REPORT INTEGRATED 2019 - about progress - Engen

Page created by Kristen Bowers
REPORT INTEGRATED 2019 - about progress - Engen

             we are
REPORT INTEGRATED 2019 - about progress - Engen
REPORT INTEGRATED 2019 - about progress - Engen
we are
    Our purpose as a company is embodied in our Statement of Purpose, which marks
    a new chapter in our journey as Southern Africa’s leading downstream petroleum
    company with a presence in 7 countries, and a brand presence in 9 more countries.

    “A Progressive Energy and Solutions Partner
    Enriching Lives for a Sustainable Future”
    Our Statement of Purpose underscores why we do what we do, now and in the future
    - a clarion call of our passion to harness the transformative power of energy for the
    benefit of all. Delivering energy needs in a responsible manner is now more important
    than ever. We are constantly seeking meaningful collaborations to provide solutions
    that enrich lives because we believe that it is only when lives are enriched that real
    progress is achieved.

    That is why we are "Passionate about Progress."

4                                                                                                 5
REPORT INTEGRATED 2019 - about progress - Engen
     Stepping up
     and supporting
     Our priority remains the unwavering support of our                                    • Directed R1 million worth of fuel to the Department of

     employees, customers and local communities.                                             Health to power the emergency response vehicles of
                                                                                             frontline health workers.
     The COVID-19 pandemic and national lockdowns have had a severe impact                 • Directed R1 million worth of fuel to FoodForward SA to
     on the economies of the countries in which Engen operates as well as on the             power their delivery vehicles in their quest to expand the
     livelihoods of many citizens. The effects will be felt for some time. As Engen, our     distribution of nutritious food to vulnerable people.
     purpose is to be “A Progressive Energy and Solutions Partner Enriching Lives for a    • Directed R2.5m fuel and medical testing equipment to the
     Sustainable Future”. In the face of this unique global challenge, we’re committed       Gift of the Givers to boost their humanitarian relief work.
     to not only living up to our clarion call but also to do so much more.                • Partnered with the Gift of the Givers to provide food relief
                                                                                             to the South Durban community, distributing 5 000 food
     We fully commend decisive government responses to the pandemic and stand
                                                                                             hampers over a 5 month period.
     in solidarity with the various country’s leadership in their respective approaches
                                                                                           • In Gauteng, Engen fuel retailers distributed food hampers
     to protect inhabitants. In these challenging times for business and society, it is
                                                                                             and basic supplies to over 7 000 Diepsloot, Alexandra and
     only by standing together as citizens of a local and global community that we
                                                                                             Tembisa residents.
     will combat COVID-19. We are all in this together and we all have a positive
     role to play.                                                                         • Contributed R1.25m in the National Solidarity Fund,
                                                                                             which comprised a R500k corporate donation and R750k
     Engen's business was not spared the impact and we experienced a decline                 from Engen employees who offered part of their salaries.
     in sales volume over the course of the national lowdowns. In response to the
     pandemic, we have implemented additional hygiene measures across our                  While we know it will take much more to alleviate the
     business. These ensure that we continue to safely and reliably manufacture            stress that many of our stakeholders are facing, we hope our
     our core petroleum products and safely deliver our quality products and related       contribution makes a small difference to each person who
     convenience services to our valued customers.                                         receives the comfort of a helping hand as a result of our efforts.

     We have also thoroughly stress tested our business model against various              As the Covid-19 virus continues to have a profound effect
     scenarios and tested our business continuity plans against the most trying            on most people and businesses across the world, Engen
     possible scenarios. Our long-term customer centric business strategy is               will continue to do all we can to support our customers,
     specifically positioned to fuel growth and future-proof our business by               employees, suppliers and neighbouring communities through
     ‘Stepping Out’ with retail non-fuel and new energy sources of growth. We              these unprecedented times. While we will undoubtedly
     therefore continue to look beyond 2020 with clarity and optimism.                     overcome the scourge, it will only be achieved by all of us
                                                                                           taking collective responsibility for preventing the spread
     As a responsible corporate citizen, we have a duty to step up in times of need.
                                                                                           of COVID-19. That is why we call on the citizens of all the
     Therefore, we swiftly moved to support the communities residing close to
                                                                                           countries in which we operate to follow government and
     our operations, and society at large who were impacted by COVID-19 and the
                                                                                           health service advice and to take care of themselves and their
     national lockdown.
                                                                                           families. We are all in this together.
     In this regard, we have sought a multi-stakeholder approach, working together
                                                                                           And while we start emerging from lockdown, and
     with a broad range of social partners in these challenging and uncertain times.
                                                                                           notwithstanding signs of recovery, the severe impact of
     We have successfully collaborated with government and civil society to bring
                                                                                           COVID-19 on people’s health and employment will continue.
     much needed relief to some of the most vulnerable sections of society.
                                                                                           While Engen’s priority remains the unwavering support our
     Focusing our response efforts on equipping and support those who are at the           employees, customers and neighbouring communities, we
     frontline of fighting the virus, we have made amongst others the following            will also continue to work supportively to assist in the fight
     investments to help fight COVID-19:                                                   against the virus, and to support recovery efforts.

 6                                                                                                                                                              7
02                                                                                                                                                              03
REPORT INTEGRATED 2019 - about progress - Engen

         ABOUT THIS
      Thank you for reading Engen Limited’s              2019
       Integrated Report for the year ended
       31 December 2019. As a company, we
     endorse the principles of transparency
     and accountability, and are committed
       to reporting on our performance and
         prospects in a meaningful manner.

 8                                                                         9
REPORT INTEGRATED 2019 - about progress - Engen

     REPORTING SCOPE AND BOUNDARY                                    our robust internal process and good governance practices.
                                                                     Our Board Audit Risk and Compliance Committee provides
     This year marks the 7th year of our integrated reporting
                                                                     internal assurance annually to the Engen Limited Board on
     journey with our emphasis on improving the clarity and
     conciseness of the Report.
                                                                     the execution of the combined assurance plan. The Group’s          NAVIGATION ICONS
                                                                     financial, operating, compliance and risk management controls
     Our 2019 Integrated Report provides a holistic overview         are assessed by the Group’s internal audit function, which is
     of Engen’s key developments, market challenges, our
                                                                                                                                        The following navigation icons are used to link our Capitals and Strategic Priorities
                                                                     overseen by the Board Audit Risk and Compliance Committee.
     strategies and initiatives as well as our approach                                                                                 to Material Matters, Key Risks and Mitigation and Business Review.
                                                                     EY have audited the Group’s annual financial statements,
     to risk and governance for the 12-month period
                                                                     which were prepared in terms of the International Financial
     1 January to 31 December 2019, unless otherwise stated.
                                                                     Reporting Standards (IFRS). The Key Financial Indicators
     In addition, we also offer relevant historical information in
                                                                     for 2019 and 2018 of the Statement of Profit and Loss and
     order to contextualise the key issues discussed.
                                                                     Statement of Financial Position are set out on page 133. The
                                                                     B-BBEE scorecard information was verified independently by
                                                                                                                                        OUR CAPITALS
     REPORTING FRAMEWORK                                             AQRate Verification Services.

