Plain-text annual report
Z Energy
2023 Annual Report
Hīrangatia
a Aotearoa
New Zealand
Ngā kiritaki, te hapori me te iwi
Whiria
te kaha
Our
context
Z’s collective context is shaped by what we stand for, the choices
we make and why we do what we do.
Our purpose, vision and values are the foundations of Z and our strategy
determines how we create value and deliver against our aspirations.
The issues that matter most to our customers, communities and our
own people round out Z’s collective context, which we capture like this:
Te pūtake | Our purpose
Ō tātou uara | Our values
Powering better journeys,
today and tomorrow
Z has always been purpose- and values-driven. What we stand for and
what we believe in drive the decisions we make and the way we behave.
Over 2023 we revisited our purpose to ensure it tightly aligned with our
operating context and with the broader Ampol Group of which Z is a part.
‘Powering better journeys, today and tomorrow’ succinctly captures our
commitment to delivering value for our customers and our economy today,
as well as through the transition to a lower carbon energy future.
The word ‘better’ is a simple word that encapsulates so much of our
aspiration. It reflects our commitment to delivering value now – safe,
secure, reliable transport energy – with the opportunity to deliver journeys
with new energy solutions in a changing world.
Te oatī | Our brand promise
Z is for Aotearoa New Zealand
The foundation of Z’s brand has always simply been
‘Z is for Aotearoa New Zealand’. This has never changed and
is a foundation for why we exist and the choices we make.
Tū kaha | Stand out
We believe we can build a better business
and a better world.
We are distinctive where it really matters.
We challenge the status quo by being bold,
innovative and passionate. We work relentlessly
to be a force for good for our communities, our
economy and our planet.
Tū māia | Speak up
We believe extraordinary outcomes are fueled
by active participation and dialogue.
We speak up with courage around what’s important
to us and encourage others to do the same.
Tū kotahi | Side by side
We believe learning and growing together
delivers unlimited potential.
We’re better together – holding each other up as
well as challenging ourselves to grow and develop.
Side by side we build trusted partnerships with our
people, our customers and our communities.
1
Ngā take matua
Our material issues
Affordability /
cost of living
Safety and
wellbeing
Te rautaki
Our strategy
Powering better journeys,
today and tomorrow.
Security of
fuel supply
Climate change /
energy transition
Each of these material issues is explored in more detail on pages 10-11.
2
3
Te pūrongo
o te wā
About this
report
Rārangi
ūpoko
Contents
Z biodiversity fund project:
Puhinui regeneration
Tāmaki‑makau‑rau / Auckland
This report covers Z’s environmental,
social and governance (ESG)
commitments. Z is no longer required
to report against the NZX Corporate
Governance Code, but continues to meet
other legal disclosure requirements,
including the NZX Debt Market Listing
Rules while Z is an issuer of listed bonds.
Z will also publish its first climate
statements under the mandatory
Aotearoa New Zealand Climate Standards
on 10 April 2024. Z is a Climate Reporting
Entity (CRE) under the Financial Markets
Conduct Act 2013 (FMC Act). CREs are
required to publish climate‑related
disclosures from financial years
commencing on or after 1 January 2023,
in accordance with climate standards
published by the External Reporting
Board (XRB).
A link to where Z’s climate statements will
be published is contained on page 13.
This report should be read alongside
Ampol Group’s annual report, which
reports for the Group against Global
Reporting Initiative (GRI) standards.
This report is organised around Z’s four
organisational stands and provides an
overview of the five strategic priorities of
Z’s new business strategy.
We have a clear purpose:
Powering better journeys,
today and tomorrow.
This year’s report is based around the
ambition: Aspirational for Aotearoa
New Zealand, our customers, our
communities, and our people. It reflects
the importance of Z remaining
aspirational for the future of Aotearoa
New Zealand while supporting our
customers, our communities and our
own people.
We are highlighting this aspiration
during a period in which Z has made
contributions to communities struggling
with extreme weather and, through
our Good In The Hood community
investment programme, to those who
support communities in need.
Implicit in this ambition is the support
and leadership Z aims to provide
in the transition to a low carbon
energy future, while providing a
safe and reliable supply of energy
to New Zealanders today.
Z has reported
to its customers,
communities,
and wide range of
stakeholders since
the company was
formed in 2010.
Across the stakeholder universe, interest
in Z and the transport energy sector
continues to increase. At a high level,
stakeholder interest in Z is driven by
its opportunity to support and enable
customers’ transition to a low carbon
future; to ensure the resilience of the
fuel supply chain; to ensure the secure
operation of the national and regional
economies; and to protect the safety and
wellbeing of people.
Z has been an early adopter of integrated
reporting . We believe this is the most
transparent form of reporting and places
an appropriate weighting between past
performance and the company’s strategy
for creating future value.
This report covers Z’s financial year
to the end of December 2023. Where
comparisons are made with the previous
reporting period, these will be for the nine
months ending 31 December 2022. This is
the first annual report for a full financial
year with Z a part of the Ampol Group
following Ampol’s acquisition of Z in 2022.
Z carries out the New Zealand business
of Ampol Limited, which is classified
as a foreign exempt issuer under the
NZX listing rules.
Table of contents
4 CEO’s report
8 Our numbers
10 Stakeholders’ most material issues
12 Our business model
16 Our strategy
18 Z On‑the‑go
19 Z Experience
20 Z at Home
22 Z for Business
23 Z Fuel Supply
26 Our stands
28
Environmental sustainability
and Community
38 Safety and wellbeing
40 Diversity and inclusion
44 Our people
48 Financial statements
75 Auditor’s report
80 Additional disclosures
86 Appendix 1: Materiality
88 Appendix 2: Connectivity
93 Company directory
4
Te pūrongo a
te kaihautū
CEO’s
report
We are aspirational
for Aotearoa
New Zealand,
our customers,
communities
and people.
Thirteen years ago, Z Energy was
born with the simple promise of ‘Z is
for Aotearoa New Zealand’. We took
a global oil brand and made it our
own – capturing our company’s local
ownership, independent spirit, and
unique Kiwi values.
While we have faced constant change and
evolution over this time, our commitment
to Aotearoa New Zealand has remained
constant: a foundation for why we exist
and the choices we make.
5
Z Mount Maunganui Terminals
Mauao / Mount Maunganui
Powering better journeys,
today and tomorrow
The 2023 financial year has been an
important one for Z. We have successfully
completed our first full year as an
integrated part of the Ampol Group
– a truly independent trans‑Tasman
energy company.
There is much that Z has in common
with Ampol: as proudly independent
market leaders in their respective
countries, both have long histories in
the transport energy industry going
back well over 100 years, and both have
developed strong, trusted brands in
developing transport energy solutions
for their customers.
Z is part of an independent regional
transport energy company with the
scale and capability to deliver value for
customers and support them in their
energy transitions.
We can set our own direction, make our
own choices and stand for a different
future. We now work together as one
company, using our collective scale,
capability and resources to deliver
against our shared purpose of ‘powering
better journeys, today and tomorrow.’
Making informed choices
about our future
In 2023, Z completed a four‑year
strategy phase which has successfully
optimised our business and our assets to
enable future growth across a changing
energy landscape.
Through the choices we have made in
the past, we are well positioned for the
future. A reconfiguration of the domestic
liquid fuel supply chain enables us to
match supply with demand and provide
the flexibility to move quickly as our
customers’ demands change. We continue
to invest in the optimisation of the fuel
supply chain to ensure it operates as
safely and efficiently as possible and can
continue to support our customers and
economy as we move through what will be
a decades‑long energy transition.
Z’s journey over the last 13 years has
included multiple phases of strategy,
iterations of ownership and different
leadership, all of which combine to bring
us to this point in time. We have been
preparing for the energy transition and
we have the ability to flex with it.
Underpinned by strong past financial
performance from a tightly focused core
business, Z has developed a refreshed
strategy which aims to deliver as
customer demand evolves and grows.
Delivering energy solutions
for tomorrow
Z’s strategy is anchored in what we
call the ‘world of both’: supporting our
customers and our economy with the
fuels they need, while providing the
products, offers and energy solutions
when customers are ready to make
different energy choices.
Electrification will be a core element
of Aotearoa New Zealand’s energy
transition. Strategy decisions made more
than five years ago now position Z to
deliver customer value in unique ways.
In 2018, Z bought a majority share in
electricity retailer Flick Electric (Flick),
and in 2023 took 100 percent ownership
of Flick. The early years of Z’s ownership
of Flick were challenging, with wholesale
electricity market conditions negatively
impacting the business. Flick has
now become integrated into the
Z business and is one of the country’s
fastest‑growing electricity retailers.
We are beginning to deliver new low
carbon energy solutions directly into
customers’ homes and Flick is an
important platform for Z’s future growth
in electricity. As an example, we have
launched an innovative new bundled
electricity offer targeted at EV owners.
Flick also demonstrates our commitment
to harnessing the power of digital
technology to benefit customers.
We are proud to be developing energy
solutions for EV owners on the road,
with 104 high‑capacity EV charging bays
across the Z network and counting. Z has
partnered with innovative Kiwi companies
like Red Phase Technologies to assist in
the rollout of EV charging solutions.
6
CEO’s report
7
Meeting Kiwi needs on-the-go
Z also continues to invest in its retail
network. Over the year Z continued to roll
out a major retail site refresh programme,
including an upgraded convenience retail
and high‑quality coffee offer.
Our convenience retail capability has
evolved over the Z journey. Z now sells
over six million cups of coffee per annum.
We continue to invest in our digital
capabilities with an increasing number of
coffee sales now made through Z’s App.
Our convenience retail contribution is
an increasingly important part of Z’s
financial performance.
We continue to invest in a clear and
consistent Z brand story that connects
with customers and will continue to
reward our customers for their loyalty.
Z’s convenience offer will benefit from
changes in customer needs associated
with the growth of on‑the‑go EV charging.
The development and commercialisation
of low carbon energy solutions is an
area where the independence and
trans‑Tasman scale of the Ampol
Group can be of particular value to
Z’s commercial customers. Over 2023,
we have created a combined Energy
Solutions team that aims to provide
leading solutions in the energy transition
for our customers and key markets.
Safe and reliable operations
The interconnectedness between people
and our planet works both ways. We must
protect our planet in order to sustain
people, but I also believe we cannot care
for our environment if we do not care for
our people.
It is a challenging time for Kiwi in the
tough economic conditions we are seeing.
Z will continue to invest in the support,
training and technology to keep our
people safe and we ask that you treat all
of our people with respect all of the time.
Alongside the safety of our own team,
Z has a responsibility to the safety of our
customers and the communities we serve.
A foundation of powering better journeys
is safety and reliability.
Last year provided significant challenges
in keeping our people safe. Z’s response
to Cyclone Gabrielle and the speed
at which we restored fuel supplies
to affected communities reflects the
capability of our people, the resilience of
our supply chain and our commitment to
those communities.
Building on this ability to deal with the
challenges of natural disasters and having
the right plans and capabilities in place to
support communities in times of need is
an explicit priority for Z.
Z has everything to work for
Whaowhia te kete mātauranga –
seize every chance to learn.
One year into this role as Chief Executive
of Z, this whakataukī, Māori proverb,
sums up an approach that has guided
me stepping into this role and the
responsibilities that come with it.
While I have been a part of Z since
2010, I have always been driven by the
opportunity to learn more and encourage
learning in others. The Z team I lead will
seize the opportunity to learn more and
partner with others; the transition to a
low carbon economy requires partnership
and collaboration between customers,
businesses and government.
We will only succeed when we all play our
part and work together to help each other.
This annual report is based around Z’s
values and purpose, which continue to
drive the choices we make, what we stand
for and how we behave.
The choices we have made in the past
have set us up for success. We have
the right strategy, the right people,
and the key skills and capabilities we
need to deliver for our customers and
our economy.
Ultimately, our success will be determined
by how we deliver for our customers
today while enabling Kiwi households
and businesses to transition to a low
carbon future.
Our success will be
determined by how
we deliver for our
customers today...
I want to thank every person who has
been a part of the Z journey for the last
13 years, and beyond, who have created
our foundations. I want to particularly
thank the people on the frontline of our
business who serve our customers every
single day and who bring to life what it
means when we say, ‘Z is for Aotearoa
New Zealand’.
Lindis Jones
CEO
...while enabling
Kiwi households
and businesses to
transition to a low
carbon future.
8
Ngā
raraunga
Our
numbers
9
Z biodiversity fund project:
seed island trial
Te Matau‑a‑Māui / Hawke’s Bay
Highlights
12 months to 31 December 2023 results
$115m
3.09cpl
Replacement cost net profit after tax
Replacement cost net profit after tax per litre
9 months to 31 December 2022 comparison
9 months to 31 Dec ’22: $62m
9 months to 31 Dec ’22: 2.3cpl
55.8 million
transactions
Total transactions on Z-branded retail sites
9 months to 31 Dec ’22: 41.4 million transactions
3,726 million
litres
Total fuel volume Retail and Commercial
9 months to 31 Dec ’22: 2,672 million litres
$337m
Replacement cost EBITDAF
9 months to 31 Dec ’22: $254m
$103m
Net capital expenditure
9 months to 31 Dec ’22: $94m
$16m
Statutory net profit after tax
9 months to 31 Dec ’22: $108m
645MWh
Megawatt hours sold through EV charging network1
9 months to 31 Dec ’22: 22.8MWh
2,235
Z direct employees, contractors and
retail network members
9 months to 31 Dec ’22: 2,275
18%
+69
Brand preference (Aotearoa New Zealand)
Employee net promoter score3
9 months to 31 Dec ’22: 19%
9 months to 31 Dec ’22: +57
81%
+72
Safety and wellbeing actions close out rate
Employee wellbeing net promoter score4
9 months to 31 Dec ’22: 66%
9 months to 31 Dec ’22: +73
+73
Safety leadership net promoter score2
9 months to 31 Dec ’22: +72
12.9 million
tonnes
Total carbon footprint – carbon dioxide
equivalent (tCO2-e)5
9 months to 31 Dec ’22: 9 million tonnes
1 Hours sold through Z’s EV charging network were expressed in kilowatt hours in the previous report,
these are now expressed in megawatt hours.
2 A Safety leadership net promoter score of +73 places Z in the top five percent of companies globally,
and is an indicator of Z’s culture of safety leadership.
3 An Employee net promoter score of +69 places Z in the top five percent of companies globally.
4 An Employee wellbeing net promoter score of +72 places Z in the top five percent of companies globally.
5 Z’s total carbon footprint includes the Scope 1, 2 and 3 emissions as identified in the Greenhouse gas
emissions table on page 31.
10
Ngā take matua ki
ngā kaiwhakangao
Stakeholders’ most
material issues
11
Z Napier Terminal
Ahuriri / Napier
Materiality simply means
the most material issues
affecting an organisation’s
ability to create value in the
short, medium or long term.
Z engages continuously with stakeholders in both a structured and a day-to-day way and
records feedback and themes from engagements. This is how we remain connected with our
stakeholders’ most material issues.
Pages 86 and 87 detail who Z’s primary stakeholders are, how we engage with them and their
areas of material interest over the year.
Z’s four most material issues
Z’s experience over 2023 is that
stakeholders, including customers and
the public, are feeling more intensely
about the issues that concern them.
While there are fewer issues of general
concern than in previous years, there are
four main issues that are interconnected
and felt with increasing concern.
Affordability / cost of living
Climate change / energy transition
Safety and wellbeing
Security of fuel supply
Affordability /
cost of living
Climate change /
energy transition
Safety and
wellbeing
Security of
fuel supply
The 2023 year has been a challenging one for many businesses, families and
communities. The Aotearoa New Zealand economy has been under pressure,
with stubbornly high inflation driving sustained cost-of-living increases.
Alongside increased costs of staples such as fruit and vegetables, fuel prices have also
continued to be at historic highs. These increases have been driven by higher crude
oil prices, constrained supply, and ongoing geopolitical events and a soft Kiwi dollar
against the US.
In aggregate, the emissions from the fuels that Z sells and which are then used by our
customers are one of the country’s single biggest sources of transport emissions.
Z’s Greenhouse Gas (GHG) emissions table can be found on page 31.
It is also important that we acknowledge the challenges in the ‘energy trilemma’ – both
for ourselves as an energy supplier and for our customers. The energy trilemma requires
the balancing of three objectives: energy security, affordability, and emissions reductions.
We believe that providing a safe and inclusive place for site staff and customers
matters. Unfortunately, the economic pressures facing the country over 2022–2023
have had safety and wellbeing consequences – for our customers who may be
struggling to make ends meet and to our frontline teams who serve them.
Over the last five years, Z has invested over $33 million in site security and introduced a
number of initiatives to support our staff including a framework designed to protect our
site teams called ‘We’ve got your back’.
Z is always mindful of our responsibilities to the country and to local communities as a
lifeline utility provider and an essential service. Following Cyclone Gabrielle, Z performed
well in rapidly re‑establishing fuel supplies to communities impacted by extreme weather.
We continue to invest in our capabilities to respond quickly and effectively to a wide
range of scenarios in order to ensure we can keep communities, customers and local
economies moving.
As with the price of fuel, stakeholders remain consistently interested in ensuring a
continuous, reliable, and safe supply of transport fuels across the country. Security of
fuel supply, particularly under adverse weather or emergency conditions, is
fundamentally linked to the safety and wellbeing of the communities we serve.
Having operated since April 2022, the import‑only liquid fuel model is now well
embedded. The new supply chain is more flexible, efficient, and responsive than the
previous Aotearoa New Zealand refinery‑based model.
With Z a part of the Ampol Group, we have integrated our fuel supply chain into a regional
fuel company of meaningful scale. This has built additional flexibility, resilience, and
control into our supply of transport fuels for Aotearoa New Zealand, and we have seen the
strength of the Group in practice to support resilience over the last year.
Overall, Z’s position is that the new supply chain delivers robust security of fuel supply
and much greater supply flexibility. We do not believe there is a need for legislation on
a minimum fuel stockholding obligation, but will continue to work constructively with
officials to ensure the obligation achieves its purpose of increasing fuel resilience with
limited impacts on consumers.
12
Tō tātou
anga pakihi
Our business
model
Z continues to base its business around six
areas of input and performance. These six
elements directly underpin Z’s strategy
and are increasingly interconnected.
13
Z Lyttelton Terminal
Riritana / Lyttelton
Our assets and
supply chain
Our assets and supply chain are the
heart of our business. They enable us to
create ongoing value for customers, run
a profitable business and deliver secure
and safe transport energy fuels to our
national and regional economies.
Our assets and supply chain provide
the base from which we support our
customers in their energy transitions.
Z is one of the country’s leading transport
energy companies. We own and operate
a network of strategically located assets
at genuine scale across the country,
providing commercial refuelling stations,
retail service stations and bulk fuel
storage terminals across the country.
Z has scale in the domestic market.
We manage around 40 percent of the
country’s bulk fuel terminal storage
by volume and in 2023 Z integrated its
supply chain with Ampol’s. This has
improved Z’s fuel supply chain capability.
Combining with Ampol’s shipping and
trading functions has resulted in Z being
able to provide greater flexibility and
security of supply for our customers.
We will continue to refine the operation
of our supply chain in service of greater
efficiency and security of supply to
Aotearoa New Zealand’s economy.
Our
finances
Z runs a profitable business and we
continue to operate with a focus on
capital discipline in order to ensure
profitability, the ability to invest in
growth and remain a viable business.
As part of the Ampol Group, Z benefits
from being part of a much larger
organisation. In addition to increased
financial strength, Z also benefits
from access to a much larger set of
capabilities. Together, these enhance
Z’s ability to deliver reliably and bring
increased confidence to invest for growth.
Delivering on our commitments to our
communities as well as our environmental
commitments requires Z to first be
profitable. Transforming Aotearoa
New Zealand’s supply chain to exit the
crude oil supply chain and domestic
refining has reduced earnings volatility
and significantly improved supply chain
security and flexibility.
In progressively optimising the company’s
assets, balance sheet and supply
chain, over 2023 Z has delivered strong
financial performance, grown its market
share as at September 2023 in respect
of Z’s and its subsidiaries’ retail and
particularly wholesale channels, and
invested in adjacent parts of the business
that represent future energy options –
for example, Flick.
Our people
and culture
We know how critical our people and
culture are to our success, and our work
in this area continues to be a priority.
This continued commitment of our
people and our culture has seen team
engagement remain at globally high
benchmark levels during a year of
ongoing change. Ampol’s ownership of
Z has created multiple opportunities
for growth and personal development
across the Z team: in exposure to regional
supply and energy trading functions, in
continually optimising the regional supply
chain and in working together on low
carbon energy solutions.
