Introduction: E.ON Strategic Co-Investments EcoSummit · PDF file6 Technology & Innovation...
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Transcript of Introduction: E.ON Strategic Co-Investments EcoSummit · PDF file6 Technology & Innovation...
Introduction: E.ON Strategic Co-Investments
EcoSummit
An Overview of E.ON � At facilities across Europe, Russia, and North
America, our more than 72,000 employees generated approx. €122 billion in sales in 2013. In addition, there are businesses in Brazil and Turkey we manage jointly with partners. In total E.ON has over 35 million customers
� With our strategy of cleaner & better energy, we're transforming E.ON into a global provider of specialized energy solutions which will benefit our employees, customers, and investors alike
� Our objective is to make energy cleaner and
better wherever we operate � Strategic Co – Investments is part of E.ON’s
Technology and Innovation Department (T&I)
E.ON to split into two publicly listed companies
3
Empowering customers
Shaping markets
• E.ON to spin off a majority stake in its power & gas up- and midstream business (‘New Company‘) to its shareholders
• Intention to divest remaining stake in the new company over the medium term post spin-off
• Internal spin-off expected to be completed in 2016
• Divestment Spanish activities agreed to; divestment of Italian activities under evaluation; E&P North Sea under review Two highly competitive companies with distinct identities
Technology & Innovation 4
E.ON Corporate Strategy
Provide cleaner and better energy for the system
Cleaner generation mix, better product portfolio
Transform E.ON from a utility to a solution provider
T&I informs corporate strategy, improves and develops businesses & is guided by group strategy
E.ON Technology & Innovation
Detect disruptive change
Explore technologies and innovation opportunities
Prepare new business for E.ON
Major T&I activities
+
T&I constantly screens mega- and subtrends as starting point for decision on future innovation area
5
Health & well-being
New work
Consumption shift
Ubiquitous intelligence & computing
Disruptive technology
& innovation
Individuality Diffusion of power
Urbanization
Knowledge society
Climate
New social structure
Resources & energy
SUSTAINABILITY
NEW SOCIETY & ECONOMY RISE OF THE INDIVIDUAL
ACCELERATED TECHNOLOGY
Megatrends
Technology & Innovation 6
“Technology & Innovation” within GM with three distinct functions
� Innovation Scouting & Co-Investments: Focus on detection of new and disruptive technologies and CVC activities
� Innovation Portfolio Management: Ensure transparency across all technologies to enable active portfolio management
� Energy System Innovation: Provide a holistic view on energy systems
E.ON Innovation Centers cover new technologies from today's businesses to drive them forward to a new level of operations
“Project Executing Units” execute all projects and programs of the group wide E.ON Innovation centers. PEU are E.ON business units and E.ON Technologies
Technology & Innovation is organized as a network
E.ON Innova-
tion Center
E.ON Innova-
tion Center
E.ON Innova-
tion Center
E.ON Innova-
tion Center
E.ON Innova-
tion Center
Tech- Nology & Innova-
tion
Illustrative
T&I
EIC
PEU
Three main building blocks
7
EIC
� E.ON Innovation Centers function as networks and steer all activities within their Technology & Innovation area across E.ON business units
� Each EIC includes a multitude of activities, i.e., innovation programs and projects, as well as tracking activities
� All E.ON internal resources taking part in these activities are part of the EIC, regardless of their geographic position
� Each EIC has a dedicated Head of EIC, respon-sible for translating the Technology & Innovation strategy into innovation programs and ensure close collaboration with businesses
� Heads of EICs are embedded in business units and led by SVP Technology & Innovation in GM following the steering & leadership principles (functional steering)
E.ON Innovation Centers (EIC) manage the majority of Technology & Innovation activities within E.ON
Principles of setup E.ON Innovation Centers*
*Including T&I Incubator
8
� All projects are executed by an E.ON business units or E.ON Technologies with responsibility for project management and reporting to the Technology & Innovation community
� New projects are developed by PEU’s
� In order to incorporate and maintain the knowledge within the group and make it available to all parts of the group, ETG function as a knowledge hub with more than 100 FTE working for Technology & Innovation
� Involvement of business units ensure that activities are close to the needs of the business and implementation is prepared
Projects are executed by units across the whole group with ETG functions as a center of gravity 45 E.ON Project Executing Units* (PEU) Principles of responsibility
a
*Incl. EC&R North America
Add. PEU 2014 Add. PEU 2013
A
ETG PEU 2011 Add. PEU 2012
Single project in Russia
Strategic co-investments – Combining start-up innovation with E.ON resources to shape E.ON future
WHERE
� Screen outside innovation � Bring external innovations into E.ON � Info and capital to de-risk commercial deals � Benefit from upside provided by E.ON
� Equity investments linked to - E.ON’s demonstration / validation
- E.ON’s commercial roll-out
� Residential and C&I solutions � Renewables balance of systems
� Distributed energy and storage
� Smart grid (regulated and unregulated)
� IT (Big data, cyber security, comms, etc)
HOW
� E.ON T&I set-up brings value beyond capital - SCI & EIC close collaboration
- EIC imbedded in business
WHAT
WHY
= Capital 35 m customers 15 countries
5 GW renewables Expertise
9
why
Why Strategic Co-Investment – We create a win-win situation for E.ON…
Screen outside innovation for developments in the markets and technology trends and
derive implications for E.ON
Find disruptive technologies and business models
Bring external innovations into E.ON (either by investment or by facilitating contact to
the right partners within E.ON) and develop strategic partnerships for technology
development and commercialization
Increase the rate of technology development in core areas of interest to E.ON
Combine investments with commercial agreements to maximize business impact for
both start-up and E.ON
Gather information during the financial due diligence process on the company to reduce
risk on commercial agreements
Participate in the economical upside to the start-up that the collaboration with E.ON
brings
10
why
Why Strategic Co-Investment – We create a win-win situation for E.ON…and the start up company
“Company A” valuation
“Company A” valuation after E.ON’s
investment
Access to E.ON’s operational and market expertise Access to E.ON resources (engineers, experts, facilities and systems) and suppliers
KNOWLEDGE
Technology validation Strong reference customer/partner with brand credibility
VALIDATION
Additional channels to market Access to one of the biggest customer bases in the utility sector Potential of high volume of purchase orders and strong customer pipeline
COMMERCIAL ROLL-‐OUT Access to growth capital via equity co-investment Reliable investor for follow-on rounds Network into the VC landscape
FINANCIAL STRENGTH
11
What type of investments – Four building blocks define the type of investments we make
� Products can be used or leveraged by E.ON (invest for value creation through combina-tion of investee and E.ON)
� E.ON may need to rely on in the future (invest for long-term absorption of external innovation into core business)
� Board represen-tation in portfolio companies preferred
Companies Products / services Financials Governance
� Later and growth stage companies with technologies ready for deploy-ment (or close to it), typically B/C-round
� Strong and reliable syndicate partners and co-investors
� Typically holding minority stakes (<20%)
� Typical investments between EUR 3 m and EUR 5 m per portfolio company
wha
t
Fund Managers
wha
t
Co-Investments To Date - Portfolio (May 2015) IT (cybersecurity, comms, infrastructure, etc)
Residential and C&I solutions
Smart Grid
Renewables BOS
Distributed energy