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Viva Energy Group
How will Viva Energy Group accelerate its shift from refining to retail and mobility?
Viva Energy completed a transformative $1.15 billion acquisition of OTR in 2024–25, pivoting from fuel refining toward convenience retail and mobility services. The company runs the Geelong Refinery and a nationwide network of over 1,300 service stations, positioning itself for higher-margin growth.
Growth strategy centers on expanding convenience retail, enhancing sustainable fuels, and leveraging OTR’s retail expertise to boost margins and customer frequency. See detailed competitive insight in Viva Energy Group Porter's Five Forces Analysis.
How Is Viva Energy Group Expanding Its Reach?
Primary customers include retail convenience shoppers seeking food, coffee and quick meals, commercial fuel buyers in aviation and heavy transport, and B2B industrial clients requiring bulk energy and logistics services.
Convenience and Mobility Transformation
Viva Energy Group is unifying retail operations after integrating OTR and converting Coles Express sites to Reddy Express, targeting higher non-fuel revenues and foot traffic.
Non-Fuel Revenue Focus
The company aims for non-fuel gross margins to reach 40% of total retail margin by 2026, shifting dependence away from fuel sales amid vehicle electrification trends.
Commercial & Industrial Expansion
Viva Energy is expanding supply contracts in aviation and heavy transport, securing long-term agreements in 2025 and investigating SAF production at Geelong to serve growing aviation demand.
Regional Network Growth
The Liberty Convenience brand targets adding 15–20 new sites annually, leveraging OTR’s retail model to increase basket size and cross-sell non-fuel items across Australia.
Expansion initiatives combine branded partnerships, site rollouts and product mix improvements to capture a larger share of the ~$10 billion Australian convenience market and diversify the Viva Energy business model.
Key Expansion Actions and Metrics
Actions taken in 2025 and targets through 2026 focus on retail unification, SAF exploration, and network scale to improve margins and revenue diversification.
- Complete Reddy Express conversion and OTR integration to raise non-fuel margin contribution to 40% by 2026
- Grow Liberty Convenience by 15–20 sites per year to expand regional market position
- Secure long-term aviation supply deals and progress feasibility for SAF at Geelong
- Leverage OTR partnership model to increase average basket size and foot traffic across the national network
For context on competitors and market positioning see Competitors Landscape of Viva Energy Group, which complements analysis of Viva Energy Group's growth strategy and future prospects.
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How Does Viva Energy Group Invest in Innovation?
Customers increasingly demand low-emission fuels, seamless digital experiences and reliable site services; Viva Energy responds by integrating renewables, advanced refuelling options and personalized retail tech across its network.
Geelong Energy Hub as innovation flagship
The Geelong Energy Hub centralizes decarbonization pilots and industrial electrification to support Viva Energy Group's growth strategy and future prospects.
Commercial green hydrogen refuelling
In 2025 Viva Energy commissioned a commercial green hydrogen refuelling station, a $43,000,000 project backed by a $22,800,000 ARENA grant.
Electrolysis for zero-emission heavy transport
Advanced electrolysis at Geelong produces zero-emission fuel targeted at heavy vehicle fleets, positioning the company as a first-mover in the hydrogen economy.
Large-scale solar and battery pilots
Viva Energy is deploying utility-scale solar and evaluating battery storage to decarbonize refinery and terminal operations and improve energy resilience.
Digital transformation across retail network
A unified mobile platform integrates loyalty, digital payments and personalized analytics across ~1,300 sites to boost engagement and operational efficiency.
AI-driven refinery optimisation
At Geelong Refinery AI predictive maintenance and advanced process controls enhance throughput and energy efficiency, reinforcing Viva Energy market position.
Technology investments align with Viva Energy business model shifts toward low-carbon fuels and digitized retail, supporting Viva Energy expansion plans and resilience in the Australian fuel market.
Innovation outcomes and measurable impacts
Key measurable benefits from the innovation agenda that affect growth strategy and future prospects:
- Hydrogen station reduces lifecycle CO2 intensity for participating fleets; commercial operations began in 2025.
- ARENA grant covered 53% of the hydrogen project's capital, de‑risking early-stage rollout.
- Unified mobile platform improved loyalty engagement and supported inventory optimisation across ~1,300 sites.
