Powergen is now part of E.ON, Europe's largest investor-owned energy service provider, with an annual turnover of roughly €80 billion in sales and more than 150,000 employees.

The Group and the E.ON brand were created in June 2000 by the merger of VEBA AG and VIAG AG, to create the fourth largest industrial group in Germany, based on market capitalization at year-end, 2002.

As of July 2002, following E.ON's acquisition of Powergen, the E.ON Group structure was as shown below:

E.ON AG is the Group's Düsseldorf-based holding company. E.ON's subsidiaries are responsible for managing day-to-day business. The Group pursues a value-oriented management approach that aims to boost competitiveness and achieve profitable growth.

E.ON's strategic focus is on its core energy business, and its expansion into wider Europe and the US have put it in an extremely strong position as a global player. E.ON is well on the way to becoming one of the world's leading providers of energy services. This is being pursued through a strategy of:

• Concentrating exclusively on core energy services business;
• Pursuing accretive acquisitions to cement a leading position in Europe and to establish a solid position worldwide;
• Disposing of non-utility activities;
• Continually cutting costs and restructuring throughout the Group.
  

In the UK E.ON's objective is to further consolidate Powergen's leading market positions in electricity and natural gas. With the acquisition of TXU's retail business, Powergen UK is now better balanced between its generation and retail operations, helping to reduce the impact of wholesale price movements. E.ON intends to enhance the profitability of its UK operations by further improving Powergen's cost position. Two key components of this programme are the closure of uneconomic power stations and the centralization of service functions.

E.ON's acquisition of LG&E Energy as part of the Powergen transaction provided a potential platform for further growth in the world's largest electricity market, the US. The US energy market is in a transitional phase, opening the door to opportunities to expand existing operations, with an eye towards creating value.

On 14 August 2003, E.ON announced the first results of its on­ top project. This stated E.ON's strategy to be an integrated power and gas group with clear European focus and proposed a change in organisation for E.ON's power and gas business, along the lines of a single pan-European market for up and mid-stream gas, together with predominantly regional markets for gas distribution and supply and for electricity (Central Europe, the UK, the Nordic region, and the Midwestern US).

Within E.ON, there is a clear commitment to the principles of corporate responsibility. Given below are details of arrangements to ensure corporate governance within E.ON AG, environmental protection measures undertaken by E.ON Energie in mainland Europe, and some of the social initiatives, or corporate citizenship, undertaken by E.ON AG.