The Investment Case of ADNOC Logistics & Services

[Music] us now in case you don't know him there's his name behind him Nicholas gleon Chief Financial Officer of adnoc logistics and services thank you very much thank you very much and nice to see everyone here this afternoon uh let me talk to you a little bit this afternoon about one of the stories if you had invested in on the 1st of June last year you'd be feeling extremely happy about the investment that you've made and held on to uh adnoc Logistics and services is one of the fastest growing industrial companies in the world and you can only match these types of returns typically by investing in a technology organization so what do we do adnoc Logistics and services provides the services to the energy industry globally which involve the transportation of equipment onshore to Offshore offshore to any fields and the energy from the energy fields to the end users internationally so we're a mission critical Logistics provider to the energy industry in the UAE in the region and increasingly to the whole world and that's where this very significant growth is coming from you've seen this afternoon there's so much growth coming in the energy industry here in the UAE we're heavily tapped into that we're heavily tapped into the growth which is happening in the region but most importantly that growth delivers to the whole world and we're heavily tapped into the growth that's delivering from here to the world but also the growth which is incurring in other regions around the world so we have visible long-term revenue streams what does that mean when you're heavy industrial you want to make sure that you can secure your investors returns so what do we do we contract securely for very long periods of time we've got contracts for 20 years delivery of gas with our friends Peta with ADN not gas we have contracts for 20 years with woa chemicals in China for example in the past 5 months we've put in place 340 years for long-term distribution of uh methane and ethane around the world we have a blue chip customer base so we have customers whose names you will know and that provides us with strong credit quality against those long-term contracts we have tremendous organic growth opportunity coming from the ADN ecosystem but also from the customer base we have around the world we have Financial strength as a result of the balance sheet we positioned ourselves with on IPO so when we listed we equitized $2 billion of pre-existing debt and left ourselves with a negative net debt to ibit to balance sheet why would anyone do that well the reason is we wanted to make sure that we were going to be able to deliver several billion dollars of growth into the future so at IPO we promised the market we'd deliver $4 to5 billion of Highly value ACA investment within the first 5 years of IPO but we've done it we listed on the 1st of June last year by the middle of this year we'd already delivered beyond that promise and it keeps on coming and we're going to keep on coming so we're growing that business tremendously post IPO to the benefit of our shareholders in fact as you'll see later on we've added so many contracts it takes us all the way to 2048 in terms of contracted income far beyond our forecast period we support the energy transition so while we're transporting oil and gas we're rapidly moving up the energy train increasing the proportion of cleaner energies that we transport internationally at the same time as reducing our carbon intensity we've reduced our fuel consumption dramatically on average across our vessels over the past 5 years uh we we only recycle vessels uh to International environmental standards uh and we maintain our Net Zero 2045 Target for the company um we've delivered tremendous inorganic growth for the company as well and that's really important because that inorganic growth is built as a platform for the future growth of the company so we're not finished we're just getting started we invested in zaka Marine International in late 2022 November 2022 we've grown that business 25% already in terms of the jackup barge Fleet by adding eight addition eight additional units in the first year post acquisition with significant profitability and very highit utilization across that Fleet we continue to grow the integrated Logistics business in our core and through that zmi acquisition we've also announced the acquisition of navigate so we'll complete 80% acquisition of navigate within the coming months uh likely within the next 3 months and that will give us a platform with 15 offices around the world with some of the world's best commercial chartering commercial operations desks access to two ship managers one in Germany uh one in Singapore uh access to a bunkering organization which serves 200 ports globally so you can see the growth coming from our organization is absolutely tremendous so when you think of adnoc logistics and services think of a mission critical provider serving the logistics for energy companies globally benefiting from the growth of adnoc the growth of UAE the growth of the gulf countries and the growth of the energy industry globally that pathway to growth has been secured by Strate iic Acquisitions of high quality vessels delivered to high quality customers around the world so you can see on this slide we started off with the acquisition of zaka marine I mentioned we listed on the 1st of June last year we've executed the acquisition of navigate we won a $975 million EPC contract which we're delivering on G island offshore here in the UAE we've delivered contracts for nine very large ethane carriers for 20 years delivering ethane uh into Asia we're delivering four very large ammonia carriers to support that transition to new energies in the future and we keep on adding to the fleet we keep on adding with value of creative growth with a very high proportion of that long-term contractor so our main focus of course is on our shareholders and that's why we're working so hard to deliver this growth engine that's supporting that growth in value for shareholders so if you bought our shares on IPO you'd be up over 170% today in terms of value and we're determined to keep that growth rate going to the benefit of our shareholders we've announced so much in future long-term contracted activity to deliver that continued growth I encourage you to download our presentation from our website the data is there it's validated you'll be able to see very clearly where all of this growth is coming from if we look on a proformer basis after the navigate acquisition 2023 to 2024 you'd be talking about 90% growth in revenues 70% growth in IA and 50% growth in net income now that acquisition is just subject to final regulatory approvals so it's not fully absorbed into the numbers of analysts in the market you can see that again openly by looking at the analysis out there it's a very interesting time to have a look at our stock from the perspective of the unrealized growth we delivered 38% Revenue growth to about $2.7 billion for the 9 months ending September this year uh we've delivered 148% growth in free cash flows how do you do that we've delivered tremendous improvement in our ebit margins from the business so before IPO we were operating about 22% ebit margin we grew that to 34% last year this year it's slightly down to 32% because the EPC projects have a lower margin but that delivers tremendous free cash flow to the business which is one of the reasons we've been able to grow so rapidly without drawing on our debt so at the moment our net debt to iiter is about 0.3 times now to a non- banker you'll understand that means we have tremendous Financial capacity for New Growth we're going to be able to borrow at very very attractive rates as a result of our strong balance sheet and we can deliver the next phase of incremental growth to the benefit of our shareholders using that debt from third parties to fund the shareholder benefits of growth in terms of contracted Revenue it's really important to look at just how much we've delivered Beyond 2030 so most of the market looks at the value of the business between now and 2029 our midterm guidance but look you've got around $13 billion of growth which is being delivered from 2030 to 2045 which is or 2048 actually which is potentially not yet fully recognized in the discounted cash flow value of the business we have so much locked in in terms of future growth we have so much locked in in terms of future opportunities we've delivered the platform for our international shipping growth which is navigate that should complete in the coming months we've delivered the platform for growth for our integrated Logistics through the zacha Marine platform we've delivered the team locally and now globally with 19 officers around the world post the navate acquisition to deliver that next phase of growth in the logistics requirements for the energy industry out of the UAE out of the gulf to the rest of the world I hope you'll understand this is an opportunity that's well worth looking at please download the investor presentation from the website it's worth looking at the numbers we will continue to grow this business to the benefit of our shareholders just because you didn't invest on IPO does not mean that you've missed out thanks very much for your time this afternoon [Applause] [Music]