We continue to prioritise the wellbeing
and personal development of our people.
We remain focused on building a diverse,
representative workforce that provides
Z with a wide range of experiences,
perspectives and skills that will drive
unique commercial performance.
We continue to progress our commitment
to diversity, inclusion and belonging
at Z. We continued to lift our Māori
and Pasifika representation and are
excited to have a newly appointed leader
responsible for building our internal
and external Māori capability, our
Kaihautū Māori.
We are also preparing our first climate
statements in accordance with the
Aotearoa New Zealand Climate Standards.
Once published on 10 April 2024,
Z’s climate statements will be found at:
https://www.z.co.nz/about‑z/corporate‑
centre/
Our place
in Aotearoa
New Zealand
Z’s place in Aotearoa New Zealand
is important.
Z is one of the leading transport energy
companies in the country. We play a
critical role in the safe and secure supply
of the transport fuels which are the
economy’s lifeblood.
As adverse weather events become more
common, we are increasingly focused on
the resilience of our operations, and our
response capabilities, to continue to serve
our customers and communities.
Over 2023, Z reviewed the Good In
The Hood community contribution
programme and made changes to
better support communities that need
more help, particularly communities
experiencing particular hardship.
Our
environment
Z’s strategy has been squarely focused
on getting to this point: a safe, optimised
fuel supply chain that delivers customer
value and supports the economy;
a profitable core business; and the skills,
capability, and resources to drive growth
through supporting customers on their
journey to a low carbon economy.
While providing the fuels our customers
and economy need, we are also
increasingly offering diverse new energy
solutions – EV charging in the home and
on the road, innovative electricity offers,
investigating alternative fuels for heavy
vehicles and Sustainable Aviation Fuel.
Over 2023, Z also bought the remaining
shares in Flick, bringing the organisation
wholly into Z. Flick is an integrated and
important part of the Z business strategy
and is growing its customer base.
Z continues to invest at least $1 million
annually in partnerships to enhance
indigenous biodiversity and nature‑based
carbon sequestration. In addition,
Z voluntarily finances climate change
mitigation actions resulting in emissions
reductions equivalent to its residual
annual operational emissions.
14
Our business model
15
Z’s investment in
its capabilities in
a changing energy
landscape directly
support its strategy.
Our
capabilities
Z’s capabilities have been deliberately
designed to set the company up
for success at this point in time.
Over the last five years in particular,
Z’s investment in the capabilities
it needs in a changing energy
landscape now directly support the
company’s strategy.
We are growing our presence
as a domestic retail electricity
provider, through providing both
an at‑home EV charging plan and a
fuel‑rewards‑at‑home electricity plan.
Z was the first retail fuel company in the
country to install an EV charger on site,
and we have progressively built our public
EV charging infrastructure at Z sites on
some of the country’s most strategically
important transport routes.
In all of this work we are supported by
the scale, resource and capability of the
broader Ampol Group. This depth and
scale is a significant advantage as we
collectively support the development of
low carbon energy options.
We have also benefited from the depth of
Ampol’s regional supply chain expertise,
together building a stronger, more
resilient liquid fuel supply chain for
Aotearoa New Zealand. In standing for
a strong Kiwi brand, we saw particular
growth in our wholesale market share as
at September 2023, and are continuing
to deliver strong performance across a
widening customer base.
Z is also realising the benefits of
previous sustained investment in brand
development and convenience retailing.
These capabilities are inter‑related
and support our move into new energy
markets as well as supporting an evolving
convenience retail business.
One of the core areas where Z has
transformed its business and created
critically important capabilities is in
building a truly digitally enabled business.
Z has embedded digital processes in its
operational risk management system,
enabling a much more data‑driven
and responsive approach to safety
management, as well as consolidating
core business systems and moving them
into the cloud.
Over 2023, Z refreshed the Z App,
which is increasingly driving customer
purchasing decisions and delivering
improved financial performance. Z’s fuel
forecasting and scheduling are all done
though digital tools which are again
driving increased operational efficiency.
Z’s performance is increasingly
underpinned by its commitment to
leadership as a core capability.
Over 2023, Z continued to develop its
leadership framework which, among other
things, recognises that every person in
Z is a leader. The commitment to strong,
distinctive leadership, supported by
a clear framework and a commitment
to agile work practices, provides an
important foundation for Z as it continues
to evolve and move into new areas
of business.
16
Te rautaki
Our strategy
17
Z Timaru Terminals
Te Tihi‑o‑Maru / Timaru
Refining our strategy
Between 2019 and 2023, Z delivered
against a four-year strategy programme
that generated a new industry
structure, a reconfigured liquid
fuel supply chain and an optimised
network and customer offer.
While the previous four-year strategy has prepared Z for the
energy transition, Z’s new strategy provides the opportunity
to grow through supporting customers in their own
energy transitions.
Over 2023, Z has continued
to balance its responsibility
as one of the country’s
leading transport energy
companies to deliver against
the challenge of the energy
trilemma: to safely and
reliably deliver the affordable
energy our customers and
our economy need, while
supporting the transition
to a low carbon future for
Aotearoa New Zealand.
We believe we can do all of these things,
if we are well supported by clear and
effective policy and regulatory settings.
We have the key capabilities needed
to help deliver the transition to a low
carbon economy. We have the assets,
infrastructure, independence, and scale
we need to create strong, sustained
commercial value.
Ultimately, our customers are
instrumental in determining the energy
future they need, and this is where
we have less control and significant
uncertainty remains around the speed
of transition. As conventional transport
fuels are replaced with lower carbon
alternatives, we aim to continue to
innovate and build on the work we have
done over the last decade to meet the
changing needs of our customers.
We aim to deliver against this strategy
by focusing on four key enablers:
• Continue to evolve our culture and
capabilities to meet a changing
business context
• Fund growth initiatives through cost
and capital efficiencies
• Transform our data and analytics
capability in service of better
decision‑making
• Ensure our risk management is fit for
purpose in a rapidly changing context.
Z’s strategy is focused on five strategic priorities Z On-the-goWe will have a retail network that is best placed to deliver energy and convenience retail choices to Kiwi customers on the move. Z at HomeBringing smart energy choices into people’s homes.Z for BusinessDelivering value for business customers by meeting various energy needs and supporting their decarbonisation journeys.Z ExperienceBuilding the loyalty of valued customers by delivering value, ease, new offers and increased recognition.Z Fuel SupplyContinuing to generate value through scale, efficiency and integration of supply operations. 18
Our strategy
19
Z On-the-go
Site and customer offer refresh
Z continues to invest in its brand and
the customer experience at its retail
stores. Z’s retail site refresh continued
at pace over 2023, presenting a cleaner,
more modern and consistent offer
for customers.
Core to the refreshed offer is a
higher‑quality espresso coffee offer,
with trained baristas using group handle,
manually operated espresso machines
to deliver a very high‑quality coffee
experience. Z sold six million cups of
coffee in 2023 and expects to continue
to grow this number.
Z has now completed 32 retail site
refurbishments across the country and
has another 35 to complete over 2024.
Site refurbishment and transformation
and promotion of the new customer offer
is an area where Z is benefitting from
increased capability.
Z will continue to invest in its convenience
customer offer, including progressively
offering new products and services over
2024. Convenience retail is a core part of
the business, as customers diversify from
those seeking meals on‑the‑go to those
charging their EVs.
Driving the EV transition
Z has emerged as a leader in providing
high‑quality, on‑the‑go charging for
EV owners. Previous strategic decisions
to optimise Z’s retail site network means
we have high‑quality sites in key areas of
the state highway network.
These sites are where EV travellers
are increasingly looking to recharge
– both their vehicle and, at the same
time, themselves. Z is seeing a high
conversion rate of people using Z EV
chargers also buying convenience retail
products. The continued evolution of
the Z convenience offer, combined with
more EV chargers being installed at
Z sites, represents important revenue
diversification opportunities as we
develop new ways to serve changing
customer needs.
Z installed 82 EV charging bays over
2023, taking the total to 104. These sites
will provide important major route
coverage and options for the increasing
number of light passenger EV owners.
Z aimed to reach EV charging capability
across 20 percent of its retail network by
the end of 2023. Z substantially achieved
this target, while installing more EV
charging bays at sites where current
demand is higher in order to better serve
its customers, rather than on new sites
simply to meet its goal.
Red Phase partnership
In September 2023, Z started a trial of
an innovative, domestically produced
EV charger at the Z Waiouru retail site.
In partnership with local EV charger
manufacturer Red Phase, and
supported by lines company Powerco
and the Energy Efficiency and
Conservation Authority (EECA), the
four 200kW charging bays provide an
ultra‑high‑speed charging experience.
Napier‑based Red Phase uses an
innovative technology that helps the
EV charging infrastructure use power
more efficiently and reduces pressure
on the local electricity network.
This technology should enable EV
charging infrastructure to be rolled out
more efficiently by avoiding costly and
time‑consuming upgrades.
Charging with an old
bus battery
Z has partnered with Zenobē, an EV fleet
and battery storage specialist, to trial a
new EV charging solution, thanks to an
old bus battery.
The trial at Z Tom Pearce Drive in
Auckland, uses a portable, refurbished
electric bus battery, which acts like
a giant power bank on the forecourt.
The battery has the ability to charge
two cars at once via 75kW CCS/
CHAdeMO chargers.
This innovation adds EV charging
capacity to Z Tom Pearce Drive – albeit
currently at a relatively slow charge
rate – without the need to upgrade the
electricity network to cope with the
increased demand. Additional benefits
include the possibility to provide EV
charging infrastructure to areas where
upgrading the network and installing
a DC charger would be impossible
or prohibitively expensive, as the
battery can be transported on the
back of a flatbed truck and delivered
almost anywhere.
Z Experience
Customer purchase patterns have
fundamentally shifted from the
Covid‑19 lockdown of the early 2020s;
probably permanently.
Working from home remains common
and customers are looking for different
ways of being recognised for their loyalty.
In 2024, Z will develop new ways to
reward customers in ways that they value.
Z has always believed that delivering real
convenience is key to earning loyalty,
and our digital capabilities deliver for us
here in meeting customers where they
are. For example, a growing number of
customers save time by using the Z App
to pre‑order and pre‑pay for their coffee
and we have their drinks ready to go
when they drive up to their selected
retail service station.
While Z’s convenience retail offer
continues to deliver growth, customers
are also embracing Z’s digital payment
options that deliver speed and
convenience. Growth in customers
choosing to use digital payment options
like pay at pump and pay by plate have
increased strongly year‑on‑year.
We measure the strength of the Z brand,
which continues to perform strongly,
based on our promise of ‘Z is for
Aotearoa New Zealand’. Z is continuing
to refine its brand strategy to deliver
a more consistent voice, message and
customer experience.
20
Our strategy
21
Z at Home
Z’s strategy is about delivering increasing
value through its retail, commercial and
supply chain assets at the same time as
moving into new growth markets. As the
economy becomes more dependent on
electricity, Z is now well positioned to
grow into this market as the 100 percent
owner of innovative electricity
retailer, Flick.
In 2018, Z bought a 70 percent stake
in Flick. Towards the end of 2022 this
stake had increased to 95 percent, and
in April 2023 Z purchased the remaining
shares to take 100 percent ownership.
Initially, the Flick acquisition was
challenging, particularly in 2018–2019,
as wholesale electricity prices rose
sharply and stayed high for a sustained
period, significantly disadvantaging
independent retailers.
However, the rationale for the acquisition
and the capability that now exists inside
Z has been demonstrated with Flick now
representing an important strategic
growth opportunity for Z.
Flick, with a team of approximately
90 people, is now based in Z’s
Wellington offices and is growing
as a small, independent, integrated
technology‑based company with the
ability to deliver a range of energy
solutions in customers’ homes.
Over 2023, Flick’s customer numbers
increased 40 percent.
EV charging image provided by Evnex.
A unique customer offer
Flick is a growing disruptor in an
electricity market dominated by large
incumbents with inherited electricity
generation assets. It’s a challenger to the
model of locking customers into contracts
that provide bundles of services with
sharp penalty clauses.
Flick has award‑winning local customer
service, fair, transparent prices and no
fixed contracts or exit fees. Every three
months, Flick will also review whether
customers are on the best plan for them.
If a customer can save money by being
on a different plan, Flick will notify them
and with the click of a button move the
customer to the best plan for them.
While growing in the domestic electricity
market, Flick is a small business
with potential.
For the vast majority of EV drivers, this
offer equates to providing customers
with free transport energy and
further increases the attractiveness
of EV ownership. It’s an example of an
innovative partnership and supports
Kiwi in their move to more sustainable
energy sources.
New EV charging offer
for homes
With low consumer demand for electricity
in the middle of the night, the team turned
its attention to how it could deliver a
unique customer offer that could give
EV owners better value transport energy.
With the support of Flick, Z brought
to market a new Z‑branded residential
electricity offer. A compelling part of the
offer is an option to bundle and install a
smart EV charger from Z’s new partner,
Evnex, a Christchurch‑based domestic
EV charger manufacturer.
Customers on the EV at home plan can
access an energy offer that provides
three hours of free electricity per day
between 3am and 6am (the free hours
are not applicable for any separately
priced controlled meters such as for
hot water) and optionally can get an
Evnex charger installed and bundled
into their electricity plan. These three
hours of free electricity can be used to
provide up to 120 kilometres of driving
range for a typical EV that is charging
during these times – this is based on
using an Evnex 7.4kW smart charger and
achieving 40 kilometres per hour of range
equivalent from charging, noting actual
rates can vary based on a number of
variables including the customer’s car.
22
Our strategy
23
Z for Business
Our commercial or business-to-business
customers have always been an
essential part of our business.
Half of our total fuel volumes keep
trucks, couriers, planes, ships,
businesses, emergency services and
our agriculture sector moving.
These customers are critical to our
economy. Our strategy is committed
to continuing to deliver value for
them as we also look to support their
decarbonisation journeys.
Our priority is to continue to support
our customers with the secure, safe and
competitively priced transport fuels
they need, while working to understand
opportunities for the development of
replacement fuels.
Sustainable Aviation Fuel
Globally, aviation is responsible for
around two percent of global CO2
emissions, and jet fuel is a stubbornly
challenging product to replace with
alternatives given the high volumes and
rigorous global safety standards that
must always be met.
In June 2023, the then Minister for
Tourism announced that Government, in
conjunction with Air New Zealand, was
co‑funding two feasibility studies to test
the viability of establishing and operating
a domestic Sustainable Aviation Fuel
(SAF) facility in Aotearoa New Zealand.
In one of these feasibility studies, Z is
partnering directly with LanzaTech and
LanzaJet, focusing on the potential to
use forestry residue as a feedstock in the
production of SAF.
Z had previously examined the role of
wood waste in renewable fuels around
10 years ago, and while this was seen
as technically feasible, Z elected not to
pursue this noting the then‑challenges
of being able to produce and supply
sufficient volumes economically.
Recent changes to regulations associated
with forestry harvest and advances
in technology mean that this position
should be reconsidered. This project will
continue through 2024.
Hydrogen and
decarbonisation
Hydrogen holds promise as an important
fuel, both for the future of aviation as well
as for heavy transport.
Z continues to maintain a watching
brief on hydrogen as a possible clean
fuel for heavy transport and is building
partnerships with potential providers.
Z Fuel Supply
At the heart of Z’s previous four-year
phase of strategy was optimising the
company’s supply chain and safely
and successfully transforming it from
a refiner of crude oil into an exclusive
importer of refined transport fuel.
Z’s supply chain, including its distribution
and storage assets, is the core of the
business and again lies at the heart of
Z’s new strategy. It is what enables the
company to create value, supply fuel to
power the national economy, and keep our
customers moving.
We have transformed our supply chain over
the last two years into one that is more
efficient, resilient and flexible. In integrating
with Ampol’s regional fuel supply chain
we now benefit from much greater scale
and expertise, including from Ampol’s fuel
trading and shipping functions.
This scale and integration with the Ampol
Group directly contributes to greater
supply security for Aotearoa New Zealand.
The transformation of Z’s supply chain has
been a highly strategic and very carefully
planned exercise. On 1 January 2023, we
shifted 30 percent of Z’s total supply to
Ampol from a Korean supplier and on
1 April 2023 the remaining 70 percent of
volume was cut over to a Z contract with
Ampol Trading and Shipping.
Z is now a part of a large, integrated,
regional and independent liquid fuel supply
chain that covers Australasia. The financial
value coming from the efficiency and cost
benefits of integrating Z’s and Ampol’s
supply chains have been realised and
the Z and Ampol supply teams have built
strong collaborative relationships.
Future supply opportunity
While Z has successfully optimised its
supply chain, including realising the
security of supply and commercial
benefits of the transformation, Z’s
supply chain is constantly evolving.
It represents an ongoing opportunity to
create additional value through constant
fine‑tuning and reconfiguring to meet
changing customer demand patterns for
different fuels.
There is further opportunity and work
underway to continue to optimise the
efficiency of the supply chain, including
through using digital forecasting tools to
match shipping movements with demand,
scheduling different sized ships into
different ports, and shifting the mix of
different products at different ports to
match market demand.
Market share
Z holds around 40 percent of Aotearoa
New Zealand’s total bulk fuel storage.
In moving to an import‑only supply
chain and choosing to operate its own
terminals independently outside of
industry joint ventures, Z has focused
on the opportunity to use its commercial
assets to grow its wholesale fuel volumes.
In moving away from domestic refining
of crude oil to an import‑only liquid fuel
supply chain, Z is now able to adapt
and transition much faster in line with
changes in customer fuel demands.
By September 2023, Z’s market share
reached approximately 45 percent,
supported by strong commercial and
wholesale volumes. Total market share
for Z and its subsidiaries are in respect
of retail and wholesale channels.
Supporting the road transport delivery of
fuel across the country, in 2023 Z signed
a five‑year contract with its primary
fuel haulier. This contract provides
greater security around Z’s road delivery
requirements and provides certainty for
the haulier to invest in their operations.
24
Our strategy
25
Te rārangi
tukutuku
Our supply
chain
Refined fuel imports
There are approximately 83
refined fuel imports for Z per year.
At any point in time there are:
2
imports in Aotearoa New Zealand waters
3
imports en route in international waters
(3 weeks out)
17
imports scheduled (3 months out)
13
imports penciled in (5 months out)
Retail network
189
Z‑branded retail service stations
130
Caltex‑branded retail service stations
82
Z‑branded truck stops, (including 17 private
truck stops for business customers only)
60
Caltex‑branded truck stops
104
EV charging bays, across 37 retail sites
Northland
Taranaki
Manawatū
& Whanganui
Wellington
Auckland
Waikato
Bay of Plenty
Gisborne
& Hawke’s Bay
Z Dunedin Terminal
Ōtepoti / Dunedin
Marlborough
Canterbury
Key
Channel Infrastructure
Refined fuel imports
Pipeline
Depot
Terminal—Z owned
Terminal—jointly owned
Service Stations
Truck Stop
Retail Sites with
EV charging bays
Nelson &
Tasman
West Coast
Southland
Otago
1111666676371607318886189882946885831111666676371607318886189882946885831115113211151132 26
Ngā tūnga
Our stands
Standing for the things
that really matter to us
has always been a part
of Z’s DNA. We stand
for four core areas that,
alongside our values
and purpose, make up
the foundations from
which we operate.
27
Z biodiversity fund project:
blue carbon pilot
Ngāti Tū‑mata‑kōkiri /
Tasman Bay Region
What Z stands for
These four areas inform all of the decisions we make, as well as what we prioritise.
The following pages highlight some core current examples of our work against these stands.
Environmental sustainability We stand for an environmentally sustainable Aotearoa New Zealand that is an example to the rest of the world and an inspiration to Kiwi.Community We stand for a resilient and healthy Aotearoa New Zealand that empowers our communities and Z whānau.Safety and wellbeingWe stand for enhancing the lives of our people and communities. Diversity and inclusionWe stand for fostering an environment of diversity and inclusion that makes it possible for our people to truly be themselves, and deliver on our aspirations for Z.Z’s performance against these four stands can have the greatest impact on the UN Sustainable Development Goals identified below. 28
Our stands
29
Te tiaki Taiao me Te hapori |
Environmental sustainability
and Community
While Z’s strategy is built around continuing to grow
the business through the energy transition and to
support customers on their decarbonisation journeys,
Z’s environmental sustainability stand acknowledges
the interconnection and interdependence between
living things and our natural environment.
