Abu Dhabi National Oil Company For Distribution · ADX:ADNOCDIST
Abu Dhabi National Oil Company For Distribution — ADNOC Distribution — Investor Day (February 2024)
48 slides from Abu Dhabi National Oil Company For Distribution's investor day presentation, February 2024
Slide 1: ADNOC Distribution: Investor Day Strategy update
ADNOC Distribution: Investor Day Strategy update February 2024 ADNOC Distribution
Slide 2: Agenda
Agenda Welcome address and agenda 3:30 PM Overview and key messages Focus on HSE and sustainability Strategic update Bader Saeed Al Lamki Athmane Benzerroug Fuel Chief Executive Officer Chief Strategy, Transformation & Non-fuel retail Sustainability Officer Futureproofing and new revenue streams Int
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: Overview and Key messages
Overview and Key messages 01 ADNOC Distribution
Slide 5: ADNOC Distribution at a glance
ADNOC Distribution at a glance 840 40mL 50+ ~600k ~500 service stations in our fuel supplied to customers EV charging points UAE customers convenience stores fuel retail network in the per day (B2C, B2B) across our UAE network served per day in our network in the UAE, KSA and Egypt UAE, KSA and Egyp
Slide 6: ADNOC Distribution transformational journey
ADNOC Distribution National fuel distribution champion Transformational journey Futureproofing the business Announced ADNOC Distribution Entry into Dubai Capital Markets Launched next-gen Company included in Opened the decarbonization established and KSA Day: strategic convenience store and MSCI and
Slide 7: We have delivered on our growth targets
We have delivered on our growth targets May ‘19 CMD: 2023 targets 2023 achievements Low single-digit growth in fuel volumes UAE retail fuel volumes CAGR: 2% Fuel retail UAE network: c.530 stations Increase UAE network size to c.530-550 stations KSA and Egypt network: 311 stations Increase total netw
Slide 8: ADNOC Rewards | Growing customer lifetime value
ADNOC Rewards | Growing customer lifetime value through developing one-on-one digital relationships ~2 million members, +22% Y-o-Y 3X 5X retail fuel volumes Y-o-Y growth in 2023 by active fuel and non-fuel transactions Y-o-Y growth in 2023 ADNOC Rewards members vs. total retail fuel by active ADNOC
Slide 9: ADNOC Distribution 2028 ambition
ADNOC Distribution 2028 ambition Establish ADNOC Distribution as a multi-energy, convenience +50% ~1,000 and mobility leader Increase in number of non-fuel (1) Station network transactions 2023: 840 Hyper-personalized digital-first experience to drive customer engagement, footfall and monetization D
Slide 10: Extending core strengths into new business models
Extending ADNOC Distribution core strengths and capabilities into new business models Vehicle servicing Futureproofing New Fleet solutions Core fuel retail & commercial Leveraging core strengths to develop world-class QSR master franchise capabilities in the local UAE market through the ADNOC Food &
Slide 11: New dividend policy proposal provides payback visibility
New dividend policy proposal provides payback visibility and upside from future earnings growth New policy proposal: Current policy $3.7bn Dividend framework 2024-28(1) Payment of $700m dividends distributed Min. since IPO dividends $700m or min. 75% in 2023, ADNOC Distribution is twice each fiscal
Slide 12: Focus on HSE and sustainability
Focus on HSE And sustainability
Slide 13: Committed to 100% HSE
Committed to 100% HSE World-class safety metrics TRIR(1) LTIF(2) 0.03 0.03 0.03 0.03 Zero fatalities in 2023 Zero catastrophic 2022 2023 2022 2023 events in 2023 WELL Health Safety Rating in 2023 awarded for entire network in the UAE (500+ sites) Testament to our commitment to maintain the highest l
Slide 14: An inclusive sustainability partner
An inclusive sustainability partner Main sustainability projects delivered in 2023 First UAE fuel retailer to announce Install PV solar panels Power 100% of heavy vehicle First high-speed hydrogen 2030 decarbonization roadmap & across our network fleet with biofuel refueling station in the Middle Ea
Slide 15: Placing sustainability at the core of our operations
Placing sustainability at the core of our operations and futureproofing the business Strategic initiatives 2023 achievements Tomorrow Energy optimization Reduce energy use across our assets through efficient systems and optimized building designs ~10% reduction in Scope 1 and Scope 2 emissions PV so
Slide 16: Strategic update
"syfateate update
Slide 17: Our market is transforming with changing consumer needs