     Our report is based on the principles and framework             A reasonable assurance report by independent auditor’s on
     as presented in the International Integrated Reporting          selected sustainability information was included in the 2018
     Framework (IIRC). The focus is on Engen’s value chain and       Engen Integrated Report. We endeavour to conduct this
     how we manage the process of value creation across the six      exercise every 3-5 years. Therefore, reasonable independent
     sustainability capitals as guided by the framework.             assurance on selected sustainability information is not
                                                                     included in the 2019 Engen Integrated Report.                        01 FINANCIAL           02 HUMAN          03 MANUFACTURED
     The activities of Engen Limited, and of all our operating
     subsidiaries, are covered. This includes all operations in
     which we have direct control and are able to implement          FORWARD LOOKING STATEMENTS
     our policies, practices and standards. We report fully on       This report contains certain forward-looking statements,
     key sustainability performance indicators regardless of
                                                                     typically with words such as ‘aim’, ‘may’, ‘plan’, ‘will’ and
     percentage share ownership. Deviations from this reporting
                                                                     ‘expected’ or other similar expressions. These statements
     boundary are clearly stated.
                                                                     discuss future expectations concerning the dispositions of         04 INTELLECTUAL       05 SOCIAL AND           06 NATURAL
     While the financial and non-financial data from our             assets or financial conditions or provide other forward-looking                          RELATIONSHIP
     subsidiaries are fully consolidated, the B-BBEE assessment,     information into 2020. These forward-looking statements are
     along with our employment equity statistics, exclude all non-   not guarantees or predictions of future performance and
     South African operations.                                       involve known and unknown risks, uncertainties and other
                                                                     factors, many of which are beyond our control and may cause

     MATERIAL MATTERS                                                actual results to differ materially from those expressed in the    OUR STRATEGIC PRIORITIES
                                                                     statements contained in this report. Readers are cautioned
     Our report is relevant for stakeholders with an interest in     not to put undue reliance on the forward-looking statements.
                                                                                                                                                     GROW & STRENGTHEN                             DRIVE DOWN COST
     our performance and prospects against our Statement of
     Purpose: A Progressive Energy and Solutions Partner,
                                                                                                                                           GSC       THE CORE                          DDCS        TO SERVE
     Enriching Lives for a Sustainable Future.
                                                                     BOARD APPROVAL
                                                                     The Engen Limited Board is responsible for ensuring the
     We apply the principle of materiality in assessing what                                                                                                                                       OPTIMISE ACROSS THE
     information should be included in our Integrated Report.        integrity of the Integrated Report. In the Board’s opinion, this       SO       STEPPING OUT                      OAVC        VALUE CHAIN
     The information provided focuses on issues, opportunities       report addresses all material issues, and presents a balanced
     and challenges that impact materially on Engen in ensuring      and fair account of Engen’s performance.
     a sustainable future, while consistently delivering value and
     enriching the lives of our stakeholders.                        Engen External Communications Manager
                                                                     Engen Court, Thibault Square. Cape Town, 8001
     ASSURANCE                                                       PO Box 35, Cape Town, 8000
     Our financial statements are independently audited while the    Email:
     development of our non-financial reports are supported by       Tel: +27 21 403 4312

06                                                                                                                                                                                                                                   07
REPORT INTEGRATED 2019 - about progress - Engen
INSIDE THIS REPORT                              Stakeholder Engagement          50
                                                     Our Strategy                    53

                                                     Key Performance Indicators      54

     Overview of Engen                               56
     Who We Are & What We Do                    10   Performance Review
     What We Offer                              12   Retail                          58
     Group Corporate Struture                   14   Commercial                      60
     Where We Operate                           18   Lubricants                      62
     Our Value Chain                            20   International Business          64
     Our Strategic Alliances                    22

     23                                              68
     Leadership Statements                           Leadership
                                                     Engen Limited Board             69
     Chairman’s Letter                          22   Engen Management Committee      75
     CEO’s Statement                            26

     30                                              70
     2019 Highlights                                 Governance
                                                     Our Approach                    85
     Business Highlights                        31   Engen Limited Board             85
     Financial Highlights                       32   Internal Audit                  87
     Awards                                     33   Compliance                      88

     36                                              77                                    ENGEN IS SOUTH AFRICA’S
     Strategic Review                                Sustainability                        FASTEST GROWING BRAND AND
     Our Value Creating Business Model          36   Human Capital                   95
                                                                                           “COOLEST” PETROLEUM BRAND
     Operating Environment and Market Outlook   38   Social & Relationship Capital   103
     Risks & Materiality                        40   Manufacturing Capital           123
     Managing Material Matters                  42   Natural Capital                 127
     Key Risks and Mitigation                   46   Financial Capital               132

08                                                                                                                     09
REPORT INTEGRATED 2019 - about progress - Engen

      Engen is South Africa’s fastest growing brand* and “coolest” petroleum brand**; an industry trendsetter and customer
      focused market leader that harnesses human potential to deliver innovative petroleum products, exciting retail
      convenience offerings and digitally enabled solutions.
      We leverage our parent company, PETRONAS’ intellectual capital and extensive investments in R&D to deliver
      world-class petroleum products.

                                     We operate approximately 1,030 Engen service stations across South Africa, marketing superior petroleum
                                                                                                                                                        STATEMENT OF PURPOSE

                                                                                                                                                                                                                    SHARED VALUES
                                     products and offering unique convenience at over 600 Quickshops and through various prestigious partner
                                     brands. By developing innovative digital solutions and partnering with leading loyalty programmes, we              A Progressive Energy and
                                     create a seamless refuel and convenience experience for our customers.                                             Solutions Partner, Enriching Lives
     The scale of operations,
     facilities and manpower                                                                                                                            for a Sustainable Future.                                                               OWNERSHIP         TEAMWORK    PERFORMANCE

     involved in the day-to-day
     manufacturing, logistics                                                 COMMERCIAL                                                                   Progressive
     and distribution network of
     the Company necessitates                                              As a proud partner to a broad section of South African industry, our fully      We are a dynamic Southern African brand that
     a culture that prioritises                                            integrated commercial business focuses on the sales and marketing               is Passionate About Progress and places                                              EMPOWERED         INTEGRITY
     Health, Safety and                                                    of bulk petroleum products, including: Diesel, Jet A-1, Heavy Fuel Oil,         customers at the heart of all the things that we do.
     Environment.                                                          Bitumen, Gasoline, Kerosene, LPG and Chemicals.
     Our passionate workforce                                                                                                                              Energy
     harnesses a history that
                                                                                                                                                           We provide a range of energy solutions for our
     stretches back to 1897 and

                                                                                                                                                                                                                    PETRONAS CULTURAL BELIEFS
     draws on the legacy of
                                                                                                                                                           customers’ Energy requirements with the ambition
     those employees in whose                                                                                                                              to add renewables to our customer offering.
     footsteps they tread, to                         We offer premium lubricant products in South Africa based on PETRONAS’ Fluid Technology
     strongly collaborate with                        Solutions, including: Automotive, Industrial and Marine. These cater for consumers and
                                                                                                                                                           Solutions Partner
     our business partners and     commercial customers. Alongside quality Engen lubricants, we also market various PETRONAS lubricants and                We are a provider of products and services, delivering
     stakeholders to ensure        functional fluids.                                                                                                      innovative Solutions to be a trusted Partner that
                                                                                                                                                                                                                                                  RESULT MATTER          OWN IT!
     that we maintain our
                                                                                                                                                           delivers value.
     proud record of consistent
     Our continuous service
                                                         INTERNATIONAL BUSINESS                                                                            Enriching Lives
     journey anchored on a
                                                                                                                                                           We are committed to Enriching the Lives of all
                                                      Our International Business houses our retail assets, including 230+ service stations, in                                                                                                  FOCUSED EXECUTION     NURTURE TRUST
     ‘customer first’ mindset                                                                                                                              our stakeholders and to help society to reach its full
     drives us to create and                          six countries, namely: Botswana, DRC, eSwatini, Lesotho, Mauritius and Namibia. It also              potential for a prosperous future.
     deliver a seamless customer                      focuses on the commercial fuels and lubricants sectors in these countries, with reseller
     service experience so that                       agreements for lubricants in a number of other sub-Saharan African countries.                        Sustainable Future
     we consistently deliver our
     brand promise ‘With us you                                                                                                                            We create a Sustainable Future by protecting                                          SHARED SUCCESS          TELL ME
     are Number One’.                                    MANUFACTURING                                                                                     value across Human, Social, Manufacturing,
                                                                                                                                                           Intellectual, Natural, and Financial capitals.
                                                      We are committed to safely manufacturing and maintaining excellence and reliability in
                                                      every product we produce at our three manufacturing plants, while limiting our effect on
                                                      the environment.

