Athmane Benzerroug: The Next Chapter for ADNOC Distribution

Welcome to the ADX today. I have Athmane Benzerroug, Chief Strategy, Transformation and Sustainability Officer at ADNOC Distribution. Welcome, Athmane. Thank you very much for joining us today.
Thank you for having me, Lucy.
Let's start with the big picture. Why is this proposed acquisition significant for ADNOC Distribution?
It's a big day today. This proposed acquisition of Shell Downstream South Africa comes in line with the strategy we have communicated to the market — growing internationally in an accretive manner. It fits perfectly with our target to become an international mobility player.
South Africa is a very different market to the UAE, both politically, commercially, and regulatory wise. Why does it make sense as your next move?
It makes a lot of sense. South Africa mirrors the UAE from a regulatory point of view, where the fuel prices and the margins are regulated with a strong regulatory framework that protects the retailers from inflation and currency risks. So there is strong visibility on the cash flows. On top of that, the margins per liter are attractive.
And what specifically makes Shell Downstream South Africa a compelling platform for growth rather than just an available asset?
First of all, it's a trusted asset. Shell Downstream South Africa is a top-3 player by number of stations. We are talking about a trusted brand — by customers, by partners — with 120 years of operations. It's a high quality asset with an extensive network, non-fuel retail presence, commercial operations, and lubricants. This is a great platform for ADNOC Distribution to create higher value in the market for the long term.
Investors hear a lot about companies talking about growth. How do you demonstrate that this is disciplined growth?
For us it's all about disciplined growth — and what does that mean? It means disciplined execution, and this is where we have been consistently delivering over the years since we listed on the ADX. It means any transaction should bring scale, be accretive at the earnings and dividend levels, and generate significant free cash flow yield. This transaction brings us a 15% free cash flow yield and a hurdle rate above the communicated return we have provided to the market.
Where does this fit into ADNOC Distribution's longer term ambitions — is this a one-off or part of something bigger?
It is part of something bigger. Like the UAE leadership, we are always looking to expand and bring the best of our knowledge to the countries we enter. We have done this consistently in Saudi Arabia and Egypt, and what we want to do now is build a platform to develop ADNOC Distribution into a global mobility player. What is important about South Africa is that the long-term volumes are very attractive — significant government investment in infrastructure and a growing, driving-age population. The future is really attractive, and we will bring the ADNOC Distribution model, with the support of the local management team, to deliver better customer experience to South African drivers and partners.
And for the international investor community, are there any key messages you would share about ADNOC Distribution?
The key messages are simple. What we are announcing today is in line with our strategy. It's a disciplined approach based on a strong track record of execution in markets where we have already created tremendous value — Saudi Arabia and Egypt. What investors should expect is that this transaction will provide more value and strengthen our vision to grow our dividends over time. This asset also has significant upside — we have identified $30 to $40 million in incremental value by year five post-completion, and we are confident in receiving regulatory approvals next year on this transaction.
It definitely is. Athmane, thank you so much for joining us at ADX today.
Thank you very much.