Abu Dhabi: ADNOC Distribution, the UAE’s largest fuel and convenience retailer, is holding its first Capital Markets Day presentations since its IPO on the Abu Dhabi Securities Exchange (ADX) in December 2017. Management will present today to institutional investors and analysts in London, with a similar presentation taking place tomorrow, May 8, in New York.
The focus of the Capital Markets Day presentations will be to provide an update by the company’s senior management on ADNOC Distribution’s achievements to date, growth strategy and future vision, as well as the financial profile of the business.
The event will be hosted by the ADNOC Distribution leadership team, including Saeed Mubarak Al Rashdi, Acting Chief Executive Officer, John Carey, Deputy Chief Executive Officer, and Petri Pentti, Chief Financial Officer.
Strong Growth and Shareholder Returns
In its Capital Markets Day presentation, the company will present its achievements to date, its solid performance and strong growth trajectory, which underpins its progressive new dividend policy, and the company’s capacity to invest in future growth.
Key highlights from the presentation include:
• The company successfully delivered on its IPO commitments, securing year-on-year EBITDA growth of 22%, from US$621 million in 2017 to US$755 million in 2018.
• The company’s clear and deliverable growth strategy remains on track, as it targets EBITDA in excess of US$1 billion by 2023. As the company outlined last week in its quarterly earnings announcement, its strong trajectory has continued in the first quarter of 2019.
• The company aims to boost top-line growth in both its fuel and non-fuel businesses through acceleration of its expansion in the UAE, particularly in Dubai where it targets at least 10 new stations in 2019, with a similar amount annually thereafter through to 2023.
• The company expects its non-fuel offering to continue to contribute to its profitability through the continued revitalization of its convenience stores, further roll out of Géant Express convenience stores, and further roll out of its proprietary Oasis Cafe coffee and bakery offering.
• The company’s cost optimization program remains in place and is expected to contribute to higher operating margins. The company is targeting US$100-150 million of additional savings through 2023 on top of the US$50+ million of like-for-like cost savings already delivered in 2018.
• The company expects to deliver further growth by expanding its lubricants business in the UAE and internationally, as well as by expanding its fuel and non-fuel retail offering into new geographies, such as Saudi Arabia.
• Strong cash flow generation and confidence in the company’s growth prospects support the company’s Board of Directors’ and shareholders’ recent approval of a new dividend policy under which the company intends to pay US$650 million, or AED 0.1910 per share, for 2019 (+63% versus 2018), US$700 million, or AED 0.2057 per share, for 2020 (+75% versus 2018), and a minimum pay-out of 75% of distributable profits thereafter. This dividend policy represents a balance between a sustainable shareholder pay-out, while maintaining significant capacity to invest in future growth. The company had approximately US$1.2 billion of cash on its balance sheet and a ratio of net debt to EBITDA at 0.35x as of March 31, 2019, providing significant additional leverage capacity.