                                   *according to Brand South Africa
10                                 **as voted in the 2019 Sunday Times Generation Next survey                                                                                                                                                                                               11
REPORT INTEGRATED 2019 - about progress - Engen


                       RETAIL                           COMMERCIAL                              LUBRICANTS                                  BUSINESS                                                   MANUFACTURING

       Markets fuels, convenience and offers     Fully integrated business focusing on   Undertakes all sales and marketing          Offers retail fuels and services in 6        Of the approximately 500 petrochemical products we market, many
       a seamless customer experience            sales and marketing of bulk petroleum   functions of Engen and PETRONAS             countries via 230+ service stations, while   are manufactured safely in our three manufacturing plants – Engen
       at 1 030 service stations, 615            products, lubricants and chemicals in   lubricant products in South Africa.         also focusing on the sales and marketing     Refinery, Engen Lubricants Oil Blend Plant and Zenex Blend Plant.
       Quickshops and numerous fast food         South Africa.                                                                       of bulk petroleum products, lubricants
       partners across South Africa.                                                                                                 and chemicals across Southern Africa.

       FUEL                                      PRODUCTS                                KEY STRATEGIC BRANDS                        FUEL                                         REFINERY
       • Engen Primax Unleaded 93/95             •   Engen Dynamic Diesel                • PETRONAS Syntium         • Engen Xtreme   • Engen Primax Unleaded 93/95                • Location: Wentworth, Durban
       • Engen Dynamic Diesel 50ppm              •   Engen Primax Unleaded               • Engen Dieselube                           • Engen Dynamic Diesel 50ppm                 •   Nameplate Capacity: 120 000 bpd
                                                 •   Jet A1
       NON-FUEL                                  •   Heavy Fuel Oil                      AUTOMOTIVE MOTOR OILS                       NON-FUEL                                     •   Certified ISO 9001 (Quality) & ISO 14001 (Environmental)
       •   Quickshop                                                                     • Fully & Semi Synthetic • Mineral          •   Quickshop                                •   Produces EURO 2 unleaded Mogas (93 & 95) & 50ppm Diesel
                                                 •   Illuminating Kerosene
       •   Quick service restaurants             •   LP Gas                              • OEM Genuine Oil                           •   Quick service restaurants                •   Product Range: Mogas | Diesel | Jet | LPG | HFO | Bitumen | Aromatic &
       •   Banking ATMs                          •   Chemicals                                                                       •   Banking ATMs                                 Aliphatic Solvents | Sulphur
       •   Courier Services                                                              COMMERCIAL VEHICLE OILS                     •   Car Wash
       •   Car Wash
                                                 •   Bitumen
                                                                                         • Heavy duty diesel engine oil                                                           LUBRICANTS OIL BLEND PLANT
                                                 INDUSTRIES SERVED:                                                                  B2B PRODUCTS                                 •   Location: Island View, Durban
       •   Truckstop                                                                     AUTOMOTIVE FUNCTIONAL                       •   Engen Dynamic Diesel                     •   Certified ISO 9001 (Quality), ISO 14001 (Environmental) & ISO 17025 (Lab Testing)
       ENGEN 1APP                                •   Agriculture                         FLUIDS                                      •   Jet A1                                   •   Product Range: Engine, Industrial, Marine, Gear oils
                                                 •   Aviation
       South Africa’s first mobile application                                           •   Auto Transmission and Gear              •   Heavy Fuel Oil
                                                 •   Coatings                                                                                                                     •   Production Capacity: 33850 m² | 80 000 MT | 1 Shift | 78 staff
       that creates seamless on-the-go                                                   •   Greases                                 •   Illuminating Kerosene
                                                 •   Construction                                                                                                                 •   Storage: Base oil: 28 365 m3 | Additives: 938 m3 | Semi-finished oils: 1 847 m3
       refuel and retail experience for Engen                                            •   Radiator Coolant                        •   LP Gas
                                                 •   Fleet
       customers.                                                                        •   Brake Fluid                             •   Chemicals                                    Manufacturing Kettles: 4 x 10t (2 trains) | Dosing Kettles: 2 x 500kg + 2x2t
                                                 •   Manufacturing
       REWARDS PARTNERS                          •   Marine                              INDUSTRIAL LUBES & FLUIDS                   •   Lubricants & Fluids
                                                                                                                                                                                  ZENEX BLEND PLANT
       • FNB eBucks                              •   Mining                              •   Hydraulic         • Compressor          INDUSTRIES SERVED:                           •   Location: Island View, Durban
       • Clicks Clubcard                                                                 •   Turbine           • Agriculture         •   Agriculture                              •   Certified ISO 9001 (Quality)
       • Edcon ThankU                                                                    •   Marine            • Metal Working       •   Aviation                                 •   Product Range: Engine, Industrial, Rail, Transformer, White, Gear oils
                                                                                         •   Industrial Gear                         •   Coatings                                 •   Production Capacity 30000 m² | 25000 MT | 1 Shift | 32 staff
                                                                                         SERVICES                                    •   Construction
                                                                                                                                                                                  •   Storage: Base oil: 26000 m3 | Additives: 400 m3
                                                                                                                                     •   Fleet
                                                                                         • Fluidlink                                                                                  Finished Products: 1 565 m3 | Manufacturing Kettles: 3 x 800Lt
                                                                                                                                     •   Manufacturing
                                                                                                                                     •   Marine
                                                                                                                                     •   Mining

12                                                                                                                                                                                                                                                                        13
REPORT INTEGRATED 2019 - about progress - Engen


                                                                                                                                         21.2 %    Afric Energy

                                                                                  74     %   PETRONAS                                              Resources
                                      ENGEN LIMITED                                          Marketing
                                                                                                                                                   (Pty) Ltd
                                                                                             sdn bhd
                                                                                                                                         4.8% Main   Street 1412
                                                                                                                                              (Pty) Ltd

         100%                  100%           100%
             ENPET                 ENPET
                                                                                                                                     COMPLIANT with
                                                                                                                                     the liquid fuels charter
            AFRICA              INSURANCE
          INSURANCE               LIMITED
                                                   (PTY) LTD
            LIMITED                (10M)

         100%                 100%          100%                 100%             100%                       100%           100%             60%
            ENGEN                CITYCAT        ENGEN                               PETROLEUM                   ENGEN
                                                                     ENGEN                                                      ENGEN         ENGEN
          PETROLEUM            PROPERTIES      LESOTHO                             INVESTMENT                  COMPANY
                                                                   SWAZILAND                                                  PETROLEUM        DRC
              LTD               (PTY) LTD      (PTY) LTD                           HOLDING LTD                (MAURITIUS)
                                                                  (PTY) LIMITED                                              (DRC) LIMITED      SA
                                              (LESOTHO)                            (MAURITIUS)                  LIMITED

                                                                 100%             70%                        100%
         100%           40%
                                                                     ENGEN            ENGEN                     ENGEN
                                                                  PRODUCING         PRODUCING                 PRODUCING        ARTISEA
           IMTRASEL      REATILE                                                                                               BELGIUM
            (PTY) LTD    GAZ LTD                                   (NAMIBIA)       (BOTSWANA)                 (MAURITIUS)
                                                                      LTD              LTD                       LTD
                                                                   (NAMIBIA)       (BOTSWANA)                 (MAURITIUS)

                                               25%               40%              100%                       23.5%           SEP CONGO
                                                                     ENGEN           ENGEN                       MER OIL
                                                   ENGEN MAUN                      MARKETING
                                                                    PALAPYE                                     STORAGE
                                                   PARTNERSHIP                     BOTSWANA
                                                                  PARTNERSHIP                                 TERMINAL CO
                                                     (PTY) LTD                      (PTY) LTD
                                                                    (PTY) LTD                                     LTD

14                                                                                                                                                                       15

     Engen is a valued member of the PETRONAS Group, a Fortune 500 company and
     our majority shareholder. PETRONAS is a fully-integrated oil and gas company
     operating in approximately 70 countries across the globe, employing more than
     50 000 people.
     As well as drawing on the skills of their human capital, business capabilities
     and competencies, our relationship with PETRONAS enables us to leverage
     their research and advanced technology. This is evident in our Primax brand of
     gasoline, which uses the same technology used to develop the fuel to power the
     6 x World Championship-winning Mercedes AMG PETRONAS Formula One team.
     We also market products on behalf of PETRONAS Lubricants International (PLI),
     the global lubricants manufacturing and marketing arm of PETRONAS. PLI drives
     technology as a winning differentiator in responding to the needs of both the
     automotive and industrial lubricants market, and continues to invest in world-
     class technology, infrastructure and talent.
     PETRONAS also provides the technical expertise responsible for designing,
     developing and delivering the fuel, fluid and lubricant technology solutions that
     have powered the Mercedes AMG PETRONAS Formula One team to the 2014,
     2015, 2016, 2017, 2018 and 2019 World Driver and Constructor Championships.
     This technical partnership ensures that the products we as Engen offer our
     customers, have withstood the ultimate Formula One testing ground.


