Accelerating Growth: Unpacking ADNOC Distribution’s Bold New Vision

As we gather to reflect on the outcomes of our recent Annual General Assembly Meeting (AGM), I am thrilled to share insights into the exciting journey ahead for ADNOC Distribution. Our AGM marked a significant milestone as shareholders approved our new and first ever five-year dividend policy that provides long-term payback visibility and dividend upside from future earnings growth – confirming our strategic direction and setting the stage for a transformative period of growth and innovation.

With consumer preferences shifting and governments across the world beginning to prioritize the transition towards Net Zero, we as fuel retailers will need to adapt our business models to not only support this vision but also diversify our offering to consumers – be that through building EV infrastructure or developing our stations into must-visit retail destinations.

As per Deloitte’s recently released The Middle East goes electric! report, the region’s EV market is projected to more than triple in size over the next few years from $2.7 billion in 2023 to $7.65 billion by 2028. Factors driving this growth include government initiatives to promote the use of electric vehicles, increased awareness of energy storage solutions, and the implementation of Vision documents here in the United Arab Emirates, and in the Kingdom of Saudi Arabia, Qatar, and Kuwait.

In line with our commitment to diversify our offerings, we will also shift from serving motorists to serving communities experiences. Leveraging our expansive network of fuel retail stations and prime real-estate locations, we plan to grow our offerings and partner brands, transforming our stations into destinations of choice.

At the heart of our strategy is our drive to transform into an international multi-energy, convenience, and mobility leader. With a focus on sustainable growth, customer-centricity, and operational excellence, we are poised to redefine standards and shape the future across our industry.

The new strategy, unveiled during our recent Investor Day, charts an ambitious course for growth and innovation. With strong cash generation, a healthy balance sheet, and high annual CAPEX committed to growth, we are well-equipped to expand our network to 1,000 service stations by 2028, increase non-fuel transactions by 50%, and strategically grow our electric vehicle infrastructure from 50 to 500 fast and super-fast charging points by 2028. The company also continues to target value-accretive domestic and international expansion opportunities.

AI has featured heavily in the business media over the past couple of years, but using it as an avenue for growth requires strategic implementation. Our commitment to innovation is evident in our embrace of AI and advanced technology. From AI-enabled license plate recognition for seamless refueling launched in 2023, to predictive analytics for optimizing fuel distribution, we are harnessing the power of data to enhance customer experiences and drive operational efficiency across the business.

Our new dividend policy aligns with this new strategy and emphasizes our dedication to delivering long-term value to our shareholders. By setting an annual dividend of $700 million or 75% of net profits, whichever is higher, we aim to provide clarity and confidence in our financial performance while ensuring attractive returns for our investors.

The AGM also saw shareholders approve the distribution of a significant dividend for the second half of 2023, totaling AED 2.57 billion. This milestone reaffirms our commitment to delivering tangible returns and reflects the strength of our financial position, with shareholders provided a 90% return on their investment and total dividend amounting to $3.7 billion since ADNOC Distribution’s IPO in 2017.

I believe an exciting future lies ahead for ADNOC Distribution and the broader fuel retail sector – follow us as we embark on our journey of transformation into an international multi-energy, convenience, and mobility leader.

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