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29/07/2016 - Sustainability news

How Z Energy is leading sustainability in New Zealand

The following case study is an excerpt from ACCSR’s recent publication, Pathways to the Sustainable Development Goals: Annual Review of the State of CSR in Australia and New Zealand 2016.

You can read the full report here

 

Formed in 2010, Z Energy is now New Zealand’s biggest fuel business. It operates with sustainability as a stakeholder-driven core to its triple-bottom-line strategy, committed to business’s responsibility to lead by example toward national sustainability priorities.

Emily Watt, Sustainability Manager, says asking over 40,000 people what they wanted and expected of a “Kiwi” company when it formed, became the basis for Z Energy’s offer.

“Sustainability, community, customer service and health and safety have become the four things we stand for – where we can make the biggest difference in New Zealand, including through changing the behaviour and expectations of both business and customers.

“We believe in the science of climate change and want to be in the solutions space. Companies like ours have a big opportunity to do big things.”

“To date, we’ve focused our strategy in four areas. Firstly, consumer less ourselves and having ambitious targets to reduce w3ate to landfill, electricity and water consumption.

“Secondly, reducing the carbon emissions of Z and our customers through tracking and managing our own carbon, more efficient deliveries, and through working partnerships with suppliers.

“Thirdly, reducing New Zealand’s reliance on fossil fuels – we have built a $26 million biodiesel plant, which will produce 20 million litres for New Zealand, and we are working providing fast charging station at our sites to recharge electric cars.

“And finally, we are supporting capability development in New Zealand by investing in community and neighbourhood programmes, and developing skills in our team.”

Emily says that Z can have a bigger impact by working with others to influence change. Z Energy regularly engages with key stakeholders to understand expectations, values and impacts, to inform its strategy, sustainability programmes, reporting and products.

“We ask what the communities’ priorities are for our investment programmes, and in our annual GRI reporting, what stakeholders want us to measure against. We ask our customers what is important to them through our retail sites, and through social media engagement. We have conversations with the Sustainable Business Council and Sustainable Business Network to help us refine what we’re focusing on,” says Emily.

Z Energy sees efforts towards the Sustainability Development Goals as a logical extension of the organisation’s sustainability strategy.

Emily say, “We are seeing that we are aligned to many of the Sustainable Development Goals – with Decent Work and Economic Growth, Responsible Consumption and Production, and Climate Action the most relevant to us.”

“I see the Goals guiding us to see what we should be focusing on next.”

“We believe businesses have a leadership role to deliver on sustainable development. With the areas we’ve identified, we can make the greatest difference, working with customers, suppliers, and like-minded organisations to influence and change behaviours. We have a big reach, and ability to invest in the things that matter.”

Z Energy has been advocating for greater incorporation of sustainability for New Zealand’s listed companies.

“We found the GRI great for reporting what we’ve done. We are now looking at the Integrated Reporting Framework and how it connects business interdependencies, to help us define what we are going to do next.

“There is an exciting change in people’s expectations – Climate Change conference in Paris has really made people want to make a difference, and we see where that produces us with the greatest benefits.”

29/07/2016 - General News

Z is New Zealand’s most trusted fuel company

The votes are in – Z is New Zealand’s most trusted petrol company after securing the top spot in this year’s Reader’s Digest Trusted Brands survey.

The survey, now in its 16th year, asks Kiwis about their preferred New Zealand brands based on a number of drivers, including reliability, pricing, and customer service.

 Z’s Chief Executive, Mike Bennetts, said earning the trust and confidence of Kiwis reflected everything Z is about.

 “We want Z to represent what New Zealanders can achieve when they put their minds to the things that matter – things like putting the service back into service stations, and fueling Kiwis to get ahead,” he said.

 “Being recognised as New Zealand’s most trusted fuel company really reinforces the importance of the things we do on our forecourts, and in our offices, each day.”

Mike said it was great to see a number of Z’s valued community partners also recognised.

“At Z, we stand for making a positive difference – to our customers, to our shareholders, and to the communities in which we live and work,” he said.

