Shell accelerates strategy to deliver more value with less emissions
Shell (SHEL) announced at its Capital Markets Day 2025 significant enhancements to its strategy, focusing on delivering more value with reduced emissions. The company revealed plans to increase shareholder distributions from 30-40% to 40-50% of cash flow from operations, while maintaining a 4% annual progressive dividend policy.
Key strategic initiatives include:
- Expanding structural cost reduction target to $5-7 billion by 2028
- Reducing capital spending to $20-22 billion annually for 2025-2028
- Growing free cash flow per share by over 10% yearly through 2030
- Increasing LNG sales by 4-5% annually through 2030
- Growing combined Upstream and Integrated Gas production by 1% yearly to 2030
The company aims to maintain 1.4 million barrels per day of liquids production through 2030 while focusing on lower carbon intensity. Shell also plans to optimize its Chemicals business through strategic partnerships in the US and portfolio adjustments in Europe.
Shell (SHEL) ha annunciato durante il suo Capital Markets Day 2025 significativi miglioramenti alla sua strategia, concentrandosi sulla creazione di maggiore valore con emissioni ridotte. L'azienda ha rivelato piani per aumentare le distribuzioni agli azionisti dal 30-40% al 40-50% del flusso di cassa dalle operazioni, mantenendo una politica di dividendi progressivi annuali del 4%.
Le principali iniziative strategiche includono:
- Espandere l'obiettivo di riduzione dei costi strutturali a 5-7 miliardi di dollari entro il 2028
- Ridurre la spesa in conto capitale a 20-22 miliardi di dollari all'anno per il 2025-2028
- Crescere il flusso di cassa libero per azione di oltre il 10% all'anno fino al 2030
- Aumentare le vendite di GNL del 4-5% all'anno fino al 2030
- Crescere la produzione combinata di Upstream e Gas Integrato dell'1% all'anno fino al 2030
L'azienda mira a mantenere una produzione di liquidi di 1,4 milioni di barili al giorno fino al 2030, concentrandosi su un'intensità di carbonio inferiore. Shell prevede anche di ottimizzare il suo business Chimico attraverso partnership strategiche negli Stati Uniti e aggiustamenti del portafoglio in Europa.
Shell (SHEL) anunció en su Capital Markets Day 2025 mejoras significativas en su estrategia, centrándose en ofrecer más valor con emisiones reducidas. La compañía reveló planes para aumentar las distribuciones a los accionistas del 30-40% al 40-50% del flujo de caja de las operaciones, mientras mantiene una política de dividendos progresivos anuales del 4%.
Las principales iniciativas estratégicas incluyen:
- Ampliar el objetivo de reducción de costos estructurales a 5-7 mil millones de dólares para 2028
- Reducir el gasto de capital a 20-22 mil millones de dólares anuales para 2025-2028
- Aumentar el flujo de caja libre por acción en más del 10% anualmente hasta 2030
- Aumentar las ventas de GNL en un 4-5% anualmente hasta 2030
- Aumentar la producción combinada de Upstream y Gas Integrado en un 1% anual hasta 2030
La compañía tiene como objetivo mantener una producción de líquidos de 1.4 millones de barriles por día hasta 2030, mientras se enfoca en una menor intensidad de carbono. Shell también planea optimizar su negocio de Químicos a través de asociaciones estratégicas en EE. UU. y ajustes de cartera en Europa.
셸(SHEL)은 2025년 자본 시장의 날 행사에서 전략의 중요한 개선 사항을 발표하며, 배출량을 줄이면서 더 많은 가치를 창출하는 데 집중한다고 밝혔습니다. 회사는 운영 현금 흐름의 30-40%에서 40-50%로 주주 배당금을 늘릴 계획을 공개하며, 연 4%의 점진적 배당금 정책을 유지할 것이라고 밝혔습니다.
주요 전략적 이니셔티브는 다음과 같습니다:
- 2028년까지 구조적 비용 절감 목표를 50-70억 달러로 확대
- 2025-2028년 동안 연간 자본 지출을 200-220억 달러로 줄임
- 2030년까지 연간 10% 이상 주당 자유 현금 흐름 증가
- 2030년까지 연간 4-5% LNG 판매 증가
- 2030년까지 연간 1% Upstream 및 통합 가스 생산 증가
회사는 2030년까지 하루 140만 배럴의 액체 생산을 유지하면서 탄소 강도를 낮추는 데 집중할 계획입니다. 셸은 또한 미국의 전략적 파트너십과 유럽의 포트폴리오 조정을 통해 화학 사업을 최적화할 계획입니다.
