Introduction Board of Management Report

Foreword Board of Management

Everyone's sustainable energy. Instead of sustainable energy for everyone. We changed our mission in 2017. As a major transformation is taking place in the energy world. The old, omniscient energy monopolists that delivered fossil fuel kilowatt hours, joules and cubic metres to their ‘connections’ no longer exist. Instead, people have become the central focal point as they are increasingly taking control of their own energy supply. Although it is only a small change in wording, there is a world of difference between ‘everyone's’ and ‘for everyone’. A world that we contribute to with innovative products and services.

Of course, the energy transition is all about the transition from fossil energy sources to sustainable and renewable sources such as wind, solar and geothermal energy. About people who produce, use, store and share their own energy. About sustainable solutions for mobility issues, sustainable heat, and alternative energy systems in offices and homes, smart street lights in our towns and cities and electrification of the industrial demand for heat. Given the large role that innovation plays in the energy transition, new developments will certainly take place in the future which we currently have no idea of, but that will be important for everyone's energy. That is why we invest in innovative companies in the Netherlands and abroad, such as Jedlix, LichtBlick, Next Kraftwerke, ONZO, Peeeks, Quby and Triggi (with the new brand name Olisto).

Also as result of digitalisation, people are taking control of their own smart sustainable energy web as smart suppliers as well as smart users. Similar to the development of the internet, all sorts of energy hubs are being connected to each other in, on and around homes, in districts, in the city, in the whole country. Connecting the small production capacity at home, but also the large sustainable production facilities at sea and on land. Directing energy flows is shifting from a centralised to a decentralised system. In order to ensure that this democratic system can work properly, the storage of electricity has to be taken a big step further, so that energy is also available for customers when sustainable energy supplies are insufficient.

For years, there has only been one way forward for Eneco Group: taking the lead in the transition. In doing so, we continue to focus on our customers: the services and products that they need have to be available to them. This applies for consumers for, for example, their heating and lighting, but also for companies that require a lot of energy for their operations. One of our solutions for industrial customers is to link their energy demand to a sustainable production facility. Examples included wind turbines specifically for the Dutch railways company NS and Royal Schiphol Group and connecting our biomass power station to AkzoNobel to supply sustainable electricity.

Eneco Group is rapidly developing into an energy service company that is in close contact with its customers and helps its customers to become more sustainable with innovative products and services. We can only make the fascinating journey to this sustainable destination together with our partners. With our retail and commercial customers, suppliers, partners in society, the companies in which we participate, our shareholders and certainly our employees in the Netherlands, Belgium, Germany, the United Kingdom and France. Together, we are the Eneco Group and we deliver on our mission.

Our internal transition is running more or less parallel to the energy transition. Over ten years ago, we were one of the first energy companies to opt for a sustainable and innovative course. We have been able to make good and substantial progress again in 2017. Our financial results are excellent. We are also proud of important achievements, such as the acquisition of a 50% interest in the German IT and energy company LichtBlick, the acquisition of Eni Belgium, the 25% interest that Renault acquired in our company Jedlix, our role in the Smart City developments in Scheveningen and three new services that were added to the platform of the smart thermostat Toon, including the Waste Checker (Verspillingschecker). Customer satisfaction remained high (7.6) and the alignment of our employees with the strategic objectives of the company remained high as well (78%). You can read more about this in this annual report.

‘Sustainability is becoming important for the economy’

Jeroen de Haas
CEO Eneco Group

The changes in the energy market are tumbling over each other. This demands quick decisions that are taken on a more decentralised level within our organisation. This is why we changed the structure at the top of the company after the unbundling of Eneco Holding in Eneco Group and Stedin Group. A Strategic Board has been established with specific focus areas (transformation, growth, customers, operational excellence, finance and human resources).

A consultation process among shareholding municipalities was started mid-2017 regarding their future shareholdership. It became clear at the end of October that a majority of the municipalities wished to privatise Eneco Group. Eneco Group's position has been clear from the beginning. We understand that the majority of our shareholders wish to privatise Eneco Group and we would like to work together with the remaining and departing shareholders to arrive at an optimal outcome for all stakeholders. A return on investment for shareholders that is in line with the market, guarantees for the continuation of our sustainable course, and continuity of the company are central issues for us in this process.

Who will be are new shareholders is of course of vital importance for our ambition to increase the sustainability of the lives of as many people as possible. The energy transitions is continuing at full speed. Eneco Group can and will continue to opt for a leading role, in line with our more clearly defined mission: everyone's sustainable energy.

Jeroen de Haas

Chief Executive Officer

Eneco Group and its brands

Eneco Group is a group of companies active in the energy sector. As a group and together with our customers and partners, we work on realising our mission: everyone’s sustainable energy. In this way, people can take control of their own energy supply. With our consistent course, we are leading in the field of sustainability and innovation. Nationally and internationally, we offer added value to consumers and businesses with our smart products and services. And we deliver a contribution to society by generating and supplying green energy. We are active in the Netherlands, Belgium, Germany, the United Kingdom and France.

Participations1

LichtBlick is a leading supplier of sustainable energy on the German consumer market.

Peeeks detects and harnesses flexibility for electricity companies so that energy systems can perform optimally.