“It’s great to see one of our major commercial customers and community partners, St John, recognised as well, along with the Cancer Society and LandSAR, both charities we’ve supported in the past through Z’s Good in the Hood initiative.”

The Reader’s Digest Trusted Brands survey asked a representative sample of people in New Zealand to rate their most trusted brands in 41 categories of products and services across a wide range of industries.

For the survey’s full results, visit the Reader’s Digest Trusted Brands website: http://www.trustedbrands.co.nz/

Media contact: Hannah Heberley – 04 498 0300 or 021 272 8021

21/07/2016 - General News

NZ’s biggest loyalty programme gets pumped with fuel discounts

Customers using New Zealand’s most popular loyalty programme, Fly Buys, are in for a boost with today’s announcement that Z Energy will shortly be offering direct fuel discounts through Fly Buys Pumped’.

From 1 August, the nearly 2.5 million Fly Buys members across New Zealand will now be able to access instant fuel discounts on selected days and still collect Fly Buys points, simply by presenting their card at Z sites nationwide.

Z’s General Manager of Marketing, Jane Anthony, said combining Fly Buys with direct fuel discounts would be the most attractive loyalty offer in the New Zealand market, giving customers valuable choice.

“Z is the most trusted brand in this industry with a very loyal customer base. It’s important our loyalty offer remains current, easy to use and provides customers with the offers they deserve in this case customers can still collect Fly Buys points and receive discounts as they are offered.”

Jane said loyalty offers were going through a period of significant change and customers were wanting more choices.

“The old paper-based supermarket dockets have been dwindling in popularity, with people telling us they want instant fuel discounts instead. We’ve listened to customers and taken the opportunity to boost New Zealand’s leading loyalty offer with a fast, efficient discount mechanism that’s as simple as swiping your card.

“Having the ability to offer instant discounts through Fly Buys, rather than through a blanket discount offer, is a more sophisticated approach to loyalty that will give us the flexibility to tailor our offers and to engage with our customers in a way which works best for them,she said.

Jane said customers who still want to get fuel discounts through their supermarket shopping will be able to do this at Caltex branded sites.

New Zealanders who aren’t already Fly Buys members but want to be ready to take advantage of the Fly Buys Pumped fuel discounts from 1 August can sign up to Fly Buys or order new cards on the Fly Buys website.

 

Jonathan Hill: 04 498 0212 or 021440090 

08/06/2016 - General News

Fonterra confirmed as foundation customer for Z biodiesel

Since early 2014, Fonterra has worked closely with Z as a foundation customer for the new B5 biodiesel, helping Z introduce the lower carbon fuel to New Zealand.

The farmer owned co-operative is committed to making a difference by reducing its emissions as well as supporting other Kiwis so they have the option to make better energy choices.

Lower emission sources like biodiesel are in keeping with Fonterra’s energy strategy and are one of a range of ways that the co-operative is looking to adjust its carbon profile in the years ahead. This initiative with Z is an effective way for Fonterra to integrate carbon savings into its supply chain almost immediately.

Fonterra tankers are a familiar sight on New Zealand roads, travelling thousands of kilometres every day. The Co-operative’s 500 tankers cover more than 80 million kilometres of New Zealand roads annually – and that takes a lot of fuel.

Using B5 biodiesel in its tankers has the potential to bring an almost 4% reduction in emissions from each truck over the course of a year, which will in turn reduce the co-operative’s carbon costs. Because B5 is a drop-in fuel, Fonterra’s trucks can use it wherever it is available around the country, but not have any issues should standard diesel be the only option. Fonterra says the initiative with Z is important to them because of the cooperative’s commitment to reduce its own carbon emissions while also supporting Z in making B5 more widely available for the benefit of New Zealanders. For more information on biodiesel, visit z.co.nz/biodiesel.

Fonterra biodiesel truck

07/06/2016 - General News

Z confirmed as best employer

Z Energy has been announced as a 2016 Aon Hewitt ‘Best Employer’ for the second year running. 