Shell (SHEL) a annoncé lors de son Capital Markets Day 2025 d'importantes améliorations de sa stratégie, en se concentrant sur la création de plus de valeur avec des émissions réduites. L'entreprise a révélé des plans pour augmenter les distributions aux actionnaires de 30-40% à 40-50% du flux de trésorerie des opérations, tout en maintenant une politique de dividende progressif de 4% par an.
Les principales initiatives stratégiques comprennent :
- Élargir l'objectif de réduction des coûts structurels à 5-7 milliards de dollars d'ici 2028
- Réduire les dépenses d'investissement à 20-22 milliards de dollars par an pour 2025-2028
- Augmenter le flux de trésorerie libre par action de plus de 10% par an jusqu'en 2030
- Augmenter les ventes de GNL de 4-5% par an jusqu'en 2030
- Augmenter la production combinée d'Upstream et de Gaz Intégré de 1% par an jusqu'en 2030
L'entreprise vise à maintenir une production de liquides de 1,4 million de barils par jour jusqu'en 2030, tout en se concentrant sur une intensité carbone plus faible. Shell prévoit également d'optimiser son activité chimique grâce à des partenariats stratégiques aux États-Unis et à des ajustements de portefeuille en Europe.
Shell (SHEL) hat an ihrem Capital Markets Day 2025 bedeutende Verbesserungen ihrer Strategie angekündigt, mit dem Fokus, mehr Wert bei reduzierten Emissionen zu schaffen. Das Unternehmen gab Pläne bekannt, die Ausschüttungen an die Aktionäre von 30-40% auf 40-50% des Cashflows aus dem operativen Geschäft zu erhöhen, während eine jährliche progressive Dividendenpolitik von 4% beibehalten wird.
Zu den wichtigsten strategischen Initiativen gehören:
- Erhöhung des Ziels zur Senkung der strukturellen Kosten auf 5-7 Milliarden Dollar bis 2028
- Reduzierung der Investitionsausgaben auf 20-22 Milliarden Dollar jährlich für 2025-2028
- Steigerung des freien Cashflows pro Aktie um über 10% jährlich bis 2030
- Erhöhung der LNG-Verkäufe um 4-5% jährlich bis 2030
- Steigerung der kombinierten Upstream- und integrierten Gasproduktion um 1% jährlich bis 2030
Das Unternehmen strebt an, bis 2030 eine Produktion von 1,4 Millionen Barrel pro Tag aufrechtzuerhalten, während es sich auf eine geringere Kohlenstoffintensität konzentriert. Shell plant auch, ihr Chemiegeschäft durch strategische Partnerschaften in den USA und Portfolioanpassungen in Europa zu optimieren.
- Increased shareholder distributions to 40-50% of cash flow from operations
- Higher cost reduction target of $5-7 billion by 2028
- 10%+ annual free cash flow per share growth target through 2030
- 4-5% annual LNG sales growth target through 2030
- Maintained 1.4 million barrels per day liquids production target
- Lower capital spending of $20-22 billion annually
- Potential portfolio restructuring costs in European chemicals business
- Reduced capital investment compared to previous guidance
Insights
Shell's strategy update represents a significant pivot toward shareholder value while maintaining its climate commitments. The company is increasing shareholder distributions from 30-40% to 40-50% of cash flow from operations while keeping its 4% annual dividend growth policy intact - a clear positive signal for investors seeking reliable returns.
The enhanced cost-cutting target of $5-7 billion by 2028 (up from $2-3 billion) coupled with reduced capital spending of $20-22 billion annually (down from $22-25 billion) demonstrates a disciplined approach to capital allocation. This fiscal restraint while still projecting free cash flow growth exceeding 10% annually through 2030 indicates improved operational efficiency.
Shell's strategic focus on its core strengths is evident in plans to grow LNG sales by 4-5% annually and increase combined upstream and integrated gas production by 1% yearly. Maintaining 1.4 million barrels per day of liquids production through 2030 provides production stability while the company strategically restructures its chemicals business.
This announcement effectively balances shareholder demands for returns with measured growth in high-margin businesses. The company is streamlining operations while defending its market-leading positions - exactly what investors typically reward in the current energy market environment.