Te tiaki Taiao |
Environmental
sustainability
While climate change is beginning
to impact human populations
around the planet, Aotearoa New
Zealand’s indigenous biodiversity
is also at threat from a changing
climate and from land‑use change,
urbanisation and the impact of
introduced species.
How we are tracking on our
outcomes and targets
Here we report our progress in 2023 to achieve the
strategic goals and outcomes of the Community and
Environmental Sustainability Strategy 2030 in relation
to Environmental sustainability, and the action focus
areas that have been defined out to 2025.
Whakahaumanu Taiao | Restore Nature and Wellbeing
Our Goals
Outcomes
2025 Action Focus Areas
Progress
Status
We leverage our scale
and unique capabilities
to foster restorative and
regenerative actions that
have a positive impact
on communities, nature,
and inter-generational
wellbeing.
We bring a circular
economy mindset
to the design of our
business operations
and offerings.
Build capability in circular
economy and showcase
good practice.
Reduce waste and water use
across our operations.
Total waste to landfill was 1,602 tonnes, predominantly from Z retail sites, with a
47% diversion from landfill rate.
We recorded 135,600 kilolitres of water use this year. At least 55 retail sites have
car washes fitted with water recyclers, reducing water use by 65% per wash.
We increase the
resilience of nature
and communities
through our
procurement choices
and partnerships.
Administer our $1 million
Biodiversity Fund.
Leverage supplier
relationships for social and
environmental outcomes.
Z’s initial 2022 pilot with Will&Able and Anchor Milk to provide dedicated
recycling bins at 9 selected Z service stations has been replaced by a larger
trial focused on the Auckland region. Will&Able, a better‑for‑planet cleaning
product brand, is dedicated to employing people with disabilities who can
struggle to find permanent employment elsewhere. The Auckland trial
complements Will&Able’s existing container return scheme, where customers
can return empty Will&Able bottles to Aon branches for reuse, with these
collection bins installed at 39 Z service stations.
This is Z’s second year supporting our three founding partners under Z’s
Biodiversity Fund – The Nature Conservancy, the Sustainable Business
Network and Trees That Count. The mahi, work, supported in 2023 is detailed
on pages 32 to 34.
Z has a Supplier Code of Conduct which sets expectations of all our suppliers
regarding ethical, social and environmental business practices, and provides
a framework for collaborative partnerships that work to enhance our
communities, increase efficiency and reduce our environmental impact.
In 2023, Z renewed contracts with our primary fuel haulier, which include
short‑ and long‑term sustainability targets.
Planting at the Puhinui Regeneration Project
(photo credit: Phil Crawford, Sustainable Business Network)
Key
We’re on track and doing well
We’ve made some good progress but we need to do more
We are not on track and need to do more
Government policy
and the collective
actions of business
are strengthened with
our advocacy and
leadership.
Support the Climate Leaders
Coalition 2022 Ambition
Statement.
Z continues to support the Climate Leaders Coalition both as a member and as
part of the Steering Group. Z transitioned to the 2022 Statement of Ambition in
November 2023, having met the minimum requirements.
Be a valued member of
the Sustainable Business
Council and Sustainable
Business Network.
Z continues its support as an active member of the Sustainable Business
Council (SBC) and Sustainable Business Network (SBN).
Proactively engage with
Government on policy thinking
and implementation of
relevant proposals.
Z submitted on a range of public consultations in 2023, including the National
EV Charging Strategy, the Climate Change Commission’s draft advice to
Government on the Second Emissions Reduction Plan, proposed changes to
the ETS, and submissions in relation to the regulation of electricity distribution
businesses as a member of Drive Electric.
30
Our stands
31
Arahi Whanaketanga | Lead Transition
Our Goals
Outcomes
2025 Action Focus Areas
Progress
Status
Implement ongoing emission
reduction initiatives.
In 2023, Z reduced emissions by 47% from our 2019 baseline, placing Z on a
trajectory to achieving our operational emissions reduction target by 2029.3,4
We will take bold action
in response to climate
change to reduce our own
impact, work with our
customers, suppliers, and
partners to reduce theirs,
and provide solutions that
will enable New Zealanders
to join us on the path to a
low carbon future.
Our operational
emissions are
reduced in line with
the Paris Agreement
to limit warming by
1.5 degrees Celsius.1
Science‑aligned
target: 42% reduction
by 2030.2
Finance voluntary climate
mitigation for unavoidable
emissions.
Support our employees to
reduce their emissions.
Z voluntarily finances climate change mitigation actions resulting in
emissions reductions equivalent to its residual annual operational emissions.
These emissions offsets do not contribute towards any emissions reductions
claimed. Z purchases emissions units generated by emissions reduction or
removal projects that are verified by independent standards endorsed by
the International Carbon Reduction and Offset Alliance (ICROA). A total of
18,550 emissions units (equivalent to tonnes of reduced/removed CO2‑e
emissions) were permanently cancelled to offset our residual operational
emissions for the twelve months to 31 December 2023.
Z supports active and sustainable transport options to help our people reduce
their own emissions including through provision of dedicated cycling facilities
at main office locations and encouraging use of Mevo car‑share.
In 2023, Z engaged a small Wellington‑based company, Hitch, to offer their
app ‘Accelerate’ to Z staff to measure and understand the CO2 impact of their
commute to work. Hitch also worked with Z to run low emissions transport
themed competitions and administer staff surveys to better understand our
people’s commuting patterns and to encourage more sustainable travel choices.
Z now has 20 full battery electric vehicles and 8 hybrid vehicles which
combined represent 67% of the total corporate fleet.
In 2023 Z:
• Installed 82 more EV charging bays, taking the total to 104 bays across 37 of
its Z retail sites
• Supported two business customers in their transition journeys through
strategic advice and provision of EV charging infrastructure
• Launched Z’s EV at Home electricity plan.
While the previous Government dropped the biofuels mandate, Z is partnering
directly with LanzaTech and LanzaJet, focusing on the potential to use
forestry residue as a feedstock in the production of SAF.
Z’s carbon footprint is detailed in this annual report and supported
by Z’s Greenhouse Gas Inventory which can be found at:
https://www.z.co.nz/about‑z/corporate‑centre/
This is the fifth year that Z’s climate‑related risks and opportunities have been
internally assessed and publicly disclosed. Z’s 2023 climate statements will
provide further details – see publication details below.
Z’s climate statements, being prepared in accordance with the
Aotearoa New Zealand Climate Standards, will be published on
10 April 2024 and will be available on Z’s Corporate Centre at:
https://www.z.co.nz/about‑z/corporate‑centre/
In line with the Aotearoa New Zealand Climate Standards, Z has conducted
a new scenario analysis process to test the resilience of the business under
three temperature‑aligned climate scenarios. Details are provided in Z’s
climate statements as referenced above.
More of our customers
are using low carbon
products and services.
We publicly disclose
decision‑relevant
information about our
climate‑related risks
and opportunities.
Meet customers where they
are at on their low carbon
journey by investing in:
‑ Electric Vehicle Charging
Infrastructure
‑ Mobility services
‑ Retail electricity, distributed
energy and storage
‑ Sustainable biofuels.
Measure and publish our
carbon footprint.
Assess our climate‑related
risks and opportunities,
incorporating them into
strategy, risk management and
financial planning.
Disclose information in
accordance with Aotearoa
New Zealand’s climate
standards.
Update and improve our
analysis and disclosures.
Key
We’re on track and doing well
We’ve made some good progress but we need to do more
We are not on track and need to do more
1 Operational emissions include those domestic emissions which Z has the most control or influence over, or both, and can therefore take meaningful action to reduce, including
all Scope 1 and Scope 2 emissions and Scope 3 emissions from business travel, waste and fuel distribution.
2 There is no Science Based Target initiative (SBTi) methodology for the Oil and Gas sector to set emissions reductions targets. Z has set an absolute emissions reduction target
for its operational emissions that is aligned with the SBTi methodology to limit warming to 1.5 degrees. The SBTi tool was used to determine the target parameters using the
‘Absolute Contraction Approach’ for Scopes 1 and 2, extending this to Scope 3 for emissions sources within Z’s operational control boundary (see footnote 1 above).
3 Z’s strategy choices have led to divestments and changes in the way we transport fuel around Aotearoa New Zealand which have reduced Z’s share of Scope 3 operational emissions.
Our focus is now on working with our domestic fuel distributor on options to reduce emissions from trucking and across our retail sites to reduce Scope 2 electricity emissions.
4 Following an assessment to re-baseline our Greenhouse Gas inventory in 2023 to ensure the effectiveness of Z’s operational emissions target, we will review the target in 2024.
Greenhouse gas emissions
Z undertook an assessment to re‑baseline our greenhouse gas inventory and operational emissions target and will review this target for
effectiveness in 2024.
The table below provides a summary of Z’s greenhouse gas inventory and progress made against Z’s emissions reduction target. Z’s full
greenhouse gas inventory is published at: https://www.z.co.nz/about‑z/corporate‑centre
Greenhouse gas emissions – tonnes CO2-e
Scope
Category
Calendar Year
2019
Calendar Year
2020
Calendar Year
2021
Calendar Year
2022
Calendar Year
2023
Direct emissions
Electricity consumption
1,127
3,888
784
3,913
490
3,589
Purchased goods and services
1,562,214
1,351,056
1,278,952
S1
S2
S3C1
S3C3
S3C4
S3C5
S3C6
S3C11
S3C15
Fuel and energy related activities
Upstream transportation
Waste generated in operations
Business travel
Use of sold products
Investments
Total Scope 1
Total Scope 2
Total Scope 3
Total Scope 1, 2 and 3
Operational emissions1
% change from Calendar Year 2019
1,120
12,948
2,333
1,504
10,311,412
13,291
1,127
3,888
11,904,821
11,909,835
34,889
941
12,402
1,816
403
8,341,615
16,593
784
3,913
9,724,826
9,729,523
35,737
2%
1,143
13,032
1,692
380
8,776,344
16,180
490
3,589
10,087,723
10,091,802
35,151
1%
462
2,349
1,171,303
488
295,485
993
791
9,847,166
3,978
462
2,349
11,320,204
11,323,015
21,799
-38%
315
2,417
1,411,034
321
376,431
1,127
984
11,147,010
324
315
2,417
12,937,231
12,939,963
18,539
-47%
1 Operational Emissions are those domestic emissions which Z has the most control and/or influence over and can therefore take meaningful action to reduce. Z’s Operational
Emissions are all of its Scope 1 and 2 emissions and the following sources of Scope 3 emissions: business travel, waste and fuel distribution.
All numbers are subject to rounding.
KPMG has provided an unmodified reasonable assurance opinion as to whether Z’s Greenhouse Gas statement has, in all material respects, been prepared in accordance with the
Greenhouse Gas Protocol’s Corporate Standard requirements.
Consumer New Zealand legal action
In November 2023, Z was served a statement of claim in the High Court by Consumer NZ Incorporated, Lawyers for Climate Action NZ
Incorporated (LCANZI), and the Environmental Law Initiative.
The plaintiffs claim Z made various representations in breach of the Fair Trading Act 1986. Z has been transparent about the challenges
and opportunities associated with the energy transition and ambitious about the changes it wants to make as a modern energy company.
Z filed its Statement of Defence in response to the plaintiffs’ claim in the High Court on 25 January 2024.
Smith court case to proceed
In 2019, Mike Smith, Chair of the Iwi Leaders Forum, filed a statement of claim in the High Court against seven companies including Z,
essentially asserting that they have a common law duty of care in relation to the impact of emissions from their activities.
The defendants applied to strike the claim out. While two of three causes of action were struck out by the High Court and all three causes
of action were struck out by the Court of Appeal, Smith appealed the strike out decision to the Supreme Court.
In February 2024, the Supreme Court announced its decision that the strike out was not granted. This is a procedural ruling on the
relevant threshold for a strike out and does not make any prediction on the merits of the claim itself. The Supreme Court made it clear
in its judgment that the strike out decision “is not a commentary on whether or not [the claim] will ultimately succeed”.
This case is one of several currently before courts globally that are seeking to speed up action on climate change.
32
Our stands
33
Partnership 1
Trees That Count seed island trial at
Mangara Station, Elsthorpe, Hawke’s Bay.
Partnership 2
The Nature Conservancy Study Location,
Ruataniwha Inlet, Tasman Region – by Olya Albot
Z’s biodiversity fund
In support of our indigenous biodiversity
Z invests at least $1 million per annum
across biodiversity projects that are
committed to restoring indigenous
biodiversity at scale, including updates
on our three foundation partnerships:
$1 million
Per annum invested in biodiversity projects
across our three partnerships
Trees That Count:
Z Energy Seed Island Partnership
Z is partnering with Trees That Count
and Tane’s Tree Trust (TTT) to trial and
demonstrate the use of ‘seed islands’
to assist the natural regeneration of
indigenous forests at scale.
Planting native forest using conventional
methods can be cost prohibitive, however,
employing the use of seed islands –
smaller concentrations of plantings that
are strategically located across a larger
landscape – can encourage the dispersal
of seeds and accelerate indigenous
forest regeneration.
This partnership is now well underway
with thousands of native trees being
planted at multiple seed islands across
a range of sites. TTT is actively building
relationships with NGOs, local authorities
and mana whenua, targeting marginal or
degraded land that will benefit from being
restored to indigenous forest.
When the results of these seed island
pilots are known, Trees That Count and
TTT will seek to lead discussion around
the potential benefits of this approach
as a cost‑effective way to reforest
large parts of Aotearoa New Zealand’s
landscape. While in its early stages, there
is considerable interest in the pilots as
Cyclone Gabrielle has demonstrated the
long‑term value of stabilising land with
indigenous forest.
Establishing large‑scale indigenous
forest cover across large swathes of
marginal, eroding hill country is also
a highly effective mitigation strategy
against the adverse weather events
that are becoming more common with
a changing climate. Reforestation
protects waterways, and ultimately
the coastal marine environment, from
erosion and sediment run‑off as well
as providing habitat for threatened
indigenous animals.
Marking Matariki with trees
Trees That Count is a national charity
that has funded and planted almost
two million native trees across Aotearoa
New Zealand.
Z’s partnership with Trees That Count
is directly linked to Z’s Environmental
sustainability and Community stands, as
well as its journey to better understand
and honour Te Ao Māori.
To mark Matariki, the Māori New Year,
in 2023 Z donated $120,000 to Trees
That Count to plant native trees across
the country.
The Nature Conservancy’s
Blue Carbon Initiative
Z’s investment in the Nature
Conservancy’s Blue Carbon initiative
seeks to help finance coastal restoration,
enhance biodiversity and increase coastal
resilience to sea‑level rise. The initiative
is working to establish projects on
Aotearoa New Zealand’s coastline to
restore salt marshes and collect data with
the intent to develop a robust evidence
base and work towards Blue Carbon
being recognised as a legitimate
sequestration pathway.
The initiative is working to restore
estuarine salt marshes at seven pilot
locations around Aotearoa New Zealand’s
coastline, enabling the natural
environment to more effectively absorb
and store atmospheric CO2. The project is
developing a range of sites, including the
restoration of natural coastal wetlands,
monitoring the efficacy of sequestration
and developing a model through which
carbon credits can be realised through
the project.
$120,000
Donated to Trees that Count for Matariki in 2023
34
Our stands
35
Partnership 3
Moving plants for the Puhinui Regeneration Project
(photo credit: Phil Crawford, Sustainable Business Network)
Whakamana Hapori | Empower Communities
Our Goals
Outcomes
2025 Action Focus Areas
Progress
Status
Te Hapori |
Community
Being loyal to our communities requires
us to constantly review how we are
making a difference and whether
our support is reaching areas of
greatest need.
Z is a part of communities right across
Aotearoa New Zealand and all of these
communities are diverse and have
different needs. As we have seen over
the year, the ability to ensure continued
supply of transport fuels to communities
impacted by severe weather events is a
core responsibility for Z. Our ability to
respond to a range of circumstances and
ensure a robust and resilient fuel supply
is something we continue to prioritise
and in which we invest our time, effort
and resource.
How we are tracking on our
outcomes and targets
Here we report our progress in 2023 to
achieve the strategic goals and outcomes
of the Community and Environmental
Sustainability Strategy 2030 in relation
to Community, and the action focus areas
that have been defined out to 2025.
Sustainable Business Network
regeneration partnership
Z contributes towards indigenous
biodiversity regeneration initiatives
through its partnership with the
Sustainable Business Network.
This funding goes to two projects: the
Nature Systems Change partnership,
which seeks to facilitate $10 billion
of investment in biodiversity‑based
environmental initiatives, including the
restoration of marine, land and freshwater
environments across the country.
Within this partnership, Z has also
allocated specific funding for the Puhinui
Regeneration Project, an indigenous
biodiversity restoration initiative within
the Puhinui catchment.
Through the restoration of land and the
catchment’s biodiversity, the initiative
seeks to create 100 new employment
opportunities for local people who
will complete at least 800 training
accreditations.
In partnership with the Ministry for
the Environment and Z, SBN launched
the Regenerating Nature in Aotearoa
New Zealand: The Transformative Role
of Business report. A key aspect was to
better understand the different barriers
to investing in nature with insights on how
investment in nature can be accelerated.
We will actively support
local communities in
the locations where we
operate, enabling more
New Zealanders to live
the lives they value and
empower the young people
of Aotearoa to reach their
full potential.
Our workplace is
safe and inclusive
for everyone.
Deliver industry leading safety
and wellbeing.
Z’s focus in 2023 has been on digital processes which aim to enable rapid
learning and decision‑making, and supporting our people’s wellbeing, in
particular at retail sites. Refer page 14 for further details.
Be one of the most inclusive
workplaces in Aotearoa.
In 2023, Z achieved Advanced Gender Tick reaccreditation, Rainbow Tick
reaccreditation and supported our people through Te Ao Māori learning and
development. Refer page 40 for further details.
Promote and support staff
volunteering.
We give staff two days per year to volunteer for not‑for‑profit groups. In 2023,
97 staff contributed 108 volunteer days (approximately 810 hours) giving back
to their communities.
Our staff are
empowered to connect
with and support their
local communities
Facilitate connections between
staff and local charities.
Young people are
empowered to achieve
their full potential.
Support transformative
services and opportunities
for youth.
Community groups
who care for
New Zealanders are
enabled to do more
mahi, more effectively.
Deliver Good In The Hood
campaign giving $1 million to
local communities.
During the extreme weather events in the upper North Island at the start of
2023, Z’s Community Specialist connected via Philanthropy New Zealand
to a working group of funders and community organisations to discuss a
collaborative relief effort. Through this connection, Z ensured its donations
quickly reached those in need.
We hosted Good In The Hood events alongside Z retailers, bringing together
community groups and making connections between charities, office and
site staff.
Through Good In The Hood, $113,625 was donated to groups that provide
support to the health, wellbeing, and development of young people. 11% of the
groups selected by local stations and voted for by customers self‑identified as
being youth‑led.
We also continue our support of rangatahi‑led work as part of Z’s partnership
with SBN on the Puhinui Regeneration Project in Auckland.
In 2023, Z donated $1 million to hundreds of groups through Good In The
Hood. Customers decided what mattered most to them by casting close to
1 million votes with their orange tokens, with 517 groups receiving a share of
$4,000 per Z service station. A further $1,000 per Z station was donated to
community events and initiatives throughout the year.
Increasing the equity of funding for Māori‑led charities was a priority for
the campaign in 2023, bringing David Letele on board as Good In The Hood
ambassador and making a $10,000 donation to his charity BBM.
Alongside voting, a regional funding initiative saw $41,100 donated to charities
meeting the needs of those in three of Aotearoa New Zealand’s most deprived
communities where there is a Z station.
This year’s campaign helped Z exceed $10 million in total contributions to
community organisations and charities throughout Aotearoa New Zealand
since 2011, largely through its annual Good In The Hood programme.
Measure our impact to improve
outcomes for communities.
Changes that were recommended to improve outcomes in 2023 were
implemented. These are outlined above. These are multi‑year goals that we
will continue to focus on in 2024.
Key
We’re on track and doing well
We’ve made some good progress but we need to do more
We are not on track and need to do more
36
Our stands
37
Good In The Hood
A more inclusive Good In The Hood
Over 2023, Z reviewed its flagship
community investment programme,
Good In The Hood. The review was
triggered by a desire to ensure the
$1 million of community funding that
the programme provides every year was
making the most impact. The review was
also designed to ensure Good In The
Hood was inclusive and recognising the
needs of Māori communities and Māori
within communities.
