00
ADNOC Classification: Public
AADDNNOOCC
DDIISSTTRRIIBBUUTTIIOONN
Second Quarter and
First Half 2023 Results
Management Discussion & Analysis Report
;
4 August 2023
Key highlights: Growth in underlying profitability driven by
higher fuel volume and opex optimization
1 | P ageADNOC Classification: Public
Key highlights: Strong operating performance and growth in
underlying profitability in H1 2023
Fuel volumes – H1 2023
6,539 +34.0% Y-o-Y
Retail fuel volumes: +39.3%, mainly attributable to consolidation of TotalEnergies Marketing Egypt
million liters
Commercial fuel volumes: +23.2%, mainly attributable to consolidation of TotalEnergies Marketing Egypt
5,310 +8.8% Y-o-Y
Retail fuel volumes: +8.3% supported by network expansion and ongoing growth in region’s economic
million liters
activities
sold in UAE
and KSA Commercial fuel volumes: +9.7% on a strong growth in the corporate business and new contracts signed
in 2022 and H1 2023
Revenue – H1 2023
16,130 +4.9% Y-o-Y
driven by growth in total fuel volumes and higher non-fuel retail segment contribution, partially offset by
AED million lower pump prices as a result of declining oil prices
Gross profit – H1 2023
2,652 -16.2% Y-o-Y
AED million
ADNOC Distribution benefited from significant inventory gains in H1 2022 (AED 556 million in a rising oil
price environment), while in H1 2023 the Company recorded limited inventory gains (AED 61 million due
to lower oil prices).
1,702 Retail fuel: -13.8% Y-o-Y
AED million
significant inventory gains in H1 2022 (AED 401 million in a rising oil price environment) vs. limited inventory
gains H1 2023 (AED 80 million due to lower oil prices) – this negative development was partially offset by
higher retail fuel volumes
353 Non-fuel retail: +12.2% Y-o-Y
AED million
supported by strong growth in non-fuel transactions, record-high C-store conversion rate in three years of
25%, improved customer offerings following revitalization of stores, marketing and promotion campaigns,
and higher Food and Beverage (F&B) sales
597 Commercial: -31.8% Y-o-Y
AED million
growth in corporate fuel volumes offset by a margin reduction as well as inventory losses in H1 2023
(AED 20 million due to lower oil prices) vs. material inventory gains in H1 2022 (AED 154 million in a
rising oil price environment)
EBITDA – H1 2023
1,627 -18.4% Y-o-Y
AED million
significant inventory gains in H1 2022 in a rising oil price environment vs. limited inventory gains in H1
2023 due to lower oil prices
Underlying EBITDA (EBITDA excluding inventory movements) – H1 2023
1,567 +8.9% Y-o-Y
driven by volume growth, higher contribution from non-fuel retail business and company-wide efficiency
AED million
initiatives
Net profit attributable to equity holders – H1 2023
1,089 -30.3% Y-o-Y
AED million
due to lower EBITDA on the back of significantly lower inventory gains compared to H1 2022
Net profit excluding inventory movements – H1 2023
1,028 +2.1 % Y-o-Y
supported by volume growth, higher contribution from non-fuel retail business and company-wide efficiency
AED million
initiatives partially offset by higher interest costs
2 | P ageADNOC Classification: Public
Robust cash flow generation and balance sheet – H1 2023
1,222 Free cash flow
AED million
ADNOC Distribution reported free cash flow of AED 1,222 million, maintaining a strong financial position at
the end of June 2023 with liquidity of AED 4.7 billion, in the form of AED 1.9 billion in cash and cash
equivalents and AED 2.8 billion in unutilized credit facility
1.13x Net debt to EBITDA ratio
Balance sheet remained strong with a Net debt to EBITDA ratio of 1.13x as of 30 June 2023
(0.78x as of 31 December 2022)
Operational highlights – H1 2023
16 New stations 816 Total stations network
511 in UAE
64 in KSA
241 in Egypt*
351 Total convenience stores
network in the UAE
86.6 Fuel transactions in UAE 21.6 Non-fuel transactions in the
flat Y-o-Y UAE
million million
+13.8% Y-o-Y
25% Convenience store conversion
rate in the UAE
+400 bps
Compared to 21% in H1 2022
* Acquisition of 50% of TotalEnergies Marketing Egypt completed in Feb. 2023
3 | P ageADNOC Classification: Public
Strategy update: Sustained growth momentum in H1 2023
ADNOC Distribution continued to record positive underlying financial performance in H1 2023. Underlying
EBITDA (excluding inventory movements) grew by 8.9% year-on-year to AED 1,567 million, and net profit
excluding inventory movements increased by 2.1% year-on-year to AED 1,028 million. This performance was
driven by an 8.8% growth in the UAE and KSA fuel volumes, a 12.2% increase in non-fuel retail gross profit, and
like-for-like OPEX reduction of AED 55 million. Continued execution momentum on Smart Growth Strategy
signals the Company’s commitment to delivering on its growth initiatives and generating long-term shareholder
value.
Fuel business (retail and commercial)
ADNOC Distribution’s UAE and KSA fuel volumes grew by 8.8% year-on-year, as economic activity continued
to demonstrate positive momentum supporting retail and corporate fuel consumption. ADNOC Distribution added
new stations in Dubai and Saudi Arabia, resulting in incremental retail fuel volumes in H1 2023 which increased
by 8.3% compared to H1 2022. Including the consolidation of TotalEnergies Marketing Egypt, we recorded a
34.0% year-on-year increase in total fuel volumes.
Network expansion: ADNOC Distribution continued to expand its retail fuel activities by adding 16 new stations
and is on track to open 25-35 new stations in 2023.
o Domestically: ADNOC Distribution added 13 new stations in the UAE in H1 2023 to reach 511 stations (H1
2022: 472).
In Dubai, the Company opened 3 new stations in H1 2023. As a result, ADNOC Distribution’s service station
network in the emirate expanded by 20% to 42 stations (H1 2022: 35).
o Internationally: ADNOC Distribution continued to execute on its plans in the Kingdom of Saudi Arabia, with
64 stations at the end H1 2023, while c.80% of the network has been rebranded.
Beyond the GCC region, at the beginning of the year ADNOC Distribution successfully completed the acquisition
of a 50% stake in TotalEnergies Marketing Egypt LLC (TEME), which is among the top fuel distributors in Egypt,
with a diversified portfolio comprising 240 fuel retail stations, 100+ convenience stores, 250+ lube changing
points, and 16 car wash sites, as well as wholesale fuel, aviation fuel and lubricant operations. In H1 2023
TotalEnergies Marketing Egypt added 2 new service stations to its portfolio and operates 241 service stations.
Commercial business: In H1 2023, commercial segment fuel volumes in the UAE increased by 9.7% compared
to H1 2022 driven by an increase of 12.5% in corporate business volumes. This was a result of execution of new
corporate contracts signed last year and during the first half of 2023, as our Company has been proactively
focusing on gaining market share in Dubai and Northern Emirates.
The total number of export network countries in ADNOC Distribution’s VOYAGER lubricants portfolio rose to 32
markets at the end of H1 2023 compared to 21 markets at the end of the same period last year. The Company
is also exploring opportunities to penetrate new and growing lubricant markets through collaboration with leading
partners worldwide.
Non-fuel business - UAE
During H1 2023, non-fuel business continued to gain momentum with a c.14% year-on-year increase in
transactions. This positive trend was supported by a series of marketing campaigns and customer-centric
initiatives in line with the Company’s non-fuel retail strategy underpinned by a record-high C-store conversion
rate in three years of 25%, which increased by 400 bps compared to H1 2022.
