Freedom of Convenience

Annual Report
2017
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About Caltex

Convenience is our new mindset

The Caltex Freedom of Convenience strategy gained momentum in 2017 as new ventures, improved practices, and a refined mindset embedded convenience thinking across the business.


About Caltex

A proud and iconic Australian company, Caltex has grown to become the nation’s leading transport fuel supplier, with a network of approximately 1,900 company-owned or affiliated sites. Our complex supply chains safely and reliably deliver fuel and an evolving range of convenience products and services, to more than three million customers each week.

Our history

Caltex refines, imports and markets the fuels and lubricants which meet one third of all Australia’s transport fuel needs. With a history that dates back to the early 1900s, we have come a long way – to around 4,700 employees and a convenience retail network that covers Australia.

About Caltex

Life just got easier for our customers, employees and partners

Making life easier

Ease is the greatest benefit we can offer to anyone who engages with Caltex. Whether this is our fuel customers wanting to stay on the move, our retail customers who want to get more of what they love under one roof, our business customers who want the complex made simple, or our employees benefiting from working in an environment where delivering for our customers is easier than ever before, at Caltex we make life easier.

Embracing innovation

Our focus on convenience has resulted in new digital enablers, streamlined transactions and efficiency improvements that are truly world class. We are using the latest technologies to improve the experience of our customers, reconfigure our manufacturing operations and maximise the highest value products.

By embracing new technologies, we are taking convenience to a whole new level.

This is an exciting time for Caltex.

2017 Highlights

Lytton refinery’s strong operational performance, resulting in higher refiner margins and continued growth of Caltex’s businesses, supported the 2017 results.
$619M
Full year historic cost profit after tax
$308M
Lytton refinery earnings before interest and tax
6.2BL
produced at the Lytton refinery
$733M
Supply & Marketing earnings before interest and tax
16.2BL
of total domestic transport fuel volume
Historic cost of sales operating profit
(HCOP) ($million)

On an historic basis, Caltex recorded an after-tax profit  of $619 million for the 2017  full year. This includes crude and product inventory gains  of $12 million after tax.

Replacement cost of sales operating profit
(RCOP) ($million)

Caltex recorded an after-tax profit for the 2017 full year of $621 million, excluding significant items, on a RCOP basis. This is our preferred measure, as it excludes net inventory gains and losses and better represents the underlying performance of the business. RCOP NPAT of $621 million is up 18% on the 2016 result of $524 million.

Transport fuel sales
(Billion Litres)

Total sales volumes of transport fuels increased 3.4% to 16.2 Billion Litres (BL) from the previous year of 16.0 BL. By product, total diesel volumes increased 7.3% to 7.6 BL, while total petrols decreased 2.8% to 5.7 BL, broadly in line with industry trends.

Refinery transport fuel production
(Billion Litres)

Lytton refinery transport fuel production of 6.2 BL was in line with the record 2016 performance (6.2 BL).

*Reflects production from the Lyttonrefinery only, following the conversion of the Kurnell refinery into a fuels import terminal.

$619M
Full year historic cost profit after tax
$308M
Lytton Refinery earnings before interest and tax
6.2B
Litres produced at the Lytton Refinery
$733M
Lytton Refinery earnings before interest and tax
16.2B
Lytton Refinery earnings before interest and tax
Historic cost of sales operating profit
(HCOP) ($million)

On an historic basis, Caltex recorded an after-tax profit  of $619 million for the 2017  full year. This includes crude and product inventory gains  of $12 million after tax.

Replacement cost of sales operating profit
(RCOP) ($million)

Caltex recorded an after-tax profit for the 2017 full year of $621 million, excluding significant items, on a RCOP basis. This is our preferred measure, as it excludes net inventory gains and losses and better represents the underlying performance of the business. RCOP NPAT of $621 million is up 18% on the 2016 result of $524 million.

Transport fuel sales
(Billion Litres)

Total sales volumes of transport fuels increased 3.4% to 16.2 Billion Litres (BL) from the previous year of 16.0 BL. By product, total diesel volumes increased 7.3% to 7.6 BL, while total petrols decreased 2.8% to 5.7 BL, broadly in line with industry trends.

Refinery transport fuel production
(Billion Litres)

Lytton refinery transport fuel production of 6.2 BL was in line with the record 2016 performance (6.2 BL).

