Matthew Halliday, Caltex’s Chief Financial Officer (CFO) takes the role of the company’s Interim CEO today, following the stepping down of Julian Segal.
Caltex Australia announced in August 2019 that Mr Segal would retire and step down once the Board completes a formal succession and transition process.
Caltex Chairman Steven Gregg says the Board recognises the critical importance of CEO succession and has made significant progress in its search over the past six months. However progress has been hindered by the receipt of revised and new proposals to acquire Caltex.
“It is not possible for us to complete this search at this time,” Mr Gregg said last week.
“The interim appointments … will ensure we can continue to engage with interested parties on a potential transaction, while continuing to execute our strategy.”
Mr Halliday has held senior finance and commercial roles in Australia and overseas. He has led major strategic initiatives at Caltex over the past 12 months, including the ongoing retail network review and proposed Property IPO, cost-out initiatives, along with playing a key role in the response to the approaches from Alimentation Couche-Tard and EG Group.
“Matthew’s ASX-listed company experience and knowledge of M&A, capital management and transformation make him the ideal candidate to lead Caltex at this time,” Mr Gregg says.
Full year results
The transition follows the announcement of Caltex’s financial results for the twelve months ending 31 December 2019, announced last week.
“Caltex continues to respond to the tough operating conditions with a focus on capital discipline and reducing costs, while also progressing its growth strategies,” Mr Segal said at the presentation.
“The underlying performance of our business has been resilient and we have continued to build on the solid foundations we have in place for future growth.”
Convenience Retail delivered an EBIT result of $201 million The decline from 2018 was attributed to prolonged softness in retail fuel margins, which had an unfavourable impact of $115 million, partially offset by improved shop earnings.
Convenience Retail fuel volumes fell 2.2% to 4.8 billion litres in 2019, which was slightly better than the 2.3 per cent decline in total industry retail fuel volumes. Retail fuel volumes in 2019 were said to be impacted by economic weakness in addition to a more competitive retail fuel market.
Caltex reported that network shop sales grew by two per cent on pcp, driven by strong growth in hot beverages and fresh product categories, with Caltex’s national market share increasing by 0.2 per cent to 20.5 per cent during the year.
During 2019, Caltex continued the transition of franchise sites to company operations, a key enabler of the company’s convenience retail strategy. A total of 112 franchise sites were transitioned to company operation during the year, bringing the number of company-operated sites to 631, with more than 99 per cent of the network to be company operated by the end of 2020.
Update on acquisition proposal from EG Group
Caltex today (March 2) announced it has declined the latest acquisition proposal from EG Group. Announced on February 19, the proposal was to acquire all of the shares in Caltex via a scheme of arrangement for a combination of $3.9 billion cash and securities in an entity to be listed on the ASX which would own the Caltex Fuels & Infrastructure business.
The Caltex Board says it carefully considered the proposal, taking into account the associated risks, costs and complexities. It also obtained advice from its financial and legal advisers and has also considered feedback from Caltex shareholders.
The Board concluded that the proposal undervalued the company and does not represent compelling value for Caltex’s shareholders. However, it has offered to engage further with EG in relation to a potential transaction.
