Ampol reflects on successful year

2021 was a successful and transformational year for Ampol, as announced at its 2022 AGM this morning.

Ampol achieved record total sales volumes of 22.04 billion litres, delivered significant growth in volumes and earnings in its international business and opened 20 new Ampol Woolworths Metro sites as it continued to execute its Convenience Retail growth strategy.

Managing Director & CEO Matt Halliday said Ampol: “continued to deliver strong financial and operational performance, while making progress on key strategic initiatives that provide the foundations for our success in the future”.

Ongoing Ampol rebrand

The Ampol rebrand continued to gather positive momentum in 2021. 880 sites across the network had been rebranded at the end of 2021 and 1215 sites have been rebranded across Ampol’s 1900 branded store network as of today.

“Customer feedback demonstrates that the iconic Australian brand is resonating strongly with customers,” Mr Halliday said.

“Our rebranded sites have outperformed control sites on all key performance indicators, including measures of total transactions as well as volume measures such as total fuel, premium petrol and AmpolCard.”

Ampol also delivered ongoing improvement in prompted and unprompted customer awareness of the brand among all demographic segments.

“Across the year, we continued to introduce our new brand and purpose to customers and partners,” Mr Halliday said.

“Our ‘far and wide’ multichannel brand campaign launched nationally in April to showcase how our business connects and is a part of the fabric of Australian life. This campaign was supported by our major partnerships, including with the National Rugby League as the naming rights sponsor of the Ampol State of Origin and with Red Bull Ampol Racing.”

Ampol also continued to build on its important work in local communities through the Ampol Foundation, with a total contribution to community programs of $3.17 million across the year. Increased employee volunteering, and the delivery of major fundraising campaigns for The Smith Family and Surf Life Saving Australia, were two milestones throughout the year.

Future Energy and Decarbonisation strategy

In 2021, Ampol released its Future Energy and Decarbonisation strategy, including an ambition to achieve net zero emissions operations by 2040 and to invest more than $100 million in future energy projects by 2025.

Mr Halliday said Ampol is uniquely positioned to play a key role in the energy transition.

“Our integrated supply chain capabilities and privileged assets, Australian brand, customer relationships and industry knowledge, when combined with our financial strength, set us apart from our competitors and will put us at the forefront of building new energy solutions to support change across the Australian economy,” he said.

As technology and policy continues to evolve, Ampol expects the most commercially viable alternative fuel solutions to include a combination of electricity, hydrogen, biofuels and carbon offsets.

“We will focus our efforts on developing our customer value proposition in these key areas and seek to position Ampol as a partner of choice for industry, government and our communities,” Mr Halliday said.

Execution of the strategy has begun, with:

“AmpCharge will service customers both at home and on the road at both forecourts and destinations, leveraging existing Ampol infrastructure and customer relationships to ensure Australians can recharge wherever and whenever they need to,” Mr Halliday said.

At-home branded charging infrastructure is also expected to be developed under AmpCharge, with offers to be made available to consumers as part of a broader home energy offer.

Performance and outlook

Ampol’s Convenience Retail business recorded RCOP EBIT of $253.7 million with total volumes falling by 4.9%. Covid-19 impacts were said to have affected most of the second half and offset positive trends in first half fuel volumes, shop sales and earnings.

Rapidly rising crude and product prices also put pressure on fuel margins, but showed improvement towards the end of the year. Despite this, Ampol delivered a cumulative $52.6 million of its nonfuel earnings uplift target to date and are on track to achieving its target of $85 million in earnings uplift by 2024.

Mr Halliday said the result demonstrates the quality and resilience of the Ampol integrated supply chain.

“The business has successfully managed the short-term impacts of Omicron, significant flooding events and the unprecedented volatility caused by the Russia and Ukraine conflict,” he said.

“In particular, I am proud of how the Ampol team has responded to deliver such strong operational and financial performance during some of the most challenging conditions in our history while, at the same time, progressing our strategic priorities.”

Ampol completed the acquisition of Z Energy on 10 May and Mr Halliday said he was “excited by the potential” of the two companies coming together.

“In 2022 we will focus on strong operational performance and continue to execute our strategy to improve returns and deliver growth for shareholders,” he said. “This will include the expansion of our international operations toward regional market leadership, as we integrate and work with the Z Energy team in New Zealand following the completion of this important acquisition.”

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