Capital Markets Day 13 June 2017
Brief History Contract to Fill, Distribution Rights Warehouse for Elf & Pennzoil - Name change to Centlube & Distribute - Construction of Wadeville Plant - Blending Capacity Valvoline - Awarded AGIP Warehousing & - Awarded License for AGIP LFS Founded Distribution - Start of Shell/Houghton Relationship 2005 1991 2002 1998 2003 1989 1997 2008 Filling for AGIP Contract to Fill, Began Warehouse & Trading Distribute Chevron - Distributor for ExxonMobil - Expand to Bedfordview, CPT & DBN - Toll Blending & Manufacturing for Puma Re-launch ENI 2017 2016 2014 2012 2011 2013 2015 Houghton contract to Distributor for Provide Mittal with enX Group Houghton Distribution Rolling oils acquires 100% CERA Plant license with AGIP 1
Six Step Plant Process Finished Goods Various Suppliers Base Oils & Additives Warehouse Drum Yard Finished Goods transferred to Warehouse Storage Area: Storage Vessels Additives Lab Quality Control Checks Blending Filling Hall Laboratory with drums Blended lubricants pumped to filling station Filling Filling Hall Blending Vessels 2
Quality and Commitment 3
Business Strengths Represent #1 Premium Positioned global • ExxonMobil oil lubricant brand • ExxonMobil • Strong OEM relationships Puma • Houghton • CERA Plant in Johannesburg has surplus Largest inland blending plant, with production capacity independence from oil majors • Nationwide presence 100% consumable revenues No capital goods revenues • ISO 9001:2008 • Quality accreditation ISO 14001:2004 • DPIM compliant • Executive team with proven track Long history of profitable operations record within oil industry • Over 25 years of experience 4
Executive Overview • Vision: To be a truly African lubricant manufacturer and marketer with a core geographical focus of Sub Saharan Africa. Vision & Mission • Mission : We aim to penetrate all major lubricant sectors to deliver, without harm, superior customer service aligned with ENX values. • RSA market 360mln litre: (Passenger 82mln) + (Commercial 92mln) + (Industrial 160mln) + (Marine 25mln) + (Aviation 1mln). • The lubricants market has slowly returned to demand levels experienced in 2008 however Market Analysis a bigger focus on value add (product and corporate) , cost saving and energy efficiency is evident as companies are under extreme pressure to be operationally efficient due to substantial cost increases. • The Mobil brand has significant recognition in Sub Saharan Africa, which needs to be maximized in terms of growth in volume reflecting brand strength. • Industrial = Mining (Plant with PCI and off-highway with SGA) Manufacturing • Commercial = Truck Fleet, Bus Fleet, Large Independent WS , Fleet WS Business Analysis • Passenger = Car Dealerships, Large Independent WS , Auto Parts/Spare Shops • Marine = Repair Facilities, Coastal , Fishing and Mobil International Marine • Aviation = Mobil International Strategic Alliances 5
Our Partners Notes : • Merger with Quaker has been announced but not yet finalised • 6 In process of resolving competitive conflict between ExxonMobil and ENI
Revenue from Top 10 Customers 1 Revenue Contribution Customer 1 Customer 2 17% Customer 3 31% Customer 4 Customer 5 14% Customer 6 Customer 7 Customer 8 1% 12% Customer 9 1% Customer 10 2% 10% 5% Rest 2% 5% 1 excludes toll blending 7
OEM Relationships 8
Some Key Customers 9
Half year performance Revenue H1 Revenue Contribution Distribution Toll Blending 58% 42% Toll Blending Distribution 10
Market Share 1 360 mln litres 1 Market share figures are internally generated estimates 11
Product Description Product Features Distribution Unique • • • • High Performance Cutting Edge SADAC Value Added Services • • and quality lubricants Technology, Research South Africa Technical and Basic • • Across all lines of and Development Africa Lubrication Training • • • business Improved productivity Dedicated Used Oil Analysis • • • B2B and B2C Energy Efficiency Distribution channel MobilServ • • • • Imported and Locally Relationships with Resellers, Direct, In-house Lab Testing • manufactured leading OEMs Retail, Workshops Years of Experience • • • Affordable/Exclusive Advanced Support • Price Range Productivity Brand Reputation • • • Across all Sectors and Extended equipment Knowledge • in all sub-sectors life International Brands • Legacy of innovation and decades of proven performance 12
