AGL Partners with Kaluza to Drive Retail Transformation

Highlights:

• Strategic Partnership: AGL Energy partners with Kaluza to enhance customer operations, aiming to improve experiences, reduce costs, and support sustainability goals.
• Significant Cost Savings: The Retail Transformation Program is expected to save AGL AU$70-90 million annually by FY29, with a total implementation cost of AU$300 million over four years.
• Major Investment: AGL invests AU$150 million in Kaluza, acquiring a 20% stake to influence strategic direction and support Kaluza’s international growth and operations.

Strategic Partnership for Customer Transformation

AGL Energy Limited (ASX: AGL) announced a significant partnership with Kaluza as part of its Retail Transformation Program. This initiative aims to enhance customer and agent experiences, reduce operating costs, and accelerate AGL’s goal of connecting customers to a sustainable future through electrification.

Kaluza's Role in the Transformation

Kaluza, a proven technology platform, digitizes and simplifies energy billing, reduces service costs, and speeds up product innovation to support the energy transition. Currently, Kaluza services over 6 million meters at OVO Energy in the UK.

Deployment and Cost Savings

AGL plans to integrate Kaluza into its consumer customer base over the next three years, transitioning 4 million electricity and gas customers to the Kaluza platform. The Retail Transformation Program is expected to cut operating costs and capital expenditure, with net benefits starting in FY28 and pre-tax cash savings of approximately AU$70-90 million annually from FY29.

AGL's existing relationship with Kaluza includes its full ownership of OVO Energy Australia, which successfully migrated its customer base to the Kaluza platform in 2023. The estimated implementation cost for the Retail Transformation Program is around AU$300 million over four financial years, starting in FY24. This includes program management, customer migration, systems integration, and support platform changes.

Investment in Kaluza

In addition to utilizing Kaluza’s platform, AGL will invest approximately AU$150 million in Kaluza, acquiring a 20% interest via preference shares. This investment will allow AGL to influence Kaluza’s strategic direction and gain value for its shareholders. The investment, funded from AGL’s cash reserves, will support Kaluza’s growth and international expansion, with completion expected later in 2024.

CEO Commentary

AGL CEO Damien Nicks highlighted the milestone, stating, “Our partnership with Kaluza is a significant step in our transformation journey to connect more customers to a sustainable future. The Kaluza platform will enable rapid product innovation, reduce operating costs, and improve customer experiences.”

“This partnership aligns with the changing technology market, which demands greater flexibility and speed. The Kaluza platform will help us deliver superior market speed and cost reductions,” Nicks added.

Conclusion

AGL’s strategic investment in Kaluza represents a pivotal move to support its customers in decarbonization and electrification, enhancing operational efficiency and customer satisfaction through innovative technology.

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