what you need to know Tony McHardy Corporate Director 23 rd March - - PowerPoint PPT Presentation

Market deregulation is almost here: what you need to know

Tony McHardy– Corporate Director 23rd March 2017

• Water Plus: who we are
• Recap: Benefits of competition
• What’s happening in the market (competitive landscape)
• How are Customers currently engaging ?
• What are the opportunities for Brokers?
• What should you be doing now ?
• Summary

Agenda

Who we are….

Company Overview

• 50/50 JV: Two of the UK’s largest listed

water companies, United Utilities and Severn Trent combined their existing non-domestic supply arms into a new legally separate business in June 2016

• UKs largest Customer base: currently

supply more than 450,000 supply points across Scotland, NW & Midlands area with an annual revenue around £1b

• UK based Offices with Field Based

Experienced Account Management teams: Offices in Stoke on Trent and Bellshill Glasgow with national coverage

• Experienced staff: 19 Sector specific key

customer account managers with more than 150 years combined experience

• Retail Competition Pedigree: have been

competing successfully in Scotland since 2012 and switched more than 10,000 supply points

• England Switches: Have already

delivered the largest Water only switches in England

• Value Added Services: have an

integrated ‘beyond the meter’ water solutions team

Water Plus is designed to meet business customer needs in an open water market

• In depth knowledge and expertise
• Everything made easy
• Personal service
• Innovative services and products

AND

• Proactive approach to Water Management

Recap: Benefits of competition

Increased innovation Improvement to Service

• Lower cost to serve
• More competitive offers
• Simplified processes
• Investing in market leading systems
• New products, services and online tools
• Water management services
• UK wide consolidation for multi site customers
• Single points of contact for account management & billing
• Multiple contact channels

Downward Pricing More choice

• More retailers – 20 Licenses granted in England
• Brand values, company ethos, services on offer
• Serving niche markets

The changing water market

Interaction with the market is changing

The competitive landscape

Who’s rebranded? Who’s Exited? Who’s Taken Over? Others to look out for

Retail margins & charges vary by region

Margin variance across regions (Example: Water 500m3 20mm meter)

8.4% 5.4% 11.9% 2.9% 12.3% 5.5% 10.5% 6.1% £0 £200 £400 £600 £800 £1,000 £1,200

Margin variance across tariff bands (Example: average GMs by tariff band) End-user Charge (£) Retail GM (%) Wholesale Margin (%) Volume

Marketing activity is increasing

What are customers doing?

Large food manufacturing business Beverage distribution business Public Sector Organisation Global manufacturing business Global food manufacturing business National multi-site service provider UK (Iconic Brand) manufacturing business “We will switch for a saving of £10,000+” “We are very happy with the service we receive and see no point in switching suppliers, we won’t be actively seeking a competitor offer.” “We are happy…and have no reason to switch…however we are required to follow the OJEU procurement process.” There ere is an int ntern ernal al deba bate about bout the he risk to water er quali uality/supp pply ly vers rsus us the e advant dvantages ges of swit itching hing, with h that at in mind nd there here would uld have to be a good case put forward … to consider switching from the incumbents” “Won’t look to do anything until after the market opening - where we will look for one single supplier at some point.” “Will wait approx. 6 months for the market to settle down before looking for national supplier” “Water contracts are not currently on the radar due to minimal

• savings. However the drivers for switching suppliers would be to

maximise any VAS opportunities across the sites.”

What competition means for Brokers/TPIs

• Offers a potential income stream
• Can be seen as a ‘bolt on’ to existing services

supplied

• Retention tool to protect your energy

revenues

• Some Retailers may be looking for ‘white

labelled’ services to help deliver against propositions

• Saving water = saving energy

• 3. Be realistic, compare

with current energy deal

• 1. Plan ahead, engage suppliers
• 2. Get data smart,

create a level playing field

• 4. Be clear about how you

are going to evaluate

• ffers

What do your Customers value?

What should you be doing?

What differentiates retailers?

The difference in price between retailers is likely to be around 0.5% The difference a good retailer can make is 5 – 15% through a proactive approach to water management; efficiency savings; personal relationship; peace of mind; an easy life.

• Its not just about price
• Make sure you’re engaging with suppliers
• Be data ready
• Be realistic

Summary

Thank you for your time

24th February 2017

Want to chat? Come and meet the team