Transcript Document

Investors Briefing
10th November 2009
Businessmen Hall, CMA Building
Represented by
Faisal Al Hashar – Managing Director
Achilles Sklivaniotis – Finance Director
Shell Oman Marketing Company SAOG
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Caution to the Reader
This presentation may include “forward looking statements” based upon current expectations, estimates
and projections of future capital spending and project start-ups, that involve a number of risks and
uncertainties which could cause actual results to differ materially from those anticipated by the
Company.
These risks and uncertainties include, but are not limited to, changes in market conditions, laws or
government policies, operating conditions and costs, project schedules, operating performance, demand
for fuel and related products, price and exchange rate fluctuations, commercial negotiations or other
technical and economic factors.
Shell Oman Marketing Company SAOG
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Contents of this presentation
• Corporate Strategy
• Progress against strategy
• Business Performance Highlights
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•
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Retail Business
Commercial Business
Aviation Business
Lubricants Business
Contribution by Business
Growth Opportunities
Issues & Challenges
Financial Performance YTD 2009
Summary
Q&A
Shell Oman Marketing Company SAOG
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Corporate Strategy
Provide a level of service designed to ensure that the Company is the
supplier of first choice in all business segments
CUSTOMER
Develop new customers value propositions.
High focus on selection and development of talent
Effective motivation and retention
Continue focus on enhancing our operations and
cost reduction initiatives
PEOPLE
OPERATIONAL
EXCELLENCE
& COSTS
PORTFOLIO
Upgrade and expand the retail service station network to provide the most customer-friendly
service and the widest range of facilities, at the most convenient locations
Actively pursue new opportunities that complement and enhance existing business
Shell Oman Marketing Company SAOG
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Improve efficiency within the
Company and benefit from
sharing of services and resources
with other Shell companies
Progress against Strategy
CUSTOMER
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Successful roll out of Improved Shell Super refresh across the country
Growth of inland lubricants (increased market penetration)
New Volumes in Aviation through Oman Air and RAFO and Air India
Customer Service Center launch
Continue to enhance retail forecourt services through PMTDR
Implemented competencies framework
Continued talent sourcing & development
Diversity & Inclusiveness
Improved EVP
PEOPLE
OPERATIONAL
EXCELLENCE
& COSTS
PORTFOLIO
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NTI programme in progress (5 opened, 2 under construction)
KDR programme in progress (2 opened, 4 under construction)
Oman Air and RAFO Contracts
Improve HSSE in our premises
Improve LOBP efficiency
Improve operations at Seeb Airport
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 Resolved License Fee Issue
 Focused frontline execution
 Maintained existing tight control on
cost/spending
 Customer Feedback score increased to
93%
 Deliver lower construction costs on our
sites
 Continue focus on credit management
by monitoring closely market conditions
( addressing customers on a regular
basis)
Business Performance Highlights
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Retail Business - Highlights
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Retail Fuels growth 1%
Mogas 95 grew by 6.3%
Card volume growth 13%
5 new stations opened and 2 under construction
2 rebuild stations completed and 4 under
construction
• Launch of New Shell Super August 2009
• Customer Satisfaction Index : 93%
• Improved CR business performance
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We made the customer smile…
Average M M P %
120%
Trendl ine
100%
81%
90%
91%
92%
93%
93%
71%
80%
60%
89%
55%
56%
40%
20%
0%
Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09
More and more customers are smiling at our sites….
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Commercial Fuels Business - Update
• Secured Electricity fuel business till 2011
• Added more major projects to its customer portfolio
• Enrolling Customer Value Proposition and Sales Tools which resulted in understanding the customer buying behaviour in
each segments. This enabled us to offer the customer with best offers in each segment.
Commercial Fuel Quarterly Average
Commercial Fuel
Volume
2007 Quarters
Shell Oman Marketing Company SAOG
2008 Quarters
2009 Quarters
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Commercial Fuels Market Size
Fuel Market Size
Power
Construction & Mining
Transport
Significant presence in all segments
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Government
Industry
Aviation Business - Update
•Oman Air has introduced the new wide range aircrafts for the long distances which increased the Jet-A-1 fuel volumes at Muscat Int. Airport, SOM is currently
supplying 75% of that volume.