Shell's strategic update presents a compelling financial roadmap with measurable targets that should strengthen its investment case. The enhanced shareholder return framework - increasing distributions to 40-50% of CFFO from the previous 30-40% range - signals management's confidence in sustainable cash generation and commitment to returning capital to shareholders.
The company's expanded cost-cutting initiative ($5-7 billion by 2028) combined with disciplined capital allocation ($20-22 billion annually) demonstrates a focus on operational efficiency that should support 10% annual free cash flow per share growth through 2030. This approach suggests Shell is prioritizing returns over volume growth, particularly important amid energy transition uncertainties.
Shell's sectoral approach is financially prudent - focusing investment on high-return segments (Mobility, Lubricants) while exploring strategic alternatives for underperforming assets (particularly European chemicals). This portfolio rationalization should improve overall return on capital employed.
Maintaining production stability while growing in high-margin segments like LNG (projected 4-5% annual sales growth) creates a balanced financial profile. The commitment to sustain liquids production at 1.4 million barrels daily provides a steady cash flow foundation while the company selectively invests in lower-carbon opportunities.
This strategy effectively addresses key investor concerns about capital discipline in the energy sector and positions Shell to deliver superior returns through improved capital efficiency rather than aggressive growth.
March 25, 2025 – Shell (LON/NYSE: SHEL, AMST: SHELL) will today present to investors at its Capital Markets Day 2025 the next steps in the execution of its strategy. Shell is strengthening its commitment to value creation and maintaining its focus on performance, discipline and simplification.
‘’We have made significant progress against all of the targets we set out at our Capital Markets Day in 2023. Thanks to the outstanding efforts of our people, we are transforming Shell to become simpler, more resilient and more competitive,’’ said CEO Wael Sawan. ‘‘We want to become the world’s leading integrated gas and LNG business and the most customer-focused energy marketer and trader, while sustaining a material level of liquids production. Today we are raising the bar across our key financial targets, investing where we have competitive strengths and delivering more for our shareholders.’’
Today Shell announces that it will:
- Enhance shareholder distributions from 30
-40% to 40-50% of cash flow from operations (CFFO) through the cycle1, continuing to prioritise share buybacks2, while maintaining a4% per annum progressive dividend policy. - Increase the structural cost reduction target from
$2 -3 billion by the end of 2025 to a cumulative$5 -7 billion by the end of 2028, compared to 20221. - Invest for growth while maintaining capital discipline, with spend lowered to
$20 -22 billion per year for 2025-20281. - Grow free cash flow3 (FCF) per share by more than
10% per year through to 20301. - Maintain the climate targets and ambition set out in Shell’s Energy Transition Strategy 2024.
To deliver more value with less emissions Shell will:
- Reinforce our leadership position in liquefied natural gas (LNG) by growing sales by 4
-5% per year through to 2030. - Grow top line production across our combined Upstream and Integrated Gas business by
1% per year to 2030, sustaining our 1.4 million barrels per day of liquids production to 2030 with increasingly lower carbon intensity. - Drive cash flow resilience and higher returns in our Downstream and Renewables & Energy Solutions businesses:
- Pursue focused growth in our high-return Mobility and Lubricants businesses.
- Leverage competitive strengths to drive profitable and scalable businesses across our lower carbon platforms, where we expect to have up to
10% of capital employed by 2030. - Unlock more value from our strong portfolio of Chemicals assets by exploring strategic and partnership opportunities in the US, and both high-grading and selective closures in Europe, enabling the business to prosper whilst improving returns and reducing capital employed by 2030.
Shell will continue to deliver more value with less emissions, growing in areas where we have competitive strengths, and providing a compelling investment case for our shareholders, now, and into the future.
Notes to editors:
- Shell’s Energy Transition Strategy 2024 can be found here https://www.shell.com/sustainability/our-climate-target/shell-energy-transition-strategy.html
- Shell’s 2024 Annual report and Accounts, which includes progress against our targets, can be found here https://www.shell.com/investors/results-and-reporting/annual-report
- For more information and access to the webcast of Shell’s Capital Markets Day 2025 presentation starting at 13:00 GMT (09:00 EDT, 14:00 CET) visit the investor page of our website www.shell.com/cmd25
- Shell’s lower carbon platforms include low carbon fuels, carbon capture and storage and hydrogen as well as power which includes renewable and gas fired power generation.
