What Did We Hear What Did We Learn? Henry Armour President & CEO, NACS

Transcription

1 What Did We Hear What Did We Learn? Henry Armour President & CEO, NACS

2 What? So What? Now What?

3 Henry Armour Welcome The future is here it s just unevenly distributed! Issue life cycle curve Learn from where it s happened and adapt to your market John Eichberger Introduction to the Fuels Summit It s a global marketplace and what happens in one region can impact other regions regulations, supply balances, global auto architecture, technologies

4 Dae Kim Global trends and their market impact Model: Where we live/how we get stuff/how we get around surrounded by a regulatory box - The intersection is the future of convenience - It must replace the Gas/Cokes/Smokes foundation Vertical supply chain integration is a global cross channel trend from Amazon to 7-Eleven Japan First Mile/Last Mile Amazon format Don t be in love with what you re selling today because you won t be selling it tomorrow Lack of forward looking strategy

5 Tammy Klein What is forcing markets to change? Three big factors to address the climate change agenda with differing emphasis around the world - Biofuels (lots of early investment but losing government subject) - Fuel efficiency (where the real leverage is and the real impact on our business) - Zero emission vehicles (ZEVs) the bright shiny object Car bans (internal combustion engines-ices) are the popular regulatory flavor of the day - The problem is a lack of alternative transportation modes to replace them Demand for cars will increase and with it congestion and pollution Governments are reacting but perhaps too much with mandates (choosing winners)

6 John Gartner Tomorrow s vehicles: What will we be driving? Not much different from today until 2040 Latin America Continuous convergence and integration of autonomous vehicle (AV) technologies into new models Ride hailing and car sharing - Decline in the number of cars but an increase in total miles driven EV recharging infrastructure will be influenced by many factors and is the key to the castle But ICEs are not going away any time soon AVs will positively impact EV growth and it will be driven by fleet adoption Provocative comparison of how the EV market may evolve with how the smartphone market evolved none then 20 years later they are dominant

7 Rob Smith Latin American Refined Products Markets GDP growth increases fuel demand (but fuel efficiency and EVs may cause the coefficient to decline) Gasoline and diesel demand will continue to grow and will be highly reliant on imports (particularly from the U.S. Gulf Coast USGC) - USGC supplies 30% of LATAM demand - Any increase in clean fuel regulations will be met by imports - An increase in storage capacity infrastructure is required (3-5 days of suppy) Refining run in LAC have declined largely because of underinvestment by national oil companies (NOCs) Mexico, Brazil and Venezuela Market liberalization is a major LATAM trend (Mexico, Argentina, Brazil) - Chaotic path for Mexico and Brazil; stability in Argentina

8 Diaz, Costa & Siefken The future of fuels 3 factors driving EV growth - Market fundamentals (relative price signals) - Technologies (batteries, ICEs, GPS) - Policy regulations (pollution) China is the growth EV market; charging infrastructure constraints Provocative Well to Wheel emissions slide Biofuels growing but largely driven by government policy, not markets Very clear that LATAM is very heterogeneous (Brazil presentation) Pushing back against the NGO attack on biofuels We serve people, not vehicles Exploring the fuels of the future

9 Pablo Popik Argentina s perspective on the transportation market Ensure energy supply for a growing country while reducing the impact on the environment Energy Transition (Transformation!) - Normalized - Market based - Efficiency focused - Transparency

10 Gray Taylor Evolution of technology & it s impact on retail fuel operations Consumers are defining our convenience technologies Elevated consumer expectations Technology enabled competition (barriers to entry are declining) Will location matter with advanced POS+delivery? Cheap hardware will unleash rapid new technology implementation The smartphone is THE platform of the future (and the present) so mobile is where the action is and will be Standards are the only way we will stay in the game Great one-off: Does fuel have an expiration date!

11 Armour, Levallois & Murphy Latin American fuel retailing landscape Demand for fuel will continue to grow, fueled by GDP and #cars per capita growth But important to explore/experiment with new fuels/electric charging to learn what the future may look like We need to provide the mobility solution (recharging, refueling, last mile) Breaking the Food/Fuel perceptual incompatibility - Sensory things, deemphasizing the fuel facility, personality Taking the friction out is the future of convenience (payments, ordering, etc.) Optimistic about the future BUT we re going to have to work for it! - Re-energizing and re-creating our offer with the help of our young

12 Amorim, de Stefani & Taylor Leveraging the fuel island to boost store sales Transform the relationship with your customers - Providing unexpected delight - Customize the offer by mining customer level data to offer real time relevant offer to specific loyal customers - Reducing/eliminating the pain of the payment process (taking the friction out) A revolution is coming in the payments arena Don t fall in love with the store take it to the islands!

13 When it comes to the Future, There are 3 types of people 1. Those who let it happen 2. Those who make it happen 3. Those who wondered what happened We began to explore the Future and to Make it Happen!!! Quotation with photo

14 NACS Latin America Fuels Summit November 2017 Henry Armour President & Chief Executive Officer