Rubis Adr

Good day and welcome to today's Rubis Q3 and 9-month 2024 trading update call. Throughout today's recorded presentation, all participants will be in a listen-only mode. Later, we will conduct a question-and-answer session. You may register for questions by pressing star 1 on your telephone keypad at any time, and you may also submit your questions via the webcast. And now I'd like to hand the call over to Mr. Marc Jekyll, CFO. Please go ahead, sir.

Good evening, ladies and gentlemen. Thank you for joining us today for this Q3 2024 trading update. I'm hosting the call today with Clemence Mignon du Perrault, head of investor relations. Before we dive into our business, let me remind you of the context of this quarter. We faced an extremely volatile oil price due to the escalation of the conflict in the Middle East, and prices fluctuated significantly through the quarter, especially in September and October with the general down rate trend globally. At previous level, the main elements of the quarters are the following. On the distribution side, we saw high volumes compared to last year with 7% increase. and 5% increase in the beginning of the year. This volume growth was mostly driven by Africa, and to a lesser extent, Europe. This demonstrates that Rubis is gaining market shares in these countries, and demand for the products we distribute is there. However, on the margin, the very sudden decrease in oil prices subsequent volatility had a short-term negative impact on our margins with a global picture which is a bit contrasted depending on the geographies. Because if you look in the Caribbean, which is less regulated, we are going to pass through the major part of the oil price fluctuations to our customers quite quickly. This area has not really suffered the from this volatile context. On the other end, actually in Africa, which is a much more regulated market with less flexibility in fixing the prices and time lags generated by pricing formulas. So here we ended with inventories whose value had decreased between the purchase and the sale to be degrading our margins there. When you look at support and services, the activity of our vessels continued to be dynamic in the Caribbean, and the strong performance was offset by the bitumen trading activity which lagged behind. 2023 was a record year in the context of high shipping rates. This is why we see support and services margin decreasing year on year. But as a reminder, to give you a bit of history here, we have been trading bitumen from the Mediterranean to North America when our vessels were back due to the rainy season in Africa or when we had lower in-house activity. And these opportunities generated by a market asymmetry became more limited in 2024 and more quickly than expected. And this is the reason why we're shifting to a different geographic approach in the eastern part of the Atlantic. And this switch needs some times to be fully up to speed. When we look at photosol, things are in line with what was presented in September with a secure portfolio now of 1 gigawatt. And among the important event of the quarter, it is worth mentioning the sale of Rubis terminal, which is now closed, giving way to the premier 75 cents exceptional dividend that will be paid this Friday. And as you have seen, So the pressure on the margin we have just been through, combined with the delay of the adjustment of the pricing formula in Kenya, have led us to revise our IBD guidance for 2024 to 675, to bracket of 675, 725 million euros for the year. Our net income guidance was updated with a mid-range, which is in line with what was previously communicated at 340, 375 million euros. And our dividend distribution target remains unchanged. So Clémence will comment on the operational highlights of the quarter.

Thanks, Marc, and good evening, everyone. To dig deeper into the operational highlights of the quarter, I invite you to look at slide number three, where you can see in more detail the energy distribution retail and marketing business, where volume was up 7% over the quarter and gross margin down 1%. This means that unit margins were down 7% compared to last year. On a product by product basis, LPG continued to perform well with an increase in volume and margins, which were strong over the quarter in autogas in France and Spain and a continued high level of activity in the ceramics business in Morocco. Portugal was under high competitive pressure during this quarter and had decreasing unit margins. Now looking at the fuel business, Caribbean still performed well with, let me remind you that 2023 was an excellent year for the Caribbean in the fuel distribution business. And this trend continues. Jamaica and Guyana are ahead of the boat with very strong growth, both in volume and margins. In Haiti, margins remain stable, but volume are decreasing. We're still waiting for the UN forces intervention to produce effects. In Africa, we see a catch up in the demand for products with an increase in volume. but margin are under pressure. This is the outcome of two reasons which Mark has already mentioned. First reason is the oil price decrease over the quarter in a very volatile context, which has led to inventory depreciation in Africa. And the fact that the prices are very regulated in this area leads us to adjust our prices based on the price of the previous month. So that's the reason why the effect was more important in this part of the globe. The second effect is the Kenyan pricing formula, which was defined in 2018 and which is now completely out of date and needs to be updated to reflect the increase in the different costs along the value chain. The EPRA, Energy and Petroleum Regulation Authority, has ordered a report which is called COSOP, Cost of Service Study in the Supply of Petroleum Products, which was supposed to be issued mid-year and give way to the adjustment of the pricing formula. The issuance of this report has been slightly delayed and was submitted to the EPRA last week. And the industry is waiting for the outcome and for the subsequent adjustment of the pricing formula. Now, if you look at the bitumen business, volume is increasing by 18%. This is underpinned by South Africa, which is very dynamic. Nigeria continues to suffer. Togo and Cameroon are still showing a good performance. Just to give you a bit of history in terms of margins, Nigeria is a country with very high margins. And the fact that Nigeria is decreasing to the benefit of South Africa, where margins are a bit lower, decreases mechanically the global picture of unit margins on the bitumen side. Now turning to support and services, I will not stay too long on that topic because Mark has already mentioned this before, but 2023 was very good for the Caribbean activity in the support and services and this continued in 2024. 2023 was also a moment where the freight rates were very high and what we see now in 2024 is that the bitumen trading activity is decreasing as demand in North America is shrinking. Now, if you look at Photosol, you can see that the assets in operation and the sales have grown over the quarter. This is perfectly in line with what we have announced during the Photosol day in September. The secured portfolio is now over one gigawatt. And if you wonder why the sales only grew by 6% while the assets in operation grew by 22%, you need to remember that Q3 2023 had the benefit of selling part of its electricity production directly to the market at merchandise. I will now hand over to Mark who will lead you through the updated guidance.