- AI and advanced process control at Geelong improved equipment uptime and energy efficiency, supporting competitive refinery margins.
For context on corporate priorities and values that guide these technology choices see Mission, Vision & Core Values of Viva Energy Group
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What Is Viva Energy Group’s Growth Forecast?
Viva Energy Group operates primarily across Australia, with a market presence spanning refining, fuel wholesale, and a national retail network supplying mobility and convenience services.
Underlying EBITDA and recent performance
For the 2024–2025 fiscal periods Viva Energy reported an underlying EBITDA (RC) of approximately $900,000,000, reflecting stable earnings from diversified segments including refining, wholesale and retail.
Convenience & Mobility growth target
Management targets $500,000,000 EBITDA from the Convenience and Mobility segment by 2028, implying a compound annual growth rate above 10% for that division from current baselines.
Capital expenditure guidance
Capital expenditure for 2025 is projected between $400,000,000 and $500,000,000, with significant allocations to the OTR integration and Strategic Fleet Reserve infrastructure development.
Capital management and dividends
Viva Energy maintains a disciplined capital framework targeting a dividend payout ratio of 50%–70% of underlying NPAT, supporting income-focused individual and institutional investors.
The financial outlook incorporates a strategic shift toward more stable, non‑refining earnings—retail, convenience and low‑carbon investments—to reduce exposure to oil price and refining margin volatility.
Investment reallocation
Increased investment levels versus historical practice are directed to low‑carbon energy projects and high‑margin retail expansion to support sustainable margin improvement.
Risk mitigation
Greater weighting to convenience and mobility earnings provides a buffer against global refining margin swings and commodity price cycles.
Return profile
Disciplined dividends and targeted growth investments aim to balance cash returns with long‑term capital appreciation for shareholders.
Operational priorities
Key capex programs (OTR integration, Strategic Fleet Reserve) are prioritized to enhance network resilience and commercial fuel supply capabilities.
Market positioning
Focus on retail network growth and higher‑margin services supports Viva Energy Group's market position and expansion plans across Australia.
Further reading
For a detailed breakdown of the company’s revenue mix and business model see Revenue Streams & Business Model of Viva Energy Group.
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What Risks Could Slow Viva Energy Group’s Growth?
Potential Risks and Obstacles for Viva Energy Group include margin volatility, structural demand decline from EV adoption, regulatory carbon constraints, and supply-chain or geopolitical disruptions that can materially affect the Geelong Refining Margin (GRM) and overall profitability.
GRM volatility
The Geelong Refining Margin is sensitive to global crude spreads and refining throughput; a 10–20% swing in GRM can alter refinery earnings materially in a quarter.
EV adoption
Accelerating electric vehicle uptake reduces liquid fuel volumes, requiring rapid scale-up of EV charging and convenience store revenue to offset lost fuel margins.
Regulatory carbon limits
The Safeguard Mechanism tightens emission baselines; compliance may need substantial capex in decarbonization to avoid penalties and protect the Viva Energy Group balance sheet.
Supply-chain risks
Geopolitical tensions or shipping disruptions can constrain crude imports, reducing refinery utilization and increasing spot crude costs versus contracted volumes.
Capital allocation pressure
Balancing investments in low-carbon projects, EV infrastructure and maintaining refinery capabilities creates competing demands on capital and may affect returns.
Retail transformation risks
Rolling out convenience and EV services across the Coles Express network requires execution at scale; integration missteps could reduce expected margin uplift from the Viva Energy business model.
Management mitigates these risks through geographic supply diversification, scenario planning and a multi-year transition plan toward low-carbon energy, supported by demonstrated operational resilience in recent years.
Risk management framework
Uses scenario analysis and hedging to protect GRM exposure and maintain liquidity buffers; this helped navigate post-pandemic supply chain shocks.
Supply diversification
Geographic procurement and alternative shipping arrangements reduce single-source risk to crude imports and support refinery utilization stability.
Transition investments
Capital deployed into EV charging, renewable fuels and convenience offerings aims to offset declining fuel volumes; rollout targets align with Viva Energy Group expansion plans.
Operational track record
Recent proactive transition of the Coles Express network and resilience through supply disruptions show internal capability to execute strategic pivots; see Target Market of Viva Energy Group for related context.
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