16                                                                                                        17


                                                                                       CORPORATE OFFICES                                   FUEL TERMINALS

                                                     ENGEN ALSO HAS A                  South Africa              SA- Gauteng              SA- North West       Botswana
                                                     BRAND PRESENCE                    Cape Town
                                                                                                                 Alberton (Alrode)
                                                     IN 9 OTHER                        Durban (Westville)        (Langlaagte)             Vryburg              DRC
                                                     COUNTRIES.                        Johannesburg (Sandton)
                                                                                       Port Elizabeth
                                                                                                                 Pretoria (Waltloo)
                                                                                                                                          SA- Limpopo          Kinshasa
                                                                                                                 SA- KwaZulu-Natal        Hoedspruit           Lubumbashi
                                                                                       Botswana                  Durban (Wentworth)       Makhado              Eswatini
                                                                                       Gaborone                  Ladysmith                Mokopane             Mbabane
                                                       • In March 2019, Engen
                       2                                 transferred operations        DRC                       SA- Western Cape                              Lesotho
                                                                                                                                          SA- Northern Cape
                                                         in nine countries to VIVO     Kinshasa                  Cape Town (Montague                           Maseru
                                                         Energy.                       Eswatini                  Gardens)
                                                                                                                                          Upington             Mauritius
                                                       • VIVO Energy are licenced to   Mbabane                   Mossel Bay
                                                                                                                                                               Port Louis
                                                         utilise the Engen brand for                             SA- Free State           SA- Mpumalanga
                                                                                       Lesotho                                                                 Namibia
                                                         15 years.                                               Bethlehem                Nelspruit
                                                                                       Maseru                                                                  Grootfontein
                                                                                                                 Bloemfontein             Secunda
                       1                5                                              Mauritius                                                               Keetmanshoop
               6                                                                                                 Kroonstad                eMalahleni
                                                                                       Port Louis                                                              Lüderitz
                               3                                                                                 SA- Eastern Cape                              Ondangwa
                                                                                                                 East London                                   Walvis Bay
                           4                         NO. OF FUEL       STORAGE         Windhoek
                                                                                                                 Port Elizabeth
                   7               COUNTRY
                                                      STATIONS          DEPOTS
                                                                                                                 Port Elizabeth (Ocean)                        Windhoek Airport
                                   1. Botswana            59                2

                                   2. DRC                 66                2          MANUFACTURING
                                                                                                                                   LUBRICANTS/CHEMICALS DEPOTS
                                   3. Eswatini            6                 1

                                   4. Lesotho             10                1
                                                                                       Engen Refinery (Durban)   Johannesburg (Isando)            Gaborone       Kinshasha
                                   5. Mauritius           33                1          Lubricants Oil Blend      Cape Town (Epping)               Lubumbashi     Maseru
                                                                                       Plant (Durban)            Durban Chemical (Island View)    Port Louis     Windhoek
                                   6. Namibia             59                7
                                                                                       Zenex Blend Plant         Durban (Jacobs)                  Mbabane
                                   7. South Africa      1 030       24 + 3 CHEMICAL

18                                                                                                                                                                                            19

      At the heart of our value proposition lies our integrated value chain. We seek to continually improve
      our inbound logistics, processing, outbound logistics, and sales and marketing, to ensure we operate
      safely, reliably, efficiently and responsibly.

                                          MANUFACTURING                                                              TRANSPORT MODES                                       CUSTOMERS
              SOURCING                  INBOUND LOGISTICS                      PROCESSING                              OUTBOUND LOGISTICS                               SALES & MARKETING
            Crude and finished              Crude and finished             Fuels, petrochemicals and           Storage facilities, rail, pipeline, ships and road      Product, tailored product and
            product sourced               product shipped to          lubricants produced at our three        transport used to take product to customers           convenience services marketed to
                                             local storage                  manufacturing plants.                                                                             customers

                                                                                     LOCAL                                                                                           CONVENIENCE
       West Africa •   CRUDE                  SHIPPING                               CRUDE                                PIPELINE TRANSFER

      Saudi Arabia •
                       SOURCE                 TANKER                                 STORAGE
                                                                                                                           ROAD TRANSFER
        PRODUCT                                                                                                                                                           DEPOT/
                                     REFINERY                                                                                                                            TERMINAL
                                     LOBP/ZBP                                                                             RAIL TRANSFER                                                            MINING

                                                                                                  LOCAL                    SHIPPING TRANSFER
                                                                                                  STORAGE                                                                 CUSTOMER           INDUSTRY

                                         +        30%
                                                  OTHER OIL
                                                                +        10%
                                                                                                                          PRIMARY DISTRIBUTION
                                                                                                                          • Pipeline- 42%
                                                                                                                          • Rail- 4%
                                                                                                                                               • Road- 8%
                                                                                                                                               • Shipping- 33%
                                                                                                                          • X-Pump- 13%
       Approximate annualised average of Engen's product inventory from source.

20                                                                                                                                                                                                             21

     OUR STRATEGIC ALLIANCES    CHAIRMAN’S                                                            PASSIONATE ABOUT PROGRESS
                                                                                                      In 2019, Engen adopted a new Statement of Purpose – A

                                                                                                      Progressive Energy and Solutions Partner, Enriching Lives
                                                                                                      for a Sustainable Future - to replace our vision and mission
                                                                                                      statements. This new single statement is our unified rallying
                                                                                                      call to drive action towards a higher purpose, succinctly
                                                                                                      expressing why we do what we do. It encapsulates our future
                                                                                                      business focus and the impact we wish to have as a company.
                                                                                                      Engen is a dynamic Southern Africa brand that places
                                                                                                      customers at the heart of our business. In pursuit of growth,
                                                                                                      our Statement of Purpose will guide our efforts to strengthen
                                                                                                      our existing portfolio and to future-proof the organisation
                                                                                                      beyond fuel with the ambition to add renewables to our
                                                                                                      customer offering.

                                                                                                      We also remain firmly committed to improving the quality
                                                                                                      of life for all our stakeholders while creating and protecting
                                                                                                      value across the six sustainability capitals. This will ensure
                                                                                                      that the benefits we create can be sustained over the longer-
                                                                                                      term, measured in terms of shareholder value creation,
                                                                                                      societal progress and environmental sustainability.

                                                                                                      Ultimately, our purpose will be realised when our stakeholders
                                                                                                      see us beyond just being a provider of products and services
                                                                                                      but instead trust us as a partner that creates value, delivers
                                                                                                      products that customers need, and provides opportunities to our
                                                                                                      employees to develop their careers and grow with the company.

                                                                                                      As a purpose-led and values-driven petroleum company,
                                                                                                      we play a critical role in moving society forward, thereby
                                                                                                      facilitating economic growth, and job and wealth creation.
        AUTHORITIES                                      Ahmad Adly Alias
                                                                                                      This is a key responsibility and one we do not take lightly,
                                                                                                      which is why we are Passionate About Progress.
                                It gives me pleasure to introduce Engen’s
                                2019 Integrated Report. The report presents
                                an overview of Engen’s strategic framework                            OUR STATEMENT OF PURPOSE
                                for long-term value creation. It also provides                        WILL GUIDE OUR EFFORTS
                                a concise review of how performance and                               TO STRENGTHEN OUR
                                governance over the past year is delivering on
                                this strategy.
                                                                                                      EXISTING PORTFOLIO AND
                                                                                                      TO FUTURE-PROOF THE
                                In 2019, Engen demonstrated its ability to deliver on its strategic
                                growth objectives, with outstanding safety performance and solid
                                operational and financial results. This performance is encouraging
                                against the backdrop of a challenging economic environment.