The annual award recognises the best employers across New Zealand and Australia through examining employee engagement scores and people practices.

Z’s General Manager of People and Culture, Sharlene Taylor, said the recognition reflected the commitment of every member of the Z team to leadership and to building a culture which enables extraordinary performance. 

“Being recognised as a best employer truly reflects the investment we’ve made in our people, culture, and leadership practices since day one,” she said.

Sharlene said Z’s focus on people and leadership has come from the bottom up, with its company values and leadership framework being generated by simply asking its people what mattered to them. 

“I’m particularly pleased that we’ve been able to retain such a strong employer rating during a big year characterised by large scale change,” she said. 

“This result points to the engagement and resilience of our people and our ability to lead complex change in accordance with the values upon which Z is built.” 

Sharlene said the recognition was particularly important as the company comes together with the new team from Chevron New Zealand. The acquisition to acquire Chevron New Zealand was settled on 1 June. 

“Bringing two strong companies together into a single operation is an opportunity to develop a unique and special culture in which we learn from each other and work together to deliver extraordinary performance.”

 

Jonathan Hill: 04 498 0212

01/06/2016 - General News

Z is about to share $1m among groups doing Good in the Hood

The voting phase of Z’s Good in the Hood programme is over and 852 community groups are about to share in $1 million relative to how hundreds of thousands of New Zealanders voted.

The groups doing good in neighbourhoods across the country were selected from thousands of applications, and Z customers were asked to vote for their favourite group during the month of May.

“In its fifth consecutive year the 2016 Good in the Hood finalists were selected from more than 4,000 applications, and narrowing the number down was a tough job when each and every one of the groups, both big and small, are working to make a positive difference in their community,” said Z’s Community Manager, Christine Langdon.

Each Z station supported four local groups who will each receive a share of $4,000 based on how customers voted with the Good in the Hood orange token they received every time they made a purchase or filled-up during May. The votes are now being tallied and the cheques will be presented to each of the groups this month.

A further $1,000 per station has also been set aside for Z’s local retailers to support other neighbourhood groups and projects as they arise throughout the remainder of the year.

Christine says Good in the Hood is all about keeping it local.

“Our Z stations are part of the communities they serve. We reckon the best way to give back to those communities is to put our local teams and customers at the heart of deciding how the funding is shared. They know better than anyone what matters in their neighbourhoods.

“During the month many groups promoted their activities on our forecourts and both their teams and the Z team got right behind them. The programme is a real celebration of the countless hours spent by groups across New Zealand making a significant contribution to the health and well-being of our communities,” Christine said.  

You’ll be able to see the final tally for how much each group in your neighbourhood received by visiting your local Z station at the start of July, or visiting  www.z.co.nz/goodinthehood later this month.

29/04/2016 - General News

Focus on safety, customers following Commerce Commission clearance

Z Energy confirmed its focus would be on the safety and integrity of operations, and on serving customers, following the Commerce Commission’s clearance today of its application to acquire 100 per cent of the shares of Chevron New Zealand (CNZ).

The Commerce Commission’s announcement is available on its website at: www.comcom.govt.nz/the-commission/media-centre/media-releases/.

Z applied to the Commerce Commission for clearance to acquire CNZ (comprising CNZ’s downstream operations in New Zealand, including CNZ owned service stations, supply contracts, terminals and its lubricants business) on 30 June 2015 for a purchase price of $785 million. Today the Commerce Commission cleared the transaction on the basis that, subject to Z’s undertaking to divest certain assets, it would not be likely to substantially lessen competition in any market.

Z Chief Executive Mike Bennetts said while a robust 10-month investigation by the Commerce Commission had resulted in the transaction being approved, the creation of a larger company came with significant responsibilities for Z to its staff, customers of both companies, and to New Zealand as a whole.

“As a local company we believe buying the business of a global company is good for New Zealand and it’s now up to us to prove it. We will start this journey as a new company exactly as we intend to continue - by ensuring our focus is squarely on the safety of our operations and on the customers and communities we serve.”