We’ve always been proud of how Good In
The Hood supports the things that matter
most in local communities. However, a
social impact assessment of Good In The
Hood over 2023, combined with feedback
from Good In The Hood applicants,
highlighted some material gaps and areas
for improvement.
The assessment highlighted an
unconscious bias in the programme which
has had the effect of not addressing
Māori disadvantage. For example, of the
more than 500 community organisations
that benefit from Good In The Hood every
year, representation of Māori community
interests could be as low as 2.7 percent,
despite Māori making up 17 percent of
the population.
The review highlighted that there
were barriers in the application
process for certain groups and that
traditional marketing was ineffective at
reaching Māori.
The review also found a concentration
of the same popular national charities
being selected across multiple Z service
stations and that support in areas of high
deprivation was not matching the level
of need.
David Letele with staff at Z’s Tom Pearce Drive service station, Auckland.
Good In The Hood needed to change
As with our commitment to represent and
reflect the communities we serve, we have
set a target of Māori‑led organisations
receiving support from Good In The Hood
at a representative 17 percent.
To get there we needed some help
from an expert in on‑the‑ground Māori
engagement.
Charity founder David Letele of BBM
(Brown Buttabean Motivation) worked
with us as a community advocate to help
Z build national awareness of the Good In
The Hood funding opportunity with Māori
groups and communities.
David is a well‑connected and trusted
voice in Māori and Pasifika communities.
As a result of our partnership and his
outreach and advocacy, over 2023 we
tripled Good In The Hood support to
Māori‑led or representative community
organisations to approximately
10 percent. This is still some way off our
17 percent goal, but we are committed to
building on this result in 2024 and beyond
until that target is reached.
Additional support to high
deprivation communities
In recognition of the gap in reaching
communities with some of the highest
levels of deprivation in Aotearoa
New Zealand, particularly during a period
of economic pressure, in 2023, Z provided
$41,100 of Good In The Hood funding.
This funding was put towards improved
access to healthcare and food security
in three North Island regions with high
Māori populations.
The regional boost initiative arose
after internal discussions at Z about
how to best support the communities
who needed it most across the Z retail
network. After looking across the network
and analysing the index of deprivation, it
was decided that additional funds would
be donated to community groups across
Kaikohe, Kaitaia and Kawerau, with local
retailers and their teams deciding which
organisations would be supported.
Good In The Hood 2023
In 2023, our customers voted with the famous orange token and the results were
announced in November, with a total of 517 groups receiving donations.
Of this funding, $20,000 went to
Tūwharetoa ki Kawerau Hauora;
$10,550 to Kaikohe Foodbank
(Mid North Budgeting Services Trust);
and $10,550 to Fresh Start Kaitaia.
Other charitable donations
In response to an extreme weather event
in Auckland in January 2023, Z provided
$50,000 in donations. These donations
were provided to Visionwest, Student
Volunteer Army and via Z retailers to
local charities to assist in their support
of those impacted by flooding.
In February 2023, many communities
across the East Coast of the North Island
were impacted by Cyclone Gabrielle.
Z and the Ampol Group responded
with $109,000 in donations, which was
provided to Sustaining Hawke’s Bay Trust
in partnership with Eastern & Central
Community Trust, impacted marae,
and via Z retailers to a further five local
charities. This amount included $20,000
in donations from Z and Flick employees.
38
Our stands
39
Spills
Over the year there were five incidents
of spills of fuel products. These spills are
referred to more accurately as ‘loss of
containment’ events and are detailed in
the following table.
A recordable loss of containment is an
unplanned or uncontrolled event that
releases more than 160 litres (one barrel)
of fuel product from its primary
containment and/or a spill of any quantity
that enters the external environment
(for example, soil or water).
Of these five events, two related to the
failure of assets or equipment, two related
to procedural variations, or human error,
and one was a consequence of attempted
theft of fuel from a truck stop tank.
Three of these events caused minor loss
of fuel into the external environment,
which was remediated.
The safety and integrity of our existing
fuel infrastructure assets remains a
priority area of focus for the company.
Haumarutanga
me te hauora |
Safety and
wellbeing
Ensuring the safety and wellbeing of
our people, customers, environment
and the communities we serve is core
to Z’s purpose.
There are inherent risks in Z’s business
that require vigilance, focus and a
commitment across the company to
continuous improvement.
Over its lifetime, Z has built mature
operational risk management
capabilities and systems. These
support an organisational culture
in which accountability for safety is
everybody’s responsibility.
Over 2023, Z has continued to embed
its operational risk management system
across the organisation, with a particular
focus on realising the benefits of digital
processes in harnessing the power of
data. Z’s systems and processes are
now very well supported by immediate,
high‑quality data which enables rapid
learning and decision‑making.
Z’s commitment to learning and
continuous improvement is another area
where there has been real value from the
integration into the Ampol Group. As part
of a larger integrated energy company,
with a wider scope of operations, the Z
and Ampol teams are continuously sharing
experiences and processes, and working
together in service of operational safety.
With fuel prices also at historically high
levels, our customers are understandably
under pressure. Unfortunately, the
process of purchasing fuel has become a
trigger point for built‑up frustration that
is increasingly being directed towards
our hardworking teams, and we cannot
accept the increased risk to peoples’
safety and wellbeing.
Abuse and aggression take a significant
toll on the wellbeing of innocent people
who are working hard to feed their
own whānau.
For example, over 2022 and 2023 it has
been common for there to be around
300 reported instances of staff abuse
each month across the Z network.
These are cases that are so significant
that staff report them; there are almost
certainly many more cases of disrespect
or abusive comments in passing that are
not being reported. Concerningly, much
of the abuse is racially motivated.
Z has invested in a range of initiatives to
keep its people safe, including extensive
training. We will continue to invest
in every measure we can to protect
our team.
Theft of fuel remains a significant issue.
During 2023 there were 24,700 cases of
fuel ‘drive‑offs’, slightly higher than in the
previous year.
This behaviour reflects a concerning
trend in the wellbeing of our communities,
respect for each other and respect for the
law across Aotearoa New Zealand.
We are continuing to work on solutions
in service of keeping our people safe and
sending the message throughout our
communities that collectively we cannot
accept this.
Significant spills
Significant spills (loss of containment)
Volume of recorded significant spills
Process safety events
2023
9 months to 31 Dec 2022
5
2,152 litres
1
1,000 litres
Total Tier 1 and Tier 2 process safety events1
1 (Tier 2)
0
0
0
0.0
0.0
0
0
0.0
0.0
3.2
0.0
3.8
1.8
0.0
1.9
Work-related injuries
Number of work-related fatalities
Z employees
Retailers and Mini‑Tankers franchisees and contractors2
Rate of work-related fatalities
Z employees
Retailers and Mini‑Tankers franchisees and contractors2
Number of work-related serious harm injuries
Z employees
Retailers and Mini‑Tankers franchisees and contractors2
Rate of work-related serious harm injuries
Z employees
Retailers and Mini‑Tankers franchisees and contractors2
Total recordable case frequency (TRCF)3
Z employees
Retailers and Mini‑Tankers franchisees and contractors2
Lost time injury frequency (LTIF)3
Z employees
Retailers and Mini‑Tankers franchisees and contractors2
Main types of work-related injury
Z employees
0
0
0.0
0.0
0
0
0.0
0.0
3.8
0.0
4.8
2.4
0.0
3.1
N/A
N/A
Retailers and Mini‑Tankers franchisees and contractors2
Manual handling
Manual handling
Number of hours worked
Z employees
Retailers and Mini‑Tankers franchisees and contractors2
796,531
2,908,252
595,869
2,098,424
Net promoter scores
Wellbeing net promoter score
Safety leadership net promoter score
Other safety measures
Number of motor vehicle incidents
Number of robberies
72
73
1
13
73
72
3
3
1 A process safety event is an unplanned or uncontrolled release of any material – including non-toxic and non-flammable
materials – from a process, or an undesired event or condition that under slightly different circumstances could have
resulted in a release of material. The process safety event identified above was a Tier 2 process safety event.
2 Mini-Tankers data is included from 1 January to 1 August 2023 when this business was sold, refer page 44 for more details.
3 TRCF and LTIF frequencies are based on 1,000,000 hours worked.
40
Our stands
41
Ngā rerekētanga me te whakaurutanga |
Diversity and inclusion
A strong internal and external
commitment to diversity
Z believes that in fostering diversity and
inclusion, it is important to take a public
stand and to support not only your own
people, but also the broader commitment
to more diverse and inclusive workplaces.
Z received Rainbow Tick reaccreditation
for the seventh consecutive year. We were
also a proud supporter of the Auckland
Pride Parade and Wellington Pride
Festival, and sponsored the small and
medium‑sized enterprise (SME) category
at the Rainbow Excellence Awards.
Over 2023, Z achieved Advanced Gender
Tick reaccreditation, continued to provide
leadership development through its
‘Women Rising’ Leadership Development
and ‘Male Allies’ programmes, and
engaged across the organisation
to raise awareness on menopause
and endometriosis.
We partnered with Women in Trades and
HireHer (a female‑focused job board).
Externally, Z was profiled by ‘Mind the
Gap’ on our work to close the gender
pay gap, and our decision to sign the
petition to Government to mandate
Gender Pay Gap reporting. We were the
principal event sponsor and spoke at
the Wellington Chamber of Commerce
International Women’s Day event. We also
partnered with Women in Trades to profile
two of our female Terminal Operators
and Aircraft Refuellers, sharing their
career pathways and a day in their lives.
In 2023, a further 11 percent of female
employees participated in the Women
Rising Leadership programme, following
25 percent participation in 2022.
Our recently established Neurodiversity
Network continued to gain momentum,
with engagement across the organisation
to raise awareness about ADHD and
autism in the workplace.
Te Ao Māori and diversity
and inclusion
Z continues to provide opportunities for
our people to participate in Te Ao Māori
learning and development.
Over 2023, Z gained a greater
understanding of Te Ao Māori and how
acknowledging the interconnectedness
of all things and commitment to
future generations can deliver better
business outcomes.
While we have learned a great deal
about Te Ao Māori over the year, there is
much more we must learn and the Māori
perspective is not yet strong inside Z.
We remain committed to boosting Māori
and Pasifika representation to better
represent the population we serve, in
which Māori make up approximately
17 percent.
Within younger demographics the
population is shifting and more than one
third of young people identify as Māori.
Z remains committed to increasing
representation and capability.
In 2023, Z launched a graduate and
cadetship programme to continue
to boost the pipeline of talent into Z.
Of Z’s 2024 graduate cohort, 60 percent
are Māori or Pasifika, up from 50 percent
in 2023. In addition, 33 percent of
Z’s 2024 intern cohort are Māori
or Pasifika.
Z’s Ngā Mata Kōkiri, Māori Ally Network,
which launched in 2022, continues to
gain momentum across the Z business.
Ngā Mata Kōkiri refers to the faces or
individuals who champion, promote
and lead our kaupapa Māori initiatives
within Z.
Z is now at a point in our Te Ao Māori
journey where we are putting in place
dedicated roles to support us on this
work, including a senior leadership role –
our Kaihautū Māori.
42
Our stands
Snapshot of
the Z whānau
(Z direct employees only)
43
Z Nelson Terminal
Whakatū
Ethnic diversity
Age diversity
7%
Māori
9 months to 31 Dec ’22: 6%
3%
Pacific Islander
9 months to 31 Dec ’22: 4%
11%
European
9 months to 31 Dec ’22: 11%
2%
8%
Baby Boomers (1946-1964)
9 months to 31 Dec ’22: 16%
24%
Generation X (1965-1976)
9 months to 31 Dec ’22: 23%
19%
Xennials (1977-1983)
9 months to 31 Dec ’22: 34%
41%
Middle Eastern, Latin American or African
Millennials (1984-1996)
9 months to 31 Dec ’22: 2%
9 months to 31 Dec ’22: 21%
8%
Generation Z (1997 to 2012)
9 months to 31 Dec ’22: 6%
3%
Other
9 months to 31 Dec ’22: 1%
2%
Prefer not to say
9 months to 31 Dec ’22: 4%
55%
NZ European
9 months to 31 Dec ’22: 58%
17%
Asian
9 months to 31 Dec ’22: 15%
Gender diversity
54%
Male
Location
17%
Auckland
9 months to 31 Dec ’22: 56%
9 months to 31 Dec ’22: 17%
46%
Female
66%
Wellington
Other attributes
82%
Have undertaken tertiary education
9 months to 31 Dec ’22: 78%
41 years
Average age of Z employees
9 months to 31 Dec ’22: 43%
9 months to 31 Dec ’22: 62%
9 months to 31 Dec ’22: 42 years
52%
Have dependants
9 months to 31 Dec ’22: 52%
1%
Have a disability
9 months to 31 Dec ’22: 1%
0%
17%
Non-binary and prefer not to say
9 months to 31 Dec ’22: 1%
Rest of Aotearoa New Zealand
9 months to 31 Dec ’22: 21%
Pay gap
1.96%
Overall pay gap men to women
(including the CEO and executive team)
9 months to 31 Dec ‘22: 5.26%
2.84%
Pay gap men to women
(excluding the executive team)
9 months to 31 Dec ‘22: 3.04%
0.14%
Pay gap men to women
(excluding the CEO)
9 months to 31 Dec ‘22: 2.49%
44
Ko tātou
tangata
Our
people
Over 2023, the Z team has
arranged itself to deliver on
a new phase of strategy.
The company continues to optimise its
supply chain into the Ampol supply,
shipping and trading operations which
will deliver greater efficiency and value.
As per its previous strategy
commitments, Z has exited non‑core
elements of the business, including
the sale of the Mini‑Tankers operation,
its small‑scale general aviation fuel
business and commercial homebase
business, and providing bulk storage on
customer sites. The divestment of these
discretionary businesses, plus exiting
the bitumen business, has enabled
Z to be more sharply focused on its
business and the transition opportunities
of decarbonisation.
In the last quarter of 2023, an
integrated Ampol–Z team dedicated to
pursuing commercial decarbonisation
opportunities across Australasia was
formed. The Energy Solutions team is now
operational and actively developing low
carbon initiatives, including in partnership
with commercial customers.
Over 2023, the Flick business was
fully acquired by Z and the majority of
its team of approximately 90 people
are now based in the company’s
Wellington headquarters. Note the
people‑related statistics in this report
do not include Flick employee data.
The previous Commercial business unit
has been integrated into the Z Customer
and Supply functions, and in 2023 Z’s
General Manager of Strategy and Risk,
Nicolas Williams, left Z and will not be
replaced. Z now runs a seven‑strong
Executive team with a four to three
weighting of females to males.
45
Z Seaview Terminal
Te Whanganui‑a‑Tara /
Wellington
Culture drives resilience
and engagement
At Z we believe that great leadership
can’t be replicated and is the source of
enduring competitive advantage.
The company’s value‑driven culture with
its focus on leadership has always been
in service of delivering extraordinary
performance and is now a source of
resilience for the company.
The 2023 year was one of significant
change. We completed the integration of
a transformed supply chain, continued
to reorganise the business to support
strategy and deliver against future
growth opportunities, we brought the
Flick business inside Z, and successfully
brought Z together with its new
owners, Ampol.
On top of this change we farewelled
Mike Bennetts, our founding CEO, and
welcomed Lindis as the new CEO of Z.
All of this change could reasonably be
expected to lead to a decline in staff
engagement, but the opposite has been
the case. Throughout the 2023 year,
Z held an employee engagement Net
Promoter Score of +69, up from +57
at the end of 2022. This engagement
score remains more than double that of
corporates globally and places Z in the
top five percent of companies around
the world.
As the major changes to the Z business
– the Ampol acquisition, supply
chain transformation and business
reorganisation – have been successfully
completed, we remain committed to
continuing to increase engagement.
Leadership and wellbeing
frameworks
The Ampol transaction has unlocked
significant development opportunities for
Z’s people to be a part of a much larger
organisation that can deliver energy
solutions at a scale we have not been
previously able to access.
Our people continue to learn a great deal
about regional energy supply and security
and we complement each other in our
work in decarbonisation opportunities.
With the scale and resources that come
with being a part of the Ampol Group, our
people are excited about the possibilities
for the country’s energy future as well as
for their own careers.
Z has been able to share with Ampol our
experience in leadership development,
engagement and wellbeing. Z has
contributed to the Ampol Group’s
leadership and wellbeing frameworks
and has been recognised for its unique
contribution to leadership development.
In March 2023, Z was the Supreme Winner
of the HR Institute of New Zealand
(HRNZ) awards, which recognise
professionals and organisations leading
meaningful change and best practice
across Aotearoa New Zealand.
Initially winning the ‘Innovation’ category
for its work in support of closing the
gender pay gap, supporting greater salary
transparency and enhancing its KiwiSaver
offer for those who work part time or take
time off for parental leave, Z then went on
to win the overall Supreme Award.
The HRNZ Supreme Award is awarded
to the organisation showing greatest
overall leadership in HR practice.
This industry acknowledgement was a
huge achievement for Z, and the team
were proud to take this home as further
recognition of their impact in this space.