22                                                                                                                                                                      23

     ENGEN CONTINUED WITH ITS                                                    the highest accountability and transparency through a deep-rooted
                                                                                 culture of accountability, respect, efficiency, ethical thought and
                                                                                                                                                             LOOKING AHEAD                                                             I WISH TO EXTEND IMMENSE GRATITUDE
     IMPRESSIVE SAFETY                                                           action, and a values-driven approach to everything we do.                   Penning this note amidst COVID-19, the worst pandemic in over
                                                                                                                                                             a century, 2020 is expected to be mostly unchartered and fraught
                                                                                                                                                                                                                                       TO MY PREDECESSOR, DATO’
     PERFORMANCE RECORD                                                          We have laid solid foundations set by our framework that endorses           with numerous challenges. The social, economic and commercial             SRI SYED ZAINAL FOR HIS
     OF RECENT YEARS.                                                            ethical values, good corporate governance, and risk management
                                                                                 practices that are in line with our strategic business goals. Our ability
                                                                                                                                                             aftershocks will be unpredictable, with no precedent in dealing with a
                                                                                                                                                             demand contraction resulting from the crisis.
                                                                                                                                                                                                                                       CONTRIBUTION AND SERVICES.
                                                                                 to do so is significantly enhanced by having a skilled and diverse Board
                                                                                 with an appropriate mix of race, experience and perspective. And I          We will have to brace ourselves for these extraordinary times and a
                                                                                 am proud that the Engen Limited Board has maintained its focus on           likely severe national and global economic slowdown. The long-term
     ENCOURAGING SAFETY PERFORMANCE                                              fostering high standards of corporate governance.                           impact of the COVID-19 pandemic will redefine markets and result in
                                                                                                                                                             structural shifts. Engen must remain agile to survive and thrive in the
     We continue to maintain an unwavering focus on safety and                   As the Chairman of a ‘purpose-led’ organisation, the board and I            ‘next normal’ and the greater market turbulence that will ensue.          On behalf of the Engen Limited Board, I extend sincere gratitude to
     sustainability. Our top strategic priorities include embedding a culture    strive to ensure that our governance structures are more responsive                                                                                   the South African Department of Mineral Resources and Energy for
     of zero harm, as well as promoting sustainable practices across our         to the broader environmental context. This is important if we are to        I remain inspired by the resolve of the Engen team and am certain that    their continuous support and guidance. We also thank all the other
     operations and activities.                                                  truly deliver a seamless customer experience for all our stakeholders,      management and employees will stretch their limits and rise to the        state ministries, agencies and regulators who have an interest in our
                                                                                 including employees, customers, business partners shareholders,             challenge. The strategy that Engen has put in place will serve us well    business for their input and support.
     It is pleasing to report that during the year under review, Engen           regulators and society.                                                     to strengthen performance, build resilience and win in the marketplace.
     continued with its impressive safety performance record of recent                                                                                                                                                                 Immense appreciation is offered to the Engen Management Committee
     years. We have been without a fatal incident since 2017. In the year
                                                                                 AWARDS                                                                      ACKNOWLEDGEMENT                                                           for their role in driving Engen’s commendable performance in 2019.
                                                                                                                                                                                                                                       I also acknowledge and thank my colleagues on the Engen Limited
     under review, along with zero fatality, we achieved 0.33 LTIF and 0.45
     TRR. In addition to the reduction in the number of incidents seen in        While Brand SA declared Engen the “FASTEST GROWING BRAND” in                On behalf of the Engen Limited Board I wish to extend immense             Board for their valuable contribution.
     2018, there were zero major incidents in 2019.                              South Africa in 2019, we were also proud recipients of several other        gratitude to my predecessor, Dato’ Sri Syed Zainal for his contribution
                                                                                                                                                             and services during his tenure as Chairman. Dato’ Sri Syed retired        To fellow Engen’s employees, all of whom are “Passionate about
                                                                                 prestigious awards, indicative of the special place Engen occupies in the
     While our recent safety performance is commendable, we will not                                                                                         on 30 June 2020. I am honoured to take up Engen’s chairman role,          Progress”, and who continue to play the most important role in
                                                                                 hearts and minds of our valued customers. Our awards in 2019 include:
     reduce our efforts to drive a culture of zero harm. The Engen Limited                                                                                   effective 28 July 2020.                                                   ensuring Engen delivers on its new Statement of Purpose – my heartfelt
                                                                                 •    SUNDAY TIMES TOP BRANDS (“FAVOURITE” Petrol Station) - a                                                                                         gratitude goes out to you. Engen’s impressive safety, environmental,
     Board expects to see further improvements in Engen’s health, safety
                                                                                      testament of our brand strength and recognition by our South                                                                                     operational and financial performance outlined in this report indicates
     and environmental performance going forward. Please turn to page
                                                                                      African customers.                                                                                                                               that Engen is staffed by the right people, with skills and mindset to
     105 for more on our safety performance and to page 127 for more on
                                                                                 •    SUNDAY TIMES GENERATION NEXT (“COOLEST” Petrol Station)                                                                                          successfully deliver on the Company’s strategic objectives.
     our environmental performance.
                                                                                      - in recognition of our standing amongst South Africans aged
                                                                                      between 8-23.                                                                                                                                    Finally, I wish to record my warmest appreciation to all our stakeholders,
     CONTRIBUTING TO SOCIETAL WELL-BEING                                         •    TOP COMPANIES SA – REPUTATION INDEX “Winner Oil & Gas”                                                                                           particularly our customers for their continued support of Engen. With
                                                                                      – acknowledgement of our efforts to be a responsible and ethical                                                                                 us you are Number One!
     At Engen we define achievement not just within the narrow confines
     of business growth and financial returns, but also in how we enrich the          corporate citizen.
     lives of the people, wherever we operate. We continue to be committed       •    PMR GOLDEN ARROW AWARD "ADMIRED PETROLEUM/ DIESEL                                                                                                AHMAD ADLY ALIAS
     to our corporate social responsibilities, ensuring that Engen’s efforts          BRANDS" (Namibia) – Appreciation by Namibians of the services                                                                                    Chairman
     deliver impactful value that is sustainable.                                     we provide.                                                                                                                                      (appointed 28 July 2020)
                                                                                 •    ASK AFRIKA ORANGE INDEX 2018/2019 (“BEST SERVICE” Petrol
     We recognise that Maths and Science education remains crucial                    Stations) – Acknowledgement for our service excellence in South
     in propelling the country forward. In view of this, our long-standing            Africa.
     Engen Maths and Science School programme continues to provide               •    ASK AFRIKA ICON BRANDS 2019/2020 (“BEST SERVICE” Petrol
     supplementary classes to Grade 10-12 learners in nine centres across             Stations) – Highest score in the Oil/Engine Oil category.
     South Africa, with encouraging results. In 2019, the matric class                                                                                          Dato’ Sri Syed Zainal
                                                                                 •    TOP EMPLOYER CERTIFICATION by the Top Employers Institute -
     attained an overall pass rate of 96% against a national average of               Benchmarking our people practices against the very best
     81%, with 70% of our 413-member matric class attaining a bachelor
     pass. Turn to page 113 for more about this and our other CSR initiatives.                                                                               I would also like to acknowledge Phembani for their support, guidance
                                                                                      WE WILL HAVE TO BRACE OURSELVES                                        and valuable contribution in ensuring the effective stewardship of
     MAINTAINING GOOD GOVERNANCE                                                      FOR THESE UNPRECEDENTED                                                Engen’s ambitious strategic agenda.

     We seek to create trust through ethical leadership and a commonly
     accepted and lived set of values. As a collective, we strive to uphold
24                                                                                                                                                                                                                                                                                                                  25

     CEO’S                                                                                                                                                                                                      TURNOVER FOR THE YEAR INCREASED
                                                                                                                                As a forward-looking company that is ‘Passionate About Progress’,
                                                                                                                                we have recognised the changing trends touched on above. After a

                                                   BEING “PASSIONATE ABOUT PROGRESS”
                                                                                                                                vigorous process, we developed and implemented our new ‘Beyond                  BY 3% TO R89.2 BILLION.
                                                                                                                                2020’ strategy in 2019. ‘Beyond 2020’ will focus on our development of

                                                   IS THE UNDERLYING PHILOSOPHY OF OUR                                          ‘Foodvenience’ and in the longer-term the development of new forms
                                                                                                                                of energy. This will strengthen performance, build further resilience
                                                   APPROACH TO BUSINESS.                                                        and ensure that we continue to win in the market place.                         financial performance.

