E.ON is placing a greater emphasis on expanding its end-customer business. The company is already seeing the benefits of its improved service and individually tailored solutions for its customers: “In the first quarter of this year we gained a net 17,000 residential customers in Germany. This is a real turnaround for our retail business. It marks the first time in a while that we have added more customers than we have lost,” CEO Johannes Teyssen said at the company’s Annual Shareholders Meeting in Essen, Germany.
Independent analyses indicate that among the major energy suppliers in Germany, E.ON is one of the market leaders for customer satisfaction. At the same time, E.ON offers its customers innovative solutions with superior value. An increasing number of customers want precise, rapid information that helps them reduce their energy consumption. In the UK, E.ON has partnered with Opower to launch an online 'Saving Energy Toolkit'. Over half a million E.ON UK customers have used the online tool, which compares their energy usage to other customers’ homes in their local area. In Sweden, E.ON is offering 120,000 households a free smart electricity meter, which will enable its customers to use their smart phone to monitor their energy usage and costs.
Mr. Teyssen also commented on the company’s industrial and commercial business which is also gaining momentum. The spectrum of individual, custom-tailored solutions extends from an on-site power and heat supply for the Albert Friedrich paper mill in Miltenberg in southeast Germany, to a global energy management service for major British retailer Marks & Spencer. The retailer aims to halve the energy consumption of its 850 locations worldwide and to make its entire energy supply zero-carbon by 2020. Via data links, the E.ON Energy Management Center now remotely optimizes Marks & Spencer’s entire energy supply.
E.ON is also making progress optimizing its organization. The company completed a fundamental transformation of its energy sales business in Germany, which now consists of a single, centrally managed nationwide sales organization. The organization remains close to its customers through its local offices at locations around the country.
In addition, E.ON recently started the process of combining its conventional generation and renewables businesses. The new entity will have a leaner organization and processes, which enhance the competitiveness of E.ON’s generation business and opens up new commercial prospects.
Independently of this, the company’s E.ON 2.0 program has enabled it to significantly reduce its controllable costs, simplify its organization, and make hundreds of processes more efficient. In the four years through to 2015, E.ON will have reduced its controllable costs by €1.3 billion on a net basis. The company achieved €700 million in cost savings in 2013 alone, €100 million more than planned.
These measures play an important role in helping E.ON deal with its difficult business environment. As an example of this, in his speech, Mr. Teyssen outlined the further decline of wholesale power prices and low capacity utilization of the company’s power plants in Europe. He announced that E.ON will continue to take decisive countermeasures. These include temporarily or permanently withdrawing generating units that cannot be operated profitably in the current regulatory and business environment. So far, E.ON has decided to shut down assets with an aggregate capacity of 13 gigawatts, which is more than one quarter of its conventional generation fleet in Europe. In this context, Teyssen said that it is surprising that conventional generating units are tacitly and, as a matter of course, planned for use as reserve capacity but without appropriate compensation being provided for them. The value of these conventional assets was recently demonstrated on dark and windless winter days when renewables provided just 5 percent of Germany’s power demand.
E.ON does not anticipate any significant turnaround in European energy markets in 2014. The company believes that this situation confirms that it was right to pursue a strategy of acting early to improve its competitiveness and at the same time tapping into new growth markets. Mr. Teyssen affirmed E.ON’s earnings forecast for 2014, which calls for EBITDA of €8 to €8.6 billion and underlying net income of €1.5 to €1.9 billion.
In view of the decline in underlying net income, E.ON is paying a dividend of €0.60 per share for 2013 and is therefore, as in recent years, paying out to shareholders between 50 and 60 percent of underlying net income. In addition, for the first time E.ON is offering its shareholders the option of exchanging the cash dividend partially into E.ON shares.This press release may contain forward-looking statements based on current assumptions and forecasts made by E.ON Group management and other information currently available to E.ON. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. E.ON SE does not intend, and does not assume any liability whatsoever, to update these forward-looking statements or to conform them to future events or developments.