Good day, and welcome to the ADNOC Distribution Q3 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Athmane Benzerroug. Please go ahead. Yes, good afternoon and good morning, everyone, and welcome to the ADNOC Distribution Third Quarter 2022 Earnings Call. I'm Athmane Benzerroug. I'm the Chief Investor Relations Officer. Joining me today are Bader Al Lamki, our Chief Executive Officer, and Wayne Beifus, our Chief Financial Officer. In today's call, I will start with the key highlights of the third quarter and nine months and the outlook. Our CEO will then discuss in detail the progress on our growth strategy. Our CFO will take you through the Q3 and nine months operating and financial performance. We'll answer any questions you may have at the end of this presentation. Before we begin, I will quickly reiterate our cautionary statement regarding forward-looking statements. This presentation includes forward-looking statements relating to our business. Such statements involving a number of factors that could cause actual results materially from our expectations. For more information, please refer to our international offering memorandum relating to our IPO and in our other investor communication, all of which are available on our website. I direct everyone to our website to read the full text of this disclaimer. Let me now go through the summary of company's key achievements for the third quarter and nine months and provide some insights on the company's outlook. First of all, the achievements, following record earnings in Q2 2022, ADNOC Distribution continued to demonstrate a robust financial and operating performance, while also maintaining strong momentum in network growth in the third quarter of 2022. At the end of the nine months, the EBITDA increased by 26% year-on-year to $779 million, and the net profit up 39% to $634 million. Compared to Q3 2021, the total fuel volumes increased by 2%, thanks to the expansion of our network and the continued rebound in the economic activity in the UA. As well as a strong growth in our corporate fuel volumes, which increased, sorry, by around 30% year-on-year during the third quarter. The non-fuel retail transactions increased by 17% last quarter compared to Q3 2021, while margins improved by 2.3 percentage points compared to the same period last year. In Q3 2022, the company demonstrated a strong earnings momentum with a year-on-year EBITDA growth of 18% to $236 million and a net profit growth of 45% to $209 million. Finally, the company continues to generate robust cash and maintain strong balance sheet to support the future growth opportunities and sustain attractive shareholder returns. Regarding the strategy execution and outlook. We remain on track to execute our growth commitments and reach a minimum EBITDA of $1 billion by 2023. We are accelerating execution of our network expansion and are expecting positive earnings momentum in both fuel and non-fuel to sustain. In the first nine months of the year, we delivered 47 new stations in the UAE and Saudi Arabia. This represents 80% of our full year 2022 network expansion target. We expect the delivery momentum to continue and the fuel growth to be sustained in Q4. We refurbished 11 convenience stores in the first nine months. We will continue to progress on the C-store refurbishment program in the fourth quarter and 2023, focusing on offering a modern environment and better assortment of products. This includes fresh food and premium coffee, bundle offers and digital channels to order and transact. In Q3 2022, we announced a new milestone in our international expansion by signing an agreement to acquire 50% stake in TotalEnergies Marketing Egypt. The company is one of the top four fuel distribution companies in Egypt, with exposure to a profitable lubricant and commercial aviation businesses, offering natural growth upside and value potential. We believe. The acquisition will be earnings accretive from year one post-closing, and we expect to complete the transaction in Q1 2023, pending certain conditions, including the regulatory approvals. We continue to focus on future-proofing the business to create long-term shareholder value. As an example, we are leveraging on the company's extensive network to promote EV charging and clean energy, as well as accelerating our digitalization through several initiatives to further enhance customer experience. We'll share further details on our plans in due course. Finally, ADNOC Distribution has demonstrated a proven track record of value creation since IPO. The company has a solid business model, strong cash generation, financial position, and growth potential, allowing or delivering attractive returns for our shareholders. Our dividend policy sets a minimum $700 million to be distributed in 2022, and a minimum 75% of distributable profits for 2023 onwards. Last month, the company paid a dividend of $350 million for the first half of 2022, which implied an 82% payout. In April next year, we expect to pay minimum $350 million subject to the board and shareholders' approval. Sustainability is an integral element of ADNOC Distribution