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12/08/2016

Z Darfield Closing - 26th August

On 2 June 2015 we announced our intention to purchase the Chevron New Zealand business which markets the Caltex brand of service stations.

On 29 April 2016, the Commerce Commission approved the deal, with Z agreeing to divest 19 retail service stations in areas around the country where there were concerns regarding a potential lessening of competition. In each of the 19 areas, Z needs to make a choice as to which of mixture of brands supplied by the wider Z Energy business will be divested, and our aim is to complete these by the end of year. These sites will move across to another brand and continue to supply fuel to their local community.

This process is not an easy one and we continue to work closely with all those involved and potentially impacted through this process. We appreciate that this activity may raise questions for people, and we have tried to cover these off below. We will continue to update this page as we progress through the process.

 

Z Darfield divestment frequently asked questions

Why is Z Darfield closing?

In June 2016, as part of its acquisition of Chevron New Zealand, Z undertook to divest 19 retail service stations in order to satisfy the Commerce Commission’s concerns about a potential lessening of competition in some geographic areas.

Z Darfield is being divested as part of that undertaking but don’t worry, the site won’t actually be closing permanently – a service station operating under a different brand will be coming in its place. There is some work that needs to be done at the Z Darfield site first, including the replacement of the tanks which are nearly at the end of their safe working life.

We expect the new service station to be up and running in a couple of months.

When will it close?

Don’t worry – Z Darfield isn’t closing permanently! From 8 pm on the 26 August, the site will no longer be operating under the Z brand and, while we’ll be sad to go, the great news is that a service station operating under a different brand will be coming in its place. There will be some downtime between us closing and the new site opening though – and we expect that to be a couple of months.

Why will it be shut for so long?

We appreciate that it may be a little frustrating having this service station closed for such a long time – rest assured, our focus is on working together with the new retailers to make sure the site is fully safe, operational and pumping fuel as quickly as possible. In the meantime, the nearest Z stations are Z Yaldhurst, Main West Coast Road, Christchurch, Z Hornby, cnr Carmen Road and Waterloo Road, Hornby, Christchurch and and Z Templeton, 720 Main South Road, Templeton, Christchurch.

Will it be business as usual (e.g. fully operational) until August 26th?  

We’re committed to completing the process at Z Darfield with as little disruption to our customers as possible. That means our aim is to continue to operate as normal, providing our top quality fuels, products, services and loyalty offers right up until 26 August.

There will be a little downtime between us closing and the new site opening, though, and we expect that to be a couple of months – this time will allow contractors to complete the re-tanking work required and the de-branding work safely to make sure the site is spick and span and ready for the new team to take over.

Are you going to open another Z station nearby?

We haven’t made any decisions yet regarding new Z service stations in the area in the future. Our focus is very much on ensuring we complete this process safely, and with as little disruption to our Z Darfield customers, and site team, as possible.

Where can I go for Z fuel now?

The nearest Z stations are Z Yaldhurst, Main West Coast Road, Christchurch, Z Hornby, cnr Carmen Road and Waterloo Road, Hornby, Christchurch and Z Templeton, 720 Main South Road, Templeton, Christchurch.

Where can I go to purchase fuel with my Z Card now?

You’re still able to purchase fuel using your Z Card by visiting any Z service station. The nearest Z stations are Z YaldhurstZ Hornby and Z Templeton.

What’s happening to my favourite team at Z Darfield?

One of our top priorities throughout this process is on ensuring there’s as little disruption to people as possible, and that includes our awesome Z station teams. Fortunately, given our Retailers work in clusters, the awesome team of site staff at Z Darfield have all been able to secure new roles at Z Yaldhurst, and the team at Z Yaldhurst look forward to seeing you soon.

I have a Z gift card. Where can I redeem it now?

Not to worry! You’ll be pleased to know that all Z gift cards can still be redeemed at any other participating Z service station across the country. The nearest Z stations are Z YaldhurstZ Hornby and Z Templeton

What happens to the local GITH groups?

