Shell first quarter 2025 update note
Shell has released its Q1 2025 outlook update, highlighting several operational adjustments across its business segments. LNG liquefaction volumes are expected to decrease to 6.4-6.8 MT from Q4'24's 7.1 MT due to weather impacts and unplanned maintenance in Australia. The Integrated Gas production is projected at 910-950 kboe/d.
Upstream production is forecasted at 1,790-1,890 kboe/d, with the outlook reflecting the completion of the SPDC divestment in March 2025. In Chemicals and Products, refinery utilization is expected to improve to 83-87% from 76%, while chemicals utilization is projected at 79-83%. The indicative refining margin has increased to $6.2/bbl from $5.5/bbl, though chemicals margin decreased to $126/tonne from $138/tonne.
Trading & Optimization results in Q1'25 are expected to be significantly higher than Q4'24 in the Chemicals and Products segment. The company's net debt will increase by approximately $1.5 billion due to loan facilities related to the SPDC sale and Pavilion acquisition lease additions.
Shell ha pubblicato l'aggiornamento delle previsioni per il primo trimestre del 2025, evidenziando diversi aggiustamenti operativi nei suoi segmenti di business. Si prevede che i volumi di liquefazione del GNL diminuiscano a 6,4-6,8 MT rispetto ai 7,1 MT del quarto trimestre del 2024, a causa di impatti meteorologici e manutenzioni non programmate in Australia. La produzione di Gas Integrato è prevista a 910-950 kboe/giorno.
La produzione Upstream è stimata tra 1.790 e 1.890 kboe/giorno, con le previsioni che riflettono il completamento della dismissione dello SPDC a marzo 2025. Nel settore Chimici e Prodotti, si prevede un miglioramento dell'utilizzo delle raffinerie all'83-87% rispetto al 76%, mentre l'utilizzo dei chimici è previsto tra il 79 e l'83%. Il margine di raffinazione indicativo è aumentato a $6,2/bbl rispetto a $5,5/bbl, sebbene il margine chimico sia diminuito a $126/tonnellata rispetto a $138/tonnellata.
I risultati di Trading & Ottimizzazione nel primo trimestre del 2025 sono attesi significativamente superiori rispetto al quarto trimestre del 2024 nel segmento Chimici e Prodotti. Il debito netto dell'azienda aumenterà di circa $1,5 miliardi a causa delle linee di credito relative alla vendita dello SPDC e alle aggiunte di leasing per l'acquisizione di Pavilion.
Shell ha publicado la actualización de su perspectiva para el primer trimestre de 2025, destacando varios ajustes operativos en sus segmentos comerciales. Se espera que los volúmenes de licuefacción de GNL disminuyan a 6.4-6.8 MT desde los 7.1 MT del cuarto trimestre de 2024, debido a impactos climáticos y mantenimiento no planificado en Australia. La producción de Gas Integrado se proyecta en 910-950 kboe/día.
La producción Upstream se pronostica entre 1,790 y 1,890 kboe/día, con la perspectiva que refleja la finalización de la desinversión de SPDC en marzo de 2025. En Químicos y Productos, se espera que la utilización de las refinerías mejore al 83-87% desde el 76%, mientras que la utilización de productos químicos se proyecta entre el 79 y el 83%. El margen de refinación indicativo ha aumentado a $6.2/bbl desde $5.5/bbl, aunque el margen químico ha disminuido a $126/tonelada desde $138/tonelada.
Se espera que los resultados de Trading & Optimización en el primer trimestre de 2025 sean significativamente más altos que en el cuarto trimestre de 2024 en el segmento de Químicos y Productos. La deuda neta de la empresa aumentará en aproximadamente $1.5 mil millones debido a las facilidades de préstamo relacionadas con la venta de SPDC y las adiciones de arrendamiento de la adquisición de Pavilion.
