Caltex Australia’s long-standing chief executive Julian Segal has defended his company’s convenience and retailing pivot after announcing his retirement on Wednesday.
After 10 years in the top job, Mr Segal told The Age and The Sydney Morning Herald his decision to retire was something he had “considered very seriously” for a long period of time.
“I’ve been with Caltex for 10 years, and I was CEO of Incitec Pivot for four years before that. The average life of a CEO is more like five years, but here I am 14 years later,” he said.
Mr Segal said he believed it was the right time for Caltex to appoint a “fresh” chief executive, and also the right time for him to pursue other passions.
“I do my job with passion, so that means there’s very little time for me to do other things. I’m 64, in good shape, and I’d like to spend a few years doing other things I am passionate about,” he said.
Caltex chairman Steven Gregg praised Mr Segal’s contribution, which included a broad transformation of the company away from fuel production towards a quick service retail and convenience offering, including closing its Kurnell refinery in 2014.
Mr Segal has long supported a move into the convenience and retailing side of the business, predicting last year fuel income would “peter out” in 10-15 years.
Despite this, he believed his convenience strategy had been “miscommunicated”, stressing the company was not ditching fuel as part of its business model, noting it still makes up 75 per cent of its profits.
“You could see this coming into Australia if we didn’t change our business model, we would have been history,” he said.
“It was clear we needed to create a bigger enabler of our fuel infrastructure business, and we saw the opportunity in our retail network. We made a good call when we said we should develop a new convenience model.”
Part of its move into retailing involves the company buying back 810 franchised retail sites by next year, a move Mr Segal insists was connected to the company’s retail strategy, and not related to revelations of underpayment and exploitation in the franchise network.
In its full-year results released in February, the company surprised investors by announcing a $260 million share buyback after it nixed a $500 million sale and lease-back deal for its retail sites.
Caltex is set to report its half-year results on August 27, where it confirmed it was expecting heavily-reduced profits of between $240 and $270 million, down from $443 million in the 2018 half year.
This was due to a “very challenging” market brought on by weak macroeconomic conditions, Mr Segal said at the time, such as low refining margins and high crude oil prices.
Shares dived 13 per cent after the downgrade was announced, but have since climbed back to similar levels, however, overall there has been a 25 per cent decline since early 2018.
Both external and internal candidates will be assessed for the role, and Mr Segal there was “no time-frame” for when the succession would be completed.
Shares were up two per cent after market open, before easing slightly to $26.70.
extracted from SMH