Origin will acquire a 20 per cent interest in Octopus Energy and a licence in Australia to its customer platform, Kraken. The strategic partnership will see Origin work with Octopus to adopt Octopus’ operating model and technology platform.
Over the next 24 to 30 months, Origin will transfer its 3.8 million retail electricity and gas customer accounts to the Kraken platform, delivering a step-change reduction in operating and capital costs, with expected pre-tax cash savings of $70-80 million in FY2022 increasing to $100-150 million annually from FY2024.
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The transaction is funded with staged consideration of $134 million paid upfront and $373 million spread over four financial years, comprising equity instalments and progress payments related to the rollout of Kraken across Origin’s retail operations.
Origin CEO Frank Calabria said, “The future of energy retailing lies in delivering superior customer experience at lowest cost and seamlessly integrating products and services, enabled by new technologies.
“While we have made good progress towards improving our customers’ experiences and the efficiencies within our retail business, this partnership Octopus will help us transform energy retailing by automating our end-to-end processes and embedding an operating model designed around, and for, the customer experience. This will make every transaction simpler for our customers.
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“This is an exciting opportunity because it delivers transformative change through a partnership with a company that is leading in customer satisfaction and experience in products and services that sit at Origin’s core.”
Mr Calabria said for customers, they will have a vastly simpler experience, with the technology capable of integrating multiple services to a single bill, delivering agile tariffs and easy integration of smart meters, solar, storage and electric vehicles, accelerating demand-side management capability.
“Our people will be given the tools and empowered to provide an exceptional service, with small autonomous teams having full accountability for end-to-end customer experience, resulting in faster and better service,” he said.
“Octopus is genuinely unique in the global energy market, having purpose-built its low-cost operating model and technology platform around the needs of customers. Adopting its approach will allow Origin to create a genuine competitive advantage.”