ADNOC Distribution’s management unveiled their new 5-year growth strategy during an Investor Day held lately in Abu Dhabi. Bader Saeed Al Lamki, CEO of ADNOC Distribution, highlighted three key drivers behind the company’s growth strategy: domestic expansion, international platforms, and future-proofing the business. As part of its aim to become a leader in multiple energy sectors, the company is expanding its range of low-carbon energy solutions, including biofuels, electric vehicles (EVs), and hydrogen, to support the decarbonization of the transportation industry.
Read more: ADNOC L&S achieves $620 million in 2023 net profits
Key operational objectives
According to the Emirates News Agency (WAM), the operational objectives outlined in the new five-year strategy for 2028 include expanding the ADNOC Distribution network to 1,000 service stations, a 20 percent increase compared to the 840 stations in 2023. The company also aims to achieve a 50 percent increase in non-fuel transactions and a 25 percent increase in the number of convenience stores.
Furthermore, the strategy involves scaling up franchise and sub-franchise models, with over 50 new franchise operations operated by the company. This approach is expected to yield 2-3 times more than the traditional rental model. ADNOC Distribution plans to become a comprehensive car care provider by tripling the number of car washes, doubling the number of automotive oil changes, and expanding its overall car service offerings.
Launching new digital innovations
In terms of technology and digital enhancements, the company intends to launch new innovations and build on existing digital features. This includes implementing seamless fueling through license plate recognition, enabling in-car ordering through the ADNOC Distribution application, and exploring potential subscription services for car washes and other offerings. The company also aims to establish a national network of at least 500 fast and superfast electric vehicle charging points by 2028, representing a tenfold increase from 2023.
ADNOC Distribution has set a target of achieving up to $50 million in like-for-like operational expenditure (OPEX) savings by 2028. Additionally, it plans to allocate $250 to $300 million annually for capital expenditure (CAPEX), with 70 percent of the funds dedicated to growth initiatives.
New dividend policy
The company’s proposed new dividend policy aims to provide shareholders with $700 million annually or a minimum of 75 percent of net profit, whichever is higher. This policy offers potential for increased dividends based on future earnings growth. The proposal is subject to shareholder approval at the Annual General Meeting (AGM) in March.
ADNOC Distribution is committed to achieving EBITDA growth from 2024 to 2028 through its strategic initiatives and focus areas. The company plans to redirect capital towards convenience and mobility, transforming its stations into preferred destinations. It will also continue expanding its international platforms to increase contributions and adapt the business to new revenue streams presented by the energy transition.
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