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Royal Dutch Shell March 21, 2018

Royal Dutch Shell plcMarch 21, 2018

Downstream Open HouseDelivering a world-class investment case

#makethefuture


John AbbottDownstream DirectorRoyal Dutch Shell

Royal Dutch Shell March 21, 2018 3

Definitions & cautionary note

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.

The Mountains and Oceans scenarios are based on plausible assumptions and quantification, and they are designed to stretch management thinking and even to consider events that may only be remotely possible. Scenarios therefore, are not intended to be prediction of likely future events or outcomes. Accordingly, investors should not rely on them when making an investment decision with regard to Royal Dutch Shell plc securities.

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. Unit costs for Refining and Trading are defined as operating expenses divided by refinery intake volumes. Yield on costs for Marketing are defined as CCS earnings excluding identified items divided by operating expenses. Integrated indicative margin is defined as a theoretical margin available to be captured by our integrated portfolio of Refining and Trading assets excluding portfolio impact. Breakeven margin is defined as minimum integrated margin required for zero earnings in Refining and Trading.. Gross margin is defined as net proceeds less cost of goods sold, on a CCS basis, and primary transport expenses. Income per site is defined as ratio of CCS earnings excluding identified items to the total number of Retail branded sites. Sales by region is defined as sales volumes across each of the regions Americas, East and Europe & Africa. Earnings per FTE is defined as ratio of CCS earnings excluding identified items to the number of employees in Lubricants, Aviation and Specialties. 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 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 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, March 21, 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

http://www.shell.com/investor

http://www.sec.gov/

Royal Dutch Shell March 21, 2018Royal Dutch Shell March 21, 2018 4

Summary Key messages

Significant and increasing cash and returns to support world-class investment case

Increasing portfolio resilience, leveraging technology, digitalisation and new business models

Transformational and profitable growth

Organic free cash flow per annum:

by 2020: $6-7 billion


Capital employed by 2025: Oil Products: + 30-35%; Chemicals: +>50%

ROACE >15%

Leading through the Energy Transition

Thrive in the energy transition

World-class investment

case

Strong license

to operate


Strategic themes delivery: on track

* 2019 – 21: 2016 RT $60 per barrel, mid-cycle Downstream

** Includes Deep water in cash engines and Shales in growth priorities by 2020

Price sensitivity:+/- $10 Brent = +/- ~$6 billion CFFO

Capital employed($ bln

end 2017)

Free cash flow($ bln p.a)

ROACE

(%)

~59% ~14 ~9

~27% ~2 ~4

~6% ~(1) ~(4)

~15

~12

283 ~28 ~6

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

2019-21** ~$602017 ~$54

Strategic themes

Cash engines

Growth priorities

Emerging opportunities

Organic FCF

Divestments & acquisitions

Total (incl. Corporate)


Downstream: Leadership Team

John AbbottDownstream Director

Lori RyerkerkEVP Manufacturing

Huibert VigevenoEVP Global Commercial

István KapitányEVP Retail

Martin Bambridge*Downstream General Counsel

John Hollowell*EVP Pipelines

Fabian Ziegler*EVP Contracting & Procurement

Graham van’t HoffEVP Chemicals

Andrew SmithEVP Trading & Supply

Bjorn FerminEVP DownstreamFinance

Gerard PenningEVP Downstream Human Resources

* Not present today


Downstream: An integrated story

Refining

Customers

Supply & Trading

Upstream & Integrated Gas

Chemicals

Retail

Global Commercial

Royal Dutch Shell March 21, 2018Royal Dutch Shell March 21, 2018

70

80

90

100

110

120

2010 2015 2020 2025 2030 2035 2040

8

Downstream: Business environment

* Cracker base chemicals (Aromatics, derivatives, Ethylene, Propylene and Isobutylene). Source HIS/Shell analysis

Million barrels per day

Oil and liquid demand outlook

Petrochemicals* demand in kT per annum

Chemicals demand outlook

Demand for Oil Products and petrochemicals is still growing in the 2030s

Major growth in demand, in excess of GDP growth

Chemicals enabling CO2 reduction

Demand still expands well into the 2030s

Passenger vehicles consumption represents ~25% of overall liquid hydrocarbon demand

N. America S. America EuropeMiddle East Asia Others

0

100.000

200.000

300.000

400.000

500.000

2000 2005 2010 2015 2020 2025 2030

Asia 37%

Asia 52%

IEA New Policy scenarioIEA Current Policy scenarioShell ‘Oceans’ scenario Shell ‘Mountains’ scenario