strategy, and we are moving forward in our exciting sustainability journey. We have set appropriate governance controls to oversee and monitor our sustainability performance. We have established a sustainability committee chaired by our CEO, and the sustainability committee is responsible to drive targets along with the implementation and monitoring of sustainability strategy. The past period has seen ADNOC Distribution engage in several initiatives aimed at both future-proofing the business, including installation of EV chargers, and moving the company closer to achieving our sustainable business targets. We are making progress on developing our decarbonization roadmap, which we'll communicate in due course. We will also publish our fourth edition of our ESG report in February 2023. I will now hand over to our CEO, Bader Al Lamki, who will take you through an update on our growth strategy. Over to you, Bader. Thank you, Athmane Benzerroug, and good afternoon, good morning, everyone. Thank you for joining us. In today's presentation, I will walk you through the progress we have made towards achieving our growth plans. Let me first begin with our key pillar of growth, namely the fuel business, which includes retail and commercial businesses. Our total volumes in Q3 2022 increased by 2% to 2.3 billion liters compared to the same period of last year. Our retail volumes were down by 2% year-on-year, impacted by more residents traveling outside the UAE during the summer holidays in Q3 2022 compared to the same quarter of last year, as well as by higher unprecedented pump prices, fuel prices at the pump. On the other hand, our commercial volume increased by nearly 11% compared to the same period of last year. We expect that the fuel volumes will continue to increase in Q4 of 2022 and beyond, driven by our network expansion, as well as supported by ongoing economic growth in the country and in the region. The growth trajectory of our network sustained with steadfast and laser focus on providing an enhanced customer experience across our network. In the first nine months of 2022, we've opened 47 new service stations across the UAE and Saudi Arabia. On the domestic front, we maintained our leading market position in the retail fuel sector with 481 fuel stations after we have opened 21 new stations in the first nine months of this year. In Dubai, we've opened six new stations, taking our total network in this emirate to 37 stations. This includes the opening of a new state-of-the-art flagship service stations in Dubai, where we are leveraging advanced technologies such as smart cameras and digital screens to deliver highly personalized and seamless customer journey. It includes the first double-story ADNOC Oasis convenience store. The station also offers impressive sustainability credentials being partially powered by renewable sources, solar and wind. On the international front, we have expanded our network in KSA to 66 stations after adding 26 new stations in the first nine months of this year. Our entry into Egypt will mark a significant milestone in our international growth journey that will help us unlock new earnings potential through a diversified portfolio. Moving to the next slide, our second pillar of growth strategy is the non-fuel retail business. We continue to execute on our strategy to bring modern, digitally enabled shopping experience to our customers and communities, attractive customer offers in convenience stores, lubricants and car wash, as well as opening of new vehicle inspection centers in this third quarter of this year. During Q3 of 2022, we've opened seven new convenience stores in the United Arab Emirates, increasing our network by nearly 7% year-on-year to 366 convenience stores. We refurbished six convenience stores, creating a new look and feel, and offering fresh food, hot beverages, and wide menu selection. This has translated into a 17% increase in our non-fuel transaction in the third quarter of this year compared to the same period of 2021. An improvement of 2.7 percentage points in our convenience store margins compared to Q3 of last year. Our convenience stores saw a higher footfall and improved margin as a result of our re-renovation strategy to offering a modern, digitally-enabled customer journey and in-store experience through a better product mix and introduction of fresh food coffee products. Improving our customer experience is central to ADNOC Distribution success and remains at the heart of our growth plans. This is achieved through a better understanding of what services customers value the most, and enhancing offerings that meets their needs. Convenience, service offering, digital experience, price, and loyalty are all key markers of our approach to differentiating ourselves in the market and cementing our leading position as a customer destination of choice. Our ADNOC Rewards loyalty program continued to prove its popularity among customers with nearly 300,000 new members enrolled in the program since the beginning of the year, leading to more than 1.5 million members now enrolled and many partners providing discounts and deals through