Q&A with the President and CEO

Q: How do Pilipinas Shell’s core values play a part in the Company’s mission to power progress for the Filipino?

A: We’ve named this report, “Values that Drive Us,” because the overarching mechanism that drives us to excel are our core values of Honesty, Integrity, and Respect for People. They cannot be separated from our actions because it is this core set of values that compel us to act. When we speak of living our values, it is always in the context of doing our business. For us, upholding and protecting our social license to operate, and contributing to nation-building are integral to how we conduct our business.

Q: 2018 was a challenging year for the industry. How was the Company able to steer past this year?

A: Clarity of vision, consistency of strategy, and flawless execution. We continue to deliver and remain committed to our strategy—the same one we communicated with our initial public offering in 2016. It helps that you don’t change strategy when the wind blows differently. If you’ve done your due diligence, you stay the course. So that’s why despite the challenging environment, our investment levels continue. We committed to and have invested around Php 4.1 billion of capital investments in 2018. If you believe that your strategy is well thought through, then it gives you the confidence to carry on, against rough patches. You may adjust your short- term tactics, but the strategic direction remains the same.

Q: What do you consider your most significant investment in 2018?

A: We invested around Php 730 million in our Bitumen Production Facility. It allows us to actively participate in the country’s infrastructure program, aligned with our thrust to be a strong partner in nation-building. Before we started this project, we were already servicing around half of the local market. We expect that to grow, now that we can offer locally produced and more competitively priced bitumen. As economies in the region continue to expand, demand for bitumen is also expected to grow. With the facility, we will also be able to cater to the demand from international fronts.

The project is also part of our sustainability strategy, as bitumen is a residue from refining crude oil. Essentially, we are minimizing our waste while we are delivering quality products.

Q: What was your proudest moment in 2018?

A: There were many, but if I had to pick one, it would be our performance on the “people front.” The first of which is the very positive feedback we received from our staff in our Annual People Survey. This annual survey is conducted across the Shell companies, and Pilipinas Shell usually has a high level of engagement—this year, our response rate was 95%.

Overall, we continuously score high on the Shell People Survey. In 2018, we scored higher or at par with top quartile benchmarked companies in most sections—employee engagement, leadership, people development, operational excellence, among others. The highest is on reputation, where we scored nine points better than the top quartile of benchmarked companies and of Royal Dutch Shell. Our employees are our most important asset. We value their opinions and viewpoints about the business, and we are pleased that they recognize the Company’s good reputation. We see from their responses that they are on board with the direction of the Company, and that they believe we are a responsible business and a good corporate neighbor.

I’m also very proud of the recognitions that our teams have received in the Shell system regionally and globally. The excellence of our people continues to be highlighted in various aspects of Shell’s operations. We have regularly won regional or global awards in the past, but 2018 was special in terms of quantity and breadth of awards won. Our staff in Pilipinas Shell are truly world class!

Q: Does your reputation translate to brand preference?

A: Yes, brand preference in customer survey scores is high. Filipinos continue to trust our brand. By the end of 2018, our brand preference share is over 40%, ahead of our competitors in the country. Our premium fuel penetration of 26% in the Retail business also remains one of the highest. We have achieved this against the backdrop of higher crude oil prices for most parts of the year.