Oil Products:Business environment

Company analysis

Million vehicles/year

Global vehicle sales

Million vehicles

Global vehicle fleet

0

20

40

60

80

100

120

140

2015 2020 2025 2030 2035 20400

500

1.000

1.500

2.000

2015 2020 2025 2030 2035 2040

Plug-in hybrid EV (PHEV) Battery EV (BEV)Internal combustion engine (ICE)


An aggressive EV scenario – not a forecast: one example


Downstream

Capital employed and volumes based as per end Q4 2017. Capital investment is in period 2018-2020.

Further strengthen our financial performance

Upgrading our portfolio

Chemicals growth priority

Cash engine

Marketing Refining & Trading Chemicals

Growth priority

$17 billion

6.6 mboe/d

$24 billion

2.6 mboe/d

$15 billion

~18 mtpa

$3-4 billion

Capital employed: Capital employed:

Sales volumes:

Capital Investment:

Refinery processing:

Capital employed:

Sales volumes:

$4-5 billionCapital investment:


Downstream strategy: A reminder

Source brand preference: Ipsos – Global Customer Tracker (covering 30+ markets)

HSSE – a core value

11

Cash engine

Marketing Refining & Trading Chemicals

Growth priority

Global #1 Brand

Differentiated Fuels & Lubricants

Growth

Non-fuels retailing

Low Carbon Fuels

Large, complex integrated sites

in Trading hubs

Competitiveness

Rationalization nearing

completion

Advantaged and flexible

feedstocks

Strong product portfolio

Proprietary technology

Enabling CO2 reduction

Driven through new business models, customer connectivity, innovation and digitalisation


72

76

80

2010 2011 2012 2013 2014 2015 2016 2017

12Royal Dutch Shell March 21, 2018

Safe + reliable operationsOperational excellence

Process safety/environment – Downstream

0

1

2

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Personal safety – Downstream# Tier 1 & 2 Process Safety Incidents TRCF/million working hours

Tier 1 Tier 2 TRCF trendlineTRCF/million working hours

50

75

100

2013 2017 2020E75

150

225

2013 2017 2020E

Refining & TradingUnit costs (Index 2013)

Refining - Asset utilisation%Yield on costs (Index 2013)

Marketing

Asset utilisation - 4-year average Asset utilisation

0

50

100

150

200

2011 2012 2013 2014 2015 2016 2017


-20

0

20

40

60

80

100

-5

0

5

10

15

20

25

2013 2014 2015 2016 20170

10

20

0

5

10

2013 2014 2015 2016 2017

-10

-5

0

5

10

15

-10

-5

0

5

10

15

2013 2014 2015 2016 2017

13

Downstream Financial performance

Strong cash generation

Competitive returns

Refining & Trading Marketing ChemicalsWorking capital movementCFFO excluding working capital Free cash flow (RHS)

Downstream Upstream Integrated Gas Corporate

DS as of % RDS (RHS)

Marketing Refining & Trading Chemicals ROACE (RHS)Earnings and ROACE on CCS basis,

excluding identified items

Cash flow$ billion

Capital employed

$56 billion at end 2017

Earnings Earnings by sub-segment + ROACE$ billion

$ billion

$ billion % %


0%

10%

20%

2010 2011 2012 2013 2014 2015 2016 20170

5

10

15

0

5

10

15

20

25

2013 2014 2015 2016 2017

14

Company analysis of competitors cash flow from operations; Earnings on local GAAP basis adjusted for inventory valuation differences and excluding identified items. 2016 Capital Employed is

used as proxy for calculating 2017 ROACE. Oil products peer group excludes Total: no separate oil products disclosure. Source brand preference: Ipsos – Global Customer Tracker (covering

30+markets)

Oil Products – ROACE%

Downstream – Cash flow from operations

$ billion

Chemicals – ROACE Global brand preference%%

Shell Peer groupShell Peer group

Shell Peer group range

2013 2014 2015 2016 2017


Competitive performance World-class investment case

Shell Peer group

0%

10%

20%

30%

2010 2011 2012 2013 2014 2015 2016 2017


2017

6

7

8

9

10

2011-2013 2014-2017 2020E

Earnings on CCS basis, excluding identified items

15

“Exposure and resilience” Resilient today…and tomorrow

0

1

2

3

Base growth New customers Resilient sectors New revenues

2017 2021 20252025

Capital employed2025: Oil Products: +30-35%

Chemicals: +>50%

Geographical exposureEarnings per region

Chemicals – feedstock exposure

% of feedstock

Marketing – earnings growth to 2025 Refining & Trading – Breakeven margin$ per barrel$ billion