At Z, we stand for making a positive difference where we live and operate in New Zealand. We remain committed to our local communities and, for next year’s Good in the Hood, groups who had previously applied for support from Z Darfield will be more than welcome to apply at their nearest Z service stations, including Z YaldhurstZ Hornby and Z Templeton.

 

 

 

02/08/2016

Production imminent at NZ’s first commercial scale biodiesel plant

New Zealand’s first commercial-scale biodiesel plant today received its first delivery of inedible tallow, which enables the beginning of biodiesel production.

Z Energy’s $26 million biodiesel plant at Wiri, Auckland, is now in the commissioning phase and will start to produce high quality, sustainable biodiesel later this month. At the plant’s peak of production it will produce 20 million litres of biodiesel, which will be supplied as a biodiesel / mineral diesel blend to both commercial and retail customers across much of the upper half of the North Island.

Z’s General Manager of Supply and Distribution, David Binnie, said the delivery of tallow was a milestone which has been years in the making.

“We’re now ready to start producing a more sustainable transport fuel for customers that want to do their bit for a lower carbon future when they fill up.

“As an existing by-product of the meat industry, tallow is the perfect feedstock for bringing biodiesel to New Zealand. It doesn’t compete with food production and would otherwise be exported as a low value commodity in the production of soap and candles and some overseas biofuel production.

“The tallow and the design of the plant enables the production of a very pure, high quality biodiesel which is safe to use in your engine and meets all of New Zealand’s fuel specifications.”

David said the plant will use about 12 per cent of New Zealand’s production of inedible tallow, meaning there was plenty of scope to build further biodiesel plants if customers continued to demand it.

“We’ve been delighted by the leadership and strong backing from foundation commercial customers like Fonterra, Fulton Hogan, NZ Post, Downers and TIL who have provided the support to enable us to build this plant with confidence.

“The production of 20 million litres of sustainable biodiesel provides an opportunity for other businesses to take similar leadership in taking small steps to lower their own carbon footprint.

“Given the rural origin of the feedstock, there is an opportunity for the rural sector to close the cycle by also choosing to use our biodiesel,” said David.

 

01/08/2016

Z customers get fuel discounts as Fly Buys Pumped goes live

Z Energy customers will get instant fuel discounts and bonus Fly Buys points for all of August to celebrate the arrival of Z’s new loyalty programme ‘Fly Buys Pumped’.

Fly Buys Pumped is available at Z sites nationwide from today. Anyone with a Fly Buys card can access the special launch deal of 6 cents off per litre plus triple Fly buys points.

Following the August launch deal Fly Buys Pumped will give customers instant fuel discounts on selected days, as well as Fly Buys points.

Z’s General Manager of Marketing, Jane Anthony, said customers now have access to the most attractive loyalty offer in the market.

 “We know our loyal customers want instant fuel discounts so we’ve created Fly Buys Pumped, which is extra attractive because it also gives Fly Buys points. This is a huge draw card to fuel up at Z.

 “Fly Buys Pumped is the biggest change to loyalty to happen to Z since its birth and has been created to give customers choice they deserve.”

Jane said because Fly Buys Pumped is connected to New Zealand’s leading loyalty scheme, Fly Buys, it is incredibly easy for people to access the deals.

“Nearly 2.5 million New Zealanders are already Fly Buys members and anyone else can easily sign-up and be instantly ready to swipe their card for a better deal.

“People can choose to use their plastic card or the Fly Buys App on their phone to access the Fly Buys Pumped deals-so it’s really fast and simple to get the rewards.

“We’re looking forward to seeing New Zealanders benefit from these deals, which we have introduced with them in mind,” Jane said. 

From the start of September Fly Buys Pumped deals combining fuel discounts and points will be varied.

People wanting to sign up to Fly Buys or get a new card can do this on the Fly Buys website.

 

For further information please contact Jonathan Hill: 04 498 0212, 021440090

29/07/2016

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

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

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

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

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

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

04/04/2016

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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