46
Our people
47
Te Kāhui Ārahi |
Our Leadership Team
In order from left to right:
Mandy Simpson
Chief Digital Officer
Pou Matihiko
Andy Baird
General Manager, Customer
Pou Kiritaki
Helen Sedcole
Head of People & Culture
and Group Ambition Lead
Pou Tangata
Lindis Jones
Chief Executive Officer
Pou Matua
Julian Hughes
General Manager, Supply
Pou Punakora
Debra Blackett
General Counsel,
Z Energy & Climate Change
Te Kanihera Whānui, Ngao Z,
Te Mahana haere o te Ao
Nicola Law
Chief Financial Officer
Pou Tiaki Pūtea
48
49
Pūrongo
Pūtea
Financial
statements
Statement of comprehensive income
for the year ended 31 December 2023
Statement of changes in equity
for the year ended 31 December 2023
Revenue
Expenses
Purchases of product and electricity
Excise, carbon and other taxes
Operating expenses
Share of loss/(earnings) of associate companies (net of tax)
Depreciation and amortisation
Net financing expense
Impairment
Net lease expenses
Fair value movements in interest rate and commodity derivatives
(Gain)/loss on sale of property, plant and equipment
Gain on sale of intangible assets
(Decrease)/increase in decommissioning and restoration provision
Total expenses
Net profit before tax
Tax expense
Net profit for the period
Net profit attributable to the owners of the company
Net profit attributable to non-controlling interest
Other comprehensive income
Items that will not be reclassified to profit or loss
Valuation adjustment of land and buildings
Equity accounted investees – share of other comprehensive income
Equity investment revaluation
Decommissioning and restoration provision decrease
Total items that will not be reclassified to profit or loss
Items that are or may be reclassified subsequently to profit or loss
Cash flow hedge and cost of hedging
Other comprehensive income net of tax
Total comprehensive income after tax
Total comprehensive income attributable to owners of the company
Total comprehensive income attributable to non-controlling interest
12 months ended
31 December
2023
$m
9 months ended
31 December
2022
$m
7,610
6,005
Notes
6
12, 13
8
10
17
9
5
12
15
15
5,350
1,600
446
1
97
12
13
40
43
(7)
-
(3)
7,592
18
2
16
9
7
14
13
1
6
34
(1)
33
49
42
7
4,333
1,056
309
(2)
72
47
111
29
(83)
1
(15)
1
5,859
146
38
108
98
10
(2)
-
19
-
17
1
18
126
116
10
Notes
Capital
$m
Retained
earnings
$m
Investment
revaluation
reserve
$m
Employee
share
reserve
$m
Hedging
reserve
$m
Asset
revaluation
reserve
$m
Non-
controlling
interest
$m
Balance at 1 April 2022
Net profit for the period
Other comprehensive income
Total comprehensive income
for the period
Transfers between reserves
Disposal of revalued assets
Transactions with owners
recorded directly in equity
Cancelled shares
Change in ownership of Flick
non-controlling interest
Proceeds from NCI purchase
of units in Z Property Limited
Partnership
Share-based payments
Dividends to equity holders
Distributions paid to Partner
Total transactions with owners
recorded directly in equity
Balance at 31 December 2022
Balance at 1 January 2023
Net profit for the period
Other comprehensive
income/(loss)
Total comprehensive
income/(loss) for the period
Transfers between reserves
Disposal of revalued assets
Transactions with owners
recorded directly in equity
Change in ownership of Flick
non-controlling interest
Dividends to equity holders
Distributions paid to Partner
Total transactions with owners
recorded directly in equity
20
5
5
20
5
5
20
5
767
-
-
-
-
(1)
-
-
-
-
-
(1)
766
766
-
-
-
-
-
-
-
-
Balance at 31 December 2023
766
199
98
-
98
(2)
(3)
4
-
-
(230)
-
(229)
66
66
9
-
9
1
-
(27)
-
(27)
49
(64)
-
19
19
-
-
-
-
-
-
-
-
(45)
(45)
-
14
14
-
-
-
-
-
(31)
(5)
-
-
-
-
4
-
-
1
-
-
5
-
-
-
-
-
-
-
-
-
-
-
-
-
1
1
-
-
-
-
-
-
-
-
1
1
-
(1)
(1)
-
-
-
-
-
-
457
-
(2)
(2)
2
-
-
-
-
-
-
-
457
457
-
20
20
(1)
-
-
-
-
476
Total
equity
$m
1,355
108
18
126
-
-
1
10
-
10
-
-
(7)
(3)
132
-
-
(1)
124
135
135
7
-
7
-
(2)
-
(7)
(9)
133
132
1
(230)
(1)
(101)
1,380
1,380
16
33
49
-
(2)
(27)
(7)
(36)
1,393
50
51
Statement of financial position
at 31 December 2023
31 December
2023
$m
31 December
2022
$m
Notes
Statement of cash flows
for the year ended 31 December 2023
Shareholders’ equity
Equity attributable to owners of the Company
Non-controlling interest
Total equity
Represented by:
Current assets
Cash and cash equivalents
Accounts receivable and prepayments
Related party receivable
Inventories
Derivative financial instruments
Income tax receivable
Assets held for sale
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Right of use assets
Intangible assets
Goodwill
Investments
Derivative financial instruments
Other non-current assets
Total non-current assets
Total assets
Current liabilities
Accounts payable, accruals and other liabilities
Short-term borrowings
Related party payable
Lease liabilities
Provisions
Income tax payable
Derivative financial instruments
Total current liabilities
Non-current liabilities
Lease liabilities
Long-term borrowings
Deferred tax
Provisions
Derivative financial instruments
Other liabilities
Total non-current liabilities
Total liabilities
Net assets
Approved on behalf of the Board on 28 February 2024
Gregory David Barnes
Chair
Nigel Lindis Jones
Director
5
21
11
19
12
12
10
13
13
15
19
18
21
10
17
10
18
9
17
19
1,260
133
1,393
21
514
10
386
29
22
-
3
985
1,009
265
582
158
145
45
12
2,216
3,201
970
125
103
23
16
-
-
1,237
270
162
66
61
10
2
571
1,808
1,393
1,245
135
1,380
66
596
154
712
33
-
7
1
1,569
1,007
269
647
158
120
80
12
2,293
3,862
1,301
70
22
20
19
66
8
1,506
274
522
75
96
5
4
976
2,482
1,380
Cash flows from operating activities
Receipts from customers
Interest received
Dividends received
Proceeds from sale of ETS units
Payments to suppliers and employees
Excise, carbon and other taxes paid
Interest paid
Tax paid
Net cash inflow from operating activities
Cash flows from investing activities
Proceeds from sale of property, plant and equipment
Proceeds from assets held for sale
Lease payments received from leases
Purchase of software intangible assets
Purchase of investments
Purchase of property, plant and equipment
Net cash outflow from investing activities
Cash flows from financing activities
Net proceeds from bank facility
Proceeds from related party borrowings
Repayment of related party borrowings
Dividends paid to owners of the Company
Distributions paid to Partner
Repayment of bonds
Payment of lease liabilities
Issue of units
Repayment of USPP loan
Net cash outflow from financing activities
Net increase/(decrease) in cash
Cash balances at beginning of period
Cash at end of period
12 months ended
31 December
2023
$m
9 months ended
31 December
2022
$m
Notes
7,734
18
5
-
(6,097)
(1,127)
(62)
(79)
392
10
2
1
(13)
(16)
(87)
(103)
-
2,456
(2,691)
-
(7)
(70)
(22)
-
-
(334)
(45)
66
21
5,937
22
-
49
(4,862)
(602)
(77)
(111)
356
-
-
1
(15)
(18)
(50)
(82)
(130)
397
-
(230)
(1)
-
(14)
132
(377)
(223)
51
15
66
10
18
18
5
18
10
Financial statements 52
53
Statement of cash flows (continued)
for the year ended 31 December 2023
Reconciliation of net profit for the period to cash flows
from operating activities
Net profit for the period
Adjustments to reconcile profit to net cash inflow from operating activities
Depreciation and amortisation
Impairment
Share of loss/(earnings) of associate companies (net of tax)
Change in ETS units
Change in derivatives
Change in related party receivable/payable
Other non-cash adjustments
Changes in assets and liabilities, net of non-cash, investing and financing activities
Change in accounts receivable and prepayments
Change in inventories
Change in accounts payable, accruals and other liabilities
Change in provisions
Change in tax
Net cash inflow from operating activities
12 months ended
31 December
2023
$m
9 months ended
31 December
2022
$m
16
97
13
1
47
36
225
-
82
326
(331)
(32)
(88)
392
108
72
111
(2)
64
(77)
(154)
6
(83)
(83)
438
(8)
(36)
356
Notes to the financial statements
for the year ended 31 December 2023
(1) Basis of accounting
Reporting entity
Z Energy Limited is a profit-oriented company registered in New Zealand under the Companies Act 1993 and an FMC Reporting Entity
for the purposes of the Financial Markets Conduct Act 2013. Z Energy Limited has bonds quoted on the NZX debt market.
The financial statements presented are those of Z Energy Limited (the Company) together with its subsidiaries, interests in associates
and jointly controlled operations (Z or “the Group”).
Basis of preparation
These financial statements have been prepared in accordance with generally accepted accounting practice in New Zealand (NZ GAAP)
and part 7 of the Financial Markets Conduct Act 2013. They comply with the New Zealand equivalents to International Financial
Reporting Standards (NZ IFRS) as appropriate for profit-oriented entities and with International Financial Reporting Standards (IFRS).
Z is a Tier 1 entity under the External Reporting Board (XRB) Accounting Standards Framework.
The measurement basis adopted in the preparation of these financial statements is historical cost, modified by the revaluation of
certain assets, investments and financial instruments as identified in the accompanying notes. The functional and reporting currency
used to prepare the financial statements is New Zealand dollars, rounded to the nearest million ($m), unless otherwise stated.
The financial statements have been prepared on a GST-exclusive basis except billed receivables and payables, which include GST.
Some comparatives have been reclassified to reflect current period presentation.
The Group was 100% acquired by Ampol Holdings NZ Limited (“Ampol”) in May 2022. During the period ended 31 December 2022, the
Group changed its financial reporting date from 31 March to 31 December to align with its ultimate parent company, Ampol Limited,
a company registered in Australia. Current period shows the performance for the 12 months from 1 January 2023 to 31 December
2023. The comparative period represents performance for the 9 months from 1 April 2022 to 31 December 2022. The periods are not
directly comparable.
Basis of consolidation
Consistent accounting policies are employed in preparing and presenting the Group financial statements. Intra-group balances and any
unrealised income or expenses arising from intra-group transactions are eliminated in preparing the Group financial statements.
(2) Changes in accounting policies
No changes to accounting policies have been made during the period. Policies have been consistently applied to all periods presented
in these Group financial statements.
The Group has early adopted the amending Standard Disclosure of Fees for Audit Firms’ Services (Amendments to FRS-44:
New Zealand Additional Disclosures). The amending Standard provides new requirements for the disclosure of services provided by
an entity’s audit firm. These disclosures are contained in Note 7.
Financial statements 54
55
(3) Critical accounting estimates and judgements
The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the
application of policies and reported amounts of assets and liabilities, income and expenses. Areas that involve a higher level of
estimation or judgement are:
• Estimation of liabilities for decommissioning and restoration (D&R) of certain sites of operation (note 17)
• Measurement of fair value (notes 12, 15 and 19)
• Impairment testing of goodwill, including estimating future cash flows (note 13).
Climate-related judgements
Management has considered climate-related risks (including those arising from the energy transition) when making various judgements,
estimates and assumptions within these financial statements. Individual notes describe management’s consideration of these risks,
where this is considered material.
(4) Replacement cost reconciliation
Replacement cost (RC) is a non-GAAP measure used by the downstream fuel industry to report earnings. RC removes the impact of
changes in refined product prices on the value of inventory imported and held by Z. Z manages the Group’s performance based on
RC. The difference between Historical Cost (HC) earnings and RC earnings is a cost of sales adjustment (COSA), foreign exchange,
commodity gains and losses, and the associated tax impact.
Income statement on RC basis
Revenue
Expenses
Purchases of product and electricity
Excise, carbon and other taxes
Operating expenses (net of foreign exchange and commodity gains/losses on fuel purchases)
Total expenses
RC operating EBITDAF*
Share of loss/(earnings) of associate companies (net of tax)
RC EBITDAF
Below RC EBITDAF expenses
Depreciation and amortisation
Net financing expense
Impairment
Net lease expenses
Fair value movements in interest rate and commodity derivatives
(Gain)/loss on sale of property, plant and equipment
Gain on sale of intangible assets
(Decrease)/increase in decommissioning and restoration provision
Total below RC EBITDAF expenses
RC net profit before tax
Tax expense
RC net profit after tax
12 months ended
31 December
2023
$m
9 months ended
31 December
2022
$m
7,610
6,005
5,262
1,600
410
7,272
338
1
337
97
12
13
40
43
(7)
-
(3)
195
142
27
115
4,366
1,056
331
5,753
252
(2)
254
72
47
111
29
(83)
1
(15)
1
163
91
29
62
* Earnings, before interest, tax, depreciation (including gains and (losses) on sale of fixed assets), amortisation, impairment, fair value movements in interest-rate derivatives
and movements in decommissioning and restoration provision (EBITDAF).
Reconciliation from statutory net profit after tax to RC net profit after tax
Statutory net profit after tax
COSA
Net foreign exchange and commodity (gains)/losses on fuel purchases
Tax expense on COSA
RC net profit after tax
(5) Non-controlling interest
12 months ended
31 December
2023
$m
9 months ended
31 December
2022
$m
16
88
36
(25)
115
108
(33)
(22)
9
62
Flick Energy Limited
At 31 December 2022 Z owned 95% of Flick Energy Limited (“Flick”), with 5% owned by non-controlling interest (NCI). Z consolidate
100% of Flick’s results and presented the portion of profit/(loss) and other comprehensive income attributable to NCI. In April 2023,
Z acquired the remaining 6,320,468 shares in Flick Energy Limited, increasing Z’s ownership from 95% to 100%.
Z Property Limited Partnership
Z owns 51% (2022: 51%) of Z Property Limited Partnership (“ZPLP”), an investment property entity, with 49% (2022: 49%) owned
by a NCI.
Presented below is the financial information before the elimination of intercompany transactions with the exception of the fair value
adjustment on investment properties. Z consolidates 100% of ZPLP’s results and presents the portion of profit/(loss) and other
comprehensive income attributable to NCI. The fair value adjustment on investment properties is eliminated on consolidation as it is
not recognised as ‘Revenue’ in the Group financial statements. It is also not reflected in the ‘Net assets attributable to NCI’ shown in
the Group financial statements.
Non-controlling interest in:
Z Property Limited Partnership (ZPLP)
Flick Energy Limited
Assets
Cash
Other current assets
Income tax receivable
Intangible assets
Other non-current assets
Total assets
Liabilities
Trade payables
Other current liabilities
Deferred tax
Provisions
Other non-current liabilities
Total liabilities
Net assets
Net assets attributable to NCI
31 December
2023
%
31 December
2022
%
49
-
49
5
Flick
31 December
2023
$m
Flick
31 December
2022
$m
ZPLP
31 December
2023
$m
ZPLP
31 December
2022
$m
1
31
2
3
46
83
(8)
(1)
(17)
-
(11)
(37)
46
-
5
34
3
2
76
120
(6)
-
-
(29)
(1)
(36)
84
4
-
-
-
-
272
272
-
-
-
-
-
-
272
133
-
-
-
-
269
269
-
-
-
-
-
-
269
132
Notes to the financial statements 56
57
(5) Non-controlling interest (continued)
(7) Auditor remuneration
Revenue
Net gain/(loss)*
Total comprehensive income
Total comprehensive income attributable to NCI
before consolidation
Total comprehensive income attributable to NCI
12 months ended
31 December
2023
$m
9 months ended
31 December
2022
$m
12 months ended
31 December
2023
$m
4 months ended
31 December
2022
$m
67
(38)
(38)
-
-
53
68
68
9
9
17
(4)
(4)
7
7
4
3
3
1
1
* Net gain/(loss) for Flick for the 9 months ended 31 December 2022 has been restated from $45m to $68m as a correction of a prior period disclosure error.
This restatement was contained to this note disclosure and did not impact the total comprehensive income attributable to NCI before consolidation, which remains
unchanged at $9m.
(6) Revenue
Revenue from major business activities — fuel and convenience retail
Revenue comprises the fair value of consideration received or receivable for the sale of fuel, convenience retail or other, which includes
electricity income, in the ordinary course of the Group’s activities. The Group’s performance obligations are typically satisfied when the
Group has supplied the product to the customer, the customer has accepted the product, and the collectability of the related receivable
is reasonably assured.
Fuel invoices are raised following delivery and settled in accordance with agreed payment terms. Transaction price is based on
agreed contract rates and delivered volumes and is allocated on delivery. Convenience revenue is recognised at the time of sale.
Transaction price is based on the ticketed or contract price.
Fuel
Convenience retail
Other
Total revenue
12 months ended
31 December
2023
$m
9 months ended
31 December
2022
$m
7,444
80
86
7,610
5,900
54
51
6,005
Included in operating expenses are fees paid to the auditors, KPMG. There were no fees paid to the auditors other than as outlined
below (presented in thousands).
Audit and review of financial statements
Other assurance services and other agreed-upon procedures
Climate-related disclosures assurance readiness assessment
Greenhouse Gas Statement reasonable assurance
Agreed upon procedures – cost plus pricing
Agreed upon procedures – licence fee return
Agreed upon procedures – constructive contracts
Total other assurance services and other agreed-upon procedures
Total auditor remuneration
(8) Net financing expense
Financing income
Interest income from derivatives
Interest income from cash
Other finance income
Total financing income
Financing expense
Interest expense on bonds
Interest expense on derivatives
Interest expense on secured bank facilities
Interest expense on USPP notes
Interest expense on related party loans
Financing fees
Other finance expense
Total financing expense
Net financing expense
12 months ended
31 December
2023
$000
9 months ended
31 December
2022
$000
527
75
47
9
5
1
137
664
517
-
36
-
5
-
41
558
12 months ended
31 December
2023
$m
9 months ended
31 December
2022
$m
15
4
11
30
8
16
-
-
15
1
2
42
12
16
1
-
17
6
17
2
7
7
22
3
64
47
Notes to the financial statements 58
59
(9) Tax
Tax expense or benefit is determined as follows:
Net profit before tax
Share of (earnings)/loss of associate companies (net of tax)
Net profit before tax excluding share of (earnings)/loss from associates
Tax expense on profit for the period at the corporate income tax rate of 28% (2022: 28%)
Tax adjustments
Non-deductible expenditure
Non-assessable income
Over-provision in prior periods
Tax expense
Current tax
Deferred tax
Tax expense
12 months ended
31 December
2023
$m
9 months ended
31 December
2022
$m
18
1
19
5
1
-
(4)
2
9
(7)
2
Deferred tax
Deferred tax assets and liabilities are presented as a net deferred tax asset/(liability) in the Statement of financial position.
The movement in deferred tax assets and liabilities is provided below.
Property,
plant and
equipment
$m
Intangible
assets
$m
Employee
benefits
$m
Finance
leases
$m
Other
provisions
$m
Derivative
financial
instruments
$m
Balance at 1 April 2022
Recognised in the Statement
of comprehensive income
Over-provision in prior
periods in the Statement of
comprehensive income
Recognised in Other
comprehensive income
Balance at 31 December 2022
Balance at 1 January 2023
Recognised in the Statement
of comprehensive income
Over-provision in prior
periods in the Statement of
comprehensive income
Recognised in Other
comprehensive income
(24)
15
-
(13)
(22)
(22)
-
1
2
(75)
35
-
-
(40)
(40)
2
(1)
-
Balance at 31 December 2023
(19)
(39)
2
6
-
-
8
8
(3)
(1)
-
4
6
(1)
-
-
5
5
2
1
-
-
3
3
(4)
(1)
1
-
2
-
-
2
(1)
1
(8)
-
(8)
(8)
1
(8)
-
(15)
Other
items
$m
(9)
(20)
8
-
(21)
(21)
12
8
-
(1)
Deferred tax expected to be settled within 12 months
Deferred tax expected to be settled after 12 months
Deferred tax
31 December
2023
$m
31 December
2022
$m
(8)
(58)
(66)
-
(75)
(75)
Imputation credits available for use in subsequent reporting periods are $17m (2022: $107m). These credits are available for use in
subsequent periods provided a 66% shareholder continuity is maintained as defined in the Income Tax Act 2007.
146
(2)
144
40
(1)
(1)
-
38
75
(37)
38
Total
$m
(99)
37
-
(13)
(75)
(75)
7
-
2
(66)
(10) Leases
Under NZ IFRS 16: Leases, Z recognises right of use assets and lease liabilities for most property leases.
On inception of a new lease, the lease liability is measured at the present value of the remaining lease payments, discounted using
Z’s incremental borrowing rate at that date. The right of use assets are measured at an amount equal to the lease liability and are
depreciated over the estimated remaining lease term on a straight-line basis. Z presents the right of use assets and lease liabilities
separately on the face of the Statement of financial position.
Z applies the following practical expedients when applying NZ IFRS 16:
• A single discount rate to a portfolio of leases with similar characteristics
• Exemption to not recognise right of use assets for low-value leases; and
• Exemption to not recognise right of use assets for leases with less than 12 months remaining.
The expense related to short-term leases for the year ended 31 December 2023 was $1m (2022: $1m).
Z as the lessee has various non-cancellable leases predominantly for the lease of land and buildings. The leases have varying terms,
escalation clauses and renewal rights. On renewal, the terms of the lease are renegotiated.
Information about leases for which Z is a lessee is presented below.
Right of use assets
Opening balance
Depreciation charge for the period
Additions to right of use assets
Adjustments to existing right of use assets
Closing balance
Income from subleasing right of use assets was $1m (2022: $1m).
Maturity analysis
Lease liabilities as lessee
Between 0 to 1 year
Between 1 to 5 years
More than 5 years
Lease liabilities as lessee
Total lease expenses/(income) as lessor and lessee
Lease interest income
Lease depreciation
Lease interest expense
Net lease expenses
31 December
2023
$m
31 December
2022
$m
269
(27)
16
7
265
278
(18)
7
2
269
31 December
2023
$m
31 December
2022
$m
23
85
185
293
20
78
196
294
12 months ended
31 December
2023
$m
9 months ended
31 December
2022
$m
(1)
27
14
40
-
18
11
29
Z has made assumptions around site tenure based on expected future use, patronage of sites and useful lives of related site assets,
taking into account Z’s network plan. No adjustments were required to useful lives of right of use assets during the year due to
climate-related impacts, in particular the energy transition and its impact on fuel demand. Useful lives continue to align with Z’s view
of future fuel demand.
Notes to the financial statements 60
61
(11) Inventories
Inventory is stated at the lower of cost or net realisable value (NRV). The cost of inventories is based on the first-in-first-out principle
and includes any duties and taxes and Emissions Trading Scheme (ETS) obligations incurred on product imported but not yet sold.
NRV is the estimated selling price in the ordinary course of business less applicable variable selling expenses. Inventory write-down
for the year ended 31 December 2023 was $4m (2022: $6m). The write-down is recorded as purchases of product and electricity in the
Statement of comprehensive income.
Z traditionally holds short to medium inventory reserves and is therefore not exposed to long-term changes in inventory price. As an
obligated party under the ETS, Z holds New Zealand Units (NZUs), and in the event of future regulatory change, the value of inventory
including ETS obligations incurred on product imported but not yet sold may be impaired.
(12) Property, plant and equipment
Property, plant and equipment (PPE) excluding Construction in progress and Plant and machinery is measured at fair value based on
periodic valuations, less accumulated depreciation and any impairment after the date of revaluation.
