Market cap

* For banks, enterprise value is substituted with market cap. Source: Bloomberg Finance L.P.

Performance of the brand

E.ON AG is a German investor owned energy services provider. The company’s businesses include various forms of electricity generation, electricity transmission, regional distribution, gas and heating services, power trading and energy sales. Under its current CEO Johannes Teyssen, the company recorded revenues of €92.9 bn in 2010, a 13.6% increase over the 2009 results. For 2011, revenues can be expected to increase due to a general increase in energy costs.

Price Increases

2011 was a year of rising wholesale energy costs; some estimates suggest that energy companies’ costs could have increased by as much as 30%. In the UK many of these rising costs have been passed on to consumers with E.ON raising its prices by no less than 20% for both gas and electricity provision. As a result, there has been a widespread public reaction against many energy companies which have raised their prices despite making healthy profit this year; these events have had a negative impact on the way that people perceive these companies’ brands. E.ON, the world’s largest public energy company, has raised its energy prices despite the business still being very profitable. The nature of the business means that consumers cannot easily switch away to another cheaper provider simply because wholesale cost increases affect the entire sector. Furthermore, the size and power wielded by E.ON and other energy brands has meant that it is extremely difficult for any competition regulators to tackle the monopolistic powers enjoyed by these brands.

Public Reaction

The recent increases in prices have led to a comprehensive loss of public confidence in many energy companies’ brands, including E.ON’s. The problem has gone as far as to cause the chief executives of both E.ON and EDF, another leader in the UK energy market, to admit that the public have lost confidence in the sector as a whole and that a public inquiry may be required to restore public faith in these firms.

Consumer support groups have heavily criticised E.ON for its price increases and have called for fair trading authorities to refer the company to the Competition Commission.
 

Response

To overcome these significant problems E.ON has instigated a number of reforms to attempt to regain confidence in its brand. More recent promotions by E.ON aiming to “build trust, knowledge and engagement” in its brand include the ‘Energy Fit Plan' offering the 12^th and 24^th month’s energy free on a two year contract. E.ON has also linked up with a trusted low price brand, Tesco, in a deal which will allow customers to pay for their energy with vouchers on their Tesco Clubcard. Essentially this will allow customers to enjoy discounts off both their energy and shopping expenses; offering customers ways to reduce the size of their bills is a key component of E.ON’s current strategy as it illustrates the brand’s commitment to lower prices. 

In order to publicly portray the brand’s attempts to help its customers E.ON has begun reviewing over £5 million of its direct marketing spending in order to ensure that its messages are conveyed effectively. Furthermore E.ON has reshuffled its management by replacing its head of marketing communications in the hope that this may assist in improving its public image.

 

 

Last changed December 7, 2011

League tables

E.ON appears in the following brand league tables:

Rank 88 in the Global 500 2012.
Rank 8 in the Germany 30 2012.
Rank 84 in the Global 500 2011.
Rank 84 in the Global 500 2011.
Rank 8 in the Germany 30 2011.
Rank 103 in the Global 500 2010.
Rank 95 in the Global 500 2009.
Rank 124 in the Global 500 2008.
Rank 179 in the Global 250 2007.