the ADNOC Distribution app. I will now hand over to Wayne to present the highlights of our financial performance. Wayne, over to you. Thank you very much, Bader Al Lamki. Good morning, good afternoon, everybody. We delivered strong financial results for the quarter and the nine months of 2022, while we continued to execute on our growth plans and maintained a robust balance sheet. Revenues increased by 58% in Q3 compared to Q3 same period last year, supported by higher selling prices, primarily as a result of the higher crude oil prices, and growth in fuel volumes, as well as higher non-fuel contribution. Our gross profit increased by 11% compared to the same period last year, mainly driven by higher fuel volumes and inventory gains, as well as the growth in the non-fuel retail business. Our reported EBITDA grew by 18% year-on-year to $236 million, also driven by the higher volumes in inventory gains. Excluding inventory gains and one-offs, our Q3 2022 underlying EBITDA grew by 30% to $218 million. Our Q3 net profit was $209 million, an increase of 45% compared to Q3 2021. This, driven by the higher EBITDA, while also attributed to lower depreciation charges as a result of change in accounting estimates related to the useful life of our assets. We generated a robust free cash flow of $79 million in Q3 2022, and $612 million for the nine months, and ended the quarter with a strong balance sheet and net debt to EBITDA of 0.68x, offering sufficient room to invest in growth while sustaining an attractive dividend policy. I'll now move on to our operating highlights. Our retail fuel volumes, which accounts for approximately 67% of our total fuel sales, decreased by 2% year-on-year in Q3 2022, after more residents traveled outside of the UAE during the summer holidays in Q3 compared to prior year, as well as consideration for the higher pump prices that we experienced during the period. However, retail volumes increased by circa 4% year-on-year in the nine months. Commercial fuel volumes increased by 11% year-on-year in Q3, driven by a 29% year-on-year growth in corporate volumes. However, this was partially offset by a lower uptake from our strategic aviation customers. In our non-fuel business, we've witnessed a strong 17% year-on-year increase in non-fuel retail transactions in Q3 2022. The average gross basket size in our convenience stores declined by 5% in Q3 2022 compared to last year. However, this comes after double-digit growth in gross basket sizes during the peak of the pandemic, which was a result of changed customer behaviors. Essentially, customers visiting less but buying more with each transaction. The basket size remains above pre-pandemic levels, benefiting from ongoing customer-centric initiatives. Moving on to gross profit performance by segment. Q3 2022 gross profit increased 11% year-on-year. As I mentioned before, the increase in gross profit was mainly a result of the higher fuel volumes and inventory gains, as well as growth in our non-fuel business. The fuel retail gross profit increased by 26% year-on-year, driven by higher fuel volumes as well as the inventory gains, approximately $24 million in the quarter. Non-fuel retail gross profit increased by 7% year-on-year in Q3. This driven by an increase in non-fuel transactions and improvement in margins, as highlighted earlier. Our convenience store revenue increased by 6% and gross profit by 15% year-on-year in Q3. As mentioned earlier by our CEO, this was driven by our growth strategy to optimize the product mix, which resulted in an increase in sales of fresh food and coffee. Our commercial business gross profit declined by 19% year-on-year. This was the result of a significant decline in the aviation business fuel volumes, which we sell to our strategic customers. In addition, there was a one-off charge relating to the reclassification of the aviation business operating expenses to cost of goods sold from the first of January this year of $31 million, which was fully accounted for in Q3 2022. I'll expand on this later in the presentation. Excluding the impact of this reclassification, the Q3 2022 aviation business gross profit would amount to $28 million. Let me now take you through our segment EBITDA performance. The Q3 2022 EBITDA increased by 18% year-on-year, mainly as a result of higher fuel volumes and inventory gains. Retail EBITDA increased by 29% year-on-year. This driven by higher volumes and inventory gains, while commercial EBITDA declined by 4%, mainly due to lower aviation volumes, which was fully offset by strong growth in our corporate volumes. In terms of our operating expenses, in the nine months of 2022, our total OpEx, excluding depreciation, has increased by 17% compared to last year, in line with an 18% year-on-year increase in the size of the company's network, both domestically and internationally, together with the growth in associated staff costs and expenses. The company continues to implement management initiatives to increase operational efficiency across all our business units, maintain prudent control over the expenses, and optimize our staff costs. Our cost program