A revaluation of land and buildings at 51 sites belonging to the ZPLP is undertaken by an independent valuer annually. The remaining
assets in the land and buildings asset classes are also valued by an independent valuer annually. These valuations were performed at
31 December 2023.
Any remaining property, plant and equipment in other asset classes is valued by an independent valuer using a level 3 fair value
methodology in line with the fair value hierarchy every five years. An assessment of other PPE fair values is also performed annually by
Z to assess the underlying assumptions for each asset class and determine whether any revaluation is required. Additions to PPE after
the most recent valuation are recorded at cost.
Terminal plant was independently valued at 31 March 2022, with the next revaluation scheduled for December 2027.
Depreciation is provided on a straight-line basis. The major depreciation periods (in years) are:
Buildings
Plant and machinery
Land improvements
Terminal plant
9–35
2–35
14–35
5–35
Useful lives of PPE assets incorporate Z’s network plan, which take into account Z’s view of future fuel demand, and are adjusted where
necessary for changes in the plan. There were no changes made to useful lives during the year.
The majority of PPE assets are carried at revalued amounts, with revaluations occurring frequently as described above.
These revaluations by an independent valuer take into account sustainable earnings and current market views and trends.
Con-
struction
in progress
$m
Buildings
$m
Land and
improve-
ments
$m
Plant and
machinery
$m
Terminal
plant
$m
31 December
2023
Total
$m
31 December
2022
Total
$m
Cost/valuation
Opening balance
Additions
Disposals
Transfers between asset classes
Held for sale
Impairment
Valuation adjustment
Offset accumulated
depreciation on revaluation
Closing balance
66
75
-
(31)
-
-
-
-
110
Accumulated depreciation and impairment
-
Opening balance
-
Depreciation
-
Disposals
-
Impairment loss
Reclassification to held for sale
-
Offset accumulated
depreciation on revaluation
-
Closing balance
Carrying amounts
At 1 January 2023
At 31 December 2023
-
66
110
171
-
(2)
1
-
(3)
(9)
(11)
147
(17)
(14)
1
-
-
11
(19)
154
128
434
-
(3)
3
-
-
19
(3)
450
(13)
(6)
2
-
-
3
(14)
421
436
431
-
(41)
22
-
(7)
-
-
405
(271)
(37)
41
-
-
-
(267)
160
138
1,270
59
(5)
-
(15)
-
11
(2)
1,318
(259)
(47)
5
(20)
8
2
(311)
216
-
-
5
-
-
-
-
221
(10)
(11)
(3)
-
-
-
(24)
206
197
1,318
75
(46)
-
-
(10)
10
(14)
1,333
(311)
(68)
41
-
-
14
(324)
1,007
1,009
Included in buildings are assets held under finance leases of $6m (2022: $7m).
For each revalued asset class, the carrying amount that would have been recognised had the assets been carried on a historical cost
basis are: buildings $45m (2022: $50m); land and improvements $130m (2022: $132m); terminals $147m (2022: $154m).
Notes to the financial statements 62
63
(12) Property, plant and equipment (continued)
(13) Intangible assets
The following table shows the valuation technique used in measuring the fair value of PPE, as well as the significant unobservable
inputs used.
Asset
class
Land and
buildings
Valuation techniques during full revaluation
Direct capitalisation approach based on a
sustainable market rental is capitalised at an
appropriate rate of return or yield derived from
comparable asset sales.
Market rent is based on contracted rental
amounts with reference to market observations
of rent as a percentage of earnings (EBITDA).
The value ascribed to the land is allocated using
a value estimated based on recent comparable
land sales with the residual value being allocated
to buildings.
Terminal
plant
Depreciated replacement cost approach is
based on the gross current replacement cost,
reduced by factors providing for age, physical
depreciation, and technical and functional
obsolescence considering an asset’s total
estimated useful life and anticipated residual
value (if any).
Significant unobservable
inputs
ZPLP properties: Market rental
as a percentage of site EBITDA
(average of 23%)
Capitalisation rate 4.0%–7.0%
Other properties: Throughput
rental rate (cents/litre) 2.6–2.9
(Retail)
Throughput rental rate
(cents/litre) 2.5 (truck stops)
Shop rental $250–$750
per square metre
Capitalisation rate 4.5%–6.0%
Cost estimates sourced
from contracting plant and
machinery suppliers and cost
analysis of recent projects.
Inter-relationship between key
unobservable inputs and fair
value measurement
The estimated fair value would
increase (decrease) if:
• market rentals were
higher (lower)
• capitalisation rates were
lower (higher).
The estimated fair value would
increase (decrease) if:
• cost was higher (lower)
• remaining useful life was
higher (lower)
• technical and functional
obsolescence was lower (higher).
Impairments
During the year, a fire at a Z retail service station caused smoke and water damage to the building. An impairment of $3m was
recognised in the Statement of comprehensive income. While adverse weather during the year resulted in damage to PPE assets,
this did not result in material impairments or losses on disposal.
Divestments
During the year, Z divested all General Aviation assets and completed the sale of the Mini-Tankers and Homebase businesses.
Emissions
units
$m
Goodwill
$m
Chevron
contracts
acquired
$m
Software in
progress
$m
31 December
2023
Total
$m
31 December
2022
Total
$m
Other
$m
Opening balance
Additions
Transfers between asset classes
Utilised
Sale of units
Impairment
Amortisation
Closing balance
Cost
Accumulated impairment
Accumulated amortisation
Closing balance
499
552
-
(313)
(159)
(126)
-
453
579
(126)
-
453
158
-
-
-
-
-
-
158
193
(35)
-
158
126
-
-
-
-
-
(18)
108
445
(150)
(187)
108
4
12
(11)
-
-
-
-
5
5
-
-
5
18
-
11
-
-
(2)
(11)
16
210
(4)
(190)
16
805
564
-
(313)
(159)
(128)
(29)
740
1,432
(315)
(377)
740
973
305
-
(324)
(34)
(90)
(25)
805
1,377
(187)
(385)
805
Amortisation of Z’s finite life intangible assets is provided on a straight-line basis. Useful lives of these assets sit within the timeframes
associated with Z’s view of future fuel demand and those of external industry commentators. No adjustments to useful lives were made
during the year. Management monitors customer trends and will make necessary adjustments should useful lives require amending in
the future.
Impairment
During the year ended 31 December 2023 an impairment of $172m to intangible assets classified as Emissions units was recognised to
write these assets down to fair value, and also to reduce the value of the Emissions units obligation (refer note 14) to the same fair value
based on the New Zealand Unit (NZU) spot rate at 30 June 2023. The fair value was reassessed at 31 December 2023 and $46m of the
impairment was reversed.
Emissions units
As a seller of emissions-intensive products, Z is required to surrender emissions units to the Environmental Protection Agency (EPA),
a Government agency, on an annual basis. Units acquired are carried at their weighted average cost less any accumulated impairment
(price of units determined by the market).
Stock of units
Balance at beginning of period
Units acquired and receivable
Units sold
Units surrendered
Balance at end of period
31 December
2023
Units
millions
31 December
2022
Units
millions
8
11
(4)
(7)
8
12
4
(1)
(7)
8
Other intangibles
Other intangibles include software, domain name and contacts acquired. Computer software is capitalised based on the costs
incurred to acquire and bring to use the specific software where Z has control over these related assets. These costs are amortised
over three years on a straight-line basis. Contacts acquired are amortised over the contract period which is between 12 and 17 years.
Intangible assets with indefinite lives and intangible assets not yet available for use are tested for impairment annually and whenever
there is an indication that the asset may be impaired.
Notes to the financial statements 64
65
(13) Intangible assets (continued)
Goodwill
Goodwill is the excess of purchase consideration over net identifiable assets acquired through a business combination. Goodwill is not
amortised, but it is tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be
impaired. For the purpose of assessing impairment, goodwill is allocated to cash-generating units (CGUs), which are the lowest level of
assets that generate cash inflows that are largely independent of the cash inflows of other assets.
Chevron acquisition goodwill
Z’s goodwill balance of $158m at 31 December 2023 relates to the acquisition in 2016 of Chevron New Zealand (“Chevron”)
(renamed Z Energy 2015 Limited), an importer, distributor and seller of transport fuel and related products. This goodwill is allocated to
the Z Energy cash-generating unit (CGU), comprising the Z Energy Group. As at 31 December 2023, an annual impairment test over the
goodwill was undertaken by comparing the recoverable amount of the Z Energy CGU to its carrying amount.
The recoverable amount of the CGU has been calculated based on the present value of future cash flows expected to be derived from
the CGU (value in use). This was calculated using a Z Board approved forecast to 2028. Key assumptions within the discounted cash
flow model include:
• Post-tax discount rate of 9.0% (pre-tax discount rate of 10.7%)
• Terminal growth rate of 2.0%, representing expected long-term inflationary increases
• Average annual cash flow growth rate of 3.5% over the Board approved forecast period. Cash flow projections are inclusive of
volume, margin, operating expenditure and capital expenditure assumptions, which are based on the Group’s plans and factor into
consideration historical performance and forecast macroeconomic and industry conditions.
As a result of testing performed, no impairment was identified for the goodwill at 31 December 2023.
Sensitivity analysis was performed over the key assumptions. The recoverable amount of the CGU would equal its carrying amount
if any of the key assumptions were to change as follows:
• Discount rate increases by 1.5 percentage points
• Terminal growth rate reduces by 2.2 percentage points
• Cash contributions reduce by 10% for each year modelled.
In reaching its conclusion regarding the recoverable amount of the CGU, management has considered the potential impacts the
country’s transition to a low carbon economy may have on its business through downside scenario analysis. Whilst the speed and form
of the transition is still highly uncertain, the Group has undertaken additional downside scenario analysis using expectations of the
timing and speed of these changes. This has included reviewing required cashflow growth rates for recovery of carrying values against
anticipated timing of the low carbon transition including 2040 and 2045 time horizons and timeframes to breakeven. No impairment has
been identified based on this scenario analysis.
The Z Board approved forecast utilised in goodwill impairment testing includes estimated future sales volumes based on Z’s view of
future fuel demand. Z’s view of future fuel demand incorporates management’s views and related judgements regarding the energy
transition. While management have disclosed sensitivity assessments above, climate-related impacts (including impacts arising from
the energy transition) other than those referenced could result in impairments.
(14) Emissions trading scheme
The Group is required to deliver emission units to EPA to be able to sell products that emit pollutants. A provision for this obligation is
recognised in the Statement of financial position.
Obligation
Obligation payable
31 December
2023
Units
millions
31 December
2022
Units
millions
7
7
The ETS obligation of $412m (2022: $414m) is included within accounts payable, accruals and other liabilities and is valued at the
weighted average cost of units, where units have been acquired to settle the Group’s obligation. Any shortfall in units needed to settle
the obligation is measured at fair value. Refer to note 13 for the emissions units held.
(15) Investments
The Group’s investment in Channel Infrastructure NZ Limited is recognised at the NZX-listed share price at 31 December 2023 of
$1.45 (2022: $1.43) giving rise to a $1m increase in the fair value for the year, which is accounted for in other comprehensive income.
Z’s interest in Channel Infrastructure NZ Limited is 13% (2022: 13%). Z also has a 6% investment in Red Phase Technologies Limited
(2022: 6%).
Investment in Channel Infrastructure NZ (fair value hierarchy level 1)
Investment in Red Phase Technologies Limited
Investment in associates - share of profit/(loss)
Investment in associates - share of reserves
Total investments
The Group wholly owns or has a partial interest in the below associates and subsidiaries:
Associates and subsidiaries
Z Energy 2015 Limited (formerly Chevron New Zealand)
Z Energy ESPP Trustee Limited
Z Energy LTI Trustee Limited
Z Partner Limited
Z Property Manager Limited
Flick Energy Limited
Z General Partner Limited
Z Property Limited Partnership
Wiri Oil Services Limited (WOSL)
Drylandcarbon One Limited Partnership
Loyalty NZ Limited
Forest Partners Limited Partnership
Coastal Oil Logistics Limited (COLL) (liquidated)
Mevo Limited
31 December
2023
$m
31 December
2022
$m
70
1
61
13
145
69
-
51
-
120
31 December
2023
% Holding
31 December
2022
% Holding
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Associate
Associate
Associate
Associate
Associate
Associate
100%
100%
100%
100%
100%
100%
51%
51%
44%
37%
25%
21%
0%
0%
100%
100%
100%
100%
100%
95%
51%
51%
44%
37%
25%
21%
50%
32%
Z has two investments in associates which are in the business of forestry and emission unit (NZU) generation. Management has
performed impairment indicator testing in the current year and no indicators of impairment were identified when taking into
consideration the current regulatory settings. In the event that any future change in regulatory settings excludes exotic forestry from
the NZU market, this would result in management performing specific impairment testing, incorporating different assumptions around
future cash flows.
Notes to the financial statements 66
67
(16) Investment in joint operations
The Group has participating interests in four unincorporated jointly controlled operations relating to the storage and distribution of
petroleum products. The revenues and expenses are allocated in the financial statements on a performance/usage basis rather than the
ownership share of the joint arrangement.
The Group has rights to the assets and obligations for the liabilities relating to the jointly controlled operations. At 31 December 2023, there
were no contingent liabilities for the jointly controlled operations (2022: nil). The value of assets in these interests is $12m (2022: $12m).
Joint Interplane Fuelling Services
Jointly Owned Storage Facility
Wiri to Auckland Airport Pipeline
Joint User Hydrant Installation
(17) Provisions
Principal activity
Fuel distribution
Fuel storage
Fuel distribution
Fuel storage
31 December
2023
% Holding
31 December
2022
% Holding
50%
50%
40%
33%
50%
50%
40%
33%
Decommissioning and restoration (D&R) provision is recognised at the estimated future cost, discounted back to reporting date.
The inflation and discount rates applied to the different assets are the CPI and New Zealand Government Bond rates respectively as
per New Zealand Treasury. The terms and rates applied are as follows.
Homebase
Truckstop
Aviation
Terminals
Retail
Bio Diesel
Caltex Retailer-operated
Remaining term
(years)
CPI rates
(%)
NZ Govt Bond rates
(%)
1 – 3
1 – 27
1 – 17
2 – 17
1 – 29
2
1 – 12
2.49
2.13
2.11 – 2.39
2.11 – 2.39
2.12 – 2.15
2.49
2.12
5.87
5.39 – 5.42
5.32 – 5.71
5.55 – 5.71
5.33 – 5.48
5.87
5.32
The CPI and New Zealand Government bond rates are revised annually using rates available as at balance date. The year end provision
is updated to reflect the new rates.
D&R costs expected to be settled within one year are classified as current liabilities. D&R costs expected to be settled between 1 and
29 years are classified as non-current liabilities.
Z engages a third party to provide an estimate of the D&R obligations for Z. Estimates are reviewed every three years, with the next
review due in 2024. The current D&R obligations are between $50k–$60k per tank for above-ground tanks and $80k–$95k per tank
for below-ground tanks. For terminals the current obligations are between $2.8m and $3.3m per site.
Estimated remediation costs of sites are recognised on an accrual basis at the time there is a formal plan or obligation, legal or
constructive, in place. The remediation costs are expected to be settled between 1 and 29 years, depending on the location.
The provision calculation is based on the expected timing of when D&R costs will fall due. Management aligns the timing of expected
D&R costs to match the shorter of the useful life of the associated asset to which the provision relates, or the expected site closure
dates as per the Z network plan. The Z network plan is developed incorporating Z’s view of future fuel demand, which incorporates
management’s views and related judgements regarding the energy transition. No adjustments to the timing of D&R costs due to
climate-related impacts, in particular, the energy transition and its impact on fuel demand, were made during the year.
For the year ended 31 December 2023
Opening balance
Created
Utilised
Released
Effect of changes in discount rates
Unwind of discount
Closing balance
Current
Non-current
Closing balance
Decommissioning,
restoration and
remediation
$m
108
6
(3)
(19)
(6)
(11)
75
14
61
75
Other
$m
7
12
(5)
(12)
-
-
2
2
-
2
Total
$m
115
18
(8)
(31)
(6)
(11)
77
16
61
77
(18) Borrowings
Financing arrangements
The Group’s debt includes bank facilities, related party borrowings and bonds secured against certain assets of the Group.
The arrangements require Z to maintain securities and operate within defined performance and gearing ratios. The arrangements
also include restrictions over the sale or disposal of certain assets without lender agreement. The Group has complied with all debt
covenant requirements imposed by lenders for the year ended 31 December 2023.
Bank facilities and bonds are recorded initially at fair value, net of transaction costs. After initial recognition, bank facilities
and bonds are measured at amortised cost. Any difference between the initial recognised amount and the redemption value is
recognised in the Statement of comprehensive income over the period of the borrowing.
Bank facilities and bonds issue expenses, fees and other costs incurred in arranging finance are capitalised and amortised over the
term of the relevant debt instrument or debt facility, using the effective interest method.
Related party borrowings
During the year ended 31 December 2023, Z repaid the term loan facility with the Ampol Group and drew down on the working capital
facility. This working capital facility replaces the majority of the working capital facility previously held with external banks.
Opening balance
Proceeds from related party
Repayments to related party
Closing balance carrying value
Current
Non-current
Closing balance carrying value
31 December
2023
$m
31 December
2022
$m
397
2,456
(2,691)
162
-
162
162
-
397
-
397
-
397
397
Notes to the financial statements 68
69
(18) Borrowings (continued)
(19) Financial risk management
Banking facilities
Banking facilities comprise a $1m working capital facility drawn to $0m, maturing in September 2024. A $350m revolving-term debt
facility was terminated in June 2023 and replaced by a related party facility in May 2023.
Interest rates are determined by reference to prevailing money market rates at the time of draw-down, plus a margin. The interest rate
paid during the year was 5.6% (2022: ranged between 2.5% and 6.0%).
Secured bank facilities available
Closing balance (facilities drawn down)
Bonds
Opening balance
Bonds repaid
Amortisation
Closing balance carrying value
Current
Non-current
Closing balance carrying value
Fair value of bonds
31 December
2023
$m
31 December
2022
$m
1
-
350
-
31 December
2023
$m
31 December
2022
$m
195
(70)
-
125
125
-
125
124
194
-
1
195
70
125
195
190
As part of the Ampol Group, Z reviews and sets treasury strategy within the Group policy guidelines and reports on market risk
positions and exposures to the Group Treasury Management Committee. The Group has developed a comprehensive, enterprise-wide
risk management framework that guides management and the Board in identifying, assessing, and monitoring new and existing risks.
Management reports to the Board on the relevant risks and the controls and treatments for those risks.
Summary of the Group’s exposure to financial risk and the management of those:
Financial risk Exposure
Product
Management of risk
Market risk
Foreign
exchange
risk
Sensitivity
to FX
Interest
rate risk
Sensitivity to
interest rate
Commodity
price and
timing risk
Sensitivity
to electricity
prices
Liquidity risk
Credit risk
Movement in foreign
exchange rates
Forward
exchange
contracts
Reduce price fluctuations risk of foreign currency commitments, mainly
associated with purchasing hydrocarbons.
Foreign currency: At 31 December 2023, if the New Zealand dollar had strengthened/weakened by 10% against the
currencies with which the Group has foreign currency risk (with all other variables held constant), net profit after tax
would be $27m higher/$33m lower (2022: $36m higher/$44m lower) and the change in other comprehensive income for
the period would be nil (2022: nil).
Movement in
interest rates
At 31 December 2023, if bank interest rates at that date had been 100 basis points higher/lower (with all other variables
held constant), net profit after tax would be $1m higher/$1m lower (2022: $2m higher/$2m lower) and the change in
other comprehensive income for the period would be nil (2022: nil).
Changes in product
prices
Minimise the cost of debt (interest) and manage the volatility to the
Group’s earnings.
Match commodity purchase and sales.
Interest rate
swaps (IRS)
Commodity
swaps
At 31 December 2023, if forward electricity prices at that date had been $25/MWH higher/lower (with all other variables
held constant), net profit after tax would be $39m higher/$39m lower (2022: $42m higher/$42m lower) and other
comprehensive income for the period would be nil (2022: $1m higher/$1m lower).
Risk that the Group will
not be able to meet its
financial obligations as
they fall due
Risk of loss to the
Group due to customer
or counterparty default
Risk of derivative
counterparties and cash
deposits being lost
Active management of cash flow, access to committed funds and lines of
credit and the maturity profile of its financial obligations.
Limited exposure due to credit checks carried out on new customers, credit
terms and standard payment terms. Less than 3% of the Group’s receivables
are overdue at 31 December 2023 (2022: 6%).