* Reflects production from the Lytton refinery only, following the conversion of the Kurnell refinery into a fuels import terminal.

Caltex’s Freedom of Convenience strategy continues to evolve and has been updated since 31 December 2017 to reflect the regional expansion within the company.
Connect to win

Collaborate and unite diverse ideas to reach commercial goals

Find new ways

Test big and small ideas to learn and lead change

Own it

Be accountable, take considered risks and be courageous enough to call it

Make a difference for customers

Know your customers, personalise the experience and make life easy for them

Never stop caring

Act with integrity and respect, constantly challenge each other to be better and always be safe

Caltex’s Freedom of Convenience strategy continues to evolve and has been updated since 31 December 2017 to reflect the regional expansion within the company.
Caltex aspires to be the market leader in complex supply chains and the evolving convenience marketplace, by delivering fuel and other everyday needs of our diverse customers through our networks.

To reflect our Freedom of Convenience vision, in 2017, Caltex changed its operating model and established two different but inter-connected businesses which require separate cultures, processes and systems, both with significant growth options. The company merged Supply, B2B, Refining and Infrastructure into one business unit (Fuels & Infrastructure) to better optimise our value chain. Convenience Retail will focus on the company’s consumer-facing petrol and convenience business.

The “Protect and Grow” aspect of the strategy is focused on capturing the many opportunities that exist to continue to enhance and expand across the businesses. “Extend” will build on our current assets, capabilities and customer base to develop the business in both existing and new adjacent markets.

We are confident our Freedom of Convenience strategy is the right one to deliver top quartile shareholder returns.

Message from our Chairman and Managing Director & CEO

Message from our Chairman and Managing Director & CEO

We continued to demonstrate our track record in sound decision making

2017 was a successful year for Caltex for many reasons. The result was the second highest RCOP NPAT we have ever delivered.

Steven Gregg
Chairman
Julian Segal
Managing Director & CEO
VIEW Message

Operations Report

Fuels & Infrastructure

For more than 117 years, Caltex has built a reputation across Australia as a safe, reliable provider of high quality fuels and lubricants to our many customers.

We know the world is ever-changing, and that we are equipped to take these challenges head on. That is why, in 2011, Caltex set a vision – to be the outright leader in transport fuels across Australia.

We continue to evolve our physical operations, skills and capabilities with our strength in creating value from our integrated, and complex supply chains. In 2017, we combined our Supply, Trading and Shipping, B2B Sales, Refining, Lubricants and other asset operations groups to become a single business – Fuels & Infrastructure. This integrated business supplies more than one third of all Australia’s transport fuel needs through our network of distribution assets across the country including the Lytton refinery, 19 Caltex owned or part owned terminals, 89 depots, pipeline networks in Sydney and Brisbane, and freight logistics. Our strong base in Australia, combined with our Trading and Shipping team in Ampol Singapore, has also allowed us to expand our international operations into New Zealand with Gull NZ.

Lytton

production

6.2BL
StarCard

Number of StarCard customers

900,000

Operations Report

Convenience Retail

Each week, we serve more than three million customers and 70,000 business customers who are looking for ways to make life easier.

The opportunity to meet the needs of our customers is becoming significantly wider than the traditional purchase of fuel and the odd item in store. That is why our ambition is to become  a world-class convenience retailer. It is about exploring what our existing capabilities, footprint and technology can do while at the same time discovering new capabilities and technologies which will add value to the lives of our customers.

2017 was a transformational year for the Convenience Retail business, and we are energised and encouraged by what we have achieved so far.

With new stores, new formats, a vastly improved offer and the launch of high street retailing, we are building an inviting shopping experience underpinned by digital enablers and convenient services for customers.

By the end of 2017, we had opened 23 The Foodary stores, which included the opening of our first non-fuel standalone location in a transport hub in Newcastle, New South Wales.

Case Studies

Sustainable Operations

Our People, Purpose and Values

During 2017, Caltex embarked on a major cultural review that resulted in a newly defined purpose and refreshed organisational values.

Our employees helped to define the company’s culture and refreshed values that would drive continued success for Caltex into the future, as well as provide a clear purpose to make Caltex a great place to work for our people.