                                                                                                                                Placing the customer’s lens at the very centre, ‘Beyond 2020’ seeks
                                                                                                                                to achieve commercial and operational excellence. It is anchored on             COMMERCIAL EXCELLENCE
                                                                                                                                four key areas – Grow and Strengthen the Core; Stepping Out; Drive
                                                   A SEAMLESS CUSTOMER EXPERIENCE                                                                                                                               Retail
                                                                                                                                Down Cost to Serve; and Optimise Across the Value Chain. These are
                                                                                                                                enabled by our People and Business Processes; B-BBEE Accreditation;             Our retail business had a good year in 2019, with a strong focus on
                                                   Being “Passionate About Progress” is the underlying philosophy
                                                                                                                                the PETRONAS Cultural Beliefs and Digital Enablement. Underpinning              creating a seamless customer experience on our forecourts and in our
                                                   of our approach to business. In order to lead the game and ensure
                                                                                                                                this is a firm focus on Health Safety, Environment and Quality.                 Quickshops. We pumped 3.9 billion litres of fuel in 2019, welcoming
                                                   sustainability, we must be uncompromising in our pursuit of exceeding
                                                                                                                                                                                                                149 million customer visits to our South African forecourts.
                                                   our customer’s expectations.
                                                                                                                                The implementation of our strategy has had a visible impact on our
                                                                                                                                business during the period under review and we aim to accelerate                Alongside delivering our quality fuel, we placed a strong focus on
                                                   Our key objective is therefore to seek innovative solutions to ensure we
                                                                                                                                the pace of transformation going forward. In 2019, we continued                 growing our footprint and providing the public with a clean and safe
                                                   consistently deliver a seamless customer experience. This will ensure
                                                                                                                                to future-proof our organisation by upgrading our existing assets,              environment at our service stations. We built 19 new service stations at
                                                   that we remain resilient and relevant in meeting the demanding and
                                                                                                                                embracing new technologies and investing in the right people to drive           strategic locations and added a further 20 Quickshops, while 86 of our
                                                   rapidly changing needs of our customers. Being “Passionate About
                                                                                                                                the company forward. Please refer to page 52 for more on our Strategy           service stations were refreshed to improve the consistency of our image.
                                                   Progress” translates into further innovation, the leverage of technology,
                                                                                                                                and page 54 for our Key Performance Indicators.                                 A further 127 Engen service stations were upgraded with LED lighting.
                                                   and the introduction of new products in the market.
                                                                                                                                                                                                                With a firm focus on improving the turnaround time of our interactions
                                                   OPERATING ENVIRONMENT                                                        OUR FINANCIAL PERFORMANCE                                                       with customers and providing hassle-free services, we also boosted
                                                                                                                                                                                                                our rewards offering by successfully adding the Clicks ClubCard loyalty
                                                   Our pursuit of commercial and operational excellence continued               Against the backdrop of a challenging operating environment, Engen
                                                                                                                                                                                                                programme to our market leading ecosystem of loyalty partnerships.
                                                   in 2019 against a challenging backdrop. The global economy was               achieved a commendable financial performance in 2019. Our Gross
                                                                                                                                                                                                                In addition, we capitalised on digital technology and developed
                                                   negatively impacted by a confluence of trade tensions between the US         Profit increased by R1.56 billion from the previous year. This was
                                                                                                                                                                                                                the Engen 1app, South Africa’s first mobile application that creates
                                                   and China, growing tensions in the Middle East and volatility in global      mainly due to improved operating performance across the board.
                                                                                                                                                                                                                seamless on-the-go refuel and retail experience for Engen customers.
                                                   energy prices. Domestically, the South African economy saw negligible        Turnover for the year increased by 3% to R89.2 billion, while operating
                                                   growth, depressed customer confidence and limited infrastructure             profit was up 11% to R2.87 billion.                                             This continued focus on our customers and creating a seamless
                                                   spending, with businesses cautious in their outlook.                                                                                                         customer experience was positively reflected in our Net Promoter
                                                                                                                                Despite the challenging economic environment in South Africa and
                                                                                                                                                                                                                Score for retail in 2019. Our score of 57.1 was up from 42.4 in 2018
                                                   Our biggest market, South Africa, continued to evolve in 2019, with          record high fuel prices, our sales volumes in our biggest market showed a
                                                                                                                                                                                                                and 29.5 in 2017 and affirms our customer lens focused strategy and
                                                   intensifying competition and advances in technology continuing to            4% upward trend to 7,133 billion litres. In our six affiliate countries, that
                     Yusa' Hassan                                                                                                                                                                               delivering a seamless customer experience. Please refer to page 58 for
                                                   shake up the traditional petroleum business model. Increasingly fuel-        form part of our continuing operations following the sale of operations
                                                                                                                                                                                                                more on our Retail performance.
                                                   efficient motor vehicles have lessened the demand-growth for petrol          in nine countries to VIVO Energy in 2019, we experienced volume decline
                                                   and diesel, while technologies like e-hailing and e-commerce are             primarily due to the loss of key commercial customers in Namibia.               Commercial
     Engen continues to lead the South African
                                                   transforming the way our customers travel and consume. Society is                                                                                            In 2019, our Commercial business achieved encouraging 8.6% volume
     petroleum downstream market as well           also demanding more sustainable practice from business. Please refer
                                                                                                                                Increased provisions for anticipated credit losses, higher depreciation
                                                                                                                                costs as a result of the capital expansion programmes in our Retail,            growth in South Africa to 3.01 billion litres by securing new supply
     as many of the markets in which we do         to page 36 for more on our operating context.                                                                                                                contracts, despite the competitive business environment. Profitability
                                                                                                                                Commercial and International businesses and the introduction of IFRS
     business across Southern Africa. And while                                                                                 16 leases and increased insurance premiums as a result of higher                was also up with our gross margin after transhipping increasing from
     we remain focused on entrenching our          OUR STRATEGY                                                                 asset valuations at our refinery resulted in our expenses increasing            R1.5 billion to R1.6 billion. This was achieved through intensifying our
     position through growth and a strengthening   Our Full Potential Strategy, launched in 2016, is proving successful.
                                                                                                                                by 10% in 2019. In addition, we incurred higher commission costs in             focus on providing exceptional customer service, which was reflected
                                                                                                                                2019, mainly in our South African retail business, due to increased             in an improved NPS score.
     of our core, we are also determined to        Significant milestones include the implementation of a new                   sales activity and the introduction of a loyalty programme with a new
     evolve in order to stay true to our new       organisational structure in 2017, encouraging digital enablement, roll out   partner, Clicks ClubCard.                                                       Amidst a muted South African economy, which severely impacted
     statement of purpose - A Progressive          of the PETRONAS Cultural Beliefs, and a significant improvement in our                                                                                       key industrial sectors such as construction, retention strategies
                                                   employee NPS score. We have also successfully partnered for growth by        Our financial position is currently largely ungeared, which presents            were heightened. We placed a strategic focus on growth sectors and
     Energy and Solutions Partner, Enriching       transferring operations in nine countries to VIVO Energy. Many other gains                                                                                   maintained or rationalised declining segments. Please refer to page 60
                                                                                                                                an opportunity for the funding of significant projects envisioned in
     Lives for a Sustainable Future.               are touched upon further in my statement.                                    our Beyond 2020 strategy. Please refer to page 132 for more on our              for more on our Commercial performance.

