Innogy : and E.ON present proposals for restructuring innogy’s UK retail business npower

• Migration of npower's domestic and small business customers onto E.ON UK platform
• Carve-out of npower's industrial and commercial customers to secure profitable business
• Restructuring of the remaining npower operations over the next two years
• Michael Lewis to take over joint leadership as CEO for both E.ON UK and npower

The UK market is facing unprecedented challenges. In particular, innogy's UK subsidiary npower is in a critical and unsustainable business situation. Therefore, today, innogy and E.ON have proposed to migrate npower's domestic (B2C) and small business customers onto the E.ON UK customer service platform. This would create substantial synergies from running a single customer service platform rather than two. Today's announcement does not impact npower's profitable industrial and commercial (B2B) customer business which is considered to be carved out. However, details need to be elaborated. The remaining npower operations would be restructured over the next two years. This would include the closure of the majority of npower's sites and corresponding staff reduction.

To lead the migration, Michael Lewis, currently CEO of E.ON UK, will take over joint leadership as CEO for both E.ON UK and npower. Paul Coffey and Dirk Simons, currently npower CEO and CFO, will leave the Board of npower as of 2 December 2019. Simon Stacey has been appointed as new CFO. In addition, npower has further strengthened their expertise with Mike Hawthorne, an experienced restructuring executive, who will join the npower Board as Chief Restructuring Officer.

Leonhard Birnbaum, Chief Executive Officer of innogy SE: 'The question of how to improve the performance of our retail business in the UK, npower, has been a key issue for the past few years. I want to express my sincere thanks to our employees for their unceasing dedication to delivering a great service to our UK customers in a very challenging market. We know that this is bitter and surprising news for many of our npower employees and we are well aware of our responsibility towards our employees in the months ahead. I also want to thank departing CEO Paul Coffey and CFO Dirk Simons for how they have turned around so much of npower's performance over the past few years. This is especially true in terms of customer service performance, where npower now has a very respectable record, and in terms of the costs of running the company.'

Birnbaum added: 'What became clear to the npower Board and ourselves is that npower with its structural set-up and scale was not able to succeed by itself in this difficult market. This was the driving force behind the attempt to merge with SSE's retail business and it is the reason why these changes have been announced today. Together with E.ON, we now propose to reduce the cost of serving npower customers by combining them onto one platform, an option that simply was not available in the past.'

E.ON and innogy will consult and work with Trade Unions and employee representatives on this plan and are committed to mitigating the impact on employees. Current npower redundancy terms will be maintained as well as a range of outplacement activities to support npower employees leaving the company.