4 | P ageADNOC Classification: Public
The Company continued to execute on its convenience store revitalization program, with additional 5 stores
refurbished during the first half of 2023. Since the launch of the program, the Company modernized a total of
c.200 ADNOC Oasis stores over 2020-H1 2023, offering fresh food, barista-brewed coffee and a wider menu
selection, and providing support to key convenience stores operating metrics, including number of transactions,
conversion rate, gross margin, and basket size.
ADNOC Distribution continued to enhance customer offerings through various initiatives, such as offering a
modern shopping environment, improvement in category management, a better assortment of products,
including introduction of fresh food and premium coffee products, and digital channels to order and transact. The
customer journey improvements are consistent with the Company’s ongoing non-fuel retail strategy to offer
modern and digitally enabled shopping experience.
ADNOC Distribution expanded its vehicle inspection services in the UAE to 33 centres following the addition of
2 new centres between end of H1 2022 and end of H1 2023. The number of vehicles inspected (fresh tests) in
the Company’s vehicle inspection centres significantly increased by 39% in H1 2023 year-on-year, driven by an
increase of the number of vehicle inspection centres, particularly in the Northern Emirates, along with the
introduction of new services, and supported by marketing and promotions.
ADNOC Rewards loyalty program and customer focus
ADNOC Rewards loyalty program continued to add members throughout H1 2023, with more than 1.7 million
members (+20% vs. H1 2022) now enrolled and over 50 partner offers providing discounts and deals through
the ADNOC Distribution app.
The program received a boost in H1 2023 with an improvement in generosity of 3x and further enhancements
planned for 2023. We continued to offer our customers promotions in-store, and a range of initiatives that include
linking ADNOC Rewards across service station purchases and allowing customers to earn and redeem points
against valuable offerings – in fuel, lube change services, convenience store, and car washes. This has
contributed to the growth in the non-fuel business.
The Company has also become the region’s first fuel distributor to introduce the innovative ADNOC ‘Fill & Go’
technology at its service stations. The AI-backed solution utilizes the latest innovations in computer vision
technologies, comprising machine learning models allowing computers to recognize vehicles and responds by
offering a hyper-personalized fuelling experience, reaffirming ADNOC Distribution’s leadership position in the
UAE’s fuel and convenience retail sector.
ADNOC Distribution is committed to putting the customer at the heart of what it does to help accelerate the
mobility revolution and redefine the experience at service stations; thereby, cementing its position as a
destination of choice for its customers.
OPEX
During H1 2023, ADNOC Distribution accelerated execution of efficiency improvement initiatives across all our
operations and businesses including optimizing logistics costs, renegotiations of supply contracts with vendors,
etc. As a result, the Company’s OPEX decreased by 7.2% year-on-year to AED 1,406 million.
The cost reduction took place despite the continued expansion of our operations and associated costs. Number
of stations in the UAE and KSA increased by 7% at the end of H1 2023 compared to the same period of last
year. In addition, ADNOC Distribution consolidated operations of TotalEnergies Marketing Egypt from 1 February
2023. The Company continues to implement management initiatives to increase operational efficiency and
achieve prudent cost controls.
5 | P ageADNOC Classification: Public
Efficient capital allocation
ADNOC Distribution has demonstrated a proven track record of value creation since IPO, by pursuing new
opportunities in domestic and international markets and allocating cash towards growth. The Company expects
to invest AED 0.9-1.1 billion in 2023 to deliver on its growth plans after investing AED 384 million in H1 2023.
Through efficient capital allocation, ADNOC Distribution has consistently achieved healthy rates of return,
including Return on Capital Employed (ROCE) of 24.3% in H1 2023 (27.3% in H1 2022) and Return on Equity
(ROE) of 70.1% in H1 2023 (75.4% in H1 2022).
In H1 2023, ADNOC Distribution generated robust free cash flow of AED 1,222 million. At the end of June 2023,
the Company maintained a strong financial position with liquidity of AED 4.7 billion, in the form of AED 1.9 billion
in cash and cash equivalents and AED 2.8 billion in unutilized credit facility. The balance sheet remained strong
with a net debt to EBITDA ratio of 1.13x as of 30 June 2023 (0.78x as of 31 December 2022).
Sustainability & futureproofing of business
I/ Rollout of Electric Vehicles (EV) charging points
ADNOC Distribution continues to expand its network of EV charging stations, and has agreed with TAQA, one
of the largest listed integrated utility companies in the EMEA region, to work together to establish a new mobility
joint-venture, E GO.
2
In parallel, ADD continues an EV chargers rollout at its service stations with c.40 charging points installed across
the UAE to address current EV customer demand.
Through the development of modern mobility solutions, ADNOC Distribution intends to become a destination of
choice for charging and convenience for the UAE customers.
II/ Decarbonization roadmap
ADNOC Distribution plans to expand its sustainability-driven efforts to futureproof its business. In January 2023,
the Company unveiled its Decarbonization roadmap, committing to a reduction of carbon intensity of its business
by 25% by 2030. The Decarbonization roadmap covers Scope 1 emissions, which come directly from the
Company’s operations, and Scope 2 carbon emissions, which come from the energy ADNOC Distribution uses
to run its operations.
The Company aims to cut emissions through a set of identified initiatives that will be implemented in 2023 and
beyond, such as installing solar panels at service stations, use of biofuels to power its fleet of vehicles and other
energy optimization initiatives. ADNOC Distribution also aims to utilize ‘green concrete’, that is eco-friendly and
has a smaller carbon footprint than traditional concrete, in the construction of new service stations.
ADNOC Distribution announced partnering with Emerge, a joint venture between Masdar and EDF, to install
solar panels across its service stations network in Dubai, as part of the Company’s phased approach to UAE-
wide solar rollout to provide the power needed for daily operations.
III/ Sustainability Linked Loan
ADNOC Distribution became the first UAE fuel and convenience retailer to tap into sustainable financing, by
converting in January 2023 an existing AED 5.5 billion ($ 1.5 billion) term loan into a Sustainability Linked Loan.
The Company committed to a penalty/incentive model which ties the loan to the sustainability-linked indicators,
including GHG emissions intensity and share of renewable energy contribution. By arranging the Sustainability
Linked Loan, ADNOC Distribution has aligned its funding strategy with the sustainability roadmap.
6 | P ageADNOC Classification: Public
Eng. Bader Al Lamki – Chief Executive Officer:
"ADNOC Distribution has delivered robust results in the first half of the year, driven by strong operating
performance and efficiency improvement initiatives across the Company.
As a future-focused business, we remain on track to meet targets for the year in OPEX savings and network
expansion locally and internationally, and expect this growth momentum to continue into the second half of the
year. Supported by our firm belief in the Smart Growth Strategy while embarking on our transformational plans
that focus on innovation and upgrading the customer experience, we remain committed to achieving sustainable
growth and rewarding returns for shareholders in the long term.
We continue to actively support and contribute to the UAE’s strategic vision by reducing carbon emissions from
our operations and supporting sustainable mobility objectives. This approach aligns with our future-proofing
strategy and capitalizes on the opportunities offered by the energy transition.”
7 | P ageADNOC Classification: Public
Positive outlook supported by volume growth momentum,
OPEX savings and futureproofing initiatives
After posting a 7.9% increase in GDP in 2022, the UAE’s first quarter 2023 economic growth of 3.8% is pointing
to another solid year. Meanwhile, Q1 2023 non-oil GDP increased by 4.5% confirming the success of the
country’s efforts to promote the growth of non-oil economic sectors and transition to an economic model based
on knowledge and innovation. These achievements are moving the country closer to implementation of ‘We the
UAE 2031’ vision, under which the UAE is expected to double the size of its economy by 2031 through driving
up the country’s non-oil exports and tourism sector. In Q1 2023, UAE airports welcomed 31.8 million passengers
which compares to 11.5 million passengers in Q1 2022, while the hospitality sector returned to pre-pandemic
occupancy rates despite an increase in the number of rooms.