has yielded on a like for like basis OpEx savings of $103 million in the period 2019 to 2021. We are targeting a further $25 million of additional like for like savings. Finally, the company reclassified certain fuel distribution and aviation related OpEx to cost of goods sold. This change was made to further enhance the fair representation of our financial disclosure of OpEx. Looking at our cash generation, the company generated a strong free cash flow of $612 million in the nine months of 2022, driven by robust underlying profitability and positive impact of changes in our working capital. In line with plans to continue with our expansion strategy, we had CapEx of $200 million in the nine months. We strengthened our financial position with an overall net debt to EBITDA ratio of 0.68x, which compares favorably to the 1.06x at the end of 2021, and well below our guidance to the market of 2x. Our solid balance sheet position offers sufficient room to invest in growth and sustain a progressive and attractive dividend policy. Let me now hand back to Bader. Thank you, Wayne. Before opening the floor to the Q&A, I would like to reiterate on our key priorities. Number one, accelerate sustainable growth and shareholders value. We are executing on our growth commitment to reach a minimum of AED 1 billion EBITDA by 2023. Number two, ADNOC Distribution continues to offer the compelling investment story with strong results in the first nine months of the year and supporting growth momentum in the fuel and non-fuel businesses for the rest of 2022 and beyond. Finally, I would like also to emphasize that we aim to maintain robust balance sheet and ample liquidity with confidence in our cash flow generation capability to pursue our expansion plans. We are committed to allocate capital towards growth in a disciplined manner to deliver an enhanced customer experience, as well as to further future-proof the business to maximize value and generate sustainable value growth to our shareholders, while remaining committed to delivering an attractive shareholder distribution and backed by a strong financial position and sustainable earnings growth. This concludes today's presentation, and we are happy now to take your query, your questions. Thank you. If you wish to ask a question over the phone, please press star one on your telephone keypad. Please ensure the mute function on your telephone is switched off to allow your signal to reach our equipment. That's star one. We'll pause for a moment to allow everyone to signal. We will now take our first question from Afiq Nathani from International Securities. Please go ahead. Hello. Thank you so much for taking my question. I had a few queries that I wanted to bring up. Firstly, from what I understand, the company makes about 45-50 fils on per liter basis in the UAE business with the significant downside protection being given a floor by ADNOC. Now, at a time when the oil prices stay at a high level, the company has expanded into the Saudi market and is now entering the Egyptian market, which I believe would be margin dilutive in terms of per liter basis and expose the company to potential inventory losses. What is the strategy around that, and is my understanding on that front correct? Thank you. Let me take this question. First of all, on UAE, you are right, our margins are close to AED 0.40+ per liter, and there is a backstop guarantee from ADNOC now. In Egypt and Saudi, let me start with Saudi. The margins, we benefit from a margin of SAR 0.15 per liter, which is AED 0.15 per liter. Okay, so there is a clear agreed margin with the authorities and Aramco on the AED 0.15 per liter. For Egypt, the margins actually are also set, okay? There is, in our view, no risk on that front from a loss perspective. Okay. Just to clarify, the margins for both Saudi and Egypt are fixed net of any inventory losses. Is that correct? Can you just repeat again, sorry? Just to clarify on what you just shared, margins on Egypt and Saudi are both fixed on net of inventory losses. If there are any inventory losses, potentially oil prices decreasing, that will not affect the company's business in- Yeah. No, no. Egypt and Saudi. No, the margins in Saudi and Egypt are set, i.e., in Saudi, SAR 15 per liter. For Egypt also there's some fils per liter, which are lower than Saudi anyway. It's up to the companies, operating companies to spend the right level of OpEx to maintain this kind of margins. What we have seen historically, and since we have been running also Saudi is anyway, is our margins per liter is at SAR 15 per liter. Okay? Egypt, same thing for TotalEnergies Marketing Egypt. The margins have been historically actually higher than the fixed margins. Understood. Thanks for that. Just one more thing around your strategic plans. You have a $1 billion target for 2023. I just want to understand that if this year without inventory gains I think the company currently has a rate of about $750 million-$800 million quarterly. How exactly will that margin be? Will that target be met considering that the company might be exposed to inventory losses potentially? Or at least we