Shell plc publishes first quarter 2023 press release

London, May 4, 2023

"In Q1 Shell delivered strong results and robust operational performance, against a backdrop of ongoing volatility, while continuing to provide vital supplies of secure energy. We will commence a $4 billion share buyback programme for the next three months as part of our commitment to deliver attractive shareholder returns."

Shell plc Chief Executive Officer, Wael Sawan

STRONG RESULTS UNDERPINNED BY ROBUST PERFORMANCE 

• Q1 2023 Adjusted Earnings of $9.6 billion, with Adjusted EBITDA of $21.4 billion, with improved operational performance, lower underlying opex and better results in Chemicals & Products driven by trading & optimisation offsetting the impact of lower oil and gas prices, and higher tax compared with Q4 2022.
• $4 billion share buybacks announced, expected to be completed by Q2 2023 results announcement, which would bring total shareholder distributions to ~$12 billion for the first half of 2023. The 2023 cash capex outlook is unchanged: $23-27 billion.
• Strengthened the portfolio with the completion of the acquisition of Nature Energy (a renewable natural gas producer, Denmark), the investment decision for the Dover tie-back to the Appomattox production platform (USA) and the commencement of production at Vito (USA) and restart of Pierce (UK) facilities. Further simplified the portfolio through the divestment of non-core Upstream positions in onshore California and offshore Malaysia.

¹Income/(loss) attributable to shareholders for Q1 2023 is $8.7 billion. Reconciliation of non-GAAP measures can be found in the unaudited results, available on www.shell.com/investors.

• CFFO of $14.2 billion for Q1 2023, with tax paid of $3.1 billion, and a working capital outflow of $0.8 billion. Working capital outflows due to the reversal of temporary deposits from joint ventures received in Q4 2022 and other accounts receivable / payable movements were offset by inflows resulting from initial margins, lower prices and inventories.
  
  

Q1 2023 FINANCIAL PERFORMANCE DRIVERS

INTEGRATED GAS

• Production and liquefaction volumes were higher than in Q4 2022 mainly due to higher uptime at Prelude in Australia.
• Adjusted Earnings were lower than in Q4 2022 mainly due to lower prices and a tax help in Q4 2022, which were partly offset by higher volumes.
• Trading and optimisation results were at a similar level to Q4 2022.

UPSTREAM

• Production was higher than in Q4 2022, mainly driven by lower scheduled maintenance and unscheduled deferment.
• Adjusted Earnings were lower compared with Q4 2022 due to lower prices, timing of liftings, and tax help in Q4 2022, which were partly offset by lower opex.
• Q2 2023 production outlook reflects higher scheduled maintenance and completed divestments.

MARKETING

• Marketing Adjusted Earnings were higher than in Q4 2022 mainly due to higher margins in Lubricants which were partly offset by the seasonal impact of lower volumes, as well as lower opex in Q1 2023.

CHEMICALS & PRODUCTS

• Higher trading and optimisation results than in Q4 2022 were partly offset by lower indicative refining margins.
• Chemicals margins improved due to lower feedstock and utility costs compared with Q4 2022.
• Lower opex in Q1 2023 mainly reflects Q4 2022 year-end phasing effects.
• Q2 2023 Chemicals outlook reflects ongoing economic optimisation due to the continuing low-margin environment and a slower than expected ramp-up of Shell Polymers Monaca.

RENEWABLES & ENERGY SOLUTIONS

*Segment earnings for Q1 2023 are $2.2 billion. Reconciliation of non-GAAP measures can be found in the unaudited results, available on www.shell.com/investors.
 **Excluding Shell's equity share of associates where information cannot be obtained 

• Q1 2023 Adjusted Earnings, on a stand-alone basis, were driven by strong trading and optimisation margins for gas and power due to continued price volatility primarily in European and American markets. Compared with Q4 2022, Adjusted Earnings reflect lower operating expenses, partly offset by lower trading and optimisation results.
• Shell Energy Australia has entered into a partnership to deliver a utility-scale battery energy storage system in Cranbourne, Victoria. Shell has access to 100% of the battery’s offtake over a 20-year period.

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

• Q1 2023 Adjusted Earnings were impacted by one-off tax charges.
• The Adjusted Earnings outlook is a net expense of $2,200 - 2,600 million for the full year 2023.
  This excludes the impact of hedge effectiveness and currency exchange effects.

UPCOMING INVESTOR EVENTS

USEFUL LINKS

Results materials Q1 2023

Quarterly Databook Q1 2023

Dividend announcement Q1 2023

Webcast registration Q1 2023

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.

CAUTIONARY STATEMENT

The companies in which 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 Shell plc and its subsidiaries in general. Likewise, the words "we", "us" and "our" are also used to refer to 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 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. "Joint ventures" and "joint operations" are collectively referred to as "joint arrangements".  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