26                                                                                                                                                                                                                                                                                         05

     International Business                                                      OUR INVESTMENT IN PEOPLE IS CRITICAL                                           due to the absorption of learners through Engen’s Disability Learnership
                                                                                                                                                                Programme. Please refer to page 93 for more on our Human Capital.
                                                                                                                                                                                                                                           ENGEN’S CONCERTED EFFORTS TO
     Our Year-on-Year volumes in our affiliate countries remained stable at
     1.80 billion litres from 2018 to 2019. Overall there was an increase        TO BUILDING AN EMPOWERED,                                                                                                                                 PROGRESS TRANSFORMATION HAS
     in profitability as gross margins after transhipping went up from           ENABLED AND AGILE                                                              B-BBEE & TRANSFORMATION                                                    BEEN ACKNOWLEDGED WITH
                                                                                 WORKFORCE.                                                                                                                                                INDEPENDENT CERTIFICATION
     R1.4 billion to R1.8 billion. This remarkable performance was delivered
                                                                                                                                                                As a company mindful of the role we play in broader society, we remain
     by focusing on the customer to provide exceptional service.
                                                                                                                                                                                                                                           OF LEVEL 1 B-BBEE STATUS
                                                                                                                                                                fully committed to the transformation imperatives of South Africa, and
     In further highlights, we contributed N$2.8 million to help support                                                                                        playing our part in helping build an equal and inclusive nation. I am
     drought-stricken farmers in Namibia; celebrated record profit after tax                                                                                    therefore proud to report that Engen’s concerted efforts to progress
                                                                                 by a challenging domestic economic environment. These high impact
     of USD$15 million in DRC; and became market leader in the Mauritian                                                                                        transformation has been acknowledged with independent certification
                                                                                 challenges continue to threaten refining profitability. Please refer to
     bunker business. Please refer to page 64 for more on our International                                                                                     of Level 1 B-BBEE status for the company.
                                                                                 page 123 for more on our Manufacturing performance.                                                                                                       While good progress was made in 2019, it is incumbent upon us to
     Business performance.
                                                                                                                                                                I have no doubt that through continued consultation and collaboration      remain agile and to work towards an even better understanding of
                                                                                 Supply                                                                                                                                                    the needs of our customers, while widening our offerings, creating
     Lubricants                                                                                                                                                 with our stakeholders we will contribute to the accelerated
                                                                                 As an internal measurement, we endeavour to continually improve on             participation of historically disadvantaged people in the economy.         greater cross-selling of our products and services, and adopting strong
     Our sales and marketing in South Africa continued an upward trajectory
                                                                                 OTIF (On Time In Full) as a key gauge for customer service. In 2019 our        Engen will therefore continue to prioritise and strategically invest in    sustainability practices for continued growth in the year ahead and
     in 2019 with 81.9 million litres of lubricants sold. This performance was
                                                                                 overall OTIF score for fuels was 93%. We had an encouraging year in            the following key transformation areas:                                    beyond in the fast-evolving landscape.
     in part due to continued growth in synthetic sales and improvement of
                                                                                 improving our OTIF performance for our Lubricants customers. Our OTIF
     our sales forecast accuracy over the course of the year.                                                                                                   1.   Skills development of black people;                                   We must also maintain a strong focus on the management of our
                                                                                 average in this regard improved to 82% in 2019, up from 72% in 2018.
                                                                                                                                                                2.   Business support to black-owned entrepreneurs; and                    operations to achieve world-class performance in manufacturing and
     We moved to entrench our market position by promoting our Power
                                                                                 We also secured tankage capacity in the VOPAK Growth 4 at IV Precinct          3.   Supply chain transformation that promotes inclusion of black          distribution, never taking our eye off health, safety and the environment.
     Brands and extending our network penetration through our Route to
                                                                                 and Lesedi projects at Heidelberg in the Inland area to facilitate ease             entrepreneurs.
     Market initiative, with 6 High Street Distributors appointed in 2019.
                                                                                 of importation of finished products whilst also ensuring an improved
                                                                                 security of supply in the crucial inland region of South Africa. This          While we recognise that our Level 1 B-BBBE status is not the end of our    APPRECIATION
     We also continued to leverage Fluid Technology Solutions technology,
                                                                                 tankage is expected to be commissioned in the second half of 2020.             transformation journey, we are proud to have achieved this important       My sincere gratitude is extended to our valued customers, for driving
     which is a winning differentiator in responding to the needs of our
                                                                                                                                                                milestone. Please turn to page 116 for more on our Enterprise              us to be the best we can and without whom we would not exist. Thank
     customers, OEM partners and the industry. Please refer to page 62 for
                                                                                 We continue to further investigate securing tankage at Coega in the            Development and Transformation.                                            you for your continued trust in our products and services.
     more on our Lubricants performance.
                                                                                 Eastern Cape once industry is moved from Port Elizabeth and the Port of
                                                                                                                                                                                                                                           Appreciation is also extended to the Engen Limited Board for their
                                                                                 Port Elizabeth is permanently closed. Please refer to page 125 for more
                                                                                 on our Supply performance.
                                                                                                                                                                DIGITALLY ENABLED                                                          insight and guidance, and the belief placed in my leadership team
                                                                                                                                                                In implementing our Beyond 2020 strategy, we have moved to advance         and I in 2019. A special word of thanks is given to former chairman
                                                                                                                                                                our technology systems to accelerate growth. We took a major step          Dato Sri Syed Zainal for his exemplary leadership during his tenure
     Our refinery progressed in 2019, especially in safety performance,          PEOPLE & CULTURE                                                               forward in 2019, with successful development of the Engen 1app, as         and especially for his insights and support in the development of our
     reliability and competitiveness, to enhance our status as a reliable and                                                                                                                                                              ‘Beyond 2020’ Strategy.
                                                                                 Our investment in people is critical to building an empowered, enabled         well as the adoption of Salesforce Automation, a revamp of our customer
     an excellent manufacturer of petroleum products.
                                                                                 and agile workforce that embodies our world-class work culture.                Extranet, Digital HR and Digital procurement, amongst others. As we
                                                                                                                                                                                                                                           To my colleagues on the Engen Petroleum Limited Management
     A number of high-risk activities, including an Alkylation Outage and        Having the right people in our workforce is crucial to our ‘Beyond 2020’       increasingly focus on technology to drive our growth, we need to build
                                                                                                                                                                                                                                           Committee, thank you for your support and unwavering commitment.
     Reformer Regen, were undertaken, all of which were managed safely           strategy. Accordingly, we continue to invest in developing our people          a workforce that is competent and capable of utilising that technology
                                                                                                                                                                                                                                           I would also like to honour Mr Adnan Adams, who retired on 30 June
     and without any incidents. To reduce costs and meet our outage              to drive our business forward.                                                 effectively to play their part in executing our growth strategy.
                                                                                                                                                                                                                                           2020 after 14 distinguished years on the MC. Adnan significantly
     objectives, we also completed our first ever inspection utilising a                                                                                                                                                                   contributed to Engen’s growth, his wisdom and exemplary stewardship
                                                                                 In order to create a ‘Generative Culture’ by doing the right thing even when
     drone for internal inspection of the Fluid Catalytic Cracking Unit (FCCU)
                                                                                 no one is watching, Engenites apply the core principles and ideals of the      OUTLOOK & COVID-19                                                         having enhanced the overall excellence of our Supply Chain division.
     regenerator. This ensured a cost and schedule saving, and reduced risk
                                                                                 PETRONAS Cultural Beliefs in their working lives. We have implemented          Southern Africa’s economy is expected to remain challenged in 2020,        Most importantly, my thanks go to all Engen employees across seven
     to personnel.
                                                                                 programmes to apply these across the company and in 2019 we welcomed           more so in light of the COVID-19 Pandemic. Consumer sentiment,             countries for their continued effort to drive the ongoing success of
     Overall plant reliability was 98.5% while Overall Equipment                 13 Culture Champions and 75 Culture Influencers into our ranks.                already low pre-Covid-19, is likely to continue to be extremely            our company. You are instrumental in ensuring that we deliver on our
     Effectiveness (OEE) was 88.38%. In 2019 our Refinery also increased                                                                                        cautious. Demand for fuel will also continue to be dampened by more        core purpose of generating superior value for all our stakeholders. Our
                                                                                 We also continue to make progress with employment equity. Our
     Hexane production by 400%.                                                                                                                                 efficient vehicle technology and changing transport trends. Alongside      impressive safety, commercial, operational and financial performance
                                                                                 workforce currently comprises 55% black, 20% coloured, 15% Indian
                                                                                                                                                                this the rapid growth of the digital landscape will continue to change     for the year under review indicates that Engen has the right people,
     However, despite an excellent track record of operational efficiency,       and 10% white. Hiring of underrepresented groups (African Males
                                                                                                                                                                the buying habits of consumers.                                            skills and mindset to successfully deliver on our Beyond 2020 ambitions.
     our refinery continues to be negatively impacted by the external            and Females) at Senior and Middle Management level significantly
     global refining environment contributed by a volatile energy market         progressed in 2019, compared to 2018 and overall representation                We will however continue to explore opportunities for growth and           Yusa’ Hassan
     that is characterized by major shifts in supply and demand dynamics,        of underrepresented groups (African males and females) went up.                sustainable performance improvement, driven by our four-pillar             Managing Director and CEO
     excess global capacity, regulatory burden and further compounded            Furthermore, overall representation of people with disabilities increased      strategy – Grown and Strengthen the Core, Stepping Out, Drive Down
                                                                                                                                                                Cost to Serve, and Optimise Across the Value Chain.
28                                                                                                                                                                                                                                                                                                                      29