•SOM has Secured 4 bases of RAFO for the next 5 years till 2013
•Highly competitive international pricing environment and attractiveness of Muscat airport are key factors to further growth.
• SOM has secured Air India contract for 3 years
AVIATION FUELS
VOL
Q1 08
Q2 08
Q3 08
Shell Oman Marketing Company SAOG
Q4 08
Q1 09
Q2 09
Q3 09
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Lubricants Business - Update
• Total lubricants volume dropped by approx. 30% compared to same period last year mainly
due to export sales reduction.
• Local lubricants business has witnessed good growth in recent quarter.
• The exports lubricants business, which has been affected during the economic crisis
previously, showed some recovery despite its dependency on global demand.
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We deliver value through EFFICIENCY…
Increasing Lubricants sales performance – Local & Exports
2003
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2004
2005
Total Volume
2006
13
2007
2008
Gross Margin
2009 Q3 YTD
Contribution By Business
Turnover RO K
9%
5%
11%
51%
24%
Retail Fuel
Commercial Fuel
Export Lubricants
Inland Lubricants
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Aviation
Growth Opportunities
• Developing emerging geographic segments and revenue streams.
– Continued expansion of Retail network – NTIs and KDRs
• New road network
• New residential and commercial development
• Development of marine business at Sohar, Salalah & Duqm
• Government airport expansion program(Seeb, Salalah, Sohar, Sur etc)
• Resource optimisation through operational excellence
• Introduce automated processes(Direct Debit, Fleet card enhancements etc)
• Infrastructure & tourism related development
• Hotels, Resorts, Golf Course, International Games & Conferences
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Issues and Challenges
• Sohar Refinery price increase
• The license tariff structure was revised by the government and the company
pays increased fees vs previous years.
• Recent Global Economic crisis impacts some projects / customers in Oman
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Financial Performance Highlights
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Excellent Q3 09 YTD performance…
• Net Income After Tax Jan-Sep 2009 at RO 10.14 mln (up 4.3%)
• Cash returned to shareholders in 2008 RO 11.5 mln (up 4.5%)
• Share price at 31/10/09 RO 2.050/share
• Despite the depressed global economic environment, emphasis on continued operational
excellence delivery and growth.
• Focus on Cost Management
YTD Sep
2008
YTD Sep
2009
Var. (%)
Net Income After Tax
9.72
10.14
4.3
Earnings per share
(RO/share)
0.097
0.101
4.3
Cash from operation
(excl. w/c changes )
13.05
14.09
7.9
Total Capital Employed
24.0
25.5
6.3
All in RO mln unless otherwise stated
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Growth in Profitability Levels
NIAT
Sales
12
300
250
217
180
171
131
100
50
0
8.1
7.1
6
5.6
4
2
Sales
10.1
9.7
8
MLN RO
MLNRO
200
150
10
248
NIAT
0
2005(PM)
2006(9M)
2007(9M)
2008(9M)
Gross Profit
2009(9M)
2005(PM)
2006(9M)
2007(9M)
2008(9M)
2009(9M)
30
MLN RO
25
23
20
17.4
15
24.5
19.2
14.4
10
5
Gross Profit
0
2005(PM)
2006(9M)
Shell Oman Marketing Company SAOG
2007(9M)
2008(9M)
2009(9M)
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• Sales drop mainly attributed
to international prices
(Aviation/Lubricants) and
reduced export Lubricants
sales
Shareholders perspective
DECLARED DIVIDEND PER SHARE IN BZ
SHARE PRICE PERFORMANCE
SOM
140
120
100
80
60
MSM
40
20
0
'98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08
Maintaining strong performance even during market crisis
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Summary
• Excellent business performance
• Very Good growth potential coming from
– portfolio activities (e.g. Retail network, Aviation
contracts)
– Improved efficiency
– Enhanced Credit management procedures
– Cost Control mechanism
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Questions & Answers
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