adjusted for after-tax interest expense, is expressed as
a percentage of the average capital employed for the same period.
$ million Quarters
Q1 2021 Q4 2020 Q1 2020
Income - current and previous three quarters (15,727) (21,534) 10,252
Interest expense after tax - current and previous
three quarters 2,728 2,822 2,854
Income before interest expense - current and previous
three quarters (12,999) (18,712) 13,106
Capital employed -- opening 278,444 286,887 292,797
Capital employed -- closing 269,323 266,551 278,444
Capital employed -- average 273,883 276,719 285,620
ROACE on a Net income basis (4.7)% (6.8)% 4.6%
-------------------------------------------------------- -------- -------- -------
ROACE on a CCS basis excluding identified items
In this calculation, the sum of CCS earnings excluding identified items
for the current and previous three quarters, adjusted for after-tax
interest expense, is expressed as a percentage of the average capital
employed for the same period.
$ million Quarters
Q1 2021 Q4 2020 Q1 2020
CCS earnings - current and previous three quarters (18,125) (19,702) 13,256
Identified items - current and previous three quarters (23,562) (24,777) (1,266)
Interest expense after tax -- current and previous
three quarters 2,728 2,822 2,854
CCS earnings excluding identified items before interest
expense - current and previous three quarters 8,165 7,898 17,376
Capital employed -- average 273,883 276,719 285,620
ROACE on a CCS basis excluding identified items 3.0% 2.9% 6.1%
---------------------------------------------------------- -------- -------- -------
E. Gearing
Gearing is a measure of Shell's capital structure and is defined as net
debt as a percentage of total capital. Net debt is defined as the sum of
current and non-current debt, less cash and cash equivalents, adjusted
for the fair value of derivative financial instruments used to hedge
foreign exchange and interest rate risks relating to debt, and
associated collateral balances. Management considers this adjustment
useful because it reduces the volatility of net debt caused by
fluctuations in foreign exchange and interest rates, and eliminates the
potential impact of related collateral payments or receipts.
Debt-related derivative financial instruments are a subset of the
derivative financial instrument assets and liabilities presented on the
balance sheet. Collateral balances are reported under "Trade and other
receivables" or "Trade and other payables" as appropriate.
Page 19
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UNAUDITED RESULTS
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$ million Quarters
December 31,
March 31, 2021 2020 March 31, 2020
Current debt 14,541 16,899 15,767
Non-current debt 87,828 91,115 79,298
Total debt 102,369 108,014 95,065
Of which lease liabilities 28,177 28,419 29,290
Add: Debt-related derivative financial instruments:
net liability/(asset) (864) (1,979) 1,218
Add: Collateral on debt-related derivatives: net
liability/(asset) 732 1,181 (58)
Less: Cash and cash equivalents (30,985) (31,830) (21,811)
Net debt 71,252 75,386 74,413
Add: Total equity 166,953 158,537 183,379
Total capital 238,205 233,923 257,792
Gearing 29.9% 32.2% 28.9%
------------------------------------------------------ -------- --- ------- ---- -------- ---
F. Operating expenses
Operating expenses is a measure of Shell's cost management performance,
comprising the following items from the Consolidated Statement of
Income: production and manufacturing expenses; selling, distribution and
administrative expenses; and research and development expenses.
Underlying operating expenses is a measure aimed at facilitating a
comparative understanding of performance from period to period by
removing the effects of identified items, which, either individually or
collectively, can cause volatility, in some cases driven by external
factors.
Quarters $ million
Q1 2021 Q4 2020 Q1 2020
6,808 6,701 5,982 Production and manufacturing expenses
Selling, distribution and
2,462 2,751 2,393 administrative expenses
166 199 243 Research and development
9,436 9,652 8,618 Operating expenses
Of which identified items:
Redundancy and restructuring
(747) (371) (18) (charges)/reversal
-- (737) -- (Provisions)/reversal
35 -- -- Other
(712) (1,108) (18)
8,724 8,544 8,600 Underlying operating expenses
---------- --------- --------- --------------------------------------
G. Free cash flow
Free cash flow is used to evaluate cash available for financing
activities, including dividend payments and debt servicing, after
investment in maintaining and growing the business. It is defined as the
sum of "Cash flow from operating activities" and "Cash flow from
investing activities".
Cash flows from acquisition and divestment activities are removed from
Free cash flow to arrive at the Organic free cash flow, a measure used
by management to evaluate the generation of free cash flow without these
activities.
Page 20
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UNAUDITED RESULTS
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Quarters $ million
Q1 2021 Q4 2020 Q1 2020
8,294 6,287 14,851 Cash flow from operating activities
(590) (5,406) (2,718) Cash flow from investing activities
7,704 882 12,133 Free cash flow
3,412 212 2,233 Less: Divestment proceeds (Reference I)
Add: Tax paid on divestments (reported under "Other
-- -- -- investing cash outflows")
Add: Cash outflows related to inorganic capital
89 202 404 expenditure1
4,381 871 10,304 Organic free cash flow2
---------- --------- --------- -------------------------------------------------------
1.Cash outflows related to inorganic capital expenditure includes
portfolio actions which expand Shell's activities through acquisitions
and restructuring activities as reported in capital expenditure lines in
the Consolidated Statement of Cash Flows.
2.Free cash flow less divestment proceeds, adding back outflows related
to inorganic expenditure.