Oil Gas

East

Europe & Africa

Americas

Global commercialRetail


Offering more and cleaner energy solutions

Nature-based and technology solutions to offset CO2 emissions

New businessesCCS, Emissions Trading, District heating, Solar

TransportLighter vehicles, Mobility efficiency

ConstructionInsulation and energy efficiency

BiofuelsConventional and advanced

CNG/LNGLight & Heavy Duty Vehicles and Marine

HydrogenNetwork development

ElectricitySmart and fast charging offer for EVs

ElectronicsDigitalisaton

Energy & waterFuel additives, Low temperature detergents


Innovation & Customer

Shell is developing and adapting the technology of the future, building on our customer connectivity

Technology

Chemicals technology R&D

Improvement to refining technologies

New fuels and lubes development

Digitising the core

Data analytics

Technology use in monitoring and operation of plants, terminals and vessels

New business models

LubeChat

Pilots: Fitcar, TapUp, AccuPort

Connected customers (e.g. Jaguar Land Rover, Shell app)


Summary Key messages

Significant and increasing cash and returns to support world-class investment case

Increasing portfolio resilience, leveraging technology, digitalisation and new business models

Transformational and profitable growth

Organic free cash flow per annum:



Capital employed by 2025: Oil Products: + 30-35%; Chemicals: +>50%

ROACE >15%

Leading through the Energy Transition


World-class investment

case

Strong license

to operate


MarketingIstván Kapitány

EVP RetailRoyal Dutch Shell


Shell has the most profitable Marketing businesses in the industry

Earnings and ROACE on CCS basis, excluding identified items; Peer group: BP and Total, published annual reports, Shell analysis

2 - Geographic distribution of Marketing earnings in 2017. Retail includes Raizen Combustiveis

+$1.4 billion2017 vs 2013earnings growth

Customers first Top line growth through differentiation Active portfolio management Simplification & Offshoring

0

2

4

2013 2014 2015 2016 2017

26%ROACE

Earnings: Marketing

East

EU + Africa

Retail

Global commercial

Others

Americas

Earnings split (2017)

Balancedportfolio2

$ billion

Peer groupShell

Chemicals

Refining &

Trading

Marketing

Downstream


Shell Reference industry IOCs

21

Shell retail is the #1 mobility retailer

1 – Source: Latest published company annual reports:

Sites (in thousands): BP: ~18; Total: ~16.5; Gap: ~1.6; Zara: ~2.2; Carrefour: ~12; Starbucks: ~27

Retail includes Raizen Combustiveis

# of sites worldwide of selected retailers1

Aslam Khoso – Global Service Champion Winner 2016

Customers per day30M+70+Markets

44K+Locations

Shell

Starbucks

Carrefour

ZARAGAP

Total

BP


0

1

2

2013 2017

0

100

200

2013 2017 2020

22

Shell retail has grown strongly since 2013

1 - Source: Latest published company annual reports for Carrefour, Couche Tard, Sainsbury’s, Starbucks, Tesco and Walmart. Earnings and ROACE on CCS basis, excluding identified items; Retail

includes Raizen Combustiveis. CAGR: compound annual growth rate

+~$600 million2017 vs 2013earnings growth

Earnings: retail

Differentiated Programmes

Active Portfolio Management

Simplification & Offshoring

100

154

Selected retailers1

Yield on cost Income per site

0

100

200

2013 2017

100131

50% Convenience retailV-Power™

Fleet solutionsLoyalty

Main-grade fuel

Gross margin contribution

Index (2013=100) Index (2013=100)

>7%

CAGR

ROACE24%

$ billion


Shell retail success is built upon brand and differentiation

Brand value1 Preferred IOC across 62 countries2

5139

30

21

20

28

1 - Source: Brand Finance Global 500 (2018)

2 - Source: IPSOS, Global Customer Tracker – Shell analysis based on GCT, an independent survey conducted by Ipsos across 62 markets in 2017