셸은 2025년 1분기 전망 업데이트를 발표하며, 여러 사업 부문에서 운영 조정을 강조했습니다. LNG 액화량은 호주의 기상 영향과 계획되지 않은 유지보수로 인해 2024년 4분기의 7.1MT에서 6.4-6.8MT로 감소할 것으로 예상됩니다. 통합 가스 생산량은 하루 910-950 kboe로 예상됩니다.
업스트림 생산량은 1,790-1,890 kboe/일로 예측되며, 전망은 2025년 3월 SPDC 매각 완료를 반영합니다. 화학 및 제품 부문에서는 정유소 가동률이 76%에서 83-87%로 개선될 것으로 예상되며, 화학 제품 가동률은 79-83%로 예상됩니다. 지표 정제 마진은 배럴당 $5.5에서 $6.2로 증가했지만, 화학 마진은 톤당 $138에서 $126으로 감소했습니다.
2025년 1분기 거래 및 최적화 결과는 화학 및 제품 부문에서 2024년 4분기보다 상당히 높을 것으로 예상됩니다. 회사의 순부채는 SPDC 매각 및 파빌리온 인수 임대 추가와 관련된 대출 시설로 인해 약 15억 달러 증가할 것입니다.
Shell a publié sa mise à jour des prévisions pour le premier trimestre 2025, mettant en lumière plusieurs ajustements opérationnels dans ses segments d'activité. Les volumes de liquéfaction de GNL devraient diminuer à 6,4-6,8 MT par rapport aux 7,1 MT du quatrième trimestre 2024, en raison des impacts météorologiques et de la maintenance imprévue en Australie. La production de Gaz Intégré est projetée à 910-950 kboe/jour.
La production Upstream est estimée entre 1 790 et 1 890 kboe/jour, avec les prévisions reflétant l'achèvement de la cession de SPDC en mars 2025. Dans le secteur Chimie et Produits, l'utilisation des raffineries devrait s'améliorer à 83-87% contre 76%, tandis que l'utilisation des produits chimiques est prévue entre 79 et 83%. La marge de raffinage indicative a augmenté à 6,2 $/baril contre 5,5 $/baril, bien que la marge chimique ait diminué à 126 $/tonne contre 138 $/tonne.
Les résultats de Trading & Optimisation pour le premier trimestre 2025 devraient être nettement supérieurs à ceux du quatrième trimestre 2024 dans le segment Chimie et Produits. La dette nette de l'entreprise augmentera d'environ 1,5 milliard de dollars en raison des facilités de prêt liées à la vente de SPDC et aux ajouts de bail pour l'acquisition de Pavilion.
Shell hat sein Ausblick-Update für das erste Quartal 2025 veröffentlicht und hebt mehrere betriebliche Anpassungen in seinen Geschäftsbereichen hervor. Die LNG-Liquefaktionsvolumina werden voraussichtlich von 7,1 MT im vierten Quartal 2024 auf 6,4-6,8 MT sinken, bedingt durch Wetterbedingungen und ungeplante Wartungsarbeiten in Australien. Die Produktion von Integriertem Gas wird auf 910-950 kboe/Tag prognostiziert.
Die Upstream-Produktion wird mit 1.790-1.890 kboe/Tag vorhergesagt, wobei der Ausblick den Abschluss der SPDC-Veräußung im März 2025 widerspiegelt. Im Bereich Chemikalien und Produkte wird eine Verbesserung der Raffinerienutzung auf 83-87% von 76% erwartet, während die Nutzung von Chemikalien auf 79-83% prognostiziert wird. Die indikative Raffineriemarge ist von $5,5/bbl auf $6,2/bbl gestiegen, während die Chemikalienmarge von $138/Tonne auf $126/Tonne gesunken ist.
Die Ergebnisse von Trading & Optimierung im ersten Quartal 2025 werden im Segment Chemikalien und Produkte voraussichtlich deutlich höher ausfallen als im vierten Quartal 2024. Die Nettoverschuldung des Unternehmens wird aufgrund von Kreditfazilitäten im Zusammenhang mit dem Verkauf von SPDC und den Leasingergänzungen zur Akquisition von Pavilion um etwa 1,5 Milliarden USD steigen.