Notwithstanding significant global uncertainties, including weaker growth, tighter financial conditions and
geopolitical developments, in 2023 the IMF expects the UAE economy to expand by 3.5% which is the highest
rate among the GCC economies, with the growth accelerating to 3.9% in 2024. IMF highlighted that
implementation of enhanced UAE reform efforts poses upside risks to those forecasts. The growth in business
activity has translated into higher traffic and improved consumer confidence across the country resulting in higher
fuel volumes and non-fuel transactions for ADNOC Distribution in H1 2023. It also supports positive outlook for
the remainder of this year and beyond.
ADNOC Distribution is committed to delivering sustainable, profitable growth and attractive shareholder returns.
The Company expects positive outlook in the second half of 2023, underpinned by volume growth momentum
and OPEX savings, while also focusing on network expansion and delivering higher non-fuel retail contribution.
By executing management initiatives to increase operational efficiency across all business units, implementing
prudent cost controls and optimizing costs, in H1 2023 the Company achieved OPEX savings of AED 55 million,
a significant progress towards its full-year guidance for like-for-like OPEX savings of around AED 92 million in
2023.
ADNOC Distribution will continue to enhance customer experience and further optimize its operations to
generate sustainable value for shareholders. The Company is confident in the delivery of its strategic
commitments. As opportunities arise, ADNOC Distribution will pursue expansion plans in a disciplined manner,
supported by a robust balance sheet and ample liquidity with confidence in the cash flow generation capability.
In its ongoing quest to futureproof the business, ADNOC Distribution continues to explore potential growth
opportunities and new revenue streams created through energy transition, including opportunities in mobility and
energy transition such as electric vehicle charging services and other sustainability-driven initiatives.
Fuel business
New stations: after opening 16 new stations during H1 2023, the Company expects delivery momentum to
continue in H2 2023 and is well-positioned to achieve the full-year target of adding 25-35 new stations to its
network in 2023.
Egypt: ADNOC Distribution’s acquisition of a 50% stake in TotalEnergies Marketing Egypt reaffirms the
Company’s commitment to expanding business in attractive international growth markets. Egypt’s fuel retail,
lubricants and aviation markets are highly attractive with a potential for future growth. Due to its young and
expanding population, alongside a series of progressive economic reforms, Egypt has recorded GDP growth
with a positive outlook.
Through this transaction, ADNOC Distribution and TotalEnergies are expected to explore future growth
opportunities of TotalEnergies Marketing Egypt by unlocking value potential in fuel distribution, lubricants and
aviation businesses supported by economic growth. The Company plans to open first three ADNOC flagship
service stations in Cairo during Q3 2023.
8 | P ageADNOC Classification: Public
Other international: Beyond our successful acquisition in Egypt, the Company is evaluating inorganic growth
opportunities in international markets with a focus on efficient capital allocation towards growth.
Renewal of the Refined Products Supply Agreement: at the beginning of 2023, ADNOC Distribution
successfully renewed its supply agreement with ADNOC for a new five-year term, reaffirming the Company’s
strong value proposition driven by predictable margins and highly cash generative core business. The renewal
also demonstrated strong and ongoing support from the majority shareholder, ADNOC.
Non-fuel business
ADNOC Distribution invests in offering customers a modern and engaging retail experience. In line with the
ambitious non-fuel strategy, the focus remains on offering a modern environment and a better assortment of
products to customers, including fresh food and premium coffee, bundle offers and digital channels to order and
transact.
The convenience store revitalization program has ensured that the Company is well-positioned to capitalize on
benefits of its customer-centric initiatives and generates consistent growth in its convenience stores business.
Operating and investment efficiency
ADNOC Distribution aims to become one of the leading cost-efficient fuel retailers and remains on track to take
structural costs out, make its operations leaner and more efficient. The Company remains committed to
achieving further operational excellence and expects to realize like-for-like OPEX savings of around AED 92
million in 2023.
The key drivers for further OPEX savings include staff optimization, with the more efficient deployment of staffing
levels for stations and convenience stores, energy efficiency through smart technology, outsourcing of logistics,
centralization of key functions, etc.
Dividend policy
The Company’s continued growth and robust cash generation have enabled a progressive dividend policy for
the shareholders. ADNOC Distribution is committed to delivering sustainable, profitable growth and attractive
shareholder returns.
In March 2023, ADNOC Distribution shareholders approved a new dividend policy which stipulates a minimum
dividend of AED 2.57 billion (20.57 fils per share) for 2023 (compared to a minimum 75% of distributable profits
as per the previous policy), yielding at 5.3% (at share price of 3.90 as of 4 August 2023) and offering higher
payback visibility for shareholders.
In line with its dividend policy, ADNOC Distribution expects to pay a minimum AED 1.285 billion dividend for the
first six months of 2023 (10.285 fils per share) in October of this year, followed by a dividend for the second six-
months of 2023 in April 2024, subject to the discretion of the board and shareholders’ approval.
9 | P ageADNOC Classification: Public
Financial summary
AED million Q2 23 Q1 23 QoQ % Q2 22 YoY % H1 23 H1 22 YoY %
Revenue 8,132 7,998 1.7% 8,637 -5.9% 16,130 15,373 4.9%
Gross profit 1,388 1,264 9.8% 1,717 -19.2% 2,652 3,166 -16.2%
Gross margin, % 17.1% 15.8% 19.9% 16.4% 20.6%
EBITDA 851 776 9.7% 1,113 -23.5% 1,627 1,994 -18.4%
EBITDA margin, % 10.5% 9.7% 12.9% 10.1% 13.0%
Underlying EBITDA (1) (2) 778 789 -1.4% 707 10.1% 1,567 1,438 8.9%
Operating profit 666 626 6.3% 939 -29.1% 1,291 1,657 -22.1%
Net profit attributable to
551 537 2.6% 891 -38.1% 1,089 1,562 -30.3%
equity holders
Net margin, % 6.8% 6.7% 10.3% 6.7% 10.2%
Earnings per share
0.044 0.04 2.6% 0.07 -38.1% 0.087 0.125 -30.3%
(AED/share)
Net profit excluding
478 550 -13.2% 484 -1.4% 1,028 1,006 2.1%
inventory movements
Net cash generated from
370 1,257 -70.6% 350 5.8% 1,627 2,416 -32.7%
operating activities
Capital expenditures 227 157 44.4% 217 4.5% 384 413 -6.9%
Free cash flow (3) 174 1,048 -83.4% 92 89.5% 1,222 1,958 -37.6%
Total equity 3,324 2,793 19.0% 3,533 -5.9% 3,324 3,533 -5.9%
Net debt (4) 3,572 3,605 -0.9% 2,717 31.5% 3,572 2,717 31.5%
Capital employed 10,712 10,176 5.3% 10,450 2.5% 10,712 10,450 2.5%
Return on capital
24.3% 28.3% 27.3% 24.3% 27.3%
employed (ROCE), %
Return on equity (ROE), % 70.1% 97.0% 75.4% 70.1% 75.4%
Net debt to EBITDA ratio (4) 1.13 1.06 0.77 1.13 0.77
Leverage ratio, % 51.8% 56.3% 43.5% 51.8% 43.5%
(1) Underlying EBITDA is defined as EBITDA excluding inventory movements
(2) Underlying EBITDA for Q2 22 and H1 22 has been restated as per definition in (1)
(3) Free cash flow is defined as net cash generated from operating activities less payments for purchase of property, plant & equipment,
and advances to contractors
(4) Cash and bank balances used for net debt calculation include term deposits with banks
Notes: See the Glossary for the calculation of certain metrics referred to above
10 | P ageADNOC Classification: Public
Operating and financial review
Fuel volumes
Q2 2023 total fuel volumes sold reached 3,396 H1 2023 total fuel volumes sold reached 6,539
million liters, increasing by 40.2% year-on-year million liters, an increase of 34.0% year-on-year
mainly attributable to consolidation of TotalEnergies mainly attributable to consolidation of TotalEnergies
Marketing Egypt. Marketing Egypt.