Coca-Cola

Nike

Total

BP

Total

BP

Esso

Chevron

Mobil

$ billion


0%

10%

20%

2013 2015 2017 2020E

24

V-Power™ is the best selling premium fuel in the world

1 – Source: Shell estimate based on number of markets and sites selling Shell V-Power™ and extrapolated from public data where available 2 - Source – 16M+ transactions. Period: 21st Feb 2017 – 15 Feb 2018. Source: OPIS – Oil Price Information Service (2018) 3 - Source: Kantar Worldpanel Petrol Service report (2017) – based on 2K UK Motorists surveyed across a 12-month period

V-Power™ penetration: branded sales%

Iconic partners

US ‘street price’ for premium fuels2

Shell Major Minor Regional Hypermarket

$ per gallon

Market share: premium fuels in the UK3

Esso

BP

Shell

Sainsburys

Tesco

Morrisons

Others


Shell is the largest global provider of solutions for business fleets


2 MillionCustomers served every day

Fleet of trucks$2+ billion road services turnover

Quality and low emission fuels

Management information, advanced

controls & security

Fleet of cars/vansDigital offers & Mobility Services

CO2 offsetting & electric mobility

Growing through car-sharing, ride-sharing and leasing

#1Network

Shell cards are accepted in >200,000 roadside locations worldwide

>7 MillionActive Shell cards


Securing our position as the leading global mobility retailer

150%

Share of margin from

non-fuels retail at company sites

20%Of our fuels

margin from low emission energy

solutions at company sites

2>50%

Reduction in carbon intensity of Shell

service stations at company sites

3Every customer

Treated like a guest at Shell service stations and in the

digital world

4100%

Of Shell service stations committed to

reduce waste & benefit local communities

5

Our 5 Ambitions by 2025


Significantly growing our convenience retail business

Shell convenience store - Singapore Broaden our range of coffee and food offers

Basket check out in 5 seconds (pilot with IBM) – United Kingdom

Developing unmanned cashier with Bingo Box Technology - China

2017 - 2020 2020 - 2025 2017 - 2025

>5,000

Growth in # of stores


500 ultra-fast charge posts with IONITY in next 2 years – Europe

28

Leading through the energy transition with tangible actions

Hydrogen network development – USA & Germany 20+ ‘recharge’ locations – UK & The Netherlands

Integrated charging solutions


Innovating with award winning digital solutions for our customers

1- Shell App: Gold Award for Best Mobile App experience in EMEA in Dec 2017 by Mobile Marketing Association; GLOMO Award Winner for Best use of mobile for Retail, Brands & Commerce in Feb 2017 by Mobile World Congress - GSMA. 2- Available

from UK 2015, Turkey 2016, DE & China 2017 and US 2018

Shell Motorist App active in 36 markets and voted the Best Mobile App1

In-car payments with Jaguar Land Rover and General Motors

Mobile payment in UK, Turkey, Germany, China and US available to customers2

Fuel delivery to your door in NL with a ‘Tap’ on your phone


Earnings: retail

30

Outlook to 2025 aiming for significant growth in retail

+>$1.5 billion2025 vs 2017earnings growth

Earnings and ROACE on CCS basis, excluding identified items

New revenues Grow convenience retail5,000 new stores New offers

Resilient sectors Grow fleet solutions

New customers 5,000 new sites: China, India, Indonesia, Mexico and Russia

Grow Base V-Power™5,000 new sites Customers

40M+ 90+Markets

55K+Locations

24% >20%ROACE >20%

$ billion

0

2

4

2013 2017 Growth levers 2020 Growth levers 2025


MarketingHuibert Vigeveno

EVP Global CommercialRoyal Dutch Shell


1M+

32

Global commercial: the B2B arm of Shell

1 – Source: Kline & Company (2017)

Attractive industries Fully integrated Resilient

Lubricants - global lubricants market share1

0%

5%

10%

Supplier

Aviation - sales by region (in 2017)

Specialties - sales by region (in 2017)

B2B customers150

Markets

#1in Lubricants

%

TOTALExxon

MobilBP

East

Americas

Europe & Africa

East

Americas

Europe & Africa


Earnings per FTE

0

100

200

2013 2017 2020

0

1

2

2013 2017

33

Global commercial delivered exceptional returns

1 - Source: Latest published company annual reports - Akzo Nobel, Fuchs, Valeo, Valvoline & World Fuel Services. Earnings and ROACE on CCS basis, excluding identified items. CAGR:

compound annual growth rate

+>$300 million 2017 vs 2013earnings growth

Earnings: global commercial

> 6%

CAGR

ROACE26%

$ billion

Selected retailers1

0

100

200

2013 2017

100

150

Index (2013=100) Index (2013=100)