In October 2017 Caltex announced that its purpose is to make life easier, whether this is for our wide range of customers who want the freedom of convenience, whether it’s making the complex simple, or improving the way our employees work in an environment that will inspire them to work their best.

Gender representation at Caltex
Employees

Number of employees

4,724

Sustainable Operations

Safety and
Environment

Caltex strives for incident-free operations. We are relentless in our commitment to ensuring that our workforce goes home safe every day and that we protect the environment in which we operate.

Safety

Safety culture is fundamental to who we are at Caltex. Tragically, in 2017, a Caltex tanker driver was fatally injured by a third party vehicle during a routine delivery at one of our customer’s sites. The memory of our colleague inspires our continued commitment to personal safety — to ensure that our people go home safe every day. We will continue to strive to make sure that our people prioritise safety in their day-to-day activities.

Environment

Caltex is committed to protecting the environments in which we operate through full compliance with regulations and standards and robust operational management. We regularly conduct internal and external monitoring to ensure that our organisation meets these standards.

Total Scope 1 and Scope 2 emissions

Sustainable Operations

Caltex in
the Community

At Caltex, we value our role in working with our operating communities to create meaningful and sustainable impacts.

Our approach

Whether providing high quality fuel or everyday convenience to our customers, we consider the environmental, social and governance (ESG) risks associated with all our business activities. We recognise that our stakeholders want companies to be more transparent about communicating their ESG frameworks, investments and any related risks.

Our people in the community

We know that our employees are also passionate about our communities and making a positive, sustainable impact.

Caltex employees regularly donate a percentage of their pre-tax salary to a range of community programs, with Caltex matching their contributions dollar-for-dollar. Together, we raised more than $90,000 for nine charity partners in 2017.

Make-A-Wish Australia

Since our partnership began in 2013, more than $1.2 million has been raised for Make-A-Wish Australia by Caltex stores and our employees

$1.2M
Caltex Best All Rounder Award

For 32 years, Caltex has recognised the best students in Australia’s secondary schools last year, with 2,120 students receiving the Caltex Best All Rounder Award

2,120 students
Andrew Brewer
Executive General Manager, Transformation
Viv Da Ros
Chief Information Officer
Simon Hepworth
Chief Financial Officer
Richard Pearson
Executive General Manager, Convenience Retail
Lyndall Stoyles
Executive General Manager, Legal and Corporate Affairs
Alan Stuart-Grant
Executive General Manager, Strategy and Corporate Development
Joanne Taylor
Executive General Manager, Human Resources
Louise Warner
Executive General Manager, Fuels & Infrastructure
Steven Gregg
Chairman and Independent, Non-executive Director
Appointed 9 October 2015
Julian Segal
Managing Director & CEO
Appointed 1 July 2009
Trevor Bourne
Independent, Non-executive Director
Appointed 2 March 2006
Melinda Conrad
Independent, Non-executive Director
Appointed 1 March 2017
Bruce Morgan
Independent, Non-executive Director
Appointed 29 June 2013
Barbara Ward AM
Independent, Non-executive Director
Appointed 1 April 2015
Penny Winn
Independent, Non-executive Director
Appointed 1 November 2015

AGM Details

The 2018 Annual General Meeting of Caltex Australia Limited will be held at 10:00am (AEST) on Thursday, 10 May 2018 at the Wesley Conference Centre, 220 Pitt Street, Sydney.

Public transport, parking and accessibility

By foot:  Wesley Conference Centre can be accessed by foot from Pitt Street

By bus:  for information about bus routes and timetables, call 131 500 or visit www.131500.com.au

By train:  the closest train station is Town Hall. Take the Galleries Victoria Pitt Street exit. For information about trains and timetables, call 131 500 or visit www.131500.com.au

Parking: Wilson and Secure parking stations (next to Hilton hotel) are directly opposite the Conference Centre main entry

Accessibility: the Pitt Street entrance is a level access. The meeting is being held in the main auditorium on the LG level accessible by stairs or lifts

Add to Calendar 02/28/2018 08:00 AM 02/28/2018 10:00 AM America/Los_Angeles Summary of the event Description of the event Location of the event

Directory

Caltex Australia Limited
ACN 004 201 307

Level 24
2 Market Street
Sydney NSW 2000
Australia
GPO Box 3916
Sydney NSW 2001
Australia

T: +61 2 9250 5000
F: +61 2 9250 5742