Shell Oman Marketing Company SAOG 1 10 th November 2009 Businessmen Hall, CMA Building Represented...

1Shell Oman Marketing

Company SAOG

10th November 2009Businessmen Hall, CMA Building

Represented by Faisal Al Hashar – Managing

DirectorAchilles Sklivaniotis – Finance

Director

Investors Briefing


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.


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


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


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


Company SAOG

Business Performance Highlights


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


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


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


Company SAOG

Commercial Fuels Market Size

Significant presence in all segments

Fuel Market Size

Power Construction & Mining Transport Government Industry


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


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


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


Company SAOG

Contribution By Business

Turnover RO K

51%

24%

11%

9% 5%

Retail Fuel Commercial Fuel Aviation

Export Lubricants Inland Lubricants


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


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


Company SAOG

Financial Performance Highlights


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


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


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


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


Company SAOG

Questions & Answers


Company SAOG

Shell Oman Marketing Company SAOG 1 10 th November 2009 Businessmen Hall, CMA Building Represented...

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