CUSTOMER EXCELLENCE

CREATING VALUE

FINANCIAL HIGHLIGHTS

M Liters

9,674
0.7%
9,611
2018
9,674
2019
TOTAL FUEL VOLUME

AED m

2,839
2.3%
2,774
2018
2,839
2019
EBITDA

AED m

2,218
4.2%
2,128
2018
2,218
2019
NET PROFIT

AED m

2,331
16.4%
2,002
2018
2,331
2019
FREE CASH FLOW*

AED m

2,388
62%
1,470
2018
2,388
2019
2019 DIVIDEND**

AED

0.1910
62%
0.1176
2018
0.1910
2019
2019 DIVIDEND PER SHARE**

* EBITDA minus capital expenditures

** Includes an AED 1.194 billion (AED 0.0955 per share) dividend approved by our Board of Directors that will be submitted for ratification at our 2020 Annual General Meeting of Shareholders

Download
FINANCIAL REVIEW
Download
FINANCIAL STATEMENTS

FINANCIAL

Enhance the customer
experience and create
significant value for
our shareholders.

OPERATIONAL HIGHLIGHTS

Customer initiatives

Our focus on customer experience was an integral part of our success in 2019. We engaged with 14,000 customers throughout the year, through surveys and focus groups. Their feedback formed the backbone of a number of our campaigns through the year: nationwide free assisted fueling; launch of ADNOC Rewards loyalty program, and the return of the popular “FuelUp and FlyOff” partnership with Etihad Airways.

We launched the new ‘ADNOC On the go’ neighborhood station, providing smaller, more agile retail points, bringing us even closer to our customers and the communities we serve. With up to 50 stations planned in 2020, this new concept will contribute to the rapid expansion of our network with efficient capital allocation.

The first next-generation ADNOC Oasis convenience store was also launched in 2019, offering baked goods, made-to-order sandwiches and premium coffee.

Smart technology

The next-generation ADNOC Oasis convenience store introduced a new seamless digital experience, with new multiple payment points at the redesigned coffee station and bakery counter, in addition to a self-checkout point where customers can “tap and go’’.

‘ADNOC On the go’ offers a range of new technologies to improve customer experience, including an integrated
smart system for payments and
drive-through ordering.

Focus on shareholders’ value creation

In April 2019, we announced a significant increase in our dividend policy in recognition of the Company’s strong financial performance and cash position, as well as confidence in the Company’s strong growth prospects and cash flow generation ability going forward.

Backed by a long-term sustainable growth plan, the new dividend policy reflects the shareholders’ trust in the Company. Under the new policy, we intend to increase our annual dividend payment (subject to the Board of Directors’ recommendation),as follows:

  • An annual dividend for fiscal year 2019 of AED 2.39 billion (USD 650 million), equivalent to AED 0.1910 per share and a 62% increase compared to 2018
  • An annual dividend for fiscal year 2020 of AED 2.57 billion (USD 700 million), equivalent to AED 0.2057 per share, a 75% increase compared to 2018
  • A minimum payout of 75% of distributable profits from 2021 onwards
In 2019, we were able to drive higher fuel volumes (in both retail and commercial) and strong non-fuel growth, through a series of targeted customer campaigns.

These included customer experience initiatives such as marketing campaigns, free assisted fueling for all our customers, the launch of our innovative neighborhood fuel station concept ‘ADNOC On the go’, the new ‘ADNOC Rewards’ loyalty program, the next generation ‘ADNOC Oasis’ convenience store and convenient digital payment options.

All of these initiatives were delivered whilst maintaining a strong focus on operating and capital efficiencies. We demonstrated our continued commitment to our shareholders by unveiling a progressive and attractive dividend policy.

Download
OPERATIONAL HIGHLIGHTS
Download
BUSINESS REVIEW

OPERATIONAL HIGHLIGHTS

Fuel volumes

Total fuel volumes sold in 2019 amounted to 9.67 billion liters, an increase of 0.7%, compared to 2018.

Convenience stores

Our convenience store network grew to 264 stores across the seven emirates of the UAE. In 2019, we opened 14 new convenience stores in UAE.

The number of non-fuel transactions totaled 46.9 million, an increase of 9.8%, compared to 2018.

Rental properties

Occupancy at our rental properties increased to 84% in 2019, the eighth successive year of growth.

We have continued to transition our tenancy business to a revenue-sharing model to maximize revenue
and profitability.

Domestic expansion

Our retail fuel network grew to 382 service stations across the seven emirates of the UAE. In 2019, we opened six new retail fuel service stations in UAE, 3 of which were opened in Dubai.