In GCC markets (UAE and KSA), Q2 2023 total fuel In GCC markets (UAE and KSA), H1 2023 total fuel
volumes amounted to 2,657 million liters, up by volumes amounted to 5,310 million liters, up by
9.7% year-on-year supported by network expansion 8.8% on the back of network expansion as well as a
and ongoing growth in region’s economic activities. result of the region’s economic growth.
Q2 2023 UAE and KSA volumes were unchanged
compared to Q1 2023. UAE and KSA retail fuel volumes increased by 8.3%
in H1 2023. Commercial fuel volumes increased by
In Q2 2023, GCC retail fuel volumes increased by 9.7% year-on-year, driven by a 12.5% increase in
11.3% year-on-year, while commercial fuel volumes corporate volumes and partially offset by a 21.0%
were up by 6.6%. decline in aviation volumes.
Fuel volumes by
Q2 23 Q1 23 QoQ % Q2 22 YoY % H1 23 H1 22 YoY %
segment (million liters)
Retail (B2C) 2,389 2,148 11.2% 1,601 49.2% 4,537 3,257 39.3%
Of which GCC 1,781 1,746 2.0% 1,601 11.3% 3,528 3,257 8.3%
Of which Egypt 608 402 1,010
Commercial (B2B) 1,007 995 1.2% 821 22.6% 2,002 1,625 23.2%
Of which GCC 875 907 -3.5% 821 6.6% 1,783 1,625 9.7%
Of which Egypt 131 88 219
Of which Corporate 899 926 -2.9% 778 15.6% 1,825 1,491 22.4%
Of which GCC 814 863 -5.7% 778 4.6% 1,677 1,491 12.5%
Of which Egypt 85 62 147
Of which Aviation 108 70 55.0% 43 148.2% 177 134 32.7%
Of which GCC 62 44 40.1% 43 41.9% 106 134 -21.0%
Of which Egypt 46 26 72
Total 3,396 3,143 8.0% 2,422 40.2% 6,539 4,881 34.0%
Fuel volumes by product
Q2 23 Q1 23 QoQ % Q2 22 YoY % H1 23 H1 22 YoY %
(million liters)
Gasoline (1) 1,904 1,773 7.4% 1,476 29.0% 3,677 3,002 22.5%
Diesel 1,191 1,081 10.2% 725 64.3% 2,272 1,384 64.1%
Aviation products 108 70 55.0% 43 148.2% 177 134 32.7%
Others (2) 193 220 -12.3% 177 8.9% 413 362 14.2%
Total 3,396 3,143 8.0% 2,422 40.2% 6,539 4,881 34.0%
Of which GCC 2,657 2,654 0.1% 2,422 9.7% 5,310 4,881 8.8%
Of which Egypt 739 490 1,229
(1) Includes grade 91, 95 and 98 unleaded gasoline
(2) Includes CNG, LPG, kerosene, lubricants, and base oil
11 | P ageADNOC Classification: Public
Financial results
In Q2 2023, revenue decreased by 5.9% year-on- H1 2023 revenue increased by 4.9%, year-on-year,
year to AED 8,132 million. The reduction was driven to AED 16,130 million despite lower selling prices as
by lower selling prices as a result of lower crude oil a result of lower crude oil prices. The increase in
prices, partially offset by growth in fuel volumes, revenue was driven by growth in fuel volumes and
higher contribution of non-fuel retail business and non-fuel business, and consolidation of
consolidation of TotalEnergies Marketing Egypt. TotalEnergies Marketing Egypt.
Q2 2023 gross profit decreased by 19.2% year-on- H1 2023 gross profit decreased by 16.2%, year-on-
year to AED 1,388 million. In Q2 2022, in a rising oil year, to AED 2,652 million. In H1 2022, in a rising oil
price environment inventory gains amounted to AED price environment inventory gains amounted to AED
407 million (AED 273 million in fuel retail and AED 556 million (AED 401 million in fuel retail and AED
134 million in commercial business). In the reporting 154 million in commercial business). In H1 2023,
period, due to lower oil prices the Company due to lower oil prices the Company recorded
recorded inventory gains of AED 80 million in the inventory gains of AED 80 million in the fuel retail
fuel retail business but incurred AED 7 million business but incurred AED 20 million inventory
inventory losses in the commercial business – net losses in the commercial business – net inventory
inventory gains of AED 74 million. In addition, gains of AED 61 million. H1 2023 gross profit was
commercial margins came under pressure in a down year-on-year despite higher volumes due to
declining price environment. In Q2 2023, gross profit pressure on commercial margins in a declining price
was supported by higher fuel volumes and growth in environment.
non-fuel retail business.
H1 2023 reported EBITDA decreased by 18.4%,
Q2 2023 reported EBITDA declined by 23.5% year- year-on-year, to AED 1,627 million as a result of
on-year to AED 851 million mainly due to lower lower inventory gains in H1 2023 compared to H1
inventory gains in Q2 2023 compared to Q2 2022. 2022.
This was partially offset by the higher fuel volumes
and a reduction in cash operating expenses. H1 2023 underlying EBITDA (EBITDA excluding
inventory movements) increased by 8.9% year-on-
Q2 2023 underlying EBITDA (EBITDA excluding year to AED 1,567 million, mainly driven by higher
inventory movements) increased by 10.1% year-on- fuel volumes, growing non-fuel retail contribution
year to AED 778 million driven by higher volumes, and a reduction in cash operating expenses.
growth in non-fuel retail business contribution and
management initiatives to reduce costs. H1 2023 net profit attributable to shareholders
decreased by 30.3% year-on-year to AED 1,089
Q2 2023 net profit attributable to shareholders million, driven by the EBITDA reduction. Net profit
decreased by 38.1% year-on-year to AED 551 attributable to shareholders excluding inventory
million due to lower EBITDA. Net profit attributable movements increased by 2.1% year-on-year at AED
to shareholders excluding inventory movements 1,028 million despite higher interest costs.
remained nearly unchanged year-on-year at AED
478 million due to higher interest costs.