                                 RETAIL                                            COMMERCIAL

                                3.9 bn
                                Litres Fuel Pumped in SA
                                                                   3.01 bn
                                                                   Litres Fuel Sold in SA

                                           19                  8% volume growth
                                           stations built      Increase in NPS Score
                               20                14.7                              LUBRICANTS
                               Quickshops        NPS
                               added             Improvement

                               Clicks Clubcard
                               Loyalty partnership
                                                                        Lubes Sold in SA

                            PEOPLE AND                                      6     High Street Distributors appointed


                                                                  INTERNATIONAL BUSINESS
                                     INVESTED IN

                                                                R1.8 bn                          9.6ml
                                     & BURSARIES

                       65.77        %
                       Total Procurement Spend
                                                                PROFITABILITY                    LUBRICANTS SOLD

                       with Black-Owned Companies                                             Bunker Market
                                                                                              Leader Mauritius
                                           Offered Full-Time

30                                                                                                                           31

     FINANCIAL HIGHLIGHTS                                                                   AWARDS

            SALES VOLUMES                                                     REVENUE                            SA’S “COOLEST”
                                                                                                                 PETROL STATION 2010-2019
     8.9bn litres                                                     R89.2bn
     2018: 9.6 billion litres*                                        2018: R86.2 bn
                                                                                                                     SA’S       “FAVOURITE”
         OPERATING PROFIT                                                  TOTAL ASSETS                              		 PETROL BRAND 2011-2019
     R2.8bn                                                           R40.8bn               “FASTEST
     2018: R2.5 billion                                               2018: R43.3 billion
                                                                                            - BRAND SA (2019)
                      ROACE                                             DEBT EQUITY RATIO

     9.9%                                                             0.09%                                                Top Companies SA
                                                                                                                           REPUTATION INDEX
     2018: 8.2      %
                                                                      2018: 0.23%                                          - “Winner Oil & Gas” (2019)

                                                                                                                PMR GOLDEN ARROW AWARD
                                                                                                                "ADMIRED PETROLEUM/
                                                                                                                DIESEL BRANDS"

     * included volumes of nine countries transfered to VIVO Energy

32                                                                                                                                                                                    33

34                      35

     Our business model is designed to create a sustainable future whilst enriching the lives of our stakeholders. We do this through the
     effective management of our resources and relationships in order to deliver optimal outcomes. While our business model has been
     successful at creating sustainable value, we are acutely aware of the highly-competitive nature of the markets in which we operate, and
     the impact that regulatory and technological changes can have on our competitiveness. Accordingly, our business model is built to allow
     us to respond rapidly to changes in our operating environment.

                                INPUT                                                               VALUE CREATION PROCESS                                                                        OUTPUT

              CAPITAL RESOURCES                                                          STRATEGIC PRIORITIES                                  MATERIAL MATTERS         PERFORMANCE     VALUE CREATED FOR STAKEHOLDERS
              FINANCIAL CAPITAL relates to                                                                                                     • HEALTH SAFETY AND      REVENUE         INVESTORS
              the source of our capital derived from
              operations and equity.
                                                                                                                                                 ENVIRONMENT            R89 billion     • Consistent return on investment
                                                                                                                                                                                        • R1,241 million dividends paid to shareholders
              • Net Profit: R1.69 billion                                                                                                      • CUSTOMER
              • Value Retention: R2.16 billion                                                                                                   EXPERIENCE
                                                                                                                                               • PERFORMANCE            NET PROFIT      CUSTOMERS
              HUMAN CAPITAL is
              represented by our people, their
                                                                                                                                                 MANAGEMENT             R1.69 billion   •
                                                                                                                                                                                            Fuel customers with our quality petroleum products
                                                                                                                                                                                            Ensure reliable and security of supply to our customers
              knowledge, skills and experiences.                                                                                               • HUMAN                                  •   Provide services and convenience at our Engen stations
              • No. of employees: 3 385                                                                                                          CAPITAL                                •   8.9 billion litres of fuel sold
              • Zero work-related fatalities                                                                                                                            RETURN ON
                                                                                                                                               • SOCIAL AND             AVERAGE         •   On Time, In Full = 93%
              MANUFACTURED CAPITAL refers                                         RETAIL                          COMMERCIAL + IBD               RELATIONSHIP 		        CAPITAL         •   Customer (Retail) NPS improved by 14.7
              to our physical and digital infrastructure.                                                                                        CAPITAL                EMPLOYED
              •   Engen stations: >1,250                                                                                                       • GOVERNANCE &           9.9%            DEALERS, CONTRACTORS/SUPPLIERS AND B2B
              •   Quickshop: >700                                                                                                                                                       • Develop local businesses and provide spin-off employment
                                                                                                                                                 BUSINESS ETHICS
              •   Refinery 120 000bpd                                                  GROW &                                                                                           • Provide long-term partnerships for sustainable growth
                                                                           GSC                                 SO
              •   LOBP and ZBP
                                                                                       STRENGTHEN                                                                                       • Cultivate capabilities of our business
              •   Total Terminals: 46                                                                                     OUT                                           SA VOLUME
                                                                                       THE CORE                                                                         GROWTH
              INTELLECTUAL CAPITAL refers to
              intellectual assets such as our brand and                                                                                                                 4%              EMPLOYEES
              franchise value, research and development,                                                                                                                                •   Create rewarding employment
              innovation capacity, reputation, as well as                              DRIVE DOWN                                                                                       •   Provide opportunities for progression and development
              strategic partnerships.                                     DDCS         COST TO SERVE         OAVC         ACROSS THE           OUR RISKS                SUSTAINED       •   Provide equal opportunities and career progression
              • Engen range of fuel                                                                                       VALUE CHAIN                                                   •   R 2 230 million* paid for salaries and benefits
              • Engen/PETRONAS range of lubricant                                                                                                                       MARKET
              • Engen 1app                                                                                                                     • LEGAL AND REGULATORY   LEADERSHIP      •   R10 million invested in bursaries and learnerships
                                                                                                                                                                                        •   30% female representation
              SOCIAL AND RELATIONSHIP                                                                                                          • VALUE CHAIN            No.1 in SA
              CAPITAL reflects the strong relationships                                                                                        • CYBERSECURITY AND 		                   AUTHORITIES
              which we have with all our stakeholders who
              have contributed towards fuelling our growth.                                                                                      DIGITAL STRATEGY       ON TIME         • Compliance with regulatory requirements
              •   Dealers: >1,000                                                                                                                                       IN FULL         • R646 million Taxes paid to Government
              •   Business partners/suppliers/contractors/
                                                                                                                                               • HEALTH SAFETY AND 		                   • Indirect fuel taxes and levies
                  Vendors: >650
                                                                                                                                                 ENVIRONMENT            93%
                                                                                                                                               • OPERATIONS                             COMMUNITIES
              NATURAL CAPITAL refers to                                                                                                        • STRATEGIC                              • Provide local economic opportunities through employment,
              the electricity, fuel, water and other                                                                                                                                      business partnerships and entrepreneurship
              natural resources required to deliver                                                                                                                                     • Provide socio-economic upliftment through CSR
              our products and services to our
              customers.                                                       LUBRICANTS                          MANUFACTURING
              • Total electricity usage: 13m GJ
              • Total water usage: 3m kL

36                                                                                                                                                                                                                                                    37
You can also read