1 Non-GAAP measure, for reconciliations see www.shell.com/cmd25 this includes the definition of cash capex which in 2024 was
2 Subject to Board approval as well as shareholder approval at the 2025 Annual General Meeting.
3 Price normalised organic free cashflow, excluding working capital and derivative movements.
Cautionary Note
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 to reference 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. The terms “joint venture”, “joint operations”, “joint arrangements”, and “associates” may also be used to refer to a commercial arrangement in which Shell has a direct or indirect ownership interest with one or more parties. 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’’; “aspire”, “aspiration”, ‘‘believe’’; “commit”; “commitment”; ‘‘could’’; “desire”; ‘‘estimate’’; ‘‘expect’’; ‘‘goals’’; ‘‘intend’’; ‘‘may’’; “milestones”; ‘‘objectives’’; ‘‘outlook’’; ‘‘plan’’; ‘‘probably’’; ‘‘project’’; ‘‘risks’’; “schedule”; ‘‘seek’’; ‘‘should’’; ‘‘target’’; “vision”; ‘‘will’’; “would” 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, including climate change; (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, judicial, fiscal and regulatory developments including tariffs and 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, regional conflicts, such as the Russia-Ukraine war and the conflict in the Middle East, and a significant cyber security, data privacy or IT incident; (n) the pace of the energy transition; and (o) 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 Shell plc’s Form 20-F for the year ended December 31, 2024 (available at www.shell.com/investors/news-and-filings/sec-filings.html 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, March 25, 2025. Neither 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.
Also, in this announcement we may refer to Shell’s “net carbon intensity” (NCI), which includes Shell’s carbon emissions from the production of our energy products, our suppliers’ carbon emissions in supplying energy for that production and our customers’ carbon emissions associated with their use of the energy products we sell. Shell’s NCI also includes the emissions associated with the production and use of energy products produced by others which Shell purchases for resale. Shell only controls its own emissions. The use of the terms Shell’s “net carbon intensity” or NCI is for convenience only and not intended to suggest these emissions are those of Shell plc or its subsidiaries.
Shell’s operating plan and outlook are forecasted for a three-year period and ten-year period, respectively, and are updated every year. They reflect the current economic environment and what we can reasonably expect to see over the next three and ten years. Accordingly, the outlook reflects our Scope 1, Scope 2 and NCI targets over the next ten years. However, Shell’s operating plan and outlook cannot reflect our 2050 net-zero emissions target, as this target is outside our planning period. Such future operating plans and outlooks could include changes to our portfolio, efficiency improvements and the use of carbon capture and storage and carbon credits. In the future, as society moves towards net-zero emissions, we expect Shell’s operating plans and outlooks to reflect this movement. However, if society is not net zero in 2050, as of today, there would be significant risk that Shell may not meet this target.
This announcement may contain certain forward-looking non-GAAP measures such as adjusted earnings and divestments. We are unable to provide a reconciliation of these forward-looking non-GAAP measures to the most comparable GAAP financial measures because certain information needed to reconcile those non-GAAP measures to the most comparable GAAP financial measures is dependent on future events some of which are outside the control of Shell, such as oil and gas prices, interest rates and exchange rates. Moreover, estimating such GAAP measures 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 calculated in a manner which is consistent with the accounting policies applied in Shell plc’s consolidated financial statements. See the document named “Comparable GAAP measures and non-GAAP measures reconciliation” available on our Capital Markets Day 2025 page on shell.com for presentation of the most comparable GAAP measures, definitions and further details of historic non-GAAP measures and other metrics used throughout this announcement.
The information presented in this announcement do not reflect IFRS 18, Presentation and Disclosure in Financial Statements (“IFRS 18”), which will be effective from reporting periods beginning on or after January 1, 2027. IFRS 18 will have no impact on recognition and measurement. From Shell's initial impact assessment, it has concluded that the impact will be limited to disclosure and presentation in the Consolidated Financial Statements. The primary change will be that the share of profit from joint ventures and associates will be classified in the Consolidated Statement of Income under the investing category (income generated by the investment) instead of the operating category. As a result of this change, the dividends received from joint ventures and associates will be reclassified in the Consolidated Statement of Cash Flows from cash flow from operating activities to cash flow from investing activities.
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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.
Contacts:
- Sean Ashley, Company Secretary
- Media: International +44 (0) 207 934 5550; Americas: https://www.shell.us/about-us/news-and-insights/media/submit-an-inquiry.html
LEI number of Shell plc: 21380068P1DRHMJ8KU70
Classification: Inside Information
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