24 slides from Abu Dhabi National Oil Company For Distribution's earnings presentation, Aug 13, 2018
Slide 1: ADNOC Distribution Q2 and H1 2018 Results Presentation
ADNOC DISTRIBUTION Q2 AND H1 2018 RESULTS PRESENTATION INVESTOR AND ANALYST CONFERENCE CALL 13 AUGUST 2018 ADNOC DISTRIBUTION
Slide 2: Agenda
AGENDA ADNOC DISTRIBUTION | Q2 AND H1 2018 RESULTS 1 2 3 4 EXECUTIVE Q2 AND H1 2018 STRATEGY UPDATE OUTLOOK SUMMARY RESULTS 2
Slide 3: Disclaimer
DISCLAIMER This communication includes forward-looking statements which relate to, among other things, our plans, objectives, goals, strategies, future operational performance and anticipated developments in markets in which operate and in which we may operate in the future. These forward-looking st
Slide 4: Executive Summary
EXECUTIVE SUMMARY SPEAKER: SAEED MUBARAK AL RASHDI, ACTING CHIEF EXECUTIVE OFFICER ADNOC DISTRIBUTION
Slide 5: Introduction
INTRODUCTION Strong H1 2018 financial delivery and on track for delivery of targets ADNOC DISTRIBUTION | Q2 AND H1 2018 RESULTS Prioritization of Strong financial On track on Successfully Confident on safety remains performance implementation of achieving delivery of targets core to our (EBITDA +30%
Slide 6: H1 2018 Highlights
H1 2018 HIGHLIGHTS Strong operational and financial performance DELIVERY ON STRATEGY OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE Ongoing network expansion with 4,763 mL total fuel volumes sold Gross profit +23.9% YoY 5 new stations opened to date and (-0.7% vs. H1 2017) to USD 710m 8 more to come
Slide 7: Q2 and H1 2018 Results
Q2 AND H1 2018 RESULTS SPEAKER: PETRI PENTTI, CHIEF FINANCIAL OFFICER ADNOC DISTRIBUTION
Slide 8: H1 2018 vs. H1 2017 Performance
H1 2018 VS. H1 2017 PERFORMANCE Gross profit (USDm) EBITDA (USDm) Net profit (USDm) Margin 22.4% 22.4% Margin % 23.8% 23.8% Margin 11.8% 11.8% Margin % 13.2% 13.2% Margin 10.1% Margin % 10.1% 10.3% 10.3% 710 710 573 ADNOC DISTRIBUTION | Q2 AND H1 2018 RESULTS 573 393 393 303 302 306 306 259 259 H1 2
Slide 9: Q2 2018 vs. Q2 2017 Performance
Q2 2018 VS. Q2 2017 PERFORMANCE Gross profit (USDm) EBITDA (USDm) Net profit (USDm) Margin 22.1% Margin %22.1% 24.5% 24.5% Margin Margin % 11.4% 11.4% 12.7% 12.8% Margin 9.7% Margin %9.7% 10.0% 10.1% 388 388 ADNOC DISTRIBUTION | Q2 AND H1 2018 RESULTS 291 291 202 202 158 159 150 150 127 127 Q22017 Q
Slide 10: Retail: Improved profitability
RETAIL Improved profitability Fuel sales volume Volumes H1 H1 % (mL) 2017A 2018A Gasoline 2,963 2,903 (2.0%) Diesel 389 375 (3.6%) Other 49 46 (6.4%) ADNOC DISTRIBUTION | Q2 AND H1 2018 RESULTS products1 Total 3,401 3,323 (2.3%) Q2 Q2 % H1 H1 % USDm 2017 2018 change 2017 2018 change Gross 202 246 21
Slide 11: Retail: Improved profitability (stations, stores, basket)
RETAIL Improved profitability Number of fuel stations 4.0% 355 348 363 362 H1 Q1 2017 2017 H1Q12018 2018 ADNOC DISTRIBUTION | Q2 AND H1 2018 RESULTS Number of convenience stores • Impact of ADNOC Flex not yet reflected in 230 232 2.6% 240 238 H1 2018 financial performance • Improved profitability in
Slide 12: Corporate: Focus on gross margins
CORPORATE Focus on gross margins has positively impacted performance ADNOC DISTRIBUTION | Q2 AND H1 2018 RESULTS Q2 Q2 % H1 H1 % USDm 2017 2018 change 2017 2018 change Gross 44 65 47.0% 96 106 9.9% profit • New pricing mechanism focused on Margin 17.6% 20.6% 19.8% 18.5% improving margins EBITDA 33 5
