Origin Energy Limited · ASX:ORG
Origin Energy — Octopus Energy — Investor Presentation (May 2024)
89 slides from Origin Energy's investor presentation, May 7, 2024
Slide 1: Welcome
Welcome 1
Slide 2: Greg Jackson, Stuart Jackson, James Eddison
Greg Jackson Stuart Jackson James Eddison CEO CFO CTO 2
Slide 3: Octopus is now the largest electricity supplier in the UK
Octopus is now the largest electricity supplier in the UK Source: Ofgem, 2024 3
Slide 4: We've achieved this by delivering exceptional customer service
We’ve achieved this by delivering exceptional customer service UK energy retailer Net Promoter Score Only major UK supplier with a positive NPS Source: Bain & Company UK Consumer Trends Study, 2023 4
Slide 5: We're driving strong growth in non-UK markets
We’re driving strong growth in non-UK markets Source: Internal Octopus analysis, 2024 5
Slide 6: And we're moving beyond pure energy supply
And we’re moving beyond pure energy supply Solar PV & Heat Pumps Home EV EV Leasing Public EV batteries charging charging 6
Slide 7: Underpinned by Kraken
Underpinned by Kraken 7
Slide 8: Kraken unlocks a lower cost to serve
Kraken unlocks a lower cost to serve Annual cost to serve, £ / customer account -38% Source: Consolidated Segmental Statements, 2023; Octopus Energy Limited Annual Report and Financial Statements, 2022; “Administrative Costs” in Octopus Energy Annual Report compared to “Indirect costs” in competitor
Slide 9: Client testimonials on Kraken
“We picked Kraken because it gives us the outcomes we were looking for - an operating cost that is a step change improvement to our current cost base.” Transformation Director, EDF Energy UK “Technology very much runs deep in Kraken's DNA… it took the Kraken development team about 2-3 weeks to imple
Slide 10: 50m contracted accounts and growing rapidly
50m contracted accounts and growing rapidly Kraken client accounts Octopus Energy accounts Source: Internal Kraken data, 2024 10
Slide 11: Today's agenda
Today’s agenda Context Where Octopus operates UK retail Non-UK retail Generation Kraken 11
Slide 12: The energy industry is undergoing two complementary transformations
The energy industry is undergoing two complementary transformations… 12
Slide 13: 1. The (next) digital revolution
1. The (next) digital revolution 13
Slide 14: New ways to engage with customers
New ways to engage with customers Via apps, digital comms channels and connected devices 14
Slide 15: Data explosion
Data explosion We receive >400x as many data points for customers with an smart meter, EV, etc. Data points per customer, per month Source: Internal Octopus analysis, 2024; indicative data 15
Slide 16: Technology leaps
Technology leaps Cloud-based processing and storage Continuous Integration & Deployment (CI/CD) Artificial Intelligence 16
Slide 17: 2. The energy transition
2. The energy transition 17
Slide 18: Levelised cost of electricity (global averages)
Levelised cost of electricity (global averages), 2022 USD / MWh Offshore wind (down 59% since 2010) Solar (down 89%) Onshore wind (down 69%) Source: Our World in Data, 2023 18
Slide 19: Battery prices are down 90% since 2010
Lithium-ion battery pack prices, USD / kWh Battery prices are down 90% since 2010 Source: Bloomberg New Energy Finance, 2023 19
Slide 20: Consumer electric vehicle demand
Global EV share of car sales, % Consumer electric vehicle demand continues to beat forecasts Source: IEA Net Zero Roadmap 2023; RMI 20
Slide 21: Where Octopus operates
Where Octopus operates 21
Slide 22: Octopus Energy uses technology to drive the global energy transition
Octopus Energy uses technology to drive the global energy transition. We make the transition cheaper and faster, for people and the planet. 22
Slide 23: Generation, Retail energy, Energy services, Technology
Generation Retail energy Energy services Technology 23
Slide 24: Octopus at a glance: assets, customers, accounts
Generation Retail energy £7bn 8 million generation assets customers across 8 managed countries #1 UK electricity supplier Energy services Technology EV leasing 50 million Solar, battery, EV contracted accounts charger and heat pump installation 43 GW Public EV charging contracted energy assets Sourc
Slide 25: Octopus Energy and Kraken