can say that the recurrence of the inventory gains that we've seen this year the chances of that are quite slim. Are there any plans or initiatives in the pipeline to sort of cement that target? Yeah, sure. First of all, ADNOC Distribution is not exposed to inventory losses, especially in the retail fuel business, where it's 70% of our volumes. This is what makes actually this company unique and the level of cash flows and cash generation. This is one. Two, what's our plans? We have clear plans for the past years on how we have been already delivering above market expectations through domestic and international growth. This is what we're gonna pursue. We're gonna accelerate the expansion domestically. What do we mean by this? Higher market share in the fuel retail business, higher market share in the non-fuel retail business, i.e., in the convenience stores, car wash, lube change, optimizing our portfolio management. Also growing our commercial business by chasing higher market share. We have demonstrated for the past one year and a half that this business can grow at a double-digit. This is through the sales incentives that we have put in place in the company, but also our strategy to again gain market share. The cherry on the cake is the execution of the international strategy that will bring additional growth to the company. This is why we are confident in achieving the $1 billion target by 2023. Just a small follow-up question on that. We've seen that the company has grown aggressively in terms of the fuel pumps, especially in Saudi and Dubai. I just wanted to. I mean, what I see is that the throughput per pump is of course naturally coming down. What it seems like is that there's only so much growth that could potentially come from adding a few stations because there is some sort of like cannibalization also involved. Is that why there has been no fuel pump additions in Saudi this quarter? Has it reached some sort of a saturation point? Should we be expecting slower growth in the Saudi business? Just on the volume per station. I guess, and you're right, the volume per station is down, but this is the reflection of higher number of stations in an environment that has actually been COVID. Pre-COVID, we are seeing higher volumes. This is one. Two, I guess the focus, and you can see it in the slide number 12 of this presentation, is a Return on Capital Employed of this company. The Return on Capital Employed is still very high, i.e., 31% versus last year, 29%. We are still demonstrating that despite the fact that the throughput per station in the UAE is high, 12 million on average, 13 million, is much higher than what you have in Saudi or what you have in Egypt, okay? This is the fact that there is today less number of stations compared to the per capita, for example. The second part of your question, or did I answer the full question? No, I think that answers my question. Just one final thing that I would ask or would like to ask is about, you mentioned that, in the September quarter, the retail volumes were lower because a lot of people traveled out for vacations and all of that. But can you give us some idea if these volumes have recovered in the month of September comparing to the month of, let's say, May or June? If the numbers are back at normalized level, because usually people move in July and August away from the country. We see full volume growth trend strengthening during the balance of the year period, particularly led by progressive recovery and rebound of the business activities. We have the World Cup coming up here. There's a lot of momentum coming into the UAE in support of the FIFA World Cup next door. In September, October, we've actually observed a recovery in the fuel retail volumes compared to July and August. I think the outlook given the economic mobility here in this country is giving us optimism that the volumes are in upward trajectory, and that gives us confidence to continue in the balance of the year and beyond. Thank you so much. That's all from my side. We will now take our next question from Waleed Jimma from Goldman Sachs. Please go ahead. Hello, this is Waleed Jimma asking on behalf of Faisal Azmeh from Goldman Sachs. Just a few questions from my end. First, could you please add some color on the decline in corporate volumes Q-on-Q? You've already like mentioned this, but like also, we would have thought that this year there would be some growth in the retail fuel volumes year-over-year. If this wasn't the case, could you just maybe elaborate on what drove this weakness and how do you see the trend going into Q4 and next year? Just like one last thing on retail margin per liter, why is it down Q-on-Q? That's it from my end. Thank you. Okay. Thank you very much. If I get it well, I guess your first question was on the corporate segment volumes, no? The decrease in Q3 versus Q2 of this year. Am I right? Correct. Okay. Let me start putting things into perspective. I'm sure that you remember in H1 2022, the fuel prices were increasing throughout the period, enabling actually attractive opportunities for spot-based trading in our corporate