The Investment Case of ADNOC Distribution

[Music] so I'm Atman Benz the chief strategy uh transformation and syst officer and leading the investigation at adog distribution I guess I can press the button okay so the presentation is about adnoc distribution so part of the adnoc family um this company has been actually the first company listed by adnoc in December 2017 this is almost 7 years and the company has created Total Shadow return for the for the shareholders about 100% we have distributed more than4 billion doll and we expect to distribute another 3.5 billion sorry dollars in the next five years five years sorry which is roughly 30% of the market cap of the company I'm sure you all know adog distribution this is the largest fuel retailer and convenience players we operate actually stations across the UAE we are the largest player with more than 550 stations we have roughly 65% of the network and we are also present in the Kingdom of Saudi Arabia and in Egypt when we have respectively 70 stations and 125 stations so the company supplies roughly 40 Mill million uh liters to B to C customers which is you and me retail and B2B customers which is Corporate actually we sell gazol gasoline and we also have EV Chargers in our stations and what we have also is the non-fuel retail part which is when you arrive at our stations it is actually the Comming stores the car wash the loop change and the property management we are the largest Property Management owner in the UAE what do we do we rent boxes to Big Brands like you know mcdonals Etc elake and this is where we want to focus our Capital allocation in the next 5 years increasing the share of the non retail we have today more than 100 EV Chargers actually charging points and we aim actually to have by the end of 2020 at 500 fast and super fast charges we are in the convenience what is our aim we want to transform our stations into destination of choice making sure that the customers will come again and again and will let tell you how we're going to do this next slide is about the value proposition as youf was just mentioning about drilling atno distribution is also a comp company that has a very strong backup from adnoc who owns actually 77% of the company 23% free float on the Abu Dhabi stock exchange and we are part of msci for now a while and foty all the big indices and the company is today the top three listed fuel retailer and convenience player around the world we have also a strong track record of delivering as I was mentioning earlier we have been listed for almost 7 years this company has delivered in the past 5 years $1 billion in 2023 when actually a couple of years back it was only a $700 million company we have a very strong cash flow profile more than $1 billion operating cash flow that is generated every year and as I was mentioning earlier strong backup from adnoc with a supply contract that provides us a very strong visibility on the cash flows more than 75% of our cash flows are actually coming from the pump with very high margins a lot of predictability on the margins last point we have unveiled just last March a new fiveyear strategy and we want to continue to grow and we want to continue to create more value for our shers I was mentioning earlier we have doubled the total Sher returns since the IPO and we want to continue to give more growth and more dividend to our sholders and this is part actually of the investment and all the capital allocation that we are putting in our stations to create more value sweating the assets which means extracting maximum value from the assets from the fuel business from the conven stores from the car wash the loop change when we're upgrading actually our assets but we are also reducing our cost and on this we are using now more and more AI data analytics and all decisions are based on data the data that that that we are today developing through AI I go to the to the next slide what is our ambition by 2028 we want to increase by 50% the number of non-fuel retail transactions we want to reach 1,000 stations today we are roughly at 8:40 which is 550 in the UAE 70 in the Kingdom of Saudi Arabia where we will continue to grow and 125 stations in Egypt we want also to install 10 to 15 times more fast and super fast charging points versus 2023 and again we are in the fast and super fast charges what does it mean 100 Kow 180 KW which means that you can come to our station charge actually in 20 minutes 80% of your battery you come you park your you you park sorry your car and you go to the coming stores you grab a nice coffee nasca fresh food or you go to any of the other retail that we have in our station and you can monitor through your Apple watch or Samsung whatever the charging level and this is what we are doing also pushing notifications and you can also uh book actually the charging of your car before coming to the station and we are doing also a lot of things on technology and especially also on the fuel business where you come to our station this is feeling good that is camera with plate recognition where you can book actually your fueling and you come you say hi uh Ahmed hi John you want 98 you you Fuel and someone from the Comming stores will bring you the coffee and the croissant that you have already ordered and you just need to live without paying because it's STP up on your app we have today one of the most successful app in the UAE with more today than 2.2 million customers the total number of cars in the UA is roughly 4 million so 50% of the drivers have today the adnoc rewards up and this is where we're going to continue to to grow of course the number of customers but use AI with to hyper personalize actually the offers to the customers also and finally We are continuing continuously sorry reducing costs at adog distribution since the IPO we cut more than 120 million and we're going to continue to do so in the next five years with roughly $50 million in the next 5 years quickly dividend policy $4.4 billion that have been distributed already and I was saying just more than 3 billion to the next 5 years we invite the new dividend policy thanks to very strong cash flow profile but also and I should have said very strong balance sheet net debt to Abid just five times or so we're going to distribute $700 million or minimum 75% of the net profit which ever is higher which means that there is clearly an upside for investors and I'm done thank you please invest in ad distribution see you there [Music]