Slide 13: Corporate: Fuel and other product volumes
CORPORATE Focus on gross margins has positively impacted performance ADNOC DISTRIBUTION | Q2 AND H1 2018 RESULTS Fuel sales volume 1 Fuel sales volume (mL) (mL) Other products¹ salesOther products sales volume volume (mL) (mL) 851 851 858 858 2525 31 31 190 190 • Growth in lubricants 147 147 and LPG
Slide 14: Aviation: New services agreement and higher fuel margins
AVIATION Performance driven by new services agreement and higher fuel margins ADNOC DISTRIBUTION | Q2 AND H1 2018 RESULTS Q2 Q2 % H1 H1 % USDm 2017 2018 change 2017 2018 change Fuel sales volume (mL) • Change of Gross profit 31 56 81.7% 56 102 82.4% contractual profile of 378 378 369 369 the busines
Slide 15: Capex and Free Cash Flow
CAPEX AND FREE CASH FLOW Significant and robust free cash flow generation CAPEX (USDm) H1 2018A Net debt to EBITDA Leverage (xx) Leverage (xx) (x) Service stations projects 28 1.7x 369 Industrial projects 30 Machinery and equipment 21 377 377 Technology infrastructure 9 0.4x ADNOC DISTRIBUTION | Q2
Slide 16: Strategy Update
STRATEGY UPDATE SPEAKER: JOHN CAREY, DEPUTY CHIEF EXECUTIVE OFFICER ADNOC DISTRIBUTION
Slide 17: Progress Since IPO
PROGRESS SINCE IPO Implementation of strategy on track IPO – January 2018 …up to December 2017 to date year-end 2018 STRATEGY KEY MILESTONES ACHIEVED FURTHER STEPS TO COME • Opened 5 new fuel stations in the UAE • 8 additional fuel stations in 2018 • Launched ADNOC Flex in 152 Abu • Ongoing roll-out
Slide 18: Strategy Update: Fuel
STRATEGY UPDATE: FUEL Network expansion and ongoing roll-out of ADNOC Flex Network expansion • 13 new stations in 2018 − 5 sites opened to date − 8 more sites to open in 2018 • Strong pipeline for future sites ADNOC DISTRIBUTION | Q2 AND H1 2018 RESULTS FUEL ADNOC Flex • Successfully launched across
Slide 19: Strategy Update: Non-Fuel
STRATEGY UPDATE: NON-FUEL Convenience stores revitalisation efforts on track Strategic convenience store revitalisation • Revised store concept rolled out to 70 major stores across all regions • Portfolio rationalised with delisting of c.3,000 poor performing SKUs and introduction of new high qualit
Slide 20: Strategy Update: Cost Efficiency
STRATEGY UPDATE: COST EFFICIENCY Significant cost efficiency and CAPEX reduction Cost focus • Realized OPEX savings of c.USD 25m on a like- for-like basis and on track to hit USD 50m savings in 2018 − Includes outsourcing opportunities such as fuel transportation COST EFFICIENCY − Further savings to
Slide 21: Outlook
OUTLOOK SPEAKER: JOHN CAREY, DEPUTY CHIEF EXECUTIVE OFFICER ADNOC DISTRIBUTION
Slide 22: Outlook
OUTLOOK Strong H1 2018 with more to come in the year ADNOC DISTRIBUTION | Q2 AND H1 2018 RESULTS Confidence in achieving end of year 2018 targets Continued delivery on key pillars of our strategy 22
Slide 23: Q&A
Q&A Saeed Mubarak Al Rashdi John Carey Petri Pentti Acting Chief Executive Officer Deputy Chief Executive Officer Chief Financial Officer ADNOC DISTRIBUTION
Slide 24: Thank You
ADNOC DISTRIBUTION Q2 AND H1 2018 RESULTS PRESENTATION INVESTOR AND ANALYST CONFERENCE CALL 13 AUGUST 2018 IR@ADNOCDISTRIBUTION.AE THANK YOU ADNOC DISTRIBUTION