Businessmodel of E.ON

Customer Segments

E.ON serves a range of energy services to customers across Europe. Its customers can be broadly categorised as follows:

• Industrial and Commercial, comprising commercial and industrial entities of all sizes across multiple sectors that have high energy requirements and require a tailored service;
• Residential, comprising general consumers in single-family households and individual apartments in multi-family dwellings;
• Public Sector, comprising local and regional government bodies and entities; and
• Small and Medium-sized Businesses, comprising smaller, locally and regionally-operating business customers. E.ON serves customers across Europe, notably providing power generation services to customers across Germany, the UK, Sweden, France, and the Benelux countries. It also has operations in Romania, Russia, Hungary, Italy, Spain, Poland, and the Czech Republic.

Value Propositions

E.ON provides value to its customers in the following ways:

• Its industry standing and reputation, with the Company being one of the largest and best established energy companies in Europe, having a track-record as a reliable and efficient energy supplier;
• Commitment to innovation, with the Company devoting significant resources to research and development activities, participating in a number of strategic co-investments and start-ups to develop new energy technologies;
• Its range of products and services, with the Company providing a range of energy services and products, with customers able to receive gas and electricity from the Company as a one-stop shop; and
• Its customer service, with the Company providing ongoing support to its customers, with a dedicated team devoted to the management of each corporate client. ### Channels

E.ON operates a website at www.eon.com, through which it provides information on its services, operating jurisdictions, and corporate activities. The Company also operates region or country-specific website, such as www.eonenergy.com in the UK, through which customers are able to manage their customer accounts and energy bills. The Company, however, does not operate an online sales channel.

E.ON makes its sales through an in-house direct sales force, which is divided by region. The Company operates ten regional units that take responsibility for sales, distributed generation and management of regional energy networks across Europe. These ten units cover Germany, the UK, Sweden, Italy, France, Benelux, Hungary, the Czech Republic, Slovakia, and Romania.

E.ON also operates an International Markets team, which collaborates with local partners to provide renewable and conventional generating services and operate distribution and sales networks outside Europe. This covers the Company’s activities in Russia, Brazil and Turkey.

Customer Relationships

While E.ON does not operate a self-service sales channel, the Company does provide some self-service functionality through its website and mobile apps, which allow customers to manage their accounts, give meter readings and pay bills directly without interacting with members of E.ON’s sales teams.

E.ON’s sales are made through its regional operating units, which consult directly with commercial, industrial and residential customers to agree fixed-term supply contracts. Each corporate customer has a dedicated account management team, which works closely with the client to ensure their needs are met. E.ON also provides customer support services to its residential customers, who are able to contact the relevant E.ON team over the phone to receive a personalised response to their queries, concerns and complaints.

Customer are also able to interact directly with E.ON through its various social media accounts, including with Twitter, Facebook, Google+, Instagram, and YouTube.

Key Activities

E.ON is a provider of energy solutions, principally to customers across Europe.

The Company’s operates through global and regional business units, primarily through four global operating segments: Generation, which comprises the Company’s operation of conventional generation assets in Europe; Renewables, which comprises the Company’s carbon-sourcing and renewables businesses; Global Commodities, which is engaged in the acquisition and sale of electricity, natural gas, liquefied natural gas, oil, coal, freight, biomass and carbon allowances; and Exploration and Production, which comprises the Company’s oil and gas exploration and production operations across the North Sea and Russia.

The Company also operates fifth global unit named Technology, which combines project-development, project-delivery, and engineering activities to support the development of new assets and the operation of existing assets.

Key Partners

E.ON works with a range of companies and organisations in order to provide its customers with a reliable and comprehensive service. These partnerships can be broadly categorised as follows:

• Innovation Partners, comprising technology and energy companies with which the Company collaborates on con-investment and innovation and development projects and start-up businesses;
• Distribution Partners, comprising resellers and distributors across the Company’s operating regions that help to extend the Company’s own sale and distribution reach;
• Supplier Partners, comprising suppliers of resources, tools and services that support the Company’s active operations; and
• Strategic and Alliance Partners, comprising a range of companies with which E.ON shares tools and resources and collaborates of joint-venture projects. E.ON has co-invested in a number of start-up businesses, including Greensmith, Bloom Energy, The Westly Group, Space-Time Insight, and Thermondo. The Company also has a partnership with SolarWatt on solar energy storage solutions, with Barratt Homes to provide sustainable homes, and with IBC Solar to provide energy storage to customers in Germany.

Key Resources

E.ON’s key resources are its distribution and transmission infrastructure – including pipelines, storage facilities, substations and power generating facilities, its supply chain, its sales and support channels, and its personnel.

Cost Structure

E.ON incurs costs in relation to the development and operation of its power generation and transmission infrastructure, the management of its supply chain, the operation of its sales and support channels, and the retention of its personnel.

E.ON accrued significant costs related to the purchase of materials in 2015, which totalled €104.21 billion, up 4% on the previous year due largely to an increase in gas procurement costs. The Company also accrued substantial personnel costs – relating to the payment of salaries and benefits to the Company’s 56,490 employees – which amounted to €4.18 billion.

Revenue Streams

E.ON generates revenue from the sale of electricity and gas to industrial and commercial customers, to retail customers, and to wholesale markets, as well as through the distribution of electricity and gas, and from the delivery of steam, heat and water.

In 2015 E.ON generated annual revenue of €116.22 billion, around 3% higher than the €113.10 recorded the previous year. This increase was attributed primarily to higher gas sales volumes in the Company’s Global Commodities unit.