Retail

An increase in Origin’s customer base from 2.9 million to 4.5 million as a result of the acquisition of the Integral Energy and Country Energy retail businesses, helped deliver a step-change in Retail earnings for the year.

Retail Underlying EBITDA increased 38 per cent or $217 million to $785 million. This was primarily due to the first four months’ contribution from the acquired NSW retail businesses, effective management of the energy portfolio and growth in non-commodity sales, such as rooftop solar systems.

Total revenues for the Retail business increased by 26 per cent on the prior year to $8.1 billion. The acquired NSW retail businesses contributed revenues of $1.27 billion in four months, while organically, the Retail business increased its revenue by $410 million or 6 per cent on the prior year. Origin’s Retail Solutions business increased its contribution substantially, with revenue more than doubling to $445 million as solar installations increased to 36,840 in FY2011 from 6,449 in the prior year.

Origin also continues to hold its leadership position in the green energy market, with more than 500,000 green energy customers.

Throughout the year, Origin saw competitive activity increase across most markets. Origin’s average churn rate remained stable at 18.5 per cent, despite average market churn increasing from 19.1 per cent to 20.2 per cent as retail margins expanded.

In New South Wales, market churn increased from an average of 12 per cent in the eight months prior to 1 March 2011, to 14 per cent in the four months post completion of the NSW acquisition. Origin anticipates that market churn will continue to increase to levels experienced in other competitive markets, such as Victoria and Queensland.

As well as completing the acquisition of the NSW energy businesses, the Retail segment has been implementing a major transformation of its billing systems. A significant milestone in the Retail Transformation Program was achieved in June 2011, when 300,000 South Australian customers transitioned onto the new SAP billing platform.

Initial performance has exceeded expectations with call centre average handling times in the new SAP system already consistent with, and in some cases less than, legacy systems. Business operations are stable and there have been no customer or regulatory issues to date. Further migration activities are planned for other states in the coming months.

In May 2011, Origin announced Australia’s first large-scale pilot of world-class customer engagement technology for the energy sector. Through deployment of the application suite Tendril Energize™, Origin will have the potential to better engage with customers and deliver a range of new, more targeted products and services to help customers better manage their energy consumption and power bills. The pilot will involve thousands of Origin customers and will take place in the second half of the 2011 calendar year.

Alongside this, the Retail Solutions business continues to develop new products and business lines to deliver a better range of solutions for customers. Within Retail Solutions, Origin’s solar business continues to grow. Additionally, Origin has continued to invest in customer E-mobility and electric vehicle charging, smart home products and business-2-business solutions.

Providing energy efficient solutions for the home