In line with global trends, our market is transforming with changing consumer needs Accelerated energy Technology advances Lifestyle changes offer new transition leading to a rise creating disruptive & digital opportunities in convenience in alternative fuels opportunities as well as mobility 17
Slide 18: Strategy focused on sustainable earnings growth and shareholder returns
Our strategy focuses on driving sustainable earnings growth and attractive returns for shareholders Vision Pillars Become a multi-energy, Deliver profitable Build international Futureproofing & new convenience and mobility domestic growth platforms revenue streams leader Retail: enhance returns of c
Slide 19: Fuel
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Slide 20: Fuel retail | Solid outlook driven by population, mobility and car parc growth
Fuel retail | Solid outlook driven by population, mobility and car parc growth Margins and volumes 2028 Macro trends Industry-leading UAE ~1,000 Gasoline demand expected to grow at low- single-digit rate retail margin guarantee per supply contract with ADNOC Station network protecting from inventory
Slide 21: Fuel retail | Industry-leading UAE retail fuel margins and high throughputs
Fuel retail | Visible industry-leading UAE retail fuel margins and high throughputs Stable and proven Margin downside Retail fuel margin Throughput per station regulatory environment protection Pricing mechanism UAE pump prices are set Margin guarantee Retail margin protection $0.13/liter* 12.4mL/pa
Slide 22: Commercial | Scale-up fuel, LPG and lubricants businesses
Commercial | Scale-up fuel, LPG and lubricants businesses in the attractive markets while exploring inorganic opportunities Main fuels LPG Lubricants Largest markets: Abu Dhabi and the Northern Emirates Largest cylinders markets: Abu Dhabi emirate - Dubai Demand driven by: higher population and numb
Slide 23: Commercial | Developing new products and services
Commercial | Developing new products and services including decarbonization, fleet mgt. Strategic initiatives Expand bulk fuels, LPG and aviation through value-added fleet/B2B services Grow LPG and lubes domestically and internationally Main fuels LPG Lubricants ▪ Maintain leadership position in the
Slide 24: Non-fuel retail
ADNOC DISTRIBUTION
Slide 25: Non-fuel retail | Evolving into a 'foodvenience' player
Non-fuel retail | Evolving into a customer-centric, digitally-enabled ‘foodvenience’ player Macro trends Platform Ambition #1 #1 Globally, retail stations are becoming ‘customer destinations’ for convenience, F&B and adjacent services; the UAE follows similar trends Fuel retailer brand & Multi-energ
Slide 26: C-Stores | Format and offer innovation
26 ADNOC Oasis new format Improved category management C-Stores | Format and offer innovation Fresh bakery and coffee offering
Slide 27: C-stores | Reinvent as 'foodvenience' destinations
C-stores | Reinvent as ‘foodvenience’ destinations Strategic initiatives 2028 targets Tomorrow Targeted customer C-stores +25% offering leveraging advanced analytics ‘Foodvenience’ destination number of convenience stores including for longer-stay EV charging customers Bringing Oasis offering to cus
Slide 28: Car services | Becoming a one-stop car-care destination
Car services | Becoming a one-stop car-care destination Strategic initiatives 2028 targets Tomorrow Expanded offering comprehensive ecosystem for car services: battery, tires, repair, spare parts, EV services ~3X growth in cash washes Tunnel car wash rollout ~2X high capacity (10X traditional) with
Slide 29: Property management | Monetizing premium real estate portfolio
Property management | Monetizing premium real estate portfolio and scaling franchise operations Strategic initiatives 2028 targets Tomorrow Enhance returns of core assets by attracting more QSR(1) brands in our network, driving additional footfall 50+ scale up franchise operations Targeted tenant mi
Slide 30: Futureproofing & new revenue streams
Futureproofing & new revenue streams
Slide 31: Targeting similar profitability from EV charging vs. existing fuel business
Targeting similar profitability from EV charging vs. existing fuel business Energy consumption per 100km Gross margin per 100km Addressable market share ICE 7 liters AED 3.2 100% @AED0.45/liter 2.5x 5x Targeted addressable market share to achieve unit energy unit Gross margin profitability of existi
Slide 32: EV charging | Futureproofing our business with new revenue streams
EV charging | Futureproofing our business with new revenue streams Adoption of EVs UAE target: 50% EV penetration of car parc in 2050, according to Ministry of Energy and Infrastructure Targeting similar profitability per vehicle vs. existing fuel business, provided high-margin, fast On-the-Go captu