H. Cash flow from operating activities excluding working capital
movements
Working capital movements are defined as the sum of the following items
in the Consolidated Statement of Cash Flows: (i) (increase)/decrease
in inventories, (ii) (increase)/decrease in current receivables, and
(iii) increase/(decrease) in current payables.
Cash flow from operating activities excluding working capital movements
is a measure used by Shell to analyse its operating cash generation over
time excluding the timing effects of changes in inventories and
operating receivables and payables from period to period.
Quarters $ million
Q1 2021 Q4 2020 Q1 2020
8,294 6,287 14,851 Cash flow from operating activities
(3,426) (1,809) 9,594 (Increase)/decrease in inventories
(6,829) (107) 6,314 (Increase)/decrease in current receivables
5,865 1,579 (8,430) Increase/(decrease) in current payables
(4,390) (337) 7,478 (Increase)/decrease in working capital
Cash flow from operating activities excluding working
12,683 6,624 7,373 capital movements
Of which:
3,653 2,195 3,352 Integrated Gas
4,702 2,890 3,718 Upstream
3,313 782 353 Oil Products
1,045 775 189 Chemicals
(30) (17) (239) Corporate
---------- --------- --------- ---------------------------------------------------------
I. Divestment proceeds
Divestment proceeds represent cash received from divestment activities
in the period. Management regularly monitors this measure as a key lever
to deliver sustainable cash flow.
Quarters $ million
Q1 2021 Q4 2020 Q1 2020
Proceeds from sale of property, plant and equipment
3,106 94 1,613 and businesses
Proceeds from joint ventures and associates from sale,
275 111 547 capital reduction and repayment of long-term loans(1)
31 7 73 Proceeds from sale of equity securities
3,412 212 2,233 Divestment proceeds
---------- ----------- ----------- ----------------------------------------------------------
1.As from 2021 renamed from 'Proceeds from sale of joint ventures and
associates'.
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J. Earnings before interest, taxes, depreciation and amortisation
The "Adjusted EBITDA (FIFO basis)" and "Adjusted EBITDA (CCS basis)"
measures are introduced with effect from January 1, 2021. Management
uses both measures to evaluate Shell's performance in the period and
over time.
We define "Adjusted EBITDA (FIFO basis)" as "Income/(loss) attributable
to Royal Dutch Shell plc shareholders" adjusted for identified items;
tax charge/(credit); depreciation, amortisation and depletion;
exploration well write-offs and net interest expense. We also use
"Adjusted EBITDA" on a CCS basis as the current cost of supplies
adjustment aims to remove the impact of price changes on our inventories
in our Oil Products and Chemicals segments, therefore enabling
comparisons over time.
Quarters $ million
Q1 2021 Q4 2020 Q1 2020
Income/(loss) attributable to Royal Dutch Shell plc
5,660 (4,014) (24) shareholders
Less: Identified items attributable to Royal Dutch
1,112 (4,871) (104) Shell plc shareholders
Add: Taxation charge/(credit) excluding tax impact
1,903 865 417 of identified items
Add: Depreciation, depletion and amortisation excluding
5,812 6,255 6,344 impairments
136 199 83 Add: Exploration well write-offs
892 908 1,118 Add: Interest expense excluding identified items
134 168 199 Less: Interest income
13,157 8,916 7,843 Adjusted EBITDA (FIFO basis)
Add: Current cost of supplies adjustment attributable to
(1,314) (465) 2,780 Royal Dutch Shell plc shareholders
Add: Current cost of supplies adjustment to taxation
(353) (133) 916 charge/(credit)
11,490 8,319 11,540 Adjusted EBITDA (CCS basis)
------------ ----------- ----------- -----------------------------------------------------------
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UNAUDITED RESULTS
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CAUTIONARY STATEMENT
All amounts shown throughout this announcement are unaudited. All peak
production figures in Portfolio Developments are quoted at 100% expected
production. The numbers presented throughout this announcement may not
sum precisely to the totals provided and percentages may not precisely
reflect the absolute figures, due to rounding.
The companies in which Royal Dutch Shell plc directly and indirectly
owns investments are separate legal entities. In this announcement
"Shell", "Shell Group" and "Group" 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 its 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 announcement 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 announcement 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 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 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 Shell and could cause
those results to differ materially from those expressed in the
forward-looking statements included in this announcement, 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; (m) risks associated with the impact of
pandemics, such as the COVID-19 (coronavirus) outbreak; and (n) 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 announcement 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 plc's Form 20-F for
the year ended December 31, 2020 (available at www.shell.com/investor
and www.sec.gov). These risk factors also expressly qualify all
forward-looking statements contained in this announcement and should be
considered by the reader. Each forward-looking statement speaks only as
of the date of this announcement, April 29, 2021. 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
announcement.
The content of websites referred to in this announcement do not form
part of this announcement.
We may have used certain terms, such as resources, in this announcement
that the United States Securities and Exchange Commission (SEC) strictly
prohibits us from including in our filings with the SEC. 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.
This announcement contains inside information.
April 29, 2021
The information in this announcement reflects the unaudited
consolidated financial position and results of Royal Dutch
Shell plc. Company No. 4366849, Registered Office: Shell
Centre, London, SE1 7NA, England, UK.
--------------------------------------------------------------
Contacts:
- Linda M. Coulter, Company Secretary
- Media: International +44 (0) 207 934 5550; USA +1 832 337 4355
LEI number of Royal Dutch Shell plc: 21380068P1DRHMJ8KU70
Classification: Inside Information
Page 23
(END) Dow Jones Newswires
April 29, 2021 02:00 ET (06:00 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
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