A team of more than 100 people from both Z and CNZ have worked for almost a year on planning and technology solutions to bring the two companies together to enable them to operate as one from settlement, which is expected to be on 1 June 2016.

“Bringing two large companies with different technology, systems, processes and business models together is a complex and challenging undertaking. I want to thank the CNZ and Z teams for their commitment and professionalism in enabling us to get to this point. I look forward to welcoming the CNZ team to Z.”

He said it was very much business as usual both before and after settlement for customers of both companies, who should notice no impact or change as a result of the way these teams had worked.

Cutover Z said the next step would see the company focus on completing a safe and secure cutover of CNZ to Z’s systems on 1 June 2016.

“There is a substantial amount of work to be completed in order to fully integrate CNZ’s business into Z’s corporate structure and business operations. The technical systems cutover is scheduled to take place overnight on 31 May, with the 1 June settlement day being the first day the two companies will operate under common ownership.”

Mike Bennetts said the company had been planning for the delivery of a safe and efficient cutover for the best part of a year, and he was confident the organisation has the structures in place to deliver that.

“In the period immediately following settlement and the cutover to Z’s systems and processes, there will be an increased focus on the stabilisation of our operations, ensuring safety and continuity of supply for all of our customers.”

Synergies

Once the acquisition is settled, Z said it is confident it remains on track to deliver the $25-30 million of synergies previously identified as a result of the deal.

Synergies are expected to be realised across improved supply chain efficiency, including at Refining NZ; reduced people costs, particularly through avoiding costs associated with the provision of offshore back office and support services to CNZ; and a range of IT, systems and process efficiencies.

“The expanded company will create value through leveraging the scale and scope of both companies’ operations, including the diversity of business models and people expertise,” Mike Bennetts said.

“We’re confident in the identified synergies and once we have cutover to a single ERP system the next phase will be on integrating the two companies – this is where we expect to learn significantly more about the CNZ business, how it can most efficiently fit alongside Z’s operations and where we may be able to generate additional value by learning from one another’s experience and different business models.”

Divestments

Mike Bennetts said as part of securing clearance Z has undertaken to divest certain assets over the coming months. These are:

  • 19 retail service station businesses
  • 1 truckstop business

“Z will need time to properly assess the financial impacts of these divestments given there are options as to which branded service station is divested. The volume impact on the combined company ranges between 60 – 80 million litres per annum. Over the past 11 months Z has had approaches from numerous parties expressing interest in any assets that may be divested so Z expects competition for these assets,” he said.

Debra Blackett (Z’s Company Secretary) has been appointed to manage the divestment workstream as a continuation of her accountability for leading the acquisition workstream, which included the Commerce Commission clearance process and the financing and legal activities required to be able to settle the transaction. Preliminary planning has already been completed which gives Z confidence it can meet its divestment obligations.

“It is quite common in acquisitions and was anticipated that we might need to undertake to divest some assets as part of securing clearance. Although we have not yet decided which specific assets will be divested and the consequent impact on earnings, we do not believe they materially diminish the attractive earnings multiples we bought at, the quality of the portfolio, or the target synergies. We are already working to ensure we carry out the divestments within the period we have undertaken to do so, with a significant focus on ensuring ongoing support for operations that might be impacted by a divestment decision,” Mike Bennetts said.

People

Mike Bennetts reiterated that the skills and experiences of the CNZ team are highly valued and an important consideration in the acquisition.

“Z has committed that all CNZ staff will have at least 12 months of paid employment from the date of settlement. CNZ already runs a lean and highly efficient operation and we expect to learn a lot from their people over the coming months.

“There are obvious opportunities to reduce people costs in bringing the services that were provided to CNZ and charged in from a global services hub back into our existing operations.

“The CNZ team have conducted themselves with a high level of professionalism during an uncertain time and I’m very much looking forward to welcoming them into Z,” he said.

Commitment to dual brand strategy

Mike Bennetts said Z remained committed to a dual brand strategy in the retail market.

“The operation of a dual brand strategy means our retail customers can continue to enjoy the different Caltex and Z branded service stations and the different offers that go with those stations and their different business models,” he said.