100

212

Yield on cost1

Premium & organic growth

Supply chain footprint

Simplification & Offshoring


Shell lubricants success is built on technology, brand and people

1 in 9 engine or equipment, world-wide, is protected by Shell lubricants

Volume share2 – comparison with BP and Total

Consumer

Shell Peer Group

Commercial

IndustrialResilient Sectors

Brand share of preference1 - markets worldwide*

20%16% 14%

Passenger Car Motor Oils

36%

21%

10%

Heavy Duty Engine Oils

1 – Source: Kantar Millward Brown (H1 ’17) – PCMO (22K respondents), HDEO (9K respondents) *- PCMO: USA, China, India, Russia, Brazil, Germany, Indonesia, Canada, Thailand, Egypt

and Malaysia; HDEO: USA, China, India, Russia, Brazil, Thailand, Egypt, Pakistan, Vietnam, Argentina and Colombia. 2 – Source: Kline & Company (2017)

Exxon

MobilBP

Exxon

Mobil

BP


Shell lubricants is the IOC market leader in China

1 – Source: Millward Brown (2017 Q3) Motorist Loyalty Tracker 中国市场品牌调研- 6288 respondents annually in 33 cities in China2 – Source: Kline & Company (2017)

Shell market share2

in China in 2016: 8,5%

PCMO market: brand preference in China1

North

West East

South

TsingYi

Zhapu

Tianjin

NGG

Zhuhai

Supply chain footprint in China

Lube Oil PlantGrease PlantDistributor CenterGTL TerminalFlavex Process Oil Terminal

Operation Unit CN, HK

51511

Exceptional local team

Digital leadership

Retail integration

0

20

40

0 20 40 60 80

Preference

Awareness

TOTAL

SINOPEC

CASTROL

MOBIL


Our uniqueglobal customers footprint can grow further

1 – Source: Kline & Company – Passenger Car Motor Oils with a viscosity of 0W and 5W, Compound Annual Growth Rate (2013-2017)

7 out of 10 largest car manufacturers choose Shell lubricants Lubricants & grease blending plants

Base oil manufacturing plants

R&D Centre

Customer operations

Passenger Car Motor Oil1Premium volume development

Market Shell0

5

10

%

DEEP TECHNICAL EXPERTS,


Strengthening our position as a world class B2B business

1 – Source: Oxford Economics (2018); 2 Source: Shell analysis based on aggressive EV scenario; 3 – Source: Shell analysis; 4 – Source: Shell analysis – Ship capacity - Dead weight tonnage

LubeChat

2017 2025

+27%Ship capacity4

+36%Aircrafts3

+25%ICE Vehicles2

+24%Industrial Production1

Fitcar

Skypad

AccuPort


0

1

2

3

2013 2017 Growth levers 2020 Growth levers 2025

38

Outlook to 2020 is very strong with exceptional returns

+>$1 billion2025 vs 2017earnings growth

ROACE 26% >25% >25%

B2B customers1M+ 150

Markets#1In lubricants

Grow Base2x market growth in premium Expand airport presence

New customersGrow market share in China, India, Indonesia, Mexico and Russia

Resilient sectors $1 billion investment in technology

New revenues Accelerate digital and services growth

Earnings and ROACE on CCS basis, excluding identified items

Earnings: global commercial$ billion


Retail and global commercial are exceptional performers

+>$2.5 billion2025 vs 2017earnings growth

Earnings and ROACE on CCS basis, excluding identified items; CAGR: compound annual growth rate

Customers/day40M+ 150+

Markets#1In the industry

Strongest business performance in peer group

Attractive industries, superior returns

Resilient in the 2020s

0

2

4

6

2013 2017 Growth 2020 Growth 2025

>7%

CAGR

Earnings: retail + global commercial$ billion

Global Commercial Retail

ROACE 25% >20% >20%


Refining & Trading

Lori Ryerkerk & Andrew Smith

EVP Manufacturing & EVP Trading & SupplyRoyal Dutch Shell


Refining & Trading: Fully integrated and highly dynamic global system


0

100

200

300

400

500

600

42

Chemicals, Refining & Trading Portfolio

1 - Company analysis of external data.

