Impact of Restructuring on Employment in Central Europe East at E.ON Energie

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Impact of Restructuring on Employment in Central
Europe Eastat E.ON Energie

• Kai Portugall
• Expert Human Resources International
• Bucharest, October 11th, 2004

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Agenda

• Structure of E.ON / E.ON Energie
• Our vision and mission what we achieved so far
  ?
• Development and growth of E.ON Energie in
  Central Europe
• Success factors of E.ON Energie
• Involvement of the social partner in Post
  Acquisition Integration

3
Agenda

• Structure of E.ON / E.ON Energie
• Our vision and mission what we achieved so far
  ?
• Development and growth of E.ON Energie in
  Central Europe
• Success factors of E.ON Energie
• Involvement of the social partner in Post
  Acquisition Integration

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E.ON Group
E.ON AG
Other activities
E.ON Ruhrgas
LG E
Sydkraft
E.ON UK
E.ON Energie

• Energy
• Gas

• Energy
• Gas

• Energy
• Gas

• Gas purchase and transport

• Energy
• Gas sales
• to end
• customers

Chemistry Degussa
46,5
USA (Mid West)
North Europe
GreatBritain
Central Europe Russia Baltic states
Central Europe
Real estate Viterra
100

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Agenda

• Structure of E.ON / E.ON Energie
• Our vision and mission what we achieved so far
  ?
• Development and growth of E.ON Energie in
  Central Europe
• Success factors of E.ON Energie
• Involvement of the social partner in Post
  Acquisition Integration

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Our vision and mission

• E.ON will
• provide competitive solutions for its customers,
  their lives and businesses
• stay on top by being an integrated power and
  gas company
• combine international strength with local focus
• apply the best ideas from across the Group

• Be the world's leading power and gas company

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Agenda

• Structure of E.ON / E.ON Energie
• Our vision and mission what we achieved so far
  ?
• Development and growth of E.ON Energie in
  Central Europe
• Success factors of E.ON Energie
• Involvement of the social partner in Post
  Acquisition Integration

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Growth potential of E.ON Energie

• Growth mainly achieved through acquisitions
• Limited further acquisition potential in Germany
  due to cartel restrictions
• Clear focus on central EU countries and new EU
  accession States
• Additional growth potential through increased
  demand for electricity and gas in Central Europe
  East

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Electricity Through acquisitions and swaps E.ON
Energie has achieved a significant consolidated
market share in the region
Czech Republic
2000
VCE
ZCE
SME
JCE
JME
Slovakia
Édász
Titász
Dédász
Romania
Hungary
Bulgaria
E.ON majority
E.ON minority
1) Shareholdings with E.ON Energie management
lead. Region CZ, SK, HU, BG
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Agenda

• Structure of E.ON / E.ON Energie
• Our vision and mission what we achieved so far
  ?
• Development and growth of E.ON Energie in
  Central Europe
• Success factors of E.ON Energie
• Involvement of the social partner in Post
  Acquisition Integration

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E.ON Energie's success factors also applicable
in Central Europe East

• Best Practice
• Knowledge exchange between subsidiaries
• Efficiency gains through best practice processes
• Setting high standards for all Group members

• Decentralized Structure
• Autonomous subsidiaries
• Own Board of Management for subsidiaries
• Close contact to the local market

• PAI Process
• Conception during MA process
• Creating transparency in Controlling
• Integration into E.ON's overall strategy

Cost leadership
Corporate governance
Integration
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Agenda

• Structure of E.ON / E.ON Energie
• Our vision and mission what we achieved so far
  ?
• Development and growth of E.ON Energie in
  Central Europe
• Success factors of E.ON Energie
• Involvement of the social partner in Post
  Acquisition Integration

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Philosophy of involvement and co-operation

• E.ON Energie
• Sustainable legal framework of co-determination
  and co-operation
• Development of a culture of co-operation beyond
  the legal requirements
• Demand on social partner to take challenge of
  entrepreneurship
• CENTRAL - Central Europe East
• Transfer our philosophy to our social partner in
  Central Europe East
• Development from a role as dialogue partner to
  role as business partner
• Expectation to takeover an enhanced business
  responsibility

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Conversion into reality at Post Acquisition
Integration

• Phase of Due Diligence
• Meeting with the social partner of all levels
• Achieve reciprocal understanding of needs and
  concerns
• Start the dialogue
• Phase of Post Acquisition Integration
• Intensively consult and discuss development and
  changes in the Organization
• Create harmonized work conditions in respect to
  local conditions
• Liaise the local social partner with the overall
  E.ON Energie social partner
• Continue the dialogue
• Foster the integration in the E.ON Energie social
  partnership

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Example Change of salary structure
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Backup
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Focus Region Central Europe
approx. 14 million customers
232 TWh power sales
112 TWh gas sales
approx. 39,000 employees
2003 pro forma figures for the Market Unit
Central Europe