- Refinery utilization improving to 83-87% from 76%
- Indicative refining margin increased to $6.2/bbl from $5.5/bbl
- Trading & Optimization results expected to be significantly higher than Q4'24
- LNG liquefaction volumes declining to 6.4-6.8 MT from 7.1 MT
- Chemicals margin decreased to $126/tonne from $138/tonne
- Net debt increasing by ~$1.5 billion due to SPDC sale loan facilities
Insights
Shell's Q1 2025 preliminary outlook reveals several key operational shifts worth monitoring. The Integrated Gas segment faces headwinds with LNG liquefaction volumes projected to decrease to
The Chemicals & Products segment shows encouraging improvement with refining margins increasing to
Working capital is projected to see a
While the Upstream segment remains relatively stable with production at 1,790-1,890 kboe/d compared to 1,859 kboe/d previously, the completion of the SPDC divestment in Nigeria marks progress in Shell's strategy to reduce exposure to higher-risk assets. The quarterly performance demonstrates Shell's ability to balance operational challenges in some segments with improvements in others, characteristic of an effective integrated energy company.
This quarterly update highlights Shell's ongoing operational flexibility amid cyclical industry challenges. The temporary disruptions in Australia affecting the Integrated Gas segment represent standard operational hurdles rather than structural issues, though they will impact quarterly numbers. These Australian LNG facilities are critical assets in Shell's global gas portfolio, and their return to full capacity will be essential for performance normalization.
The downstream operations show meaningful improvement with higher refining utilization and margins, suggesting Shell is effectively capturing value in the current refining environment. The
The SPDC divestment completion in Nigeria represents a significant strategic milestone in Shell's portfolio reshaping, moving away from higher-risk, capital-intensive legacy assets toward more predictable operations. The Pavilion acquisition reinforces Shell's strategic focus on strengthening its position in growth markets.
The trading operations' expected strong performance underscores Shell's sophisticated capabilities in capturing value beyond physical assets - a key differentiator among supermajors. The improved trading results in Chemicals & Products highlight Shell's market intelligence and pricing power in volatile commodity environments. Overall, this update indicates Shell is executing its balanced strategy across the energy value chain while managing through typical operational variability.
The following is an update to the first quarter 2025 outlook and gives an overview of our current expectations for the first quarter. Outlooks presented may vary from the actual first quarter 2025 results and are subject to finalisation of those results, which are scheduled to be published on May 2, 2025. Unless otherwise indicated, all outlook statements exclude identified items.
See appendix for the definition of the non-GAAP measure used and the most comparable GAAP measure.
Integrated Gas
$ billions | Q4’24 | Q1’25 Outlook | Comment |
Adjusted EBITDA: | |||
Production (kboe/d) | 905 | 910 - 950 | Impacted by unplanned maintenance, including in Australia. |
LNG liquefaction volumes (MT) | 7.1 | 6.4 - 6.8 | Reflects weather impact (cyclones) and unplanned maintenance in Australia. |
Underlying opex | 1.0 | 0.9 - 1.1 | |
Adjusted Earnings: | |||