Revenue by segment
Q2 23 Q1 23 QoQ % Q2 22 YoY % H1 23 H1 22 YoY %
(AED million)
Retail (B2C) 5,648 5,260 7.4% 5,718 -1.2% 10,908 10,319 5.7%
Of which fuel retail 5,309 4,937 7.5% 5,447 -2.6% 10,245 9,764 4.9%
Of which non-fuel retail (1) 340 323 5.3% 271 25.5% 663 555 19.4%
Commercial (B2B) 2,483 2,739 -9.3% 2,919 -14.9% 5,222 5,055 3.3%
Of which corporate 2,100 2,430 -13.6% 2,676 -21.5% 4,531 4,495 0.8%
Of which aviation 383 308 24.2% 243 57.7% 691 559 23.5%
Total 8,132 7,998 1.7% 8,637 -5.9% 16,130 15,373 4.9%
(1) Non-fuel retail includes convenience stores, car wash, lube change, property management and vehicle inspection
12 | P ageADNOC Classification: Public
Gross profit by segment
Q2 23 Q1 23 QoQ % Q2 22 YoY % H1 23 H1 22 YoY %
(AED million)
Retail (B2C) 1,078 976 10.4% 1,250 -13.8% 2,054 2,289 -10.3%
Of which fuel retail 897 804 11.6% 1,094 -18.0% 1,702 1,975 -13.8%
Of which non-fuel retail (1) 180 172 4.5% 156 15.6% 353 314 12.2%
Commercial (B2B) 310 288 7.8% 467 -33.7% 597 876 -31.8%
Of which corporate 240 232 3.7% 361 -33.5% 472 652 -27.6%
Of which aviation 70 56 24.5% 106 -34.1% 125 224 -44.1%
Total 1,388 1,264 9.8% 1,717 -19.2% 2,652 3,166 -16.2%
EBITDA by segment
Q2 23 Q1 23 QoQ % Q2 22 YoY % H1 23 H1 22 YoY %
(AED million)
Retail (B2C) 607 545 11.4% 777 -21.9% 1,152 1,375 -16.2%
Commercial (B2B) 249 222 12.2% 336 -25.8% 471 618 -23.7%
Of which corporate 184 168 9.5% 298 -38.3% 353 529 -33.4%
Of which aviation 65 54 20.6% 38 73.1% 119 89 33.5%
Unallocated (2) -5 9 NM 1 NM 4 1 NM
Total 851 776 9.7% 1,113 -23.5% 1,627 1,994 -18.4%
NM: Not meaningful
(1) Non-fuel retail includes convenience stores, car wash, lube change, property management and vehicle inspection
(2) Unallocated includes other operating income/expenses not allocated to specific segment
Distribution and administrative expenses
In Q2 2023, distribution and administrative Excluding depreciation, Q2 2023 OPEX decreased
expenses (OPEX) were AED 737 million, a by 9.4% year-on-year to AED 552 million.
reduction of 5.8% compared to Q2 2022. This took
place as a result of the Company’s operational H1 2023 distribution and administrative expenses
efficiency improvements across all business units were AED 1,406 million, a reduction of 7.2%
despite a 7% increase in the Company’s network in compared to H1 2022, driven by Company’s
the UAE and KSA and associated costs as well as efficiency improvements initiatives. Excluding
consolidation of TotalEnergies Marketing Egypt. depreciation, cash OPEX decreased in H1 2023 by
9.2% y-o-y to AED 1,070 million.
AED million Q2 23 Q1 23 QoQ % Q2 22 YoY % H1 23 H1 22 YoY %
Staff costs 371 361 2.9% 405 -8.3% 733 798 -8.2%
Depreciation 186 150 23.7% 174 6.5% 336 337 -0.3%
Repairs, maintenance, and
47 44 7.2% 39 22.8% 91 84 8.5%
consumables
Distribution and marketing
8 4 86.1% 24 -65.3% 13 53 -76.2%
expenses
Utilities 56 34 65.1% 68 -17.7% 90 108 -16.9%
Insurance 5 5 -4.5% 4 8.0% 10 8 15.7%
Others (1) 64 70 -8.6% 69 -7.0% 134 127 5.8%
Total 737 669 10.3% 783 -5.8% 1,406 1,516 -7.2%
(1) Other costs include lease cost, bank charges, subscriptions, legal fees, consultancies, etc.
13 | P ageADNOC Classification: Public
Capital expenditures
In H1 2023, total CAPEX decreased compared H1
The Company’s capital expenditures (CAPEX)
2022 by 6.9% to AED 384 million, driven by lower
primarily consist of (i) investments related to the
CAPEX on service stations and industrial projects.
development and construction of new service
70% of the CAPEX comprised development and
stations and fuel terminal projects and capitalized
construction of new service stations.
maintenance costs related to properties, (ii) the
purchase of machinery and equipment, and (iii)
The table below presents the breakdown of capital
other capital expenditures related to properties,
expenditures for the reviewed period.
including structural upgrades, technology
infrastructure upgrades and other improvements.
AED million Q2 23 Q1 23 QoQ % Q2 22 YoY % H1 23 H1 22 YoY %
Service stations projects 148 122 21.2% 154 -4.0% 270 282 -4.2%
Industrial and other
29 8 262.1% 25 13.2% 37 62 -40.9%
projects
Machinery and equipment 28 13 106.6% 13 104.0% 41 24 71.4%
Distribution fleet 1 0 NM 0 NM 1 3 -67.4%
Technology infrastructure 16 12 40.5% 17 -5.7% 28 33 -15.9%
Office furniture and
6 2 141.2% 7 -20.3% 8 9 -13.5%
equipment
Total 227 157 44.4% 217 4.5% 384 413 -6.9%
NM: Not meaningful
14 | P ageADNOC Classification: Public
Business segments operating review
Retail segment – B2C (fuel and non-fuel)
Volumes
In Q2 2023, retail fuel volumes increased by 49.2% H1 2023 retail fuel volumes sold increased by
year-on-year, mainly attributable to consolidation of 39.3% y-o-y, mainly attributable to consolidation of
TotalEnergies Marketing Egypt. TotalEnergies Marketing Egypt.
In GCC markets (UAE and KSA), the volumes In GCC markets (UAE and KSA), they increased by
increased by 11.3% year-on-year driven by the 8.3% year-on-year as a result of the economic
region’s ongoing economic growth and addition of growth. In addition, the Company continued to
new service stations. The volumes increased by expand in Dubai by adding new stations, resulting in
2.0% compared to Q1 2023. incremental fuel volumes in H1 2023 compared to
the same period of 2022.
Retail segment volumes
Q2 23 Q1 23 QoQ % Q2 22 YoY % H1 23 H1 22 YoY %
(million liters)
Gasoline 1,829 1,701 7.5% 1,411 29.6% 3,530 2,872 22.9%
Diesel 503 389 29.2% 140 258.4% 892 288 209.6%
Other (1) 57 58 -2.0% 50 15.0% 115 97 19.5%
Total 2,389 2,148 11.2% 1,601 49.2% 4,537 3,257 39.3%
Of which GCC 1,781 1,746 2.0% 1,601 11.3% 3,528 3,257 8.3%
Of which Egypt 608 402 1,010
(1) Includes CNG, LPG, kerosene, and lubricants
Financial results
In Q2 2023, retail segment revenue decreased by Q2 2023 retail segment EBITDA declined by 21.9%
1.2% compared to Q2 2022, mainly due to lower compared to Q2 2022, mainly due to the lower
pump prices which were partially offset by higher impact of inventory gains in Q2 2023 year-on-year,
volumes, strong growth in non-fuel retail revenue partially offset by the higher fuel volumes and lower
and consolidation of TotalEnergies Marketing operating expenses in the reporting period.
Egypt.
Retail segment underlying EBITDA (EBITDA
Q2 2023 retail segment gross profit decreased by excluding inventory movements) increased in Q2
13.8% compared to Q2 2022, as a result of a 2023 by 4.5% year-on-year, supported by higher
reduction of inventory gains from AED 273 million in volumes.