In line with Ampol Group treasury policies, credit risk on cash, short-term
deposits and derivative contracts is reduced by transacting with
relationship banks which have acceptable credit ratings determined by a
recognised ratings agency.
All products are level 2 and accounted for as fair value through the Statement of comprehensive income except for the electricity price
hedges which are classified using fair value hierarchy levels 1, 2 and 3.
The fair value of the IRS excludes accrued interest. All other derivatives do not contain interest components.
Recognition and measurement of derivatives
Derivative financial instruments are recognised initially at fair value at the date they are entered into (trade date). After initial
recognition, derivative financial instruments are stated at fair value at each Statement of financial position date. The resulting gain or
loss is recognised in the Statement of comprehensive income immediately, unless the instruments are designated in an effective hedge
accounting relationship.
Notes to the financial statements 70
71
(19) Financial risk management (continued)
Liquidity risk
The following tables analyse the Group’s financial liabilities into relevant maturity groupings based on the earliest possible contractual
maturity date at period end. The amounts in the tables are contractual undiscounted cash flows, which include interest through
to maturity.
At 31 December 2023
6 months
or less
$m
6 to 12
months
$m
1 to 2 years
$m
2 to 5 years
$m
5+ years
$m
Contractual
cash flows
$m
Statement
of financial
position
$m
Non-derivative financial liabilities
Accounts payable
Lease liabilities
Related party payables
Related party borrowings
Bonds
Non-derivative financial
liabilities
Derivative financial instruments
IRS
Electricity hedges
Commodity hedges
Derivative financial
instruments
386
20
61
6
3
476
(1)
14
5
18
-
19
-
6
126
151
-
11
-
11
-
37
-
12
-
49
-
15
-
15
-
100
-
187
-
287
-
19
-
19
-
253
-
-
-
386
429
61
211
129
344
293
103
162
125
253
1,216
1,027
-
1
-
1
(1)
60
5
64
-
59
5
64
At 31 December 2022
6 months
or less
$m
6 to 12
months
$m
1 to 2 years
$m
2 to 5 years
$m
5+ years
$m
Contractual
cash flows
$m
Statement
of financial
position
$m
Non-derivative financial liabilities
Accounts payable
Lease liabilities
Related party borrowings
Bonds
Non-derivative financial
liabilities
Derivative financial instruments
IRS
Commodity hedges
Electricity hedges
Derivative financial
instruments
741
18
12
4
775
(1)
(2)
12
9
-
18
13
74
105
(1)
-
17
16
-
35
25
129
189
-
-
28
28
-
94
462
-
556
-
-
40
40
-
270
-
-
270
-
-
6
6
741
435
512
207
741
294
397
195
1,895
1,627
(2)
(2)
103
99
(2)
(2)
103
99
Interest rate risk analysis
At 31 December 2023
Interest-rate exposure borrowing
Interest-rate swaps
Net interest rate exposure
At 31 December 2022
Interest-rate exposure borrowing
Interest-rate swaps
Net interest rate exposure
Less than 1 year
$m
1 to 2 years
$m
2 to 5 years
$m
5+ years
$m
Total notional
$m
125
105
230
-
75
75
162
-
162
-
-
-
287
180
467
Less than 1 year
$m
1 to 2 years
$m
2 to 5 years
$m
5+ years
$m
Total notional
$m
70
(55)
15
125
(20)
105
397
75
472
-
-
-
592
-
592
Offsetting of financial instruments
Z enters into derivative transactions under International Swaps Derivatives Association (ISDA) master agreements. The ISDA
agreements do not meet the criteria for offsetting in the Statement of financial position for accounting purposes. This is because
Z does not have any current legally enforceable right to offset recognised amounts. Under the ISDA agreements, the right to offset is
enforceable only on the occurrence of future events such as a default on the bank loans or other credit events. The potential net impact
of this offsetting is disclosed in: ‘Amount after applying rights of offset under ISDA agreements’. Z does not hold and is not required to
post collateral against its derivative positions.
Amount after
applying rights
of offset under
ISDA agreements
31 December 2023
$m
Derivative position
31 December 2022
$m
Amount after
applying rights
of offset under
ISDA agreements
31 December 2022
$m
Derivative position
31 December 2023
$m
Derivative assets
Derivative liabilities
Derivative financial assets/(liabilities)
74
(10)
64
66
(2)
64
113
(13)
100
106
(6)
100
Electricity price hedges
To mitigate profit and loss volatility, some electricity derivatives are designated into cash flow hedge relationships. Z determines
the existence of an economic relationship between the hedging instrument and the hedged item based on the amount and timing of
their respective cash flows, reference nodes, maturities and volumes. Z assesses whether the derivative designated in each hedging
relationship is expected to be and has been effective in offsetting the changes in cash flows of the hedged item.
In these hedge relationships, the main source of ineffectiveness is where the volume of electricity sold at fixed price is lower than the
volume of the derivative contracts for more than 10% of all half-hour intervals over the life of the hedge. Other sources of ineffectiveness
include location factor differences (location of hedging and consumption nodes) and credit risk.
The assessment of any hedge as ineffective has no impact on cash flow or tax payable as the amount in profit and loss will reverse over
time if the electricity derivative is held to settlement. There will only be realised gain at time of settlement which is offset against spot
price electricity purchases in the Statement of financial performance. Hedge ineffectiveness as at year end was assessed as immaterial.
Notes to the financial statements 72
73
(20) Share capital and distributions
(21) Related parties
Ordinary shares (fully paid)
Total authorised and issued capital at beginning of period
Movements in issued and fully paid ordinary shares
Total authorised and issued capital at end of period
Issued capital
Total issued capital at end of period
The par value of one share is $1.
Dividends
31 December 2022 Interim dividend (paid November 2022)
30 June 2023 Interim dividend (non-cash)
31 December
2023
$m
31 December
2022
$m
766
-
766
767
(1)
766
31 December
2023
Shares
millions
31 December
2022
Shares
millions
519
519
$m
cents per share
230
27
44.3
5.2
Parent and ultimate controlling party
The ultimate controlling party of Z Energy Limited is Ampol Limited, a company registered in Australia.
Key management personnel
Certain Z Directors have relevant interests in several companies with which Z has transactions in the normal course of business.
Some Z Directors are also non-executive directors of other companies. Any transactions undertaken with these entities have been
entered into as part of ordinary business.
Key management personnel have been defined as the Directors, the CEO and the Z Leadership team for the Group.
Included in operating expenses are directors’ fees of $97k (2022: $141k).
Transactions with related parties received/(paid)
Key management personnel
- Short-term employee benefits
- Termination benefits
Other related party transactions
Investments
Processing fees and terminal services
- Channel Infrastructure NZ and subsidiaries
Purchase of goods and services
- Red Phase Technologies
Associates
Sale of goods and services, and on-charging
- Loyalty New Zealand Ltd
- Coastal Oil Logistics Ltd (liquidated)
- Channel Infrastructure NZ
Purchase of goods and services
- Coastal Oil Logistics Ltd (liquidated)
- Wiri Oil Services Ltd
- Loyalty New Zealand Ltd
Ampol Limited group of companies
- Sale of goods and services
- Purchase of goods and services
- Operating expenses
- Dividends paid
- Interest paid
12 months ended
31 December
2023
$m
9 months ended
31 December
2022
$m
(14)
(2)
(45)
(5)
1
-
-
-
(12)
(7)
26
(3,180)
(44)
(27)
(15)
(11)
-
(87)
-
1
4
1
(9)
(8)
(5)
60
(21)
(3)
(230)
(7)
Notes to the financial statements 74
75
(21) Related parties (continued)
Balances at the end of period
Investments
- Channel Infrastructure NZ – payable
31 December 2023 – for Terminal services (31 December 2022 – for processing fees)
Ampol Limited group of companies
- Trade receivables
- Advance to Parent Company
- Trade payables
- Interest payable
- Commodity hedge receivable/(payable)
- Foreign exchange derivatives payable
- Long-term borrowings
31 December
2023
$m
31 December
2022
$m
4
4
-
10
(103)
(1)
6
(1)
(162)
19
154
(22)
(5)
(3)
-
(397)
Refer to notes 8, 15, 18, 19 and 20 for further detail on related party transactions.
(22) Commitments
Commitments relate to property, plant and equipment of $20m (2022: $17m), Forest Partners Limited Partnership of $33m
(2022: $46m), Shell Eastern Trading (PTE) Ltd of $35m (2022: nil) and Vitol Asia Pte Ltd of $14m (2022: nil).
(23) Contingent assets and liabilities
Z currently guarantees a total potential exposure relating to Flick Energy Ltd of up to $34m as per the table below.
Counterparty
NZ Wind Farms
Mercuria
Meridian
Genesis
Westpac
Eastland
Mercury
Total exposure
31 December
2023
$m
31 December
2022
$m
1
1
1
3
9
9
10
34
1
1
-
3
9
10
10
34
The Group has no other guarantees (2022: nil).
In the ordinary course of business, the Group is involved as a plaintiff or defendant in legal proceedings. Where appropriate, Z takes
legal advice. The Group does not consider that the outcome of any current proceedings is likely to have a material effect on its
operations or financial position.
(24) Events after balance date
There are no events after balance date as at 31 December 2023.
© 2024 KPMG, a New Zealand Partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. Independent Auditor’s Report To the shareholder of Z Energy Limited Report on the audit of the consolidated financial statements Opinion In our opinion, the consolidated financial statements of Z Energy Limited (the ’company’) and its subsidiaries (the 'group') on pages 48 to 74 present fairly, in all material respects: i. the group’s financial position as at 31 December 2023 and its financial performance and cash flows for the year ended on that date, in accordance with New Zealand Equivalents to International Financial Reporting Standards issued by the New Zealand Accounting Standards Board and International Financial Reporting Standards issued by the International Accounting Standards Board. We have audited the accompanying consolidated financial statements which comprise: — the consolidated statement of financial position as at 31 December 2023; — the consolidated statements of comprehensive income, changes in equity and cash flows for the year then ended; and — notes, including a summary of significant accounting policies. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (New Zealand) (‘ISAs (NZ)’). We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. We are independent of the group in accordance with Professional and Ethical Standard 1 International Code of Ethics for Assurance Practitioners (Including International Independence Standards) (New Zealand) issued by the New Zealand Auditing and Assurance Standards Board and the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including International Independence Standards) (‘IESBA Code’), and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. Our responsibilities under ISAs (NZ) are further described in the Auditor’s responsibilities for the audit of the consolidated financial statements section of our report. Our firm has also provided other services to the group in relation to greenhouse gas assurance, climate-related disclosure pre-assurance and several agreed upon procedures engagements. Subject to certain restrictions, partners and employees of our firm may also deal with the group on normal terms within the ordinary course of trading activities of the business of the group. These matters have not impaired our independence as auditor of the group. The firm has no other relationship with, or interest in, the group. Materiality The scope of our audit was influenced by our application of materiality. Materiality helped us to determine the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually and on the consolidated financial statements as a whole. The materiality for the consolidated financial statements as a whole was set at $15.7 million, determined with reference to a benchmark of group total revenue. We chose the benchmark because, in our view, this is a key measure of the group’s performance. Notes to the financial statements 76
Independent Auditor’s Report
77
Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated financial statements in the current period. We summarise below those matters and our key audit procedures to address those matters in order that the shareholder as a body may better understand the process by which we arrived at our audit opinion. Our procedures were undertaken in the context of and solely for the purpose of our statutory audit opinion on the consolidated financial statements as a whole and we do not express discrete opinions on separate elements of the consolidated financial statements. The key audit matter How the matter was addressed in our audit Assessment of Goodwill Refer to Note 13 of the consolidated financial statements. The group’s testing of goodwill for impairment is a Key Audit Matter due to the complexity of auditing the judgements used by the group to determine the recoverable amount of the relevant cash generating units (CGU’s). The group used complex models to perform their assessment of the recoverable amount. The models used a range of external and internal inputs, including assumptions made by the group. Complex modelling using forward-looking assumptions are prone to greater risk for potential bias, error, and inconsistent application. These conditions necessitate additional scrutiny by us, in particular to address the objectivity of sources used for assumptions, and consistent application. Our audit procedures included: — We considered the appropriateness of the valuation method applied by the group to perform the test of goodwill for impairment against the requirements of the accounting standards. — We assessed the accuracy of previous group forecasts to inform our evaluation of forecasts incorporated in the model. — We checked the consistency of forward-looking assumptions to the group’s stated plan and strategy, past performance of the group, published information on industry trends, inclusive of views over the speed of energy transition in the New Zealand economy, and our experience regarding the feasibility of these assumptions in the industry in which they operate. The key forward-looking assumptions we checked are as follows: • Sales volume demand • Gross margin per litre • Discount and terminal growth rates — We worked with our valuation specialists to analyse the group’s discount and terminal growth rates used in the valuation model by comparing to independently developed discount rates using publicly available market data for comparable entities, adjusted by risk factors specific to the group and the industry in which they operate. — We considered the sensitivity of the model by varying key assumptions, such those listed above. We did this to identify those assumptions at higher risk of bias or inconsistency in application and to focus additional procedures. The speed of energy transition in the New Zealand economy is not known with any certainty and therefore our sensitivity analysis was key when considering possible different transition scenarios. — We assessed the disclosures in the consolidated financial statements using our understanding of the issue obtained from our testing and against the requirements of the accounting standards. The key audit matter How the matter was addressed in our audit Valuation of property, plant and equipment As disclosed in Note 12 of the consolidated financial statements, the group has property, plant and equipment of $1,009 million (2022: $1,007million), with land and buildings and terminal plant making up the majority of this balance. The group has a policy of recording land and buildings and terminal plant at fair value, with valuations undertaken at least every 5 years, with a material change assessment carried out in intervening years. Land and buildings $564 million (2022: $575 million) Valuation of land and buildings is considered to be a key audit matter due to the significance of the assets to the group’s consolidated statement of financial position, and due to the judgement involved in the assessment of the fair value of these assets by the group’s Directors. The judgment relates to the valuation methodology used and the assumptions used in each of those methodologies. A full independent revaluation of land and buildings assets was carried out as at 31 December 2023. Our procedures to assess the land and buildings valuations included, amongst others: — Assessing the competence, independence and objectivity of the independent valuers used by the group; — Assessing the key assumptions which are judgemental in nature and which have the largest impact on the value of land and buildings. This comprised: • assessing the appropriateness of valuation methodologies applied across the land and buildings asset categories; • discussing with the valuers the process of determining the applicable capitalisation rates and checking these against actual valuation outcomes, as well as comparison to market evidence from sales of similar assets; • assessing shop rental and land value data for sampled sites against recent market sales data; • agreeing key lease terms to contract; • assessing the reasonableness of the throughput cents per litre applied for sites valued through the “Direct Capitalisation” method, by agreeing volumes sold within the calculation to audited sales volumes reports; • performing a comparison of fixed asset register information against valued sites to check all sites have been included in the year end revaluation exercise. — Considering useful lives of assets, taking into consideration management’s stated plans and comparison against relevant forward-looking assumptions included within management’s goodwill impairment valuation model. Other information The Directors, on behalf of the group, are responsible for the other information included in the entity’s Annual Report. Our opinion on the consolidated financial statements does not cover any other information and we do not express any form of assurance conclusion thereon. 78
Independent Auditor’s Report
79
In connection with our audit of the consolidated financial statements our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements, or our knowledge obtained in the audit or otherwise appears materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Use of this independent auditor’s report This independent auditor’s report is made solely to the shareholder as a body. Our audit work has been undertaken so that we might state to the shareholder those matters we are required to state to them in the independent auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the shareholder as a body for our audit work, this independent auditor’s report, or any of the opinions we have formed. Responsibilities of the Directors for the consolidated financial statements The Directors, on behalf of the company, are responsible for: — the preparation and fair presentation of the consolidated financial statements in accordance with generally accepted accounting practice in New Zealand (being New Zealand Equivalents to International Financial Reporting Standards) and International Financial Reporting Standards issued by the New Zealand Accounting Standards Board; — implementing necessary internal control to enable the preparation of a consolidated set of financial statements that is free from material misstatement, whether due to fraud or error; and — assessing the ability to continue as a going concern. This includes disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless they either intend to liquidate or to cease operations or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the consolidated financial statements Our objective is: — to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error; and — to issue an independent auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs NZ will always detect a material misstatement when it exists. Misstatements can arise from fraud or error. They are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements. A further description of our responsibilities for the audit of these consolidated financial statements is located at the External Reporting Board (XRB) website at: http://www.xrb.govt.nz/standards-for-assurance-practitioners/auditors-responsibilities/audit-report-1/ This description forms part of our independent auditor’s report. The engagement partner on the audit resulting in this independent auditor's report is Ed Louden For and on behalf of KPMG Wellington 28 February 2024 80
81
Ngā puakanga
Tāpiri
Additional
disclosures
The Z Board
The Z Board is appointed by Ampol, with written notice to Z. Ampol has the decision‑making responsibility to appoint, remove
and replace any Z Board Director.
Employment practices
People are at the core of our business, including our Z whānau, family, and our customers, communities, suppliers and partners.
We are committed to upholding human rights to protect workers and prevent exploitation across our business.
In 2023, the following changes were made to the Z Board:
• Gregory Barnes, CFO for the Ampol Group, appointed 10 May 2022
• Penelope Winn, a non‑executive director, appointed 10 May 2022, resigned 20 December 2023
• Andrew Brewer, Executive General Manager, Fuel Supply Chain for the Ampol Group, appointed 1 September 2022
• Simon Allen, a non‑executive director, appointed 1 September 2022, resigned 20 December 2023
• Lindis Jones, CEO of Z, appointed 20 December 2023.
Information about the Ampol Board can be found in Ampol’s 2023 Corporate Governance Statement at:
https://www.ampol.com.au/about‑ampol/investor‑centre/corporate‑governance
Compliance with laws and regulations
During the period, no significant fine or monetary sanction was imposed against Z by any government authority, nor was Z made
aware that it has broken any material law.
Z is not aware of any material non‑compliance with any environmental laws and/or regulations.
Waivers
Z has no waivers from the requirements of the NZX Debt Market Listing Rules.
Modern slavery
Z has not identified any situations or instances of modern slavery practices in its operations or supply chains in the year ended 2023,
and will continue to monitor the risk of modern slavery at Z.
New employee hires and employee turnover
Total number and rate of new employee hires during the
reporting period, by age group, gender and region
Number
Rate
Total number and rate of employee turnover during the
reporting period, by age group, gender and region
Number
Rate
Age Group
Under 30 years
30–50 years
Above 50 years
Gender
Female
Male
Non‑binary
Not disclosed
Region
Auckland
Canterbury
Otago
Bay of Plenty
Hawke's Bay
Nelson
Wellington
Mini‑Tankers Drivers
Home Offices
17
45
5
32
35
0
0
17
3
2
1
0
1
42
0
1
25%
67%
8%
48%
52%
0%
0%
25%
5%
3%
2%
0%
1%
63%
0%
1%
Age Group
Under 30 years
30–50 years
Above 50 years
Gender
Female
Male
Non‑binary
Not disclosed
Region
Auckland
Canterbury
Otago
Bay of Plenty
Hawke's Bay
Nelson
Wellington
Mini‑Tankers Drivers
Home Offices
12
57
28
38
57
2
0
26
8
1
1
0
5
49
5
2
12%
59%
29%
39%
59%
2%
0%
27%
8%
1%
1%
0%
5%
51%
5%
2%
Our latest Modern Slavery Statement can be found at: https://www.z.co.nz/about‑z/corporate‑centre
Benefits for full-time employees
Z employees
Employee type
Number of employees (total)
Permanent full‑time
Permanent part‑time
Fixed‑term contract full‑time
Fixed‑term contract part‑time
Casual
Total FTE
Total Headcount
487.6
430.0
23.8
33.0
0.8
0.0
497.0
430.0
31.0
33.0
1.0
2.0
At Z we believe in rewarding people for extraordinary performance, and this is reflected in our remuneration packages.
Alongside a competitive base salary, our Crew Promise includes:
• enhanced five percent employer contribution for KiwiSaver
• two days a year to do ‘good in your hood’ through our volunteering scheme
• a competitive annual incentive scheme
• generous leave allowances including enhanced sick leave
• the option to buy additional annual leave
• the option to participate in our Employee Share Scheme
• 26 weeks topped‑up parental leave, a return to work payment and paid leave for non‑primary carers
• health insurance for employees and their families
• wellbeing partnerships and initiatives
• rewards for referring top talent
• discounts with our local and national partners.