Post-transition Technology energy company business Octopus Energy and Octopus Energy Generation Kraken operate separately Kraken Octopus Energy Retail Octopus Energy Services 25
Slide 26: Active in 27 countries across 5 continents
Active in 27 countries across 5 continents 26
Slide 27: UK Retail
UK Retail 27
Slide 28: Octopus delivers outstanding customer service
Best-in-class customer satisfaction Octopus delivers outstanding customer service, Churn lower than competitors 12 months to March 2024 leading to best in class customer retention Source: Energy UK Electricity Switching Figures; internal Octopus data, 2024 28
Slide 29: Only Octopus has super fans
Only Octopus has super fans 29
Slide 30: Customer social media post: Elizabeth
Elizabeth @elizabeth_db Ms Legit, is there a company better with their whole offering than @OctopusEnergy ? Website is so intuitive, has mobile version that’s easy to use. Called customer service earlier with a query, she emailed me to confirm the advice. The business model should be replicated by E
Slide 31: Customer social media replies
é paulaevans56 @paulaevansse - 15h Replying to @elizabeth__db and @OctopusEnergy | strongly agree. @OctopusEnergy ° =) 9 ducatista @StefaniaDaLondr - 15h Replying to @elizabeth_db and @OctopusEnergy | moved to them in July from Bulb. .@) uD 9 Nick @NickM1976 - th Replying to @elizabeth__db and @Octo
Slide 32: Customer post: John Perry
& John Perry @ @John_Perry UK Buying electricity is not about price, it’s about value. | put value on my FIT payments being made 2-3 days after qtr end and not 2-3 weeks later with previous supplier or 4-6 weeks later with the one before that. | put value on customer service and installers who are g
Slide 33: Victoria Coren Mitchell post
Victoria Coren Mitchell @VictoriaCoren I've reached the end of the road with @OvoEnergy, the most terrible service provider I've ever encountered (and I've been served in a casino by acroupier who killed someone). Nothing but legal action will do for them now. Sadly, we still need electricity. So |
Slide 34: Victoria Coren Mitchell poll results
@ Victoria Coren Mitchell @VictoriaCoren - Mar 11 a No company could possibly be worse than @OvoEnergy who, quite apart from the money they've wrongly taken, have driven me personally to despair. But I've heard @OctopusEnergy are trustworthy and communicative? Please do this poll! And/or tell me whi
Slide 35: Source: YouGov BrandIndex, 2024
Source: YouGov BrandIndex, 2024 35
Slide 36: Our customers love us…
Our customers love us… UK energy retailer Net Promoter Score Only major UK supplier with a positive NPS Source: Bain & Company UK Consumer Trends Study, 2023 36
Slide 37: …and trust us
…and trust us % of customers who trust the following entities 60% 40% 20% 0% -20% -40% -60% -80% Source: YouGov survey of 2,116 adults in Great Britain, 2023 37
Slide 38: Our marketing is more effective than other major suppliers
Our marketing is more effective than other major suppliers Media marketing spend and share Source: Ofgem; Kantar; internal Octopus analysis, 2024 38
Slide 39: Which? Recommended Provider for 7 years in a row
Which? The most thorough reviewers Recommended Provider for 7 years in a row 39
Slide 40: 17th best UK business for customer service
Based on mass population surveys across all sectors, Octopus was recognised by the Institute of Customer Service as the 17th best UK business for customer service. The only energy supplier to have ever ranked in the top 50. 40
Slide 41: Kraken unlocks a low cost to serve
Cost to serve ~40% lower than other major retailers, £ / customer account Kraken unlocks a low cost to serve, allowing Octopus to profitably price competitively Source: Consolidated Segmental Statements, 2023; Octopus Energy Limited Annual Report and Financial Statements, 2022 Notes: “Administrative
Slide 42: Using generative AI to respond to customers
We’re using generative AI to more efficiently respond to customers Adoption of generative AI (MagicInk) by Octopus Energy Source: Internal Octopus data, 2023 42
Slide 43: Generative AI is delivering better outcomes than humans alone
Generative AI is delivering better outcomes than humans alone Customer happiness index (out of 100) Source: Internal Octopus data, 2023 43
Slide 44: Octopus and Kraken enable next-generation products