Pre-tax depreciation | 1.4 | 1.2 - 1.6 | |
Taxation charge | 0.6 | 0.7 - 1.0 | |
Other Considerations: | |||
Trading & Optimisation results are expected to be in line with Q4’24, despite a higher (non-cash) impact from expiring hedge contracts compared to the previous quarter. |
Upstream
$ billions | Q4’24 | Q1’25 Outlook | Comment |
Adjusted EBITDA: | |||
Production (kboe/d) | 1,859 | 1,790 - 1,890 | |
Underlying opex | 2.5 | 2.1 - 2.7 | |
Adjusted Earnings: | |||
Pre-tax depreciation | 2.8 | 1.9 - 2.5 | |
Taxation charge | 2.6 | 2.4 - 3.2 | |
Other Considerations: | |||
The share of profit / (loss) of joint ventures and associates in Q1’25 is expected to be ~ The Q1’25 outlook reflects the completion of the SPDC divestment in March 2025. |
Marketing
$ billions | Q4’24 | Q1’25 Outlook | Comment |
Adjusted EBITDA: | |||
Sales volumes (kb/d) | 2,795 | 2,500 - 2,900 | |
Underlying opex | 2.5 | 2.3 - 2.7 | |
Adjusted Earnings: | |||
Pre-tax depreciation | 0.6 | 0.5 - 0.7 | |
Taxation charge | 0.3 | 0.2 - 0.5 | |
Other Considerations: | |||
Combined Mobility & Lubricants results expected to be in line with Q4’24. Overall Marketing results are expected to be impacted by a lower contribution from Sectors & Decarbonisation. |
Chemicals and Products
$ billions | Q4’24 | Q1’25 Outlook | Comment |
Adjusted EBITDA: | |||
Indicative refining margin | | | |
Indicative chemicals margin | | | The Chemicals sub-segment adjusted earnings are expected to be in line with Q4’24. |
Refinery utilisation | | | |
Chemicals utilisation | | | |
Underlying opex | 2.1 | 1.8 - 2.2 | |
Adjusted Earnings: | |||
Pre-tax depreciation | 0.9 | 0.8 - 1.0 | |
Taxation charge / (credit) | (0.2) | (0.2) - 0.3 | |
Other Considerations: | |||
Trading & Optimisation in Q1’25 is expected to be significantly higher than Q4’24, in line with Q2’24 and Q3’24 contributions. |
Renewables and Energy Solutions
$ billions | Q4’24 | Q1’25 Outlook | Comment |
Adjusted Earnings | (0.3) | (0.3) - 0.3 |
Corporate
$ billions | Q4’24 | Q1’25 Outlook | Comment |
Adjusted Earnings | (0.4) | (0.6) - (0.4) |
Shell Group
$ billions | Q4’24 | Q1’25 Outlook | Comment |
CFFO: | |||
Tax paid | 2.9 | 2.5 - 3.3 | |
Derivative movements | 0.3 | (2) - 2 | |
Working capital | 2.4 | (5) - 0 | Includes ~ |
Other Shell Group Considerations: | |||
The Q1’25 net debt movement will reflect a ~ |
Guidance
The ‘Quarterly Databook’ contains guidance on Indicative Refining Margin, Indicative Chemicals Margin and full-year price and margin sensitivities (Link).
Consensus
The consensus collection for quarterly Adjusted Earnings, Adjusted EBITDA is per the reporting segments and CFFO at a Shell group level, managed by Vara Research, is expected to be published on April 23, 2025.
Appendix
Indicative Margins
Chemicals & Products | Q4’24 | Q1’25 Updated Outlook |
Indicative refining margin | | |
Indicative chemicals margin | | |
Volume Data
Q4’24 Adjusted | Q1’25 QPR Outlook | Q1’25 Updated Outlook | |
Integrated Gas | |||
Production (kboe/d) | 905 | 930 - 990 | 910 - 950 |
LNG liquefaction volumes (MT) | 7.1 | 6.6 - 7.2 | 6.4 - 6.8 |
Upstream | |||
Production (kboe/d) | 1,859 | 1,750 - 1,950 | 1,790 - 1,890 |
Marketing | |||
Sales volumes (kb/d) | 2,795 | 2,500 - 3,000 | 2,500 - 2,900 |
Chemicals & Products | |||
Refinery utilisation | | | |
Chemicals utilisation | | | |
Underlying Opex
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. For further details see the 4th Quarter 2024 and full year unaudited results (Link).
