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1Shell Oman Marketing
Company SAOG
10th November 2009Businessmen Hall, CMA Building
Represented by Faisal Al Hashar – Managing
DirectorAchilles Sklivaniotis – Finance
Director
Investors Briefing
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2Shell Oman Marketing
Company SAOG
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.
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3Shell Oman Marketing
Company SAOG
Contents of this presentation• Corporate Strategy• Progress against strategy• Business Performance Highlights
– Retail Business– Commercial Business– Aviation Business– Lubricants Business– Contribution by Business
• Growth Opportunities• Issues & Challenges• Financial Performance YTD 2009• Summary• Q&A
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4Shell Oman Marketing
Company SAOG
CUSTOMER
PORTFOLIOOPERATIONALEXCELLENCE
& COSTS
PEOPLE
Corporate Strategy
Develop new customers value propositions.
Provide a level of service designed to ensure that the Company is the supplier of first choice in all business segments
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 locationsActively pursue new opportunities that complement and enhance existing business
Continue focus on enhancing our operations and cost reduction initiatives
Improve efficiency within the Company and benefit from sharing of services and resources with other Shell companies
High focus on selection and development of talent
Effective motivation and retention
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5Shell Oman Marketing
Company SAOG
Progress against Strategy
CUSTOMER
PORTFOLIOOPERATIONALEXCELLENCE
& COSTS
PEOPLE
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
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
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)
Implemented competencies frameworkContinued talent sourcing & developmentDiversity & InclusivenessImproved EVP
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6Shell Oman Marketing
Company SAOG
Business Performance Highlights
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7Shell Oman Marketing
Company SAOG
Retail Business - Highlights
• 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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8Shell Oman Marketing
Company SAOG
We made the customer smile…
More and more customers are smiling at our sites….
Average MMP %
55% 56%
71%81%
89% 90% 91% 92% 93% 93%
0%
20%
40%
60%
80%
100%
120%
Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09
Trendline
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9Shell Oman Marketing
Company SAOG
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
2007 Quarters 2008 Quarters 2009 Quarters
Commercial FuelVolume
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10Shell Oman Marketing
Company SAOG
Commercial Fuels Market Size
Significant presence in all segments
Fuel Market Size
Power Construction & Mining Transport Government Industry
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11Shell Oman Marketing
Company SAOG
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
Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09
VOL
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12Shell Oman Marketing
Company SAOG
• 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.
Lubricants Business - Update
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13Shell Oman Marketing
Company SAOG
Increasing Lubricants sales performance – Local & Exports
We deliver value through EFFICIENCY…
2003 2004 2005 2006 2007 2008 2009 Q3 YTDTotal Volume Gross Margin
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14Shell Oman Marketing
Company SAOG
Contribution By Business
Turnover RO K
51%
24%
11%
9% 5%
Retail Fuel Commercial Fuel Aviation
Export Lubricants Inland Lubricants
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15Shell Oman Marketing
Company SAOG
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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16Shell Oman Marketing
Company SAOG
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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17Shell Oman Marketing
Company SAOG
Financial Performance Highlights
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18Shell Oman Marketing
Company SAOG
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 All in RO mln unless otherwise stated
YTD Sep2008
YTD Sep2009
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
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19Shell Oman Marketing
Company SAOG
Growth in Profitability Levels
• Sales drop mainly attributed to international prices (Aviation/Lubricants) and reduced export Lubricants sales
Sales
131
171 180
248217
0
50
100
150
200
250
300
2005(PM) 2006(9M) 2007(9M) 2008(9M) 2009(9M)
MLN
RO
Sales
NIAT
5.6
7.18.1
9.7 10.1
0
2
4
6
8
10
12
2005(PM) 2006(9M) 2007(9M) 2008(9M) 2009(9M)
MLN
RO
NIAT
Gross Profit
14.417.4
19.2
2324.5
0
5
10
15
20
25
30
2005(PM) 2006(9M) 2007(9M) 2008(9M) 2009(9M)
ML
N R
O
Gross Profit
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20Shell Oman Marketing
Company SAOG
Shareholders perspectiveDECLARED DIVIDEND PER SHARE IN BZ SHARE PRICE PERFORMANCE
Maintaining strong performance even during market crisis
SOM
MSM
0
20
40
60
80
100
120
140
'98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08
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21Shell Oman Marketing
Company SAOG
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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22Shell Oman Marketing
Company SAOG
Questions & Answers
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23Shell Oman Marketing
Company SAOG