Who we are, what we do - Hjem | Finans Norge of all international bank card schemes through one single interface to Nets (IFSF OLTC) Settlement based on H2H batch totals and a single

Crossing Borders Challenges of an International Merchant

Name of presenter:

Title:

Location:

Knut Helge Hansen

Retail Technology Manager

Company overview

Statoil Fuel & Retail is a leading Scandinavian road transport fuel retailer with over 100

years of operations in the region

Statoil Fuel & Retail owns and operates 12 key terminals and 38 depots in eight countries

and it operates approximately 400 road tankers. It also delivers aviation fuel at 85 airports in

ten countries and produces and sells 750 different lubricant products.

Statoil Fuel & Retail is a wholly-owned indirect subsidiary of Alimentation Couche-Tard, Inc.

and part of a network of more than 8,100 stations and 70,000 passionate retailers that

welcomes more than 30 million visitors every week.

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Special Products

• Aviation fuel

• Lubricants and chemicals

Company overview

Scandinavia

• Fuel and convenience

• 1,761 fuel stations

Central and Eastern Europe

• Fuel and convenience

• 521 fuel stations

Special Products

• Aviation and marine fuel

• Lubricants, chemicals &

stationary energy

Scandinavia

• Fuel and convenience

• 1,700+ fuel stations

Central and Eastern Europe

• Fuel and convenience

• 550+ fuel stations

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Images: Terje Borud/Statoil

Sverre Rosén SVP Chief Staff Officer

Lars Syse Christiansen SVP Finance & Control

Jacob Schram Group President Europe

Business

drivers

Business

areas

(P&L)

Hans-Olav Høidahl EVP Scandinavia

Jørn Madsen EVP Central & Eastern Europe

Lars Gaustad SVP Transport Fuel

Ina Strand*

SVP Sales & Marketing

Market and customers

Product and price

Sales and operations

Karen Romer VP Communications

*Line M. Aarnes, Acting SVP

Employees

• Averaging approximately 1 million retail transactions every day

• Around 250,000 business-to-business customers

• Around 18,500 employees at our sites, corporate and national headquarters, terminals or depots

• Broad network of stations

• Strong brands

• Logistics network

Customers Infrastructure

Key assets

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Scandinavia: market leader with 33% volume share

• Brand leadership, high customer loyalty and growth in market share since 2005

• Number one in Norway

• Number one in Sweden

• Number one in Denmark

Norway

Sweden

Denmark

2009 volumes (litres bn) Throughput per SFR site (litres mn)

Norway

Sweden

Denmark

1.4

1.10.9

0.6

0.1

Statoil Shell Esso YX St1

34%

market

share

3.3

2.1 2.1

1.5

0.4

Statoil OKQ8 Preem Shell Others

35%

market

share

1.4

1.1 1.1

0.7 0.7

Statoil Shell OK Uno-X Others

29%

market

share

2.12.2

2.3

2007 2008 2009

2009

market

average

2.5

2.1

3.2

2007 2008 2009

2009

market

average

2.7 2.6

3.1

2007 2008 2009

2009

market

average

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CEE: multiple growth levers from 20 years and 500+ stations

Poland

• 297 stations

• #5 position

• Growth engine

• 30 new sites per year (2011-2013)

• Act as a consolidator

Latvia; Lithuania; Estonia

• 69; 72; 51 stations

• #1; #2; #1 position

• Market leader positioned for recovery

• Price management and cost control

• Build on strong convenience offer

Russia

• 32 stations

• Foothold in large market

• Initial focus on St. Petersburg

• 14 new sites planned 2012-13

Poland

Baltics

Market share Throughput per SFR site (litres mn)

Poland

Baltics

Russia

31%

12% 11%6%

5%

Orlen BP Shell Lotos Statoil

25%16%

12%

47%

Statoil Lukoil Neste Others

4.5 4.5 4.3

2.1 2.2 2.3

2007 2008 2009

M arket average Stato il

Murmansk (9 sites)

St. Petersburg (16 sites)

Pskov (7 sites)

4.8 4.84.1

2.0 2.0 1.8

2007 2008 2009

M arket average Stato il

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Alimentation Couche-Tard Inc.

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As of January 29, 2012

ACT: store network highlights

Corporate-operated stores with motor fuel without fuel Total

United States 2,720 272 2,992

Canada 673 857 1,530

Europe 2,031 - 2,031

Affiliated stores

United States 821 50 871

Canada 11 413 424

Europe 274 - 274

Total network 6,530 1,592 8,122

Licensed stores

Mexico, Middle East and Far East 4,137

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Cards overview – where we are today

Approx. 50% of Card Fuel Sales on Fuel Cards (own issued and 3. party),

50% on Bank Cards

Very significant card based loyalty functionality

SFR operates its own WM-Card FEP (online Host) handling all cards

All stations process all cards identically, but card acceptance is a commercial decision

All terminals are identical:

6500 outdoor Gilbarco SPOT M4 and 3000 indoor Yomani (ATOS Worldline)

Common POS (Site Controller) application (NCR Octane 2000) used by all sites

All card interfaces use IFSF (International Forecourt Standards Forum) specs

Common Cross-Border Acquiring contracts for all international card schemes

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Secure & standardised card data systems at SFR:

Business Benefits:

• Lower cost

• Cross-border

acquiring easy

• Aquisitions

Interfaces all

common:

• IFSF end-to-end

• No batch files

for bank cards

Components all

common

• Terminals

• POS SW

• WM-Card

• PALS

+

=

Cards overview – how we got here

Strategic decisions

Technical standardization across all countries and card schemes

Common cross-border Acquiring contracts

Multiple projects over 4 years to implement major changes to both Bank Card and Fuel Card

IFSF Standards (developed and maintained jointly by Fuel Retailing industry) as basis and included as

technical requirement for all new Acquiring contracts

Non-compliant bidders were excluded

Acceptance of all international bank card schemes through one single interface to Nets (IFSF OLTC)

Settlement based on H2H batch totals and a single contract for all SFR countries in Europe

IFSF standards accepted by BAX and Dankort

Once implemented, these solutions have been highly reliable

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Challenges and SFR requirments for future

• We are a true international Merchant and want only common international card solutions!

• International Fuel Retailing has to a large extent already achieved what SEPA wants for general retail

• Sometimes difficult to convince (national) banks of advantages of international standardization

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Standardized pre-authorisation method

We have succeeded in implementing a highly standardized solution across

borders, but…..

Not all markets are able to handle standardized pre-authorization methods following

IFSF and MC and Visa standards

Especially Sweden and Norway still widely uses the 1 unit pre-authorization method

IFSF pre-auth method should be implemented by all

In line with SEPA Cards Volume V7 rules for “Deferred Payment” - where the IFSF

method now appears to have been accepted!

Ensures that the cardholder does not use more than available on his account and

handles open-to-buy correctly

Strongly reduces risk

A much more sophisticated and smarter solution for all!!

IFSF pre-auth method should be mandatory

Acceptance of Contactless/Mobile payment

SFR is ready to accept Contactless/Mobile payments in

shops across 7 markets, but….

Transition from BankAxept trx to MC/Visa contactless trx would imply

much higher MSC costs (+100 millions worst case)

Retail industry needs contactless/mobile acceptance on BankAxept as

for Dankort *)

This way the “cheap” and efficient national card scheme (Dankort) will

be ready for the future

*) In Denmark, retail industry and banks have agreed that the retail industry will pay a higher

fee on Dankort and that the banks in return will develop and “allow” contactless technology

on DanKort