In conversation with
the Board of Management

The Board of Management of EWE AG
Wolfgang Mücher, Chief Financial Officer,
Michael Heidkamp, Chief Sales Officer

We will seize our great opportunities
with both hands

2016 was a good year for EWE and the company is looking to the future with optimism. Why? The members of EWE’s Board of Management Wolfgang Mücher and Michael Heidkamp answer this question in an interview: EWE does not have to depreciate coal or nuclear power plants, the company possesses the key technologies of the future with renewable energy generation, efficient grids, telecommunications and IT and has started to develop and test business models for a digital world. The interview was conducted by the independent editor Wolfgang Witte.

 

In light of recent events, my first question does not concern the 2016 business year or the future of EWE, but rather the present. The dismissal of the Chairman of the Board of Management and the reports on apparent irregularities, these do not fit EWE’s traditional image. What can you say about the state of play?

Wolfgang Mücher:
Mr Witte, you are absolutely right. Integrity is one of the guiding principles of EWE. Integrity is part of our business success and we know that our customers, business partners, owners and, of course, our employees, deserve to be treated with it. We take these allegations very seriously and will investigate them quickly, thoroughly and impartially. This will be in coordination with our auditing and compliance departments as well as two external consulting agencies.

We will be in an even stronger, more solid position for the next few years.

When will the Board of Management be complete again?

Michael Heidkamp:
That is up to the Supervisory Board. We expect that our Supervisory Board will not rush the issue and make the necessary personnel-related decisions in the near future. For Mr Mücher and myself, the highest priority is that we continue to provide our customers with the same quality of service. We must also work internally to return the company to an even keel.

 

These regrettable circumstances have overshadowed EWE’s positive business performance. What was behind this success?

Wolfgang Mücher:
Yes, the 2016 business year was a good year. Our earnings were significantly higher than in 2015. This was due to three elements in particular: for one, our operating units worked really well. Our success is also the result of the hard work of our employees. Secondly, 2016 was a normal weather year without the mild temperatures we experienced in 2015 and 2014. Finally, the statement of financial position features two extraordinary line items: the sale of the shares in VNG and swb’s restructuring of its company pension regulations. We were therefore able to distribute a healthy dividend in 2016 and guard against risks. We will be in an even stronger, more solid position for the next few years.

 

You have adopted a new Group strategy. How does EWE want to be successful in the future? Many energy companies find it difficult to answer this question.

Wolfgang Mücher:
The energy sector is on the precipice of an unprecedented transition. Large nuclear and fossil fuel power plants will disappear from the market. Fortunately, this problem barely affects us. We rely on decentralised, renewable energy. We also rely on intelligent networking and digitisation. We focus on customer orientation and experience. We are in an excellent position with regard to the transition in the energy sector. We can be successful in the market. It is now a matter of seizing these major opportunities with both hands.

In future our customers will be able to control their lighting, heating and smart e-mobility solutions using apps.

What does that mean specifically?

Wolfgang Mücher:
Specifically, it means that we provide everything we think we do well in our domestic market, i.e. in the north west, throughout Germany. We will work to expand our business with customers geographically. Secondly, it means that we will merge our energy products with our telecommunications and IT products. The first stage might be a flat rate for energy and Internet connections. In the future we will be able to provide a full household package; we are drawing closer to intelligent solutions for smart homes or smart living, for example. Thirdly, in specific terms this means installing fibre optic cables in every house in order to provide every one of our customers with ultrafast Internet. This is the only way to fully embrace digitisation. Finally, it means that in a decentralised world we do not try to do everything ourselves and instead work with partners to provide customers with comprehensive solutions and extend our value chain. This is what we are currently doing in a project entitled “enera”. To put it simply, with “enera” we aim to show that grids can be controlled in real time through a digital platform. This would be revolutionary in Germany and serve as a blueprint for the new electricity market

We are learning what the customer of tomorrow would like

The word “digitisation” has been used. Digitisation will be a decisive factor in the transformation of the energy sector. How has EWE prepared for this?

Michael Heidkamp:
In addition to the energy segment, our company has a major IT subsidiary in BTC and telecommunications in EWE TEL. We are the only company in Germany that has all of the resources it needs to offer its customers something digitally. We are gradually becoming familiar with new ways of working, i.e. more agile work, which not everyone would believe the energy sector capable of implementing at the moment. In addition to the “enera” project that I mentioned earlier, we are trying other things out. We are learning what the customer of tomorrow would like. We are looking at start-ups and have even created three of our own with digital business models. Essentially, digital business models mean that products and even switching services are provided automatically over digital platforms. You will have seen this kind of thing on Check24, although we aim to do it even better. And in future our customers will be able to control their lighting, heating and smart e- mobility solutions using apps or other applications.
Integrity is part of our
business success.

You are not releasing a traditional annual report for the first time, but instead an Integrated Report. Why?

Wolfgang Mücher:
Even here we are moving with the times. We want to present ourselves as more modern and target-group-oriented in our business reports. Our stakeholders’ expectations are changing with regard to our reporting methods. We are offering a condensed financial report with facts, figures and dates, yet our Integrated Report also contains information on our strategy and on the ecological, economic and societal issues that affect EWE. And that is what the people in the region, the public sector, our shareholders, our employees and other groups want to know. We are certain that this type of annual report will appeal to a number of people. I believe that we are among the first in the energy sector to introduce a report such as this. We can be proud of that.