Q2 2022 to AED 80 million in Q2 2023 due to lower
prices. Gross profit was supported by higher fuel H1 2023 retail segment revenue increased by 5.7%
volumes and higher non-fuel business contribution. compared to H1 2022 despite lower pump prices,
supported by the fuel volumes growth and increase
Fuel retail segment gross profit decreased by 18.0% in non-fuel revenues.
year-on-year principally due the lower impact of
inventory gains in Q2 2023 compared to Q2 2022, H1 2023 retail segment gross profit decreased by
partially offset by the higher fuel volumes in the 10.3% year-on-year, as in H1 2022 inventory gains
reporting period. Non-fuel retail gross profit amounted to AED 401 million in a rising oil price
increased by 15.6% in Q2 2023 compared to Q2 environment while due to lower prices in H1 2023
2022 driven by growth in non-fuel transactions of they were AED 80 million. The effect of lower
17.0% year-on-year, improvement in margins and inventory gains was partially offset by higher retail
improved customer offerings. fuel volumes and material growth of non-fuel
business.
15 | P ageADNOC Classification: Public
Fuel retail business gross profit decreased by H1 2022 retail segment EBITDA decreased by
13.8% year-on-year due to the lower impact of 16.2% compared to H1 2022, mainly due to lower
inventory gains in H1 2023 year-on-year. Non-fuel impact of inventory gains in H1 2023 compared to
retail gross profit rose by 12.2% in H1 2023 H1 2022, partially offset by higher retail fuel
compared to H1 2022, driven by growth in non-fuel volumes, growth in non-fuel business and lower
transactions of 13.8% year-on-year, higher margins operating expenses.
and improved customer offerings.
Retail segment underlying EBITDA (EBITDA
excluding inventory movements) increased in H1
2023 by 10% year-on-year.
Retail segment (AED
Q2 23 Q1 23 QoQ % Q2 22 YoY % H1 23 H1 22 YoY %
million)
Revenue 5,648 5,260 7.4% 5,718 -1.2% 10,908 10,319 5.7%
Of which fuel retail 5,309 4,937 7.5% 5,447 -2.6% 10,245 9,764 4.9%
Of which non-fuel retail (1) 340 323 5.3% 271 25.5% 663 555 19.4%
Gross profit 1,078 976 10.4% 1,250 -13.8% 2,054 2,289 -10.3%
Of which fuel retail 897 804 11.6% 1,094 -18.0% 1,702 1,975 -13.8%
Of which non-fuel retail (1) 180 172 4.5% 156 15.6% 353 314 12.2%
EBITDA 607 545 11.4% 777 -21.9% 1,152 1,375 -16.2%
Operating profit 442 408 8.1% 618 -28.5% 850 1,068 -20.4%
Capital expenditures 116 99 17.8% 141 -17.6% 215 270 -20.6%
(1) Non-fuel retail includes convenience stores, car wash, lube change, property management and vehicle inspection
Other operating metrics
Fuel transactions in the UAE decreased by 2.6% in transactions was supported by the network
Q2 2023 and by 1.5% in H1 2023 year-on-year expansion, improvement in customer sentiment as
given that following the reduction of pump prices well as the ongoing growth in economic activity in
customers visited service stations less frequently the UAE.
but bought more fuel per stop. The number of fuel
Fuel operating metrics Q2 23 Q1 23 QoQ % Q2 22 YoY % H1 23 H1 22 YoY %
Number of service stations
511 507 0.8% 472 8.3% 511 472 8.3%
– UAE (1)
Number of service stations
64 67 -4.5% 66 -3.0% 64 66 -3.0%
– Saudi Arabia (1)
Number of service stations
241 240 0.4% 241
– Egypt (1)
Total number of service
816 814 0.2% 538 51.7% 816 538 51.7%
stations (1)
Throughput per station –
3.1 3.0 1.8% 3.0 4.1% 6.1 6.1 1.3%
GCC (million liters)
Number of fuel
transactions – UAE 44.1 42.5 3.7% 45.3 -2.6% 86.6 88.0 -1.5%
(million)
(1) At end of period
Q2 2022 and H1 2022 non-fuel transactions in the promotion campaigns under ADNOC Rewards
UAE increased by 17.0% and 13.8% year-on-year loyalty program to attract higher footfall and increase
respectively driven by improving consumer customer spending. Convenience store conversion
sentiment, enhanced customer offerings following rate increased by 400 bps from 21% in H1 2022 to
the revitalization of the stores, and marketing and
16 | P ageADNOC Classification: Public
25% in H1 2023 and by 500 bps from 20% in Q2
2022 to 25% in Q2 2023.
2023 compared to Q2 2022, and by
2.7% year-on-year in H1 2023 compared to H1 2022.
The UAE convenience stores revenue increased by
22.6% to AED 207 million in Q2 2023 compared to
Q2 2022, and by 16.9% to AED 408 million in H1 In its property management business, the Company
2023 compared to H1 2022, mainly driven by higher continues to transition its tenancy business to a
number of transactions compared to the same period revenue-sharing model to maximize revenues and
of last year. profitability. In Q2 2023 and H1 2023, the number of
occupied properties remained nearly unchanged
In Q2 2023, convenience stores gross profit year-on-year. .
increased by 16.3% to AED 68 million and in H1
2023 increased by 14.0% to AED 134 million driven A number of vehicles inspected (fresh tests) in the
by higher number of transactions as a result of Company’s vehicle inspection centres increased by
enhanced customer offerings following revitalization 45.9% in Q2 2023 compared to Q2 2022 and by
of the stores, marketing, and promotion campaigns 39.3% in H1 2023 compared to H1 2022, driven by a
as well as the higher F&B sales. Average gross higher number of vehicle inspection centres,
basket size increased by 3.2% year-on-year in Q2 introduction of new service, and supported by
marketing promotions.
Non-fuel operating
Q2 23 Q1 23 QoQ % Q2 22 YoY % H1 23 H1 22 YoY %
metrics – UAE
Total number of non-fuel
11.0 10.6 3.8% 9.4 17.0% 21.6 19.0 13.8%
transactions (million) (1)
Number of convenience
351 345 1.7% 359 -2.2% 351 359 -2.2%
stores – UAE (2)
Convenience stores revenue
207 201 3.0% 169 22.6% 408 349 16.9%
(AED million) - GCC
Convenience stores gross
68 66 2.8% 58 16.3% 134 118 14.0%
profit (AED million) - GCC
Gross margin, % 32.8% 32.9% 34.6% 32.9% 33.7%
Conversion rate (C-store
25% 24% 20% 25% 21%
sites only), % (3)
Average basket size (AED) (4) 21.8 22.5 -2.8% 21.6 1.2% 22.1 22.0 0.6%
Average gross basket size
25.7 26.9 -4.4% 24.9 3.2% 26.3 25.6 2.7%
(AED) (5)
Number of Property
280 305 -8.2% 330 -15.2% 280 330 -15.2%
Management tenants (2)
Number of occupied
981 997 -1.6% 999 -1.8% 981 999 -1.8%
properties for rent (2)
Number of vehicle inspection
33 33 0.0% 31 6.5% 33 31 6.5%
centres (2)(6)
Number of vehicles
inspected – fresh tests 294 297 -1.0% 202 45.9% 592 425 39.3%
(thousands)
Other vehicle inspection
52 54 -3.6% 67 -21.9% 106 152 -29.9%
transactions (thousands) (7)
(1) Includes convenience stores, car wash and oil change transactions
(2) At end of period
(3) Number of convenience stores transactions divided by number of fuel transactions at sites with convenience stores
(4) Average basket size is calculated as convenience store revenue divided by number of convenience store transactions
(5) Average gross basket size is calculated as convenience store revenue (including revenue from consignment items shown under other
operating income) divided by number of convenience store transactions
(6) Includes one permitting centre
(7) Other vehicle inspection transactions include number of vehicles inspected (re-tests) and sale of safety items at vehicles inspection
centres
17 | P ageADNOC Classification: Public
Commercial segment – B2B (corporate and aviation)
Volumes
In Q2 2023, commercial fuel volumes increased by H1 2022 commercial fuel volumes increased by
22.6% year-on-year, mainly attributable to 23.2% compared to H1 2022, mainly as a result of
consolidation of TotalEnergies Marketing Egypt. consolidation of TotalEnergies Marketing Egypt.