Retaining competitive, integrated and more complex sites in trading hubs and advantaged markets

Legend

Refinery

Chemical plant

Chemicals & integrated refining site

Crude & product trading hub

Trading officesXYZ

Exits 2005–17Retained site 2017

Consolidated footprint

Refinery capacity in thousand barrels per day (100%)

2.9 million barrels per day

average refinery capacity (thousand barrels per day)

aver

age

refin

ing

com

plex

ity

Shell refining portfolio

Competitor refining portfolio

Bubble size represents total

equity capacity.

Increased refining complexity1

20172001

100 200 300 400

Mobile

Geismar

Jurong Island

Moerdijk

HOUSTON

LONDON ROTTERDAM

SINGAPORE

Puget Sound

Martinez

Schwedt (JV)

Convent

Tabangao (JV)

Fredericia

Pernis

Scotford

Sarnia

Deer Park (JV)

Norco

Rheinland

Pulau Bukom

Durban

Buenos Aires

Nanhai (JV)

FEP/Stanlow (JV)

Miro (JV)

Al Jubail (JV)Karachi

Pennsylvania

MOSCOW

DUBAISHELL WEST

BEIJING

CALGARY

Chemical Site under construction


Chemicals, Refining & Trading Integration

Integration and flexibility release the value of supply chain optionality

Crude & feedstock

optimisation

Oil Products“Make-Buy-Blend”

Oil-chemicals Integration

Highest value Crude and

feedstock, equity and non-equity

Highest-margin feedstocks from refinery or market

Best selection of purchased and

produced components

Refining Trading & supply

Product blending & supply Marketing

Chemicals manufacturing


Chemicals, Refining & Trading US Gulf Coast & Northeast

Significant and sustainable value uplift created by integrated re-optimisationof the eastern US value chain

Northeast volume growth+30 thousand

barrels per day

“Make-Buy-Blend” optimisation and

exports

Operating Convent FCCU for another turnaround cycle

+$150-200 million per annum margin

Hurricane Harvey response business

continuity for customers

Shell terminals

Shell refineries

N o rcoC o n v en t


Norco manufacturing complexRefining & Chemicals integration

Optimizing Refining and Chemicals as an integrated value chain expected to unlock >$70 million per annum additional margin

Past Present Future

Motiva streams managed at arm’s length

Under-optimised assets

Integration in Shell’s portfolio

Integrated economics drive real time optimisation of streams

Short term Catalyst reformulation to

maximise utilization of integrated value chain

Long term Capital projects to increase

integrated profitability

Norco integrated Refining & Chemicals value – gross margin$ million per annum

0

20

40

60

80

100

Short Term Long TermPast Present


74

75

76

77

78

79

80

81

2010 2011 2012 2013 2014 2015 2016 2017

46

Delivering operational excellence

Improving safety, reliability and cost efficiency in our operations

% utilisation

Asset utilisation – Refining Unit cost – Refining & TradingIndex (2013 =100)

Process safety & environment – Downstream

0

20

40

60

80

100

120

140

160

180

2011 2012 2013 2014 2015 2016 2017

# Tier 1 & 2 process safety incidents TRCF/million working hours

Personal safety – Downstream

0

1

2

50

75

100

2013 2017 2020E

Tier 1 Tier 2 TRCF trendlineTRCF/million working hours

Asset utilisation - 4-year average Asset utlisation


Margin resilience and stability

$ per barrel

$ per barrel

02468

101214

6

7

8

9

10

2011-2013 2014-2017 2020E

Forward view based on average of the last ten years, covers most of typical volatility: $10.40 per barrel

Rule-of-thumb: $ per barrel margin = +/- ~$600 million earnings

Delivering more resilient and less volatile margin from a high graded and integrated portfolio

2008-2017 Average marginActual margin Indicative margin

Refining & Trading – Breakeven margin

Integrated indicative margin


Building resilience for the future

Investing in refinery resilience Strengthening the core

New solutions Low carbon solutions

Strengthening the core assets while building capability through technology advances to adapt to a changing energy world

Growth

Non- and little discretionary spend

Capital investment:

$ 2-3 billion per year(2018-2020 average)

