Pursuing a new vision, ‘Freedom of Convenience’ will see Caltex reinvent and grow its consumer facing business in the convenience marketplace to gain much wider engagement with consumers.
Speaking at today’s annual general meeting, Caltex Australia managing director and CEO, Julian Segal, told shareholders is an exciting time to be a leading business in the fuel and convenience industry.
“Our role is to be the market leader in complex supply chains and the evolving convenience marketplace, by delivering the fuel and other everyday needs of our diverse customers through our networks.
“The success of our business is closely connected to our ability to recognise and meet the evolving needs of our customers. Freedom of Convenience is about adapting to their needs,” he said.
“The new vision and refreshed strategy builds on our core competitive advantages: our integrated fuel value chain that includes strategic sourcing, infrastructure, network, and retail and commercial sales. It is a continued adaptation of our business to drive growth in a changing industry and consumer environment.”
Caltex plans to build a new and differentiated convenience offer for customers by reinventing and growing the company’s consumer facing business.
According to Caltex, the convenience marketplace is not just about grocery convenience, or picking up a snack – it is about a much wider engagement with how people buy and get around; and “mobility” – how people move around and their decisions around transport – will become an additional element of the expanded definition of convenience.
“Caltex is well placed to use our current assets, capabilities and customer base to make mobility decisions easier and more efficient. As we explore this theme, we have taken an initial step with a small investment in a peer to peer car sharing business, Car Next Door,” Mr Segal said.
Freedom of Convenience vision follows strong 2015 results
Caltex recorded retail fuel sales of 8.5 billion litres across all Caltex branded sites in 2015. With this result, sales of Vortex 98 grew 9.5 per cent and Vortex Diesel grew 14 per cent on the prior year. Convenience shop sales saw steady growth of 3.6 per cent year on year and generated $1.2 billion in total sales revenue. Although total 2015 sales volumes were 5 per cent below 2014, Caltex stated this result was influenced by highly competitive commercial markets and the timing of some major supply contracts.
“Caltex continues to drive premium fuels sales of Vortex 95, Vortex 98 and Vortex Diesel. The higher sales of these premium grades of petrol, and of retail diesel, continue to offset the long term decline in demand for unleaded petrol, including E10. Our targeted investment in growth, including new retail service stations, the refurbishment of existing service stations and increased marketing spend, has continued to drive the increased penetration of premium Vortex products in the market,” Mr Segal said.
Chairman of the board, Greig Gailey, told shareholders the company’s retail offer continued to improve in 2015, with more sites added to the network, others refurbished, increased penetration of its higher margin Vortex premium products and the trialling of an improved convenience store offering.
Looking forward, Mr Gailey said Caltex would not be resting on its laurels and the Freedom of Convenience strategy encapsulates the company’s recast vision underpinning an evolving strategy.
“We are on an ongoing journey to ensure that Caltex not only adapts to the changing market but, as you would expect from a market leader, anticipates the changes ahead of us, influences them and acts to maintain its preeminent position.”
“The Caltex business is broader than just transport fuels. Our core competencies of international sourcing, shipping, warehousing, transportation and retailing, together with our extensive landholdings, have potentially wider application,” Mr Gailey said.
“Convenience, and more specifically the changing face of convenience, will be an increasingly important part of our future.”