The combination of Octopus and Kraken enables next-generation products that customers want and incumbents can’t copy 44
Slide 45: This approach to retail unlocks…
This approach to retail unlocks… 1. Huge scale 2. Significant cross-sell potential due to brand loyalty and proven service 3. A foundation for electrifying and controlling demand 4. Higher customer lifetime value (CLV) and sustainable profitability 45
Slide 46: 1. Huge scale
1. Huge scale 46
Slide 47: Octopus is the largest electricity supplier in the UK
Octopus is the largest electricity supplier in the UK Source: Ofgem, 2024 47
Slide 48: We receive multiple switches per hour from other suppliers
We receive multiple switches per hour from other suppliers Minutes between switches from other major suppliers Source: Internal Octopus analysis, 2024 48
Slide 49: 1.9m customers have joined since Q1 2023
1.9m customers have joined Octopus since Q1 2023 800,000 have switched from rival suppliers Source: Internal Octopus data, 2024 49
Slide 50: 2. The clean energy product family
2. The clean energy product family 50
Slide 51: Customers want to buy more than just energy
Customers want to buy more than just energy from Octopus Source: Internal survey of Octopus energy customers 51
Slide 52: N if)
N if)
Slide 53: The Octopus Product Family
The Octopus Product Family Solar PV & Heat Pumps Home EV EV Leasing Public EV batteries charging charging A holistic offering and a seamless experience across products 53
Slide 54: The Octopus Cosy heat pump
The Octopus Cosy heat pump delivers everything our customers need to heat their homes 54
Slide 55: Zero Bills Homes guarantee free energy
Zero Bills Homes guarantee free energy for 10 years.
Slide 56: Kraken optimises energy usage at the household level
Kraken optimises energy usage at the household level.
Slide 57: Electroverse public charging across 40 countries
Whilst Electroverse enables hassle- free public charging across… 40 countries 700,000+ charge points Source: Internal Electroverse data 57
Slide 58: 3. Control of demand
3. Control of demand 58
Slide 59: Intelligent Octopus virtual power plant
Customer trust allows Octopus to do things that incumbents can’t… Intelligent Octopus operates the largest residential “virtual power plant” in Europe 59
Slide 60: 160,000 electric vehicles, 1,000 MW dispatchable capacity
160,000 electric vehicles 1,000 MW dispatchable capacity Source: Internal Octopus analysis, 2024 60
Slide 61: 4x increase in vehicles in the last 12 months
Monthly count of electric vehicles controlled by Intelligent Octopus 4x increase in vehicles in the last 12 months A typical customer saves £500 each year Source: Internal Octopus analysis, 2024 61
Slide 62: Expanding Intelligent Octopus to heating, air conditioning and batteries
We’re expanding Intelligent Octopus to control heating, air conditioning and batteries 62
Slide 63: Significant growth in UK controlled capacity to 2030
We expect significant growth in UK controlled capacity to 2030 Forecast UK Intelligent Octopus controlled capacity in 2030, GW Source: Internal Octopus analysis, 2024; National Grid Future Energy Scenarios 2023; BloombergNEF, 2024; UK Government 63
Slide 64: 4. Customer lifetime value and profitability
4. Customer lifetime value and profitability 64
Slide 65: Operating beyond pure retail delivers market leading CLV
Operating beyond pure retail delivers market leading CLV Indicative lifetime value for a typical Octopus Energy customer e.g. EV lease & charger, heat pump, solar, battery Source: Internal Octopus analysis, 2024 65
Slide 66: Non-UK Retail
Non-UK Retail 66
Slide 67: Replicating our winning formula around the world
We’re replicating our winning formula around the world + Italy, Japan, USA, New Zealand 67
Slide 68: 12-month growth has been strong outside the UK
12-month growth has been strong outside the UK Source: Internal Octopus analysis, 2024 68
Slide 69: Japan, Spain and Italy are growing faster than the UK did
Japan, Spain and Italy are growing faster than the UK did Normalised to show growth from when country first hit 10k customers Source: Internal Octopus analysis, 2024 69
Slide 70: Services products outside the UK
We’re also offering Services products outside the UK Solar PV & Heat Pumps Home EV EV Leasing Public EV batteries charging charging And more… And we’re investing to drive significant volumes in FY25 70
