1. Innovation Scouting & Strategic Co-Investments @ E.ON
E.ON Innovation / SCI – Dr. Philipp Ulbrich
Eilat, November 28, 2016

2. Two Leading Companies for Two Energy Worlds
Uniper
Renewables
Upstream
Energy Networks
Global Trading
Customer Solutions
Generation
German Nuclear

3. With Future E.ON's core businesses we are strongly positioned to succeed in the New Energy World
Energy Networks
Networks enjoy strong fundamental growth
E.ON with sizeable presence in established regulatory regimes and markets with catch-up potential
Renewables
Renewables growth has constantly outgrown already ambitious market forecasts
E.ON with strong track record in established markets and proven technologies
Customers Solutions
Still in early stage but will enjoy strong growth driven by e.g., digitalization
E.ON to benefit from >30m customer base and strong innovation pipeline

4. Customer-centricity is more than only a word – CMO builds on E
Customer-centricity is more than only a word – CMO builds on E.ON’s vision and drives the cultural change
Vision
Group Strategy
Customer Solution Strategy
Improving People’s Lives
OUR PURPOSE
OUR GOAL
Your Partner of Choice for Energy Solutions
OUR VALUES
Acting Responsibly and with an Open Mind
Winning Together
Improving & Innovating
Working Together
Putting Our Customer First
Customer centricity
Best of two energy worlds
Leading solutions for the new energy world

5. Democratization of Energy
(Disruptive) innovation is happening outside our corporate environment and is tremendously driven by start-ups
E.ON / Corporate
Entrepreneur / Start-up
Joy's law “no matter who you are, most of the smartest people work for someone else.”
“The last 10% it takes to launch something takes as much energy as the first 90%.”
Democratization of Energy
Right mix of people
Digitalization
Agility
In the mist of this change, we have to recognize that
Understanding human needs and problems is not yet part of our NDA but key for new propositions
We are not only in the mist of the change of the energy space, but also in the middle of a phenomena called “digital darwinism”
Current culture is still very risk averse, process oriented, silo/ product thinking instead of system thinking
On the other hand (Disruptive) innovation is happening and is tremendously driven by start-up
To start with, according to Joy's law "no matter who you are, most of the smartest people work for someone else”
Start-ups are a great source of disruptive innovation as they bring speed, agility and risk taking
With limited resources successful start-ups focus their proposition on a human problem to solve
People from start-ups are often digitally savvy and don´t have legacy IT to deal with
BUT start-ups lack capital, market / customer access, brand and diversified knowledge
Risk taking
Consumer challenge
Legacy
Speed
SCI / CVC
SCI functions as bridge between the external start-up and our corporate energy world

6. SCI exists to bring more insights, faster innovation into E
SCI exists to bring more insights, faster innovation into E.ON, de-risks commercial deals and build capabilities
Key objectives SCI
Value for E.ON
Examples
Deliver insights and uncover unknown unknowns
Bring external innovation into E.ON (new disruptive technologies and business models)
Combine commercial deals with financial investments
Bring long-term strategic capabilities into E.ON
Wide view of innovation topics
More and faster innovation topics at lower risk
De-risk commercial colla-boration with investor insights
CVC activities to
become part of the VC community and improve our ability to screen for external innovation and possible disruptive technologies
To engage with the companies to be able to bring that external innovation into E.ON in the form of co-development/testing contracts or commercial role out contracts
To by doing deep due diligence on the companies that we are looking to engage, we spot early on possible risks as these high risk start-up companies
And if we help grow the company, why not participate in the upside?
First Fuel – SME energy management tool. Most of our regions have voted SME as the key market we need to address with new tools and propositions
Phoebus– Heat pump optimizer company ECT is planning to do a commercial deal with. We have signed a term sheet to invest equity in the company $4m and for every commercial deal we bring into the company, we will acquire further equity at no cost up to 51% of the company
Varentec – decided against investment and commercial deal due to very weak management team. Also as part of the due diligence process we learn of the technology gaps and about a competitor that is better suited (GridCo)
M&A advantages for strategic topics

7. And also creates value for the start-up companies
Why start-ups like SCI
Knowledge
Validation
Give access to E.ON expertise and resources
Validate technology and provide brand credibility
Commercial
deal
Financial strength
Provide access to markets and customer base
Grant access to growth capital and reliable follow-ons
I already touched on this point, but why do these start ups need us?
Because we bring significant energy and market knowledge, specially for Europe where we are present in almost every country
Because we can bring credibility to their products by helping testing, but just by associating the E.ON brand with them
Because we can be a great commercial partner with 5 GW of wind installed, 30 million customers and presence in 15 countries
Because we can bring stable capital for growing the company
And with all of this we can really grow the value of the company
But without a promise of validation, commercial deal or access to knowledge this start up would not be interested in our capital stenght
What happens after SCI invested
“Start-up X” valuation after
E.ON´s investment
“Start-up X” valuation

8. How does our process function?

9. Contact information
Would you like to propose an investment?
Please contact us!
…or just come visit us at:
Innovation
Innovation Scouting & Co-Investments
B8, Brüsseler Platz 1,
45131 Essen
Germany
E.ON SCI US 649 Mission Street, Suite 416
San Francisco, CA 94105
United States