Our Dubai network expansion is progressing well, with number of new retail service stations in advanced stages of execution and which are expected to be delivered during the first half of 2020.

Download
OPERATIONAL HIGHLIGHTS
Download
BUSINESS REVIEW

International expansion

While we continue to expand in the UAE, with a focus on Dubai, we are also pursuing opportunities internationally. We currently operate two retail fuel service stations in Saudi Arabia.

Given that the size of the Saudi Arabian market is three times that of the UAE, we see ample opportunity for growth in the Kingdom. We are also looking at new markets that meet our key strategic imperative of profitable business growth.

CHAIRMAN’S MESSAGE

ADNOC Distribution remains focused on delivering attractive returns to its shareholders and best-in-class services to its customers.

More than two years after our successful IPO, the transformation of ADNOC Distribution into a more commercially minded, performance-driven and growth-oriented organization is on track.

In 2019, we made a number of strategic decisions to enhance customer experience and deliver value for our shareholders. This includes the launch of our new ADNOC Rewards loyalty program and the unveiling of our innovative new neighborhood stations ‘ADNOC On the go’, which bring us even closer to our customers.

None of our success would have been possible without the backing of our nation’s leadership, our majority shareholder, our employees and of course,
our customers.

Our continued commitment to customer-centricity is central to the future of ADNOC Distribution. We will continue to look at everything we do through a customer lens, and strive to deliver best-in-class service to the millions of customers that we attend to every week.

In this context, our 2019 financial results demonstrate strong operational performance in both fuel and non-fuel business.

Net profit grew by 4.2% to AED 2.22 billion, or AED 0.177 per share, and underlying earnings before interest, tax, depreciation and amortization (EBITDA) increased by 7.2% to AED 2.72 billion. Free cash flow (EBITDA minus capital expenditures) generation grew by 16.4% year-on-year to AED 2.33 billion for 2019, driven by strong cash flow from operations and lower capital expenditure. Whilst delivering strong performance, we continue to benchmark ourselves at every level against our global peers and hold ourselves to the highest standards of international transparency and corporate governance.

I am confident in our ability to sustain this momentum and deliver continued success for this iconic UAE brand. People remain our foundation and we are committed to developing the next generation of leaders and preparing the way for future talent at all levels of the organization.

Dr. Sultan Ahmed Al Jaber Chairman

ADNOC Distribution
remains focused on
delivering attractive
returns to its shareholders
and best-in-class services
to its customers.

CEO’s MESSAGE

Our strategy is digitally oriented, customer-centric and driven by constant feedback from our customers.

It is a pleasure and honor to lead one of the most dynamic businesses in the UAE. My mandate is clear: to grow the business, develop its people, bring our company closer to our customers and to push forward our international expansion.

Consumers and investors have come to trust ADNOC Distribution, and as the new CEO of one of the UAE’s most valuable companies, I pledge to deliver on our targets, which include raising EBITDA to over USD$1 billion by 2023.

ADNOC Distribution is in a strong position, and as we sharpen our focus on the customer and pursue growth opportunities both domestically and internationally, we will improve all our distribution channels to reach larger market segments. We are focused on continuing to grow earnings before interest, tax, depreciation and amortization (EBITDA) across our businesses, to pursue cost optimization and margin improvement initiatives, and to maintain growth momentum.

Our strategy is digitally oriented, customer-centric and driven by constant feedback from our customers, partners and employees. We don’t just listen, we act on what they tell us. In 2019, we offered customers free assisted fueling across our network, launched the ADNOC Rewards loyalty program and our ‘ADNOC On the go’ neighborhood stations. Growth in our core fuel business will be driven domestically as we expand our commercial focus across the UAE, including into the underserved Dubai market.

In our non-fuel businesses, which includes our convenience stores, we will leverage new sales and greater profitability through better category management supported by an accelerated store revitalization program. Our customers have already started to enjoy the look and feel of our new ADNOC Oasis store experience, which includes fresh foods, baked goods and premium coffee. However, some things won’t change, like our commitment to cost management and prudent investment. Operating expense efficiencies and the optimization of capital expenditure remains a priority. Also, safety is a core value of our business and we will continuously invest in
safety solutions.

We continue to transform ADNOC Distribution into a world- class, customer-focused, commercially-driven jewel of the Emirati business world with a determined focus on driving profitable growth. Our people and our customers will remain at the center of all our
expansion plans.

Together, we will take ADNOC Distribution to the next level of excellence and beyond, for the benefit of our people, shareholders and, most importantly,
our customers.

Ahmed Al Shamsi Acting Chief Executive Officer

Our strategy is
digitally oriented,
customer-centric
and driven by
constant feedback
from our customers.