Bottom of barrel upgrading

Crude flexibility

Logistics and integration

Low sulphur fuel oil (IMO) preparedness

Biofuels Blending

Renewable Power

Offerings

Asset Carbon Offsets

Low Carbon

Solutions

Nature Based

Solutions

Shell refineries and businesses

3rd Party offerings, new value chains

Energy efficiency initiatives

Green energy

Cogeneration


ChemicalsGraham van’t HoffEVP ChemicalsRoyal Dutch Shell


Growth priorityChemicals

Top 10 producer of Ethylene

Top 5 producer of Propylene

Top 5 producer of Benzene

Positioning in the competitive landscape

Base Chemicals/Intermediates

Performance Solutions

Access to advantaged feedstock

Process technologies

Big integrated projects

Large scale

Customised solutions

Product-materials innovation

Production close to markets

Medium scale projects

Pure Chemical Companies

Add Differentiation

FEED

STO

CKS

CO

NSU

MER

S


ChemicalsStrategy

A highly profitable hydrocarbon upgrader

Advantaged feedstock First class footprint Strong product &

customer portfolioExcellence every day

& HSSE

Access advantaged feedstock Monetize with competitive advantage

Technology


ChemicalsTechnology leader

Technology focus and operating expertise create winning position

Shell Chemicals proprietary technologies leverage key skills and experience to create market leading positions

OMEGA (MEG - Polyesters) SMPO (Styrene Monomer – Insulation / Polyols - Foams) SHOP (Detergents) DPC/PC (Diphenyl carbonate – Phone casings) Technology licensing and catalyst sales combine to create strong long-term value


0

5

10

15

20

25

30

Q42012

Q42013

Q42014

Q42015

Q42016

Q42017

53

ChemicalsFinancial and competitive performance

Earnings and ROACE on CCS basis, excluding identified items; Shell ROACE calculations for 2012 has been restated for the impact of IAS 19; source: company reports, Shell analysis

$ billion

Earnings – Chemicals

%

Competitive performance – ROACE 4Q rolling

Ensure robust performance under different market conditions and grow base business

0

40

80

120

0

1

2

3

2010 2011 2012 2013 2014 2015 2016 2017

$/barrel

Average: $107

Average: $50

Average Brent oil price (RHS)Earnings

Average earnings 2010 - 2016ExxonMobilShell DOW/UCC

LBI


Chemicals Competitiveness

Organisational, operational and cultural improvements deliver sustainable annual earnings increases Operational excellence

Costs

Volume growth

Unit margin

$500 million per annum


ChemicalsGrowth projects

2006

Nanhai

2010

USGC go-light strategy

2010

Singapore

2016+

China + USA

Feedstock mix2025 Gas

Liquid

425,000 metric tonnesadditional Alpha Olefins capacity

New liquids cracker and derivatives units

Capacity: ~1.2 million metric tonnes ethylene per annum

50/50 JV CNOOC

Greenfield FID 2016

Capacity: ~1.5 million metrictonnes ethylene per annum and polyethylene derivatives

Remains on track to begin commercial production in 2H 2018

Geismar site will become largest AO facility in the world

Start-up of cracker and new downstream units in 1H 2018

SMPO/POD on-track for 2019/2020 start-up

Main construction phase started in late 2017

Under construction

Pennsylvania, USA


Geismar, USA

Nanhai, China


ChemicalsOrganic growth

Earnings and ROACE on CCS basis, excluding identified items; Shell ROACE calculations for 2012 has been restated for the impact of IAS 19

Targets aspirationper year mid-’20s: Earnings:

~$3.5 – 4 billion Cash flow:

~$5 – 6 billion Base capex:

~$1 – $1.5 billion0

5

10

15

20

0

2

4

2009 2010 2011 2012 2013 2014 2015 2016 2017 ~2025

Earnings + ROACE

$ billion

Earnings ROACE (RHS)

Improve base business

Expand current base portfolio

Adding to portfolio – growth

%


John AbbottDownstream DirectorRoyal Dutch Shell


DownstreamDelivering a world-class investment case


Downstream:

Customer-centric

Uniquely integrated

Competitive

Resilient

Leading through the energy transition

Delivering profitable growth


World-class investment case

Strong license

to operate


Questions & Answers

John AbbottDownstream Director

Lori RyerkerkEVP Manufacturing

Huibert VigevenoEVP Global Commercial

Istvan KapitanyEVP Retail

Graham van’t HoffEVP Chemicals

Andrew SmithEVP Trading & Supply

Bjorn FerminEVP DownstreamFinance

Gerard PenningEVP Downstream Human Resources

downstream open house - royal dutch shell › investors › news-and-media-releases ›...

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