Shell plc (SHEL) Reports Q4 Adjusted Earnings of $6.4B

"2021 was a momentous year for Shell (NYSE: SHEL). We launched our Powering Progress strategy and simplified our share structure and organisation. Progress made in 2021 will enable us to be bolder and move faster. We have a compelling strategy, with customers at its core. We have ambitious plans to generate shareholder value, to decarbonise our products and to provide energy to our customers while respecting nature.

We delivered very strong financial performance in 2021, and our financial strength and discipline underpin the transformation of our company. Today we are stepping up our distributions with the announcement of an $8.5 billion share buyback programme and we expect to increase our dividend per share by around 4% for Q1 2022."

Shell plc Chief Executive Officer, Ben van Beurden

STRONG DELIVERY, ACCELERATED DISTRIBUTIONS

• Strong Q4 2021 Adjusted Earnings of $6.4 billion, supported by higher commodity prices. Continued strong CFFO excluding working capital of $11.1 billion in Q4 2021. Total CFFO excluding working capital amounted to $55 billion in 2021.
• Disciplined cash capex: $20 billion in 2021 and expected to be at the lower end of $23-27 billion range in 2022.
• Net debt reduced to $52.6 billion by end-2021, a $23 billion reduction compared with 2020.
• Share buybacks of $3.5 billion announced in 2021. Dividend expected to be increased by ~4% to $0.25 per share for Q1 2022.
• Stepping up pace of distributions by announcing a share buyback programme of $8.5 billion for the first half of 2022, including the remaining $5.5 billion of Permian divestment proceeds.

1 Income/( loss) attributable to shareholders for Q4 2021 is $11.5 billion. Reconciliation of non-GAAP measures can be found in the unaudited results, available on www.shell.com/investors.

Q4 2021 FINANCIAL PERFORMANCE DRIVERS

INTEGRATED GAS, RENEWABLES AND ENERGY SOLUTIONS

Q1 2022 outlook reflects turnaround in Pearl and Prelude unplanned maintenance

• Adjusted Earnings benefited from higher realised prices and significantly higher trading and optimisation margins, overcoming supply issues and capturing unique optimisation opportunities generated through the large scale and scope of our LNG trading portfolio in a high LNG spot price environment.
• CFFO excluding working capital of $2.4 billion, mainly impacted by derivative outflows of $3.8 billion.

UPSTREAM

• Adjusted Earnings higher by $1.1 billion compared to Q3 2021, mainly driven by higher prices. Permian divestment completed in Q4, lowering DD&A.
• Continued strong cash conversion, with CFFO excluding working capital of $6.6 billion, $0.7 billion above Q3 2021.

OIL PRODUCTS

• Refinery utilisation and realised margins impacted by extended turnaround at Scotford, Hurricane Ida recovery efforts at Norco and a smaller portfolio due to ongoing divestments.
• Trading and optimisation contribution to earnings was lower compared with Q3 2021.
• Marketing Adjusted Earnings impacted due to seasonal trends and foreign exchange impacts in Turkey.
• CFFO excluding working capital of $2.0 billion includes the timing impact of payments for emission certificates relating to German BEHG and US Biofuel programmes, which was offset by derivatives inflows of $1.0 billion.

CHEMICALS

• Adjusted Earnings around break-even, reflect lower base chemicals spreads resulting in lower margins and JV earnings.
• Manufacturing plant utilisation impacted by Hurricane Ida recovery efforts in US Gulf Coast and an extended turnaround at Scotford.
• Cash conversion helped by timing of dividends from JVs.

CORPORATE

• Corporate segment Adjusted Earnings were a net expense of $889 million, including the impact of debt redemption.
• Net debt decreased by $4.9 billion to $52.6 billion in Q4 2021 mainly driven by strong CFFO and divestment proceeds.
• The Adjusted Earnings outlook for 2022 is a net expense of $2,200 - 2,600 million for the full year 2022. This excludes the impact of currency exchange rate effects.

UPCOMING INVESTOR EVENTS

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