Settlement and funding

The total purchase price is $785 million – plus a working capital adjustment - and will be funded from cash ($115 million) and debt ($670 million).

A $185 million pro rata equity raise was considered at the time of the announcement of the transaction. Given the passage of time - higher synergies and improvement in the underlying Z business over the FY16 year, partially offset by anticipated divestments - the decision has been taken not to raise additional capital and to instead fund the remainder through debt from pre-arranged debt facilities with Z’s banking syndicate.

The funding mix will see Z’s starting leverage on settlement of total debt to replacement cost operating EBITDAF earnings multiple of approximately 2.6x. Consistent with the 2 June 2015 announcement it is anticipated that leverage will reduce to ~2.0x within two to three years, albeit slightly slower given the higher opening debt.

“We appreciate the patience and support of our investors throughout the acquisition process and, think it is a better outcome to temporarily extend debt facilities rather than dilute existing equity holdings.”

The transaction is expected to be settled on 1 June at which point Chevron will be paid the balance of the purchase price and the operation of the combined business will sit with Z.

Until settlement occurs, Z and Chevron remain competitors.

Guidance and market updates

Mike Bennetts said Z would be providing regular market updates on progress of the integration of the two companies post settlement and cutover.

“Our immediate focus will be on putting the two companies together, ensuring their safe and stable operation and then moving into the integration phase, during which we will start to understand more about the operation of the business and the value that an integrated company can generate.

“We acknowledge the strong interest in the cutover process and the complexity and risks that arise from putting two large business operations together. On that basis we will provide regular updates to confirm that these complexities and risks are being managed, and that customer satisfaction levels do not diminish.

“We will provide guidance for the standalone Z business with full year results on 12 May and in June will update that guidance to include the earnings contribution from the Chevron business,” said Mike.

“Once we have been operating the business for several months we will host an investor day to update investors on the strategy for the integrated company and the financial forecasts that relate to that, probably in September or October this year.”

Conclusion

Mike Bennetts said although the process of securing clearance had taken a long time, the real work in building a world-class company was now just beginning.

“As we become a larger and more strategically significant company we will have an increased responsibility to our customers, investors, staff and to New Zealand as a whole.

This is a responsibility we welcome and we are committed to building this company for the benefit of all our stakeholders in line with the values that underpin every aspect of our operation, as they have done so for all of the past six years,” said Mike.

 


Jonathan Hill: 04 498 0212

08/04/2016 - Sustainability news

Z opens first fast start EV charging station at Auckland Airport

Z Skyway EV launch

Photo (from left to right): Charge Net Chief Executive, Steve West, Chelsea Sexton, and Z Retail Sales Manager, Rob McDonald

Z Energy today opened Auckland’s first fast charge electric vehicle charging station at the Z Skyway service station at Auckland airport.

The installation brings Z’s total number of fast start EV charging stations at its sites to six, with an additional two in Auckland, two in Wellington and one in Christchurch.

The charging station at Z Skyway was officially opened by Chelsea Sexton, an internationally renowned electric car advocate and advisor. From California, Chelsea is best known for her role in Who Killed the Electric Car, and for her articles and blog posts about electric cars and her views on obtaining mass adoption of the technology by the car industry and drivers.

“Public charging in visible, convenient locations is key to electric vehicle adoption, as well as increased use and enjoyment by existing EV drivers,” Chelsea said.

The rapid-charge stations are being supplied by Charge Net and will be available for public use. The Tritium fast chargers draw up to 400 volts of electricity and can charge a standard electric vehicle in the time it takes a customer to buy and drink a cup of coffee.

Z Sustainability Manager, Gerri Ward, said the move was part of Z’s continued commitment to moving from being a part of the climate change problem to the heart of the solution.

“We’re not an oil company, we’re a transport energy company and we’re committed to meeting the needs of our customers, whatever they might be.

“We also want to be at the front of the push towards a cleaner, more sustainable New Zealand and to give Kiwis choices to use more renewable fuels.”