$ billions | Q4’24 | Q4’24 Adjusted | Q1’25 Updated Outlook |
Production and manufacturing expenses | 5.8 | ||
Selling, distribution and administrative expenses | 3.2 | ||
Research and development | 0.3 | ||
Operating Expenses (Opex) | 9.4 | 9.4 | |
Less: Identified Items | 0.3 | ||
Underlying Opex | 9.1 | ||
of which: | |||
Integrated Gas | 1.1 | 1.0 | 0.9 - 1.1 |
Upstream | 2.6 | 2.5 | 2.1 - 2.7 |
Marketing | 2.6 | 2.5 | 2.3 - 2.7 |
Chemicals and Products | 2.1 | 2.1 | 1.8 - 2.2 |
Renewables and Energy Solutions | 0.8 | 0.7 |
Depreciation, depletion and amortisation
$ billions | Q4’24 | Q4’24 Adjusted | Q1’25 Updated Outlook |
Depreciation, Depletion & Amortisation | 7.5 | 7.5 | |
Less: Identified Items | 1.7 | ||
Pre-tax depreciation (as Adjusted) | 5.8 | ||
of which: | |||
Integrated Gas | 2.0 | 1.4 | 1.2 - 1.6 |
Upstream | 2.9 | 2.8 | 1.9 - 2.5 |
Marketing | 1.0 | 0.6 | 0.5 - 0.7 |
Chemicals and Products | 1.2 | 0.9 | 0.8 - 1.0 |
Renewables and Energy Solutions | 0.5 | 0.1 |
Tax Charge
$ billions | Q4’24 | Q4’24 Adjusted | Q1’25 Updated Outlook |
Taxation Charge | 3.2 | 3.2 | |
Less: Identified Items and Cost of supplies adjustment | (0.2) | ||
Taxation Charge (as Adjusted) | 3.4 | ||
of which: | |||
Integrated Gas | 0.5 | 0.6 | 0.7 - 1.0 |
Upstream | 2.8 | 2.6 | 2.4 - 3.2 |
Marketing | 0.2 | 0.3 | 0.2 - 0.5 |
Chemicals and Products | (0.4) | (0.2) | (0.2) - 0.3 |
Renewables and Energy Solutions | 0.1 | 0.1 |
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. For further details see the 4th Quarter 2024 and full year unaudited results (Link).
$ billions | Q4’24 | Q4’24 Adjusted | Q1’25 Updated Outlook |
Income/(loss) attributable to Shell plc shareholders | 0.9 | 0.9 | |
Add: Current cost of supplies adjustment attributable to Shell plc shareholders | — | ||
Less: Identified items attributable to Shell plc shareholders | (2.8) | ||
Adjusted Earnings | 3.7 | ||
of which: | |||
Renewables and Energy Solutions | (1.2) | (0.3) | (0.3) - 0.3 |
Corporate | (0.3) | (0.4) | (0.6) - (0.4) |
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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.
The numbers presented in this announcement may not sum precisely to the totals provided and percentages may not precisely reflect the absolute figures due to rounding.
Forward-Looking statements
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, April 7, 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.
Shell’s net carbon intensity
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 net-zero emissions target
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.
Forward-Looking Non-GAAP measures
This announcement may contain certain forward-looking non-GAAP measures such as Adjusted Earnings, Adjusted EBITDA, Cash flow from operating activities excluding working capital movements, Cash capital expenditure, Net debt and Underlying operating expense.
Adjusted Earnings and Adjusted EBITDA are measures used to evaluate Shell’s performance in the period and over time.
The “Adjusted Earnings” and Adjusted EBITDA are measures which aim 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.
Adjusted Earnings is defined as income/(loss) attributable to shareholders adjusted for the current cost of supplies and excluding identified items. “Adjusted EBITDA (CCS basis)” is defined as “Income/(loss) for the period” adjusted for current cost of supplies; identified items; tax charge/(credit); depreciation, amortisation and depletion; exploration well write-offs and net interest expense. All items include the non-controlling interest component.
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. 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 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. 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. Underlying operating expenses is a measure of Shell’s cost management performance and 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. Underlying operating expenses comprises the following items from the Consolidated statement of Income: production and manufacturing expenses; selling, distribution and administrative expenses; and research and development expenses and removes the effects of identified items such as redundancy and restructuring charges or reversals, provisions or reversals and others.
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.
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