Slide 71: Overview of Kraken
Overview of Kraken 71
Slide 72: An Operating System for Utilities
An Operating System for Utilities 72
Slide 73: KrakenFLEX, KrakenCUSTOMER, KrakenFIELD
KrakenFLEX for assets Asset Management & Control Real-time Monitoring & Alerting KrakenCUSTOMER for retail energy Asset & Portfolio Optimization Asset Reporting & Analytics CIS & Billing Meter Data Management Customer Relationship Management (CRM) KrakenFIELD Customer Interaction for field services
Slide 74: KrakenCustomer, KrakenFlex, KrakenField
KrakenCustomer KrakenFlex KrakenField 74
Slide 75: This makes life simple for clients
This makes life simple for clients Multi vendor model Kraken model Client Client SI Vendor Vendor Vendor 1 2 3 1 interface All data in 1 place Complex web of 3rd parties Simple, transparent, accountable 75
Slide 76: Kraken operates differently to other platforms
Kraken operates differently to other platforms Full stack, end to end - OS for future energy, goodbye to dozens of systems. Single data model - making changes easy/fast (for IT) and data accessible (for business users). Cloud native - infinitely scalable; industry leading resilience, innovation, sec
Slide 77: Kraken is perfectly placed to deploy useful AI
Kraken is perfectly placed to deploy useful AI Language Customer model context Kraken AI Internal Action knowledge space database 77
Slide 78: Kraken is driving serious change for clients…
Kraken is driving serious change for clients… 78
Slide 79: e.on Transformation
e.on Transformation Migration: 8.5m customers migrated in 2 years, on time. IT simplification: from 8 brands, 17 systems to 1 brand, 1 system. Customer service excellence: 4.4 stars. Innovation: launched 2 new products during migration. Cost savings: £100m earnings jump. “The most successful transfo
Slide 80: Future proofing EDF's retail business
Future proofing EDF’s retail business Customer service excellence: rated 4.8 stars on Trustpilot since Kraken migration. 79% Customer Happiness Index. Improved digital experience. Employee engagement: 8.4/10 for employee happiness. Leaner operations: increase in customers per service agent. Profitab
Slide 81: Client quote on Kraken lifecycle and future energy scenarios
“Kraken not only helps energy retailers serve customers efficiently throughout their entire life cycle, but also remains ready to embrace future energy scenarios and the rapid pace of innovation.” 81
Slide 82: Client quote on the Kraken platform
“The Kraken platform hosts the entire customer service operation, manages disaggregated energy sources, communicates with industry bodies, and uses tools such as machine learning to offer dynamic tariffs.” 82
Slide 83: £127m ARR, 95% gross margin, 75% EBITDA margin
In the 12 months to 30 April 2023… £127m in ARR (+59% YoY) 95% gross profit margin 75% EBITDA margin Source: Octopus Energy Limited Annual Report and Financial Statements, 2023 83
Slide 84: Kraken's growth and margin far exceed the Rule of 40
Kraken’s growth and profit margin far exceed the Rule of 40 Bubble size indicates sum of EBITDA margin and revenue growth Sum ex ce eds 40% Source: Octopus Energy Limited Annual Report and Financial Statements, 2023 84
Slide 85: 50m contracted accounts and growing rapidly
50m contracted accounts and growing rapidly Kraken client accounts Octopus Energy accounts Source: Internal Kraken data, 2024 85
Slide 86: Kraken's CRM / CIS pipeline across energy, water and broadband
Kraken’s CRM / CIS pipeline is strong across energy, water and broadband Region Current clients Pipeline In discussions with multiple water and telco UK utilities / retailers. Late stage discussions with several retailers Europe & with combined total of >20m energy accounts; Middle East earlier disc
Slide 87: Flex customers span 4 segments
Flex customers span 4 segments 1. ASSET OWNERS (INFRASTRUCTURE FUNDS) 2. TRADERS/OFF TAKERS Flex Customers 4. SYSTEM OPERATORS 3. RETAILERS Source: Internal Kraken data, 2024 87
Slide 88: Kraken's total addressable market is over 1.6bn meters
Kraken’s total addressable market is over 1.6bn meters in gas and elec Source: Internal Kraken analysis, 2023 88
Slide 89: Any questions?
& Any 6) questions?