The electric charging stations will cost approximately $5 - $10 for the vast majority of users (i.e. a Nissan Leaf) to fill up, and the charge time from empty will be approximately 10 – 25 minutes, as opposed to up to eight hours for a conventional slow charge. A 25 minute charge will “fill up” an entry level electric vehicle like a Leaf and allow customers to travel around 120 kilometers.

“These stations provide another option to keep our customers moving regardless of the vehicle they drive or the fuel they need,” said Gerri.

Chief Executive Steve West from Charge Net has found working with Z Energy to be a great experience, and is pleased to see the iconic Kiwi brand charging into the future.

“Z Energy is a great company to work and collaborate with. We are excited to see these stations go live,” he said.

05/04/2016 - Sustainability news

Z installs first fast start EV charging station in Christchurch

Z Energy today installed the first electric vehicle rapid charging station at a service station in Christchurch, at Z Moorhouse Avenue, Addington. The station was officially opened by Christchurch Deputy Mayor, Vicki Buck.

The installation is part of Z’s commitment to install six rapid-charge electric vehicle charging stations at sites in Auckland, Wellington and Christchurch over the following weeks.

The rapid-charge stations are being supplied by Charge Net and will be available for public use. The Tritium fast chargers draw up to 400 volts of electricity and can charge a standard electric vehicle in the time it takes a customer to buy and drink a cup of coffee.

Z Sustainability Manager, Gerri Ward, said the move was part of Z’s continued commitment to moving from being a part of the climate change problem to the heart of the solution.

“We’re not an oil company, we’re a transport energy company and we’re committed to meeting the needs of our customers, whatever they might be.

“We also want to be at the front of the push towards a cleaner, more sustainable New Zealand and to give Kiwis choices to use more renewable fuels.”

The electric charging stations will cost approximately $5 - $10 for the vast majority of users (i.e. a Nissan Leaf) to fill up, and the charge time from empty will be approximately 10 – 25 minutes, as opposed to up to eight hours for a conventional slow charge.  A 25 minute charge will “fill up” an entry level electric vehicle like a Leaf and allow customers to travel around 120 kilometres,

“These stations provide another option to keep our customers moving regardless of the vehicle they drive or the fuel they need,” said Gerri.

Chief Executive Steve West from Charge Net has found working with Z Energy to be a great experience, and is pleased to see the iconic Kiwi brand charging into the future. 

“Z Energy is a great company to work and collaborate with.  We are excited to see these stations go live,” he said. 

04/04/2016 - General News

Groups to share in $1 million with Z’s Good in the Hood

More than 800 local community groups across New Zealand will get the support they deserve this year with their share of more than $1 million thanks to Z’s Good in the Hood.

In its fifth consecutive year, the 2016 Good in the Hood finalists were selected from more than 4,000 applications, with the decision around which groups would be successful this year proving just as challenging as in previous years.

“As a Kiwi company, our customers expect us to give back to local neighbourhoods, to support the things that matter locally and to make a positive contribution right across New Zealand,” said Z’s Community Manager, Christine Langdon.

“We received more than 4,000 Good in the Hood applications this year – and these are all really deserving local groups, both big and small, who are making a real difference in their communities, so having to narrow it down to only four groups per station proved quite difficult.”

In the ultimate show of keeping it local, each of the successful groups will now be up for their share of the $4,000 up for grabs at each of the 213 Z sites across New Zealand.

Z customers will have the opportunity to decide how much each group gets by voting with an orange token each time they visit Z during the month of May.

“We reckon it doesn’t seem right for a bunch Z employees to make decisions about what matters most to the many diverse communities we have here in New Zealand,” Christine said.  

“At the end of the day, we know our local Z service stations teams and their customers are best placed to be making those decisions, and that’s why we leave the voting up to them.”

In addition to the $4,000 available per Z site, an extra $1,000 will be given to each local Z retailer to use throughout the year, supporting other neighbourhood projects and initiatives as they see fit.

To view the full list of this year’s groups, visit www.z.co.nz/GoodintheHood.

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