In GCC markets (UAE and KSA), H1 2023 volumes
In GCC markets (UAE and KSA), Q2 2023 volumes
increased by 9.7% compared to H1 2022. Corporate
increased by 6.6% compared to Q2 2022, driven by
fuel volumes increased by 12.5% year-on-year,
growth in both corporate and aviation businesses on
while aviation fuel volumes sold to strategic
the back of new corporate contracts signed in 2022
customers decreased by 21.0% year-on-year.
and H1 2023.
Commercial segment
Q2 23 Q1 23 QoQ % Q2 22 YoY % H1 23 H1 22 YoY %
volumes (million liters)
Gasoline 75 72 3.8% 66 14.3% 147 129 13.6%
Diesel 688 691 -0.5% 584 17.7% 1,380 1,096 25.9%
Aviation 108 70 55.0% 43 148.2% 177 134 32.7%
Other (1) 136 162 -16.0% 128 6.5% 298 265 12.2%
Total 1,007 995 1.2% 821 22.6% 2,002 1,625 23.2%
Of which GCC 875 907 -3.5% 821 6.6% 1,783 1,625 9.7%
Of which Egypt 131 88 219
(1) Includes LPG, lubricants, and base oil
Financial results
inventory movements) increased by 26.6% year-on-
Q2 2023 commercial segment revenue decreased
year driven by higher volumes and lower operating
by 14.9% compared to Q2 2022, as a result of lower
expenses.
prices and despite consolidation of TotalEnergies
Marketing Egypt. The reduction was driven by the H1 2022 commercial segment revenue increased by
corporate business which decreased the revenue by 3.3% compared to H1 2022, mainly driven by
21.5% in Q2 2023 compared to Q2 2022 on the back consolidation of TotalEnergies Marketing Egypt.
of lower selling prices, partially offset by a 57.7%
H1 2022 commercial segment gross profit
increase in aviation business revenues.
decreased by 31.8%. In its corporate business
ADNOC Distribution recorded AED 154 million
Q2 2023 commercial segment gross profit declined
inventory gains in H1 2022 in a rising oil price
by 33.7% year-on-year as in its corporate business
environment and due to lower prices incurred AED
ADNOC Distribution recorded AED 134 million
20 million inventory losses in H1 2023. In addition,
inventory gains in Q2 2022 in a rising oil price
commercial margins were under pressure in a
environment and incurred AED 7 million inventory
declining oil price environment.
losses in Q2 2023 due to lower prices. Q2 2023
gross profit was down year-on-year despite higher
H1 2022 commercial segment EBITDA decreased
volumes due to pressure on commercial margins in
by 23.7% year-on-year, due to the gross profit
a declining price environment.
reduction. Underlying EBITDA (EBITDA excluding
inventory movements) increased by 5.9% year-on-
Q2 2023 commercial segment EBITDA declined by
year supported by higher volumes and lower
25.8% year-on-year, due to the gross profit
operating expenses.
reduction. Underlying EBITDA (EBITDA excluding
18 | P ageADNOC Classification: Public
Commercial segment
Q2 23 Q1 23 QoQ % Q2 22 YoY % H1 23 H1 22 YoY %
(AED million)
Revenue 2,483 2,739 -9.3% 2,919 -14.9% 5,222 5,055 3.3%
Of which corporate 2,100 2,430 -13.6% 2,676 -21.5% 4,531 4,495 0.8%
Of which aviation 383 308 24.2% 243 57.7% 691 559 23.5%
Gross profit 310 288 7.8% 467 -33.7% 597 876 -31.8%
Of which corporate 240 232 3.7% 361 -33.5% 472 652 -27.6%
Of which aviation 70 56 24.5% 106 -34.1% 125 224 -44.1%
EBITDA 249 222 12.2% 336 -25.8% 471 618 -23.7%
Of which corporate 184 168 9.5% 298 -38.3% 353 529 -33.4%
Of which aviation 65 54 20.6% 38 73.1% 119 89 33.5%
Operating profit 229 208 10.1% 321 -28.7% 437 588 -25.8%
Capital expenditures 1 0 NM 0 NM 2 3 -49.7%
NM: Not meaningful
19 | P ageADNOC Classification: Public
Share trading and ownership
ADNOC Distribution shares are traded on the Abu An average of 9.2 million shares traded daily in H1
Dhabi Securities Exchange (ADX) under the symbol 2023 (0.7x 2022 level). In H1 2023, the average
ADNOCDIST. The closing share price as of 30 June daily traded value of the Company’s shares was
2023 was AED 3.90. In the period from 1 January approximately AED 39.7 million (0.8x 2022 level).
2023 through 30 June 2023, the share price ranged
As of 30 June 2023, ADNOC owned 77%, while
between AED 3.86 and AED 4.64 at close. ADNOC
23% of ADNOC Distribution outstanding shares
Distribution market capitalization was AED 48.8
were publicly owned by institutional and retail
billion as of 30 June 2023.
investors.
Potential risks
Key risks potentially affecting ADNOC Distribution’s exposure to these risks. For more detailed
financial and operational results include supply information on risks and risk management, please
chain risks, asset integrity and information refer to the Risk Factors section of the international
technology risks. The Company has identified and offering memorandum dated 26 November 2017
implemented several key controls and mitigation relating to ADNOC Distribution IPO, which is
strategies to ensure business continuity, including available on the Company’s website at
engineered controls and managed controls as well www.adnocdistribution.ae
as contractual safeguards to limit its financial
20 | P ageADNOC Classification: Public
Q2 2023 Earnings conference call details
A conference call in English for investors and analysts will be held on Monday, August 7, 2023, at 4 p.m. UAE /
1 p.m. London / 8 a.m. New York. To access the management presentation, followed by a Q&A session, please
connect through one of the following methods:
Webcast
Click here to join the webcast
Please note that participants joining by webcast will be able to ask questions via a chat box within the webcast
player
Note: Click on the link above to attend the presentation from your laptop, tablet, or mobile device. Audio will
stream through your selected device. If you have technical difficulties, please click the “Listen by Phone” button
on the webcast player and dial one of the numbers provided therein.
Audio Call Dial in Details:
UAE (Toll Free): 8000 3570 2606
KSA (Toll Free): 800 844 5726
UK (Toll Free): 0800 279 0424
US (Toll Free): 800-289-0459
Passcode: 170881
For other countries, please connect to the above webcast link, select the “Listen by Phone” option on the webcast
player and click on the audio numbers to access the dial in information
The presentation materials will be available for download in English on Friday, August 4, 2023 at
https://www.adnocdistribution.ae/en/investor-relations/investor-relations/downloads/
Reporting date for the Q3 2023
We expect to announce our third quarter 2023 results on or around November 9, 2023.
Contacts
Investor Relations
Tel.: +971 2 695 9770
Email: ir@adnocdistribution.ae
Athmane Benzerroug
Chief Strategy, Sustainability and Transformation Officer
Email: athmane.benzerroug@adnocdistribution.ae
August 4, 2023
ABU DHABI NATIONAL OIL COMPANY FOR DISTRIBUTION PJSC
21 | P ageADNOC Classification: Public
Glossary
▪ Net debt is calculated as total interest bearing debt less cash and bank balances (including term deposits
with banks).