segment. We did a lot of big wholesales. Okay? These together with a limited product supply enabled actually ADNOC Distribution to achieve a higher volume in H1, okay? When they increased by 35% year-on-year. The base is very high. Now, during Q3, the fuel prices moderated, as you know, which resulted actually in lower corporate segment volumes. While they fell 10% quarter-on-quarter, and you're right, the segment volumes remained, I would say, nearly 30% above the level of Q3 2021. Now this is what is a reflection of our aggressive market share gain strategy. Can you just repeat the second question? Sorry. Sure. Regarding retail fuel volumes, what drove the year-on-year weakness, and how do we think about the trend going into Q4 and next year? Just to echo what our CEO mentioned earlier, I guess that Q3 was down versus down actually because of people traveling outside the country, which was not the case last year because of the COVID restrictions. What do we believe? The outlook of the volumes will be. This is today, what we are seeing in September, October, is volumes increasing versus June and July. On top of that, you have some positive catalyst coming, World Cup, and also the ease of restrictions completely that will bring also higher fuel in the system, if I may say. That's the short answer. Thank you very much. Just like on the retail margin per liter, if you could also add some color on why it was down quarter-over-quarter. Can you just repeat? Sorry, I could not hear you. Sure, no problem. Retail. Just on the retail margin per liter, could you just add some color why is it down Q on Q? Okay. Okay. Thank you for your question. I'll respond to this. In Q3, we actually continued to remain near the top of our historical range in terms of retail margins. It is worth bearing in mind, though, that, in Q3, if we exclude the impact of inventory gains, the retail margins have actually decreased. It's primarily driven simply by changes in the level of the inventory gains that we had during the quarter. I'll trust that clarifies the question. Thank you. We will now take our next question from Sashank Lank a from Bank of America. Please go ahead. Yes. Thank you very much for the presentation and the opportunity to ask questions. I think, most of my questions have already been answered, but I just have one question on fuel retail volumes. I just wanted to understand on a like-for-like basis, so far this year, how are we trending versus 2019? Obviously you have had more stations, so your volume, total volume is maybe higher than 2019 levels. Just wanted to understand from a like-for-like basis how the trend is. Thank you. Well, if you look at our total volumes, they are up, and this is mainly driven by higher market share that we had in Dubai and also the number of stations that we added in North Emirates. This is triggered by our expansion. Now, regarding your question versus on a like-for-like basis versus 2019, I'm sure that you have seen some other companies reporting on the level of traffic, et cetera. What I can say is that the total volumes are still slightly behind the 2019 like-for-like levels. Okay. What we believe is that with the growth that we are seeing now and the catalyst that we were talking about, there is a good chance that we're gonna reach the 2019 levels soon. On a like-for-like, of course, because we are growing versus 2019 anyway. Yeah. Understood. Thank you for that. As a reminder, to ask a question, please press star one. We will now take our next question from Ildar Khaziev from HSBC. Please go ahead. Yes. Hi. Thank you very much. I have a quick question on the income tax proposal. Could you remind us, please, whether that has been finalized and whether the changes in depreciation schedules are going to have any implications to the possible tax charges? Thank you. As far as the first part of that question is concerned, the income tax, it becomes applicable for our business from 2024, would be the first, financial year it becomes applicable. The second part of your question was to do with depreciation. Could you just repeat that, please? Yes. Whether changes in depreciation charges would have any implications for taxes? Right. Okay. Let me just comment on the depreciation itself. In line with the requirements of the accounting standards, we do need to periodically review the useful life of our assets, which is an exercise that we conducted during the quarter and hence have made those adjustments. It will have a minimal impact on the depreciation charge that we'd anticipate during the tax years. Thank you. Thanks. When we have answered also this question was asked in the chat by Karan. I'm sure, I hope, Karan, you have also the answer to your question from our CFO. There are no further questions over the phone. Okay. Thank you very much. It was a pleasure having you. If you have any questions, please contact the investor relations team, and I hope that we'll convene another session very soon. Thank you. Have a nice weekend. Thank you. That will conclude today's conference call. Thank you for your participation. Ladies and gentlemen, you may now disconnect.