Industry Trends Automotive/Passenger Fleet/Commercial Industrial • • • Number of car dealerships are Fleet owners looking for A need for value add, cost decreasing (amalgamating lubricants that provide fuel saving, operational and into bigger dealerships) economy energy efficiency • • • Total volume of lubricants Focus is on cost saving Specialized and performance remains steady/unchanged through longer oil drain lubricants are on the increase • 70% of vehicles are out of intervals in a bid to reduce energy • warranty More owner drivers are sub- consumption and • 8 000 aftermarket workshops contracted into larger fleet maintenance cost • available companies OEM approvals are drivers • • Younger car park with a shift Vehicles are being kept for across mining, manufacturing, to semi and fully synthetic oil longer and outside of rail and construction • Auto Part Stores remain the maintenance plan best channel 13
Sub-Sahara Africa Export Business Future Export Footprint 2018-2022 Export Footprint Tunisia Tunisia Tunisia o 14 Export Markets with SGA licenses from Morocco EM already in place Morocco o Target Volumes of ~15 million litres and $ Algeria Algeria Algeria income on a cash up front basis Libya Libya Libya Egypt Egypt Egypt o Diverse revenue streams Western Western Western Sahara Sahara Sahara o Business Model : Direct Export or Reseller Mauritania Mauritania Mauritania models Mali Mali Mali Niger Niger Niger Chad Chad Chad Sudan Sudan Sudan Senegal Senegal Senegal Eritrea Djibouti Djibouti Djibouti Burkina Burkina Burkina Guinea Bissau Guinea Bissau Guinea Bissau Guinea Guinea Guinea Nigeria Nigeria Nigeria Cote Cote Cote Sierra Leone Sierra Leone Sierra Leone Ethiopia Ethiopia Ethiopia d’Ivoire d’Ivoire d’Ivoire Ghana C.A.R. C.A.R. C.A.R. Liberia Liberia Liberia Cameroon Cameroon Cameroon Benin Benin Benin Somalia Somalia Somalia Togo Togo Togo Uganda Uganda Uganda Sub Sahara Africa is Kenya Kenya Kenya Gabon Gabon Gabon Rwanda a key Market for Burundi Congo Congo Congo DR Congo DR Congo DR Congo Centlube Growth Tanzania Tanzania Factors considered in selection of markets: Malawi o Economic Trading blocks (SADC etc) Angola Angola Angola Zambia Zambia Zambia o Existing Direct Export Accounts through AGL Mozambique Mozambique Mozambique Zimbabwe Zimbabwe Zimbabwe o Potential opportunities with key Africa links Namibia Namibia Namibia Madagascar Madagascar Madagascar o Ease of doing business Botswana Botswana Botswana Mauritius Reunion o Common tariffs Swaziland Swaziland South Africa South Africa South Africa Lesotho Lesotho Lesotho 14
African Group Lubricants Pty Ltd is a new company created after a successful joint bid between West African Group Pty Ltd and Afric Oil Pty Ltd to ExxonMobil with the intention to distribute Caterpillar Branded Lubricants to Caterpillar Distributors in Sub Saharan Africa as well as the Indian Ocean Islands. ENX acquired AGL at the end of 2016 and is in the process of being integrated Seychelles Democratic Rep Congo Angola Zambia Zimbabwe Madagascar Mauritius Namibia Botswana Mozambique La Reunion CAT Dealer Ship-To in Pipeline CAT Dealer Ship-To as Current Transport via Sea-Freight South Africa Primary Transport via Road-Freight AGL Warehouse
Key Growth Strategies 1. Be the ExxonMobil partner of choice – Growing ExxonMobil volumes 2. Leverage the Mobil QP&G compliancy flag to be to be a toll blender of choice 3. Align with strategic partners to access tankage for a common set of Base Oils 4. Actively grow toll blending customers/volumes 5. Invest in the Centlube brand 6. Achieve production efficiencies (consolidate operations; ERP implementation; touchless order to cash process) 16
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