Implementation of Market Messaging Functionality in Essent-Greenfield

1. Implementation of Market Messaging Functionality in Essent-Greenfield Maarten Moolhuysen Project leader Greenfield

2. How we implemented market messaging functionality as part of a huge transition program • About Essent and the developments in the Dutch energy market … • … which force us to execute huge Transition programs • The role of SAP in one of these programs and specifically how we jointly implemented a market messaging module… • … and what we have learned from that

3. Essent: a vertically integrated energy utility company - leader in The Netherlands ESSENT’S BUSINESS KEY FIGURES 2007 • Value Creation Entities • Gas Storage, Waste, Generation, • Transport, Distribution (unbundled per 01-01-2011) • Portfolio Optimization / Trade, • C&I Sales, Residential Sales, Value Added Services(including Meter reading services) • Products and Services • Gas and Electricity • Heat • Product related services • Geography • The Netherlands • Germany • Belgium • Revenues 7,378 M€ • EBIT 991 M€ • Cash Flow* 1,003 M€ • Assets 8,048 M€ • ROIC 13,4% • Employees 10,223 FTE • Customers 2,1 M • Contracts (E+G) 2,8 M * Operational Cash Flow

4. Transition Programs in Essent – internal and external drivers BUSINESS REGULATORY CHANGES • Increased competition • Pressure for loweroperational costs • Stronger customer orientation • New products(energy saving related) • DTe scorecard • Unbundling (split Supply – Grid) • New market rules • Capacity tariff • Supplier model • Energy saving targets(20-20-20 in 2020) • Changed Meter market model • Heat law MARKET / SECTOR • EU market changes • Dutch market changes • LNG market • Mergers & Acquisitions • Labor market shortage TECHNOLOGY • Smart meters • Micro WKKs • Solar panels • Intelligent networks • Domotica

5. Greenfield: lower cost to serve and enabling unbundling and market-model changes Modular product & services packages Simple and flexible processes Standard SAP in combination with a flexible IT front end 1 2 3 Flexibility via business rules that vary communication channel, lead times, etc. driven by customer value and segmentation User friendly interface (Morphis) and Customer Self Service Optional Standard 'No Waste' Green Package Optional Standard 'No Waste' Euro Package Optional Standard 'No Risk' Euro Package SAP XI integration layer for interfacing to Flanking Applications Core of: SAP ISU / CRM / BI-BW No Hassle Basic Products & Services Offering Standardized Processes Best practice IT architecture Greenfield organization according to Lean principles 4 • VALUE • Customer first • First time right • First call resolution • Fit for purpose IT-systems • FLOW • End to end processes • FO/BO integration • Workflow • Performance management • PULL • Day production • Feedback loops • Pro-active • PERFECTION • Six sigma • Empowered employees • Continuous improvement • Best practices Greenfield facilitates the implementation of new market model and upcoming unbundling.Enables Essent to focus on business targets of individual customer segments 5

6. (Dutch) energy landscape after liberalization Generation Companies Trading Energy Suppliers • Foreign entrants • LNG and storage • Utilities • Oil companies • Banks • Incumbents • New entrants • Consumer unions National System Operator Power/Gas Exchanges Energy Clearing House Distribution Companies Metering Grid sales • Smart meter reader providers

7. What is IDEX, and Why IDEX at Essent? IDEX handles data exchange for • All Switching related processes (switches, move in/ move out) • Master and Meter data requests Rationale for Essent • Adhere to (expected) market standard to be able toeasier follow future market changes • Integrated approach with one software vendor/ solution • Expertise and quality

8. Essent as principal to SAP-Custom Development for IDEX product SAP CD as project responsible contractor After drafting the specs, on fixed price basis With strict end-date for delivery With “other implementation partner” for Developing main Greenfield applications Integrating IDEX product SAP development team in Walldorf Weekly a joint project-management meeting Essent and implementation partner to assist in development Structure of IDEX project in Greenfield ESSENT asPROJECT PRINCIPAL GREENFIELD PROJECT IT project – 1SAP Backend, Morphis Front endBy: Implementation Partner IT project – 3IDEXBy: SAP CD IT project – 2Flanking ApplicationsBy: Essent

9. On time delivery and consequently maintenance started IDEX is successfully integrated in Greenfield architecture Time-pressured issue resolution more issues than expected … … faster solved than predicted Successful “certification” by Dutchmessaging authority EDSN What have we achieved?

10. Some key lesson learned around organizational and technical challenges SAP • For technical expertise turn to the experts from the IBU or LCC (much more than to the country / sales organization, e.g. in the Netherlands) • Where SAP most often has a consultancy / advisory role, I was pleasantly surprised by their project management skills Integration • Main implementation partner is responsible for integrated solution … • … however, Essent and SAP CD delivered the IDEX module … • … when technical/ integration issues appeared, who is responsible?And how to solve the issues. IDEX Philosophy • Essent choose for future market standard … • … but experiences - as front-runner – all the start up problems … • … and maybe the start up costs?

11. Maarten Moolhuysen project leader Greenfield maarten.moolhuysen@essent.nl