▪ Free cash flow is calculated as net cash generated from operating activities less payments for purchase
of property, plant & equipment, and advances to contractors.
▪ Capital employed is calculated as the sum of total assets minus non-interest bearing current liabilities.
▪ Return on capital employed is calculated as operating profit for the twelve months ended divided by
capital employed on the last day of the period presented.
▪ Return on equity is calculated as profit distributable to equity holders of the Company for the period of
twelve months ended divided by equity attributable to owners of the Company on the last day of the
period presented.
▪ Net debt to EBITDA ratio is calculated interest bearing net debt as of the end of the period presented,
divided by EBITDA for the twelve months ended on the last day of the period presented.
▪ Leverage ratio is calculated as (a) interest bearing net debt, divided by (b) the sum of interest bearing
net debt plus total equity.
▪ Average basket size is calculated as convenience store revenue divided by number of convenience
store transactions
▪ Average gross basket size is calculated as total convenience store sales revenue (including revenue
from consignment items shown under other operating income) divided by number of convenience store
transactions.
22 | P ageADNOC Classification: Public
Cautionary statement regarding forward-looking statements
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 statements involve known and
unknown risks and uncertainties, many of which are beyond our control and all of which are based on
management’s current beliefs and expectations about future events. Forward-looking statements are sometimes
identified by the use of forward-looking terminology such as “believes”, “expects”, “may”, “will”, “could”, “should”,
“would”, “intends”, “estimates”, “plans”, “targets”, or “anticipates” or the negative thereof, or other comparable
terminology. These forward-looking statements and other statements contained in this communication regarding
matters that are not historical facts involve predictions and are based on the beliefs of our management, as well
as the assumptions made by, and information currently available to, our management. Although we believe that
the expectations reflected in such forward looking statements are reasonable at this time, we cannot assure you
that such expectations will prove to be correct. Given these uncertainties, you are cautioned not to place undue
reliance on such forward looking statements. Important factors that could cause actual results to differ materially
from our expectations include, but are not limited to: our reliance on ADNOC to supply us with substantially all
of the fuel products that we sell; an interruption in the supply of fuels to us by ADNOC; changes in the prices
that we pay ADNOC for our fuels and to the prices that we are allowed to charge our retail customers in the
UAE; failure to successfully implement our operating initiatives and growth plans, including our mixed-mode
service offering, our convenience store optimization initiatives, our cost savings initiatives, and our growth plans;
competition in our markets; decrease in demand for the fuels we sell, including due to general economic
conditions, improvements in fuel efficiency and increased consumer preference for alternative fuels; the dangers
inherent in the storage and transportation of the products we sell; our reliance on information technology to
manage our business; laws and regulations pertaining to environmental protection, operational safety, and
product quality; the extent of our related party transactions with ADNOC and our reliance on ADNOC to operate
our business; the introduction of VAT and other new taxes in the UAE; failure to successfully implement new
policies, practices, systems and controls that we implemented in connection with or following our IPO; any
inadequacy of our insurance to cover losses that we may suffer; general economic, financial and political
conditions in Abu Dhabi and elsewhere in the UAE; instability and unrest in regions in which we operate; the
introduction of new laws and regulations in Abu Dhabi and the UAE; and other risks and uncertainties detailed
in our International Offering Memorandum dated 26 November 2017 relating to our initial public offering and the
listing of our shares on the Abu Dhabi Securities Exchange, and from time to time in our other investor
communications. Except as expressly required by law, we disclaim any intent or obligation to update or revise
these forward-looking statements.
23 | P ageDate: 04 August 2023
2023 سطسغأ 04 :خيراتلا
Disclosures and Compliance Section
ل اثتملااو حاصفلإا مسق
Market Operations Surveillance Department ة باقرلاو تايلمعلا ةرادإ
Abu Dhabi Securities Exchange ة يلاملا قارولأل يبظوبأ قوس
ة دحتملا ةيبرعلا تاراملإا ،يبظوبأ
Abu Dhabi, UAE
Greetings, ، دعبو ةبيط ةيحت
Subject: Notification of the results of the meeting of ي بظوبأ لورتب ةكرش ةرادإ سلجم عامتجا جئاتنب راطخإ :عوضوملا
the Board of Directors of Abu Dhabi
National Oil Company for Distribution PJSC ) ةكرشلا وأ عيزوتلل كوندأ( .ع.م.ش عيزوتلل ةينطولا
(ADNOC Distribution or the Company)
Notice is hereby given that the Board of Directors of
ADNOC Distribution held its meeting on Friday, 04 August دقع دق عيزوتلل ك وندأ ةكرش ةرادإ سلجم نأب ًاملع مكتيانع طيحن
2023, at 3:00 p.m. via video conference, and resolved as ة عاسلا مامت يف 2023 سطسغأ 04 قفاوملا ةعمجلا موي هل ًاعامتجا
follows: قفاوو شقان دقو ،يئرملا لاصتلاا ةيصاخ مادختساب رهظلا دعب ةثلاثلا
:يتلآا ىلع
1. To approve the Company’s financial statements for the
second quarter ended 30 June 2023;
يف يهتنملا يناثلا عبرلا نع ةكرشلل ةيلاملا تانايبلا ىلع ةقفاوملا .1
2. To establish a corporate branch in Jebel Ali Free Zone ؛2023 وينوي 30
(JAFZA); and
و ؛يلع لبجب ةرحلا ةقطنملا يف ةك رشلل ديدج عرف ءاشنإ .2
3. Other general business matters.
. ةكرشلا لامعأب ةقلعتم ةماع لئاسم .3
In addition, ADNOC Distribution wishes to inform the
market of a related party transactions with Abu Dhabi تاذ فارطلأا عم ةلماعمب قوسلا ملاعإ عيزوتلل كوندأ ةكرش دوتو امك
National Oil Company (ADNOC).
. )ك وـ ندأ( ةينطولا يبظوبأ لورتب ةكرش عم ةلصلا
• ADNOC Distribution has entered into a Land Lease
عم يضارلأا ريجأت ةرادإ تامدخ ةيقافتا عيزوتلل كوندأ تمربأ •
Administration Services Agreement with ADNOC, which
.2027 ربمسيد 31 خيرات ىتح اهتيحلاص ي رست يتلاو ،كوندأ
will expire on 31 December 2027. Under the five-year
contract, ADNOC will provide administration services to كوندأ رفوتس تاونس س مخ ا هتدم ةغلابلا ةيقافتلاا هذه بجومب
ADNOC Distribution related to land plots in the Emirate يتلا يضارلأا عطقب ةقلعتم عيزوتلل كوندأ ةكرشل ةيرادإ تامدخ
of Abu Dhabi leased by ADNOC to ADNOC Distribution. مهاستسو . يبظ وبأ ةرامإ يف عيزوتلل كوندأ ةكرشل كوندأ اهرجؤت
These services will, amongst others, enable more نم ة ءافك رثكأ لكشب صيخرتلا تايلمع نيكمت يف تامدخلا هذه
efficient licensing processes. . ىرخأ رومأ نيب
Yours sincerely, ،،ريدقتلاو مارتحلاا قئاف لوبقب اولضفتو
__________________
ي دياعلا نعم
ة رادلإا سلجم رس نيمأ
Mann El Aydi
Board Secretary
Copy to: Securities and Commodities Authority علسلاو ةيلاملا قارولأا ةئيه :ةخسنADNOC
DISTRIBUTION
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P aO dn B oo cx . a4 e1 88, Abu Dhabi, UAE eigic11 610411,,j4bgit .4188 C.,1 p ADNOC Distribution

Sentiment: positive