Greenchoice, supplier of sustainable energy to companies and households.

Nerdalize develops cloud boxes for sustainable heating in homes.

Nextkraftwerke is the operator and service provider of a large Virtual Power Plant, that works as a network of smaller sources.

ONZO is a data analytics software company that has developed a platform that detects and analyses the energy consumption of household appliances based on data generated by smart meters and connected devices such as smart thermostats.

Roamler Tech is changing the way of working in the installation world.

Simaxx has developed a platform that gives the owners of buildings insight into the energy performance of their building.

Thermondo is a German start-up specialised in the sale and installation of private heating installations.

Triggi makes smart devices smarter and connects them with other devices, apps and services.

  1. Reference is made to the overview of most important participations in the financial statements.

Important events

17 January

Eneco Group acquires a 50% interest in the German sustainable IT & energy company LichtBlick.

31 January

Unbundling of Eneco Holding N.V. in Eneco Groep N.V. and Stedin Holding N.V.

13 February

First delivery of bio-steam to AkzoNobel/Chemiepark Delfzijl from Eneco’s biomass power plant Bio Golden Raand.

13 March

Eneco Group acquires an interest in smart data company ONZO, which analyses the energy consumption of household appliances using data generated by smart meters.

6 April

Eneco Group and Mitsubishi Corporation conclude a collaboration agreement for the construction of Europe’s largest battery, under the name EnspireME.

9 May

Eneco Group acquires a minority interest of 34% in Next Kraftwerke, operator of one of the largest virtual power plants in Europe.

8 June

Agro Energy wins the Hendrik Lorentz Award together with data science specialist CQM for the innovative manner in which data science is used in the service BiedOptimaal.

7 July

Eneco and Google announce that Google will be purchasing all the energy of Sunport Delfzijl for the coming ten years for its Google data centre.

10 July

Eneco becomes the owner of Eni Belgium and becomes the third player on the Belgian energy market in terms of volume.

15 August

Eneco and Royal Schiphol Group N.V. announce that the airports of Schiphol Group will operate completely on green wind energy produced by Eneco as from 2018.

1 October

The Spanish energy company Viesgo starts offering the smart thermostat Toon to its 720,000 customers, following the partnership between Viesgo and Quby, the developer of Toon.

10 October

Groupe Renault acquires a 25% interest in Jedlix, the Eneco Group start-up specialised in smart and sustainable charging of electric vehicles.

23 October

Eneco and Oxxio rise strongly in the annual Survey Sustainability of Electricity Providers of Greenpeace, the Dutch Consumer Association, Nature & Environment and WISE. Eneco rose from 7.0 to 7.9 and is the only big energy company that achieves a more than sufficient score and maintains its position in the category ‘frontrunners’. Oxxio rose from 4.3 to 6.1.

24 October

In a comparable Greenpeace survey in Belgium, Eneco achieved a very good score of 18 out of 20, ‘an example to follow’, according to the compilers of the report.

24 October

The first Solar Hub (ZonneHub) is taken into use in Etten-Leur. This is a cooperation between Eneco and Rabobank West-Brabant Noord. 170 solar panels have been installed on top of the bank’s office building.

2 November

Eneco Group acquires the wind activities of De Wolff Verenigde bedrijven, which expands the portfolio with 17 wind parks and various wind activities that are still under development.

13 November

The Municipality of The Hague and Eneco Group sign a collaboration agreement for the realisation of Living Lab Scheveningen, a smart city concept with smart lampposts as hubs.

12 December

Introduction of the Waste Checker, a new service offered by Toon and Eneco, that enables customers to easily detect and remedy energy wastage at home.

Overview of the main results

Strategic KPIs1


(amounts from financial statements 2017; in € 1 million)

Financial key figures

About this report

The annual report 2017 is the first annual report of Eneco Groep N.V. after the unbundling on 31 January 2017 of the former Eneco Holding N.V. in the energy company Eneco Group and the network company Stedin. With this integrated report, Eneco Group accounts for its financial and non-financial performance in 2017 and its financial, social and ecological value creation. We opt for a compact and transparent report that provides the information required by our stakeholders based on a stakeholder dialogue and materiality analysis.

In this report, we adhere to the standards of the Global Reporting Initiative (GRI) in as far as possible. The International Integrated Reporting Council (IIRC) framework is used to clarify the interrelationship between the core elements of our policy. Furthermore, the annual report has been prepared in accordance with the guidelines of the CDSB framework, which promotes the disclosure of environmental information and natural capital. We also report on the Sustainable Development Goals that are relevant for us. The financial statements have been prepared based on the International Financial Reporting Standards (IFRS) and the relevant provisions in the Dutch Civil Code.

The guideline for this report is the value creation model. This reflects our One Planet focus, Eneco Group's essential purpose and its mission, strategy and business model. The realisation of Eneco Group's strategy is explained based on strategic key performance indicators (KPIs) in the section Progress and in the financial statements. We have given the assignment to Deloitte Accountants B.V. to audit the financial statements 2017 as well as the strategic KPIs and the application of the GRI standards in this report. An auditor's report has been issued for the financial statements and an assurance report has been issued for the strategic KPIs and the application of the GRI standards.

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