The only benefits that are not applicable to fixed‑term employees are our annual incentive scheme, participation in our Employee Share
Scheme and health insurance.
82
Additional disclosures
83
Parental leave
Parental leave at Z is based on supporting all staff to achieve a satisfying and productive life/work balance. The intent is to support staff
with a contribution of time and financial support to minimise personal and financial stress, maintain their job and career opportunities,
and maximise their ability to return to the workplace in good mental and physical health.
Total number of employees that were entitled to parental leave, by gender
Female
277
Male
341
Non-binary
Not disclosed
2
1
Total number of employees that took parental leave, by gender
Female
16
Male
5
Non-binary
Not disclosed
0
0
Total number of employees that returned to work in the reporting period
after parental leave ended, by gender
Female
8
Male
4
Non-binary
Not disclosed
0
0
Total
621
Total
21
Total
12
Total number of employees that returned to work after parental leave ended
that were still employed 12 months after their return to work, by gender
Female
16
Male
1
Non-binary
Not disclosed
0
0
Total
17
Return to work and retention rates of employees that took parental leave, by gender
Employee type
Non-binary Not disclosed
Female
Male
Return to work rate
Retention rate
100%
100%
100%
100%
NA
NA
NA
NA
Education and performance and development reviews
Education levels
The following table provides information about the education levels of employees
Education level
Number
Tertiary
Postgraduate
Secondary
None or unknown
277
129
61
28
Performance and career development reviews
All employees received regular performance feedback and coaching throughout the year, as part of our fortnightly, quarterly and annual
conversation cadence.
Diversity policy
Z is committed to a culture that promotes and values representation, equity and inclusion. This is reflected in our Diversity and Inclusion
policy which applies to all Z people and sets out processes for annual review of the organisation’s performance against the policy and
how it will be measured.
Z has a clear plan to increasingly build diversity into our business. We have made some progress, and there is more work to be done.
Please refer to pages 40 to 41 for more information on Z’s commitments in the Diversity and Inclusion space. Further detail can also be
read here: https://www.z.co.nz/about‑z/what‑we‑stand‑for/diversity‑and‑inclusion
Diversity of employees
The following tables provide additional detail to our Diversity and Inclusion stand, refer pages 42 to 43. Diversity information
about the Z Board can be found on page xx and in Ampol’s 2023 Corporate Governance Statement at:
https://www.ampol.com.au/about‑ampol/investor‑centre/corporate‑governance
Number of individuals by gender, age and ethnicity
Employees
Executive
2023
9 months to
31 Dec 2022
2023
9 months to
31 Dec 2022
Gender
Female
Male
Non‑binary
Not disclosed
Age group
Under 30 years
30–50 years
Above 50 years
Ethnicity
NZ European/Pākehā
European
Asian (including Indian
and Pakistani)
Other ethnicity
Information not provided
Middle Eastern/Latin
American/African
Māori
Pacific Islander
226
268
0
1
69
306
120
269
56
93
17
4
9
34
13
219
283
2
1
90
291
124
279
54
82
13
13
12
35
17
4
3
0
0
0
3
4
6
1
0
0
0
0
0
0
4
5
0
0
0
4
5
8
1
0
0
0
0
0
0
Note: The numbers in this table relate to permanent and fixed‑term employees only.
The age groups of Z’s permanent
employees at 31 December 2023
Age
% Employees
Under 30 years
30–50 years
Above 50 years
12%
63%
25%
The ethnicities of Z’s permanent
employees at 31 December 2023
Ethnicity
% Employees
NZ European/Pākehā
European
Asian (including Indian
and Pakistani)
Middle Eastern/Latin
American/African
Māori
Pacific Islander
Other ethnicity
Information not provided
56%
11%
17%
2%
7%
3%
3%
1%
The number of Z’s permanent employees
with dependants at 31 December 2023
Dependants
No
Yes
Not disclosed
Employees
193
239
28
84
Additional disclosures
85
Remuneration
Remuneration policies and processes
We believe in creating a clear link between performance and reward.
Z is committed to market competitive remuneration. To ensure a competitive total remuneration offering, Z aligns its fixed remuneration
structure to the upper quartile of external market benchmarking. Z also offers a company‑wide Short‑Term Incentive (STI) programme
which provides a variable payment dependent on both company and individual performance. When Z performs above plan expectations,
total remuneration outcomes sit at or above the top quartile of the market.
Our fixed remuneration structure is informed by external benchmarking from independent remuneration specialists. This structure
informs our annual salary review budget which is approved by the Ampol People & Culture Board Committee ahead of an annual salary
review in the first quarter of each year.
In addition to base salary, a Z employee’s fixed remuneration package includes health insurance for themselves and their immediate
family and a five percent employer contribution to KiwiSaver.
At Z, each eligible person has a clear STI target opportunity, represented as a percentage of fixed remuneration. Our STI model aligns pay
with performance by setting clear goals for Z overall, including a threshold for any STI payments set at the achievement of 85 percent of
profit plan expectations in any given year.
Once this threshold has been met, payment is subject to the overall company performance rating and meeting minimum individual
performance expectations.
In addition to Z’s overall performance goals, the Ampol Board considers the following areas when finalising its assessment of overall
company performance:
• Performance within risk appetite, including any significant safety and wellbeing incidents
• Holistic performance through the lens of shareholder, customer, employees and community including any adverse reputational
incidents causing misalignment with Z being a world‑class Kiwi company and/or customer reactions to any operational failures.
Information on Ampol’s remuneration philosophy and framework including Non‑Executive Director remuneration can be found in
Ampol’s Annual Report at: https://www.ampol.com.au/about‑ampol/investor‑centre/annual‑reports
Gender pay ratio
Z’s primary method for tracking any gender pay differential measures the existence of any gaps across all career levels.
Our overall gender pay gap for all staff (including our CEO and executive team) is 1.96 percent which has reduced from 5.26 percent since
our last annual report. Z is committed to closing its gender pay gap to zero over time and to supporting work in support of pay equity
across the economy.
Charitable donations
For the year ended 31 December 2023, Z made total charitable donations of $2,773,571 (for the 9 months ended
31 December 2022: $2,475,383).
Flick Energy Limited made donations of $1,615 (for the 9 months ended 31 December 2022: $1,617) during this period.
Directors’ and senior officers’ interests in bonds
None of Z’s Directors for the nine months to 31 December 2022 held any interest in Z Energy bonds.
None of Z’s Executive team hold any Z bonds.
Distribution of ordinary bonds and bondholders
At 31 December 2023
ZEL 060
Size of holding
1–1,000
1,001–5,000
5,001–10,000
10,001–50,000
50,001–100,000
100,001 and over
Totals
Number of bondholders
0
123
165
302
27
0
617
%
0.00
0.49
1.25
7.53
90.73
0
100
Number of bonds
0
615,000
1,560,000
9,407,000
113,418,000
0
125,000,000
Z’s 20 largest registered bondholders
At 31 December 2023
ZEL 060
Rank
Holder name
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
CUSTODIAL SERVICES LIMITED
FORSYTH BARR CUSTODIAN
NEW ZEALAND CENTRAL SECURITIES DEPOSITORY LIMITED
FNZ CUSTODIANS LIMITED
HOBSON WEALTH CUSTODIAN
JB WERE (NZ) NOMINEES LIMITED
NZX WT NOMINEES LIMITED
FORSYTH BARR CUSTODIANS
CUSTODIAL SERVICES LIMITED
INVESTMENT CUSTODIAL SERVICES
LU REN + YANAN XU
FNZ CUSTODIANS LIMITED
CUSTODIAL SERVICES LIMITED
FNZ CUSTODIANS LIMITED
BEST FARM LIMITED
CRAIG PAUL WERNER + LEA LYNN WERNER
CLUTHA NOMINEES LIMITED
FORSYTH BARR CUSTODIANS LIMITED
JBWERE (NZ) NOMINEES LIMITED
Account
4 A/C
1‑CUSTODY A/C
RESIDENT CASH A/C
NZ RESIDENTS A/C
CASH A/C
1 E A/C
12 A/C
C A/C
DTA NON RESIDENT A/C
6 A/C
DRP NZ A/C
1 NRL A/C
56413 A/C
20
ANDREW GEORGE ANSON + JOANNE PATRICIA ANSON
CENTURION FAMILY A/C
Total units
% Issued capital
48,085,000
17,020,000
15,681,000
13,741,000
6,048,000
4,184,000
1,113,000
1,011,000
917,000
749,000
600,000
566,000
530,000
406,000
400,000
330,000
250,000
220,000
205,000
200,000
38.47
13.62
12.54
10.99
4.84
3.35
0.89
0.81
0.73
0.6
0.48
0.45
0.42
0.32
0.32
0.26
0.2
0.18
0.16
0.16
86
87
Ngā hononga
me ōna tikanga
Appendix 1:
Materiality – who we engage with and how
For the 2023 calendar year, materiality
has been determined through analysing
the output of external and internal
engagements with the stakeholder
groups referenced below and validated
via interviews with the Z Leadership
Team and senior leaders.
Set out below are details around how
Z has engaged with core external
stakeholder groups to understand
their material issues.
We intend to refresh our approach
to assessing materiality in 2024.
Who are Z’s core
external stakeholders?
In determining materiality, Z seeks
to understand the perspectives and
priorities of the following external
stakeholder groups:
Customers
Z routinely seeks feedback from our
business and consumer customers on
all areas of their experience. This forms
the basis for making improvements to
customer experience, products and our
service standards.
Z undertakes quarterly tracking and
monthly customer research. What our
small business and retail customer
research tells us is that they value a
consistent, fairly priced, personal service
where their loyalty is recognised. The role
of Z in supporting the local community
increased in importance to customers
over 2023.
Climate change is higher on customers’
minds this year, alongside a desire for
Z to offer the same ease of solutions for
lower carbon energy as for traditional
fuels. Cyber security is showing up in a
hesitancy towards digital payments, and
the rise in retail crime has pushed safety
and wellbeing up as a priority concern.
Mana whenua
Central government
Local government
Media
As one of the country’s leading
transport energy companies, Z engages
continuously with central government
on a wide range of regulatory and policy
issues. Z conducts meetings in person on
at least a quarterly basis with Ministers,
MPs, officials and advisors. Much of the
engagement we have with government
is focused on policy and regulatory
matters associated with the three planks
of the energy trilemma: energy security,
affordability, and emissions reductions.
Z engages proactively, deliberately and
on a non‑partisan basis. Z participates in
consultations around proposed policy and
appears at select committee hearings as
required. Over 2023, there were a number
of regulatory policy developments
that required engagement, including
consultations regarding the advancement
of the energy transition, passage of
amendments to the Fuel Industry Act,
and proposed changes to the Emissions
Trading Scheme.
The most material issues for government
engagement over 2023 have been:
1. Cost of fuel/affordability
2. Security of fuel supply – at both a
national level and for local communities
affected by adverse weather events
(like Cyclone Gabrielle)
3. Supporting the energy transition.
Z is at the beginning of a cultural journey.
Z’s engagement with mana whenua is
generally on a site‑by‑site basis, for
example at Seaview where a new pipeline
is being built, or at the Z Kahikatea Drive
retail site where local mana whenua were
consulted on a name change and invited
to formally re‑open the site.
Z is committed to supporting the
communities in which we operate.
The Good In The Hood programme
directly ensures funding is provided to
local community groups, and in 2023
a focus was made on lifting Māori
representation in the programme.
Z’s current engagement processes with
mana whenua provide us with a limited
view of what matters most to Māori within
their rohe and is largely conducted on a
case‑by‑case basis.
Public
Z participates in the annual Colmar
Brunton Corporate Reputation Index to
understand what Kiwi expect from the
country’s top 50 brands. On average,
reputation declined for all companies
during 2023, reflecting cost‑of‑living
pressures and concerns around being
charged fair prices. Concerns over
the treatment of employees and
action to address climate change have
also increased.
Z also engages with the public via
social media and digital channels,
including Facebook, LinkedIn and online
at general@z.co.nz. Core concerns
raised through these channels include
broader sustainability, including waste
management and recycling, affordability,
and security of fuel supply, including
EV charging.
Z seeks to build open, transparent and
trusted relationships with all media.
We recognise the value of an independent
media in a strong democracy. We remain
deliberately open and available
for queries and actively maintain
relationships across a wide range of local
and national media outlets. For example,
Z ran a proactive education campaign on
fuel pricing in the lead up to the return of
the Fuel Excise Duty.
Core issues for the media over 2023
included affordability, security of fuel
supply and climate change.
Internal stakeholder groups
Feedback from regular internal
stakeholder group engagement is
also included when identifying what
matters most.
Topics discussed at Z governance
meetings are analysed, such as key
organisational and operational risks,
and company performance targets and
commitments raised as part of regular
meetings of the Z Leadership Team,
Z Board and the Ampol Decarbonisation
Project Review Board, along with insights
from monthly Peakon employee surveys.
As a lifeline utility provider and an
essential service, Z plays a vital role in
ensuring communities have access to the
fuel they need.
Over 2023, there were multiple adverse
weather events that impacted local
communities, including Northland,
Auckland, the East Coast of the North
Island and Southland. In all cases, Z was
in regular communication with the
relevant local authorities to ensure local
fuel supply was either uninterrupted or
restored rapidly, as well as to support
regional recovery efforts. Ensuring we
continue to build and practice our
emergency response capability is a
priority for Z.
At a local level our fuel storage terminal
operations engage on a regular basis with
local authorities as required for resource
consent management.
Non-governmental organisations
(NGOs)
Z engages with a range of NGOs on a
regular basis in a variety of capacities,
including as direct customers to Z
(for example Hato Hone St John
Ambulance), at a local level through
our Good In The Hood community
programme, and at a national level
through our three biodiversity
partners: the Sustainable Business
Network, The Nature Conservancy and
Trees That Count.
Z also engages with emergency service
NGOs as required during local events, for
example through Cyclone Gabrielle and
its aftermath.
Z’s people are empowered to take two
volunteer days a year to engage with
charities of their choice, with long‑term
relationships built over time, for example
with Conservation Volunteers NZ.
88
89
Tūhonotanga
Appendix 2:
Connectivity
We opened this annual report with Z’s context, which is shaped by what we stand for, the choices we make
and why we do what we do.
Set out below are links to where each of the elements of our context are connected within this report:
Business model element and corresponding value creation
Refer page(s)
Our assets and supply chain
Business model: Our assets and supply chain
• One of the country’s leading transport energy companies; own and operate a network of
strategically located assets including commercial refuelling stations, retail service stations
and bulk fuel storage terminals across the country
• Integrated supply chain
Material issue: Security of fuel supply
Strategy element: Z at Home
• 100% ownership in electricity retailer Flick
• New electricity offer for homes, including optional EV charger installation
Strategy element: Z On‑the‑go
• Retail site refresh and convenience retail offers
• Growing EV charging network
• Innovation, including Red Phase partnership for ultra‑high‑speed charging
Strategy element: Z for Business
• Secure, safe and competitively priced transport fuels
• Sustainable Aviation Fuel feasibility study
Strategy element: Z Fuel Supply
• Greater supply security through integration with the Ampol Group
• Market share
A snapshot of our supply chain
• Refined fuel imports
• Retail network including EV charging
Page 12
Page 11
Page 20
Page 18
Page 22
Page 23
Page 24
Financial statements
Pages 48 to 74
Business model element and corresponding value creation
Refer page(s)
Our finances
Business model: Our finances
• Strong financial performance
• Market share
• Investment in adjacent business for future energy options
• Strength of the Ampol Group
Our numbers
• Financial highlights
Material issue: Climate change / energy transition
Our strategy
• New phase of strategy to safely and reliably deliver the affordable energy customers and the
economy need while supporting the transition to a low carbon future
Climate statements
• First climate statements to be published under the Aotearoa New Zealand Climate Standards
(April 2024)
Financial statements and Auditor’s report
Our people and culture
Business model: Our people and culture
Material issue: Safety and wellbeing
Stand: Safety and wellbeing
• Ensuring peoples’ safety and wellbeing
• Managing and mitigating spills
Stand: Diversity and inclusion
• Diversity commitment, closing the gender pay gap
• Te Ao Māori representation, learning and development
• Snapshot of the Z whānau
Our people:
• Integrated Ampol‑Z Energy Solutions Team
• New CEO, Lindis Jones
• Increased employee engagement score
• Leadership development
• HR Institute of New Zealand awards
Page 12
Pages 8 to 9
Page 11
16 to 17
See link on
page 13
Pages 48 to 79
Page 12
Page 11
Pages 38 to 39
Pages 40 to 43
Pages 44 to 47
90
Appendix 2: Connectivity
91
Business model element and corresponding value creation
Refer page(s)
Business model element and corresponding value creation
Refer page(s)
Our environment
Business model: Our environment
Material issue: Climate change / energy transition
Climate statements
• First climate statements to be published under the Aotearoa New Zealand Climate Standards
(April 2024)
Stand: Environmental sustainability
• Progress against Community and Environmental Sustainability Strategy 2030 –
Restore Nature and Wellbeing, Lead Transition
• GHG emissions
• Biodiversity fund partnerships
Our place in Aotearoa New Zealand
Business model: Our place in Aotearoa New Zealand
Material issue: Affordability / cost of living
Material issue: Climate change / energy transition
Material issue: Security of fuel supply
Stand: Environmental sustainability
• Progress against Community and Environmental Sustainability Strategy 2030 –
Restore Nature and Wellbeing, Lead Transition
• GHG emissions
• Biodiversity fund partnerships
Stand: Community
• Progress against Community and Environmental Sustainability Strategy 2030 –
Empower Communities
• Good In The Hood programme review and donations
• Other charitable donations
Page 13
Page 11
See link on
page 13
Pages 29 to 34
Page 13
Page 11
Page 11
Page 11
Pages 29 to 34
Pages 34 to 37
Our capabilities
Business model: Our capabilities
Pages 13 to 14
Strategy element: Z On‑the‑go
• Retail site refresh and convenience retail offers
• Growing EV charging network
• Innovation, including Red Phase partnership for ultra‑high‑speed charging
Strategy element: Z Experience
• Providing customer convenience, including through the Z App
• Providing digital payment options
• Increasing Z brand performance
Strategy element: Z at Home
• 100% ownership in electricity retailer Flick
• New electricity offer for homes, including optional EV charger installation
Strategy element: Z for Business
• Secure, safe and competitively priced transport fuels
• Sustainable Aviation Fuel feasibility study
Strategy element: Z Fuel Supply
• Greater supply security through integration with the Ampol Group
• Market share
Our people:
• Integrated Ampol‑Z Energy Solutions Team
• New CEO, Lindis Jones
• Increased employee engagement score
• Leadership development
• HR Institute of New Zealand awards
Page 18
Page 19
Page 20
Page 22
Page 23
Pages 44 to 47
92
93
Ngā
pārongo
Company
directory
Registered and head office –
New Zealand
3 Queens Wharf
Wellington
z.co.nz
Contact us
For general enquiries phone:
0800 474 355 and select ‘0’ or
email: general@z.co.nz
Facebook: Z Energy
LinkedIn: Z Energy
Directors
Greg Barnes (Chair)
Lindis Jones
Andrew Brewer
Executive team
Lindis Jones
Chief Executive Officer
Pou Matua
Nicola Law
Chief Financial Officer
Pou Tiaki Pūtea
Andy Baird
General Manager, Customer
Pou Kiritaki
Debra Blackett
General Counsel, Z Energy
& Climate Change
Te Kanihera Whānui, Ngao Z,
Te Mahana haere o te Ao
Julian Hughes
General Manager, Supply
Pou Punakora
Helen Sedcole
Head of People & Culture and
Group Ambition Lead
Pou Tangata
Mandy Simpson
Chief Digital Officer
Pou Matihiko
This report printed on FSC® certified
paper using vegetable‑based inks.
Lawyers
Chapman Tripp
6/20 Customhouse Quay
Wellington
Minter Ellison Rudd Watts
18/125 The Terrace
Wellington
Bankers
ANZ Bank New Zealand Limited
215‑229 Lambton Quay
Wellington
Bank of New Zealand
80 Queen Street
Auckland
Hong Kong and Shanghai
Banking Corporation
HSBC Tower
195 Lambton Quay
Wellington
MUFG Bank
Level 19, 151 Queen Street
Auckland
Westpac Banking Corporation
51 Te Ara Tahuhu Street
Auckland
Auditor
KPMG
Level 6, 44 Bowen Street
Wellington
Z Energy
2023 Annual Report
Aspirational
for Aotearoa
New Zealand
Our customers, communities and people
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