Slide 33: Customer-centric | Placing the customer at the heart of what we do
Customer-centric | We are placing the customer at the heart of what we do Leading the way Rewarding journeys Seamless fueling Frictionless retail Industry-leading Enhanced loyalty Robust program with loyalty TIERs and customer experiences enhanced offers through continuous innovation & digital enhan
Slide 34: International platforms
International platforms
Slide 35: Increasing contribution from international operations - KSA and Egypt
Increasing contribution from international operations - KSA and Egypt Macro trends: KSA/Egypt Retail Commercial Growth in car parc by strong economy growth, industrialization and late uptake of EVs Leveraging on strong Aviation Tourism growth and new airports ADNOC brand Expand to new airlines in Eg
Slide 36: KSA | 2023: building our branded platform
KSA | 2023: building our branded platform ~10,000 ~15% 0.15 0.05 total number of stations share of top 3 players SAR/liter gasoline retail SAR/liter diesel retail in a highly fragmented on KSA fuel retail market fuel margin (vs. non-organized fuel margin KSA retail fuel market players SAR0.09/liter)
Slide 37: KSA | Build on sustainable foundation to grow share
KSA | Build on sustainable foundation set in Central & Eastern province to grow share in the large market Strategic initiatives Enablers Environment is changing towards organized players, and brings market Capitalize on consolidation opportunities offered by new government regulations(1) New CAPEX r
Slide 38: Egypt | At a glance: structurally-attractive growth market
Egypt | At a glance: structurally-attractive growth market Commercial Retail Lubricants Aviation Fuel retail Deregulated business Deregulated business Regulated fuel margins but increased annually Driven by GDP Driven by tourism activity Driven by population growth and mobility Limited exposure to E
Slide 39: Egypt | Expand aviation segment and grow lubricant market share
Egypt | Building on synergies to expand aviation segment and grow lubricant market share Strategic initiatives Two successful brands coming together Growing tourism in Egypt supports expansion of aviation business to more airlines Grow lubricants business leveraging on a dual-brand portfolio Enhance
Slide 40: Financial framework
Financial framework
Slide 41: Strong track record of robust financial performance and returns
Strong track record of delivering robust financial performance and competitive returns Efficient capital allocation translates into industry-leading returns, robust cash generation and shareholder payback EBITDA, $m ROCE, % FCF(1), $m Dividend, $m +33% 26%(2) +75% 1,002 26.3% 1,155* 1,096* 24.2% 700
Slide 42: Delivering EBITDA growth in 2024-28
Delivering EBITDA growth in 2024-28: key strategic initiatives and focus areas Incremental EBITDA Initiatives to drive EBITDA growth in the strategic period Commercial Non-fuel New energy Cost Inorganic Retail fuel optimization opportunities Core UAE – Convenience & Mobility International growth Fue
Slide 43: Capital discipline and a robust balance sheet
Capital discipline and a robust balance sheet Balance sheet CAPEX & returns 0.62x $1.2bn Net debt/EBITDA - 2023 CAPEX in 2019-23 $1.6bn ~70% Liquidity in form of cash and unutilized of CAPEX allocated to growth credit facility - 2023 $3.2bn 26% Cash generation in 2019-23 Return on Capital Employed 2
Slide 44: Optimization programme to deliver $50 million in additional savings
Optimization programme in place to deliver $50 million in additional savings over 2024-28 Like-for-like OPEX savings, 2019-23, $ million 2024-28 initiatives 10-15% Targeting up to $50 million OPEX savings through: • Payment Systems 30-35% Standardization • Contracting & Procurement 130 Savings • Mac
Slide 45: Construction cost optimization and CAPEX outlook
Construction cost optimization and CAPEX outlook 2020-23: cost of building construction Base 2024-28: CAPEX outlook reduced by more than 20% Engineering optimisation: $250-300m ✓ More compact service station with higher plot utilization ratio ✓ Building Information Modelling (BIM) technology in 2019
Slide 46: Closing remarks
Closing remarks
Slide 47: ADNOC Distribution unique value proposition
ADNOC Distribution unique value proposition Solid business performance Deliver incremental and Deliver higher shareholder and cash flow visibility sustainable growth payback Demonstrable solid business performance reinforced by strong 2023 operating and Establish ADNOC Distribution as a multi- Prove
Slide 48: ADNOC
ADNOC DISTRIBUTION