AREVA, business & strategy overview - April 2009 - Appendix1

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    AREVA, business & strategy overview - April 2009 - Appendix1 - Presentation Transcript

    1. Appendix 1 Nuclear: a critical part of the solution
    2. Worldwide demand for electricity to double by 2030 Worldwide electric power generation (in TWh) X2 30 000 15 000 2005 2010 2015 2020 2025 2030 2008 – Worldwide distribution of Capex in the Power sector expected to reach $13.8 trillion2007 electric power mix $6.8 trillion in T&D Nuclear 16% $6.8 trillion in generating capacity Coal Hydro 39% 19% Covering both Generation and T&D markets, AREVA has 2 reasons to benefit from Oil Hydro. 10% 19% electricity sector investments Sources: World Energy Association (March 2009), IEA-World Energy Outlook (2008) > Overview – April 2009 3
    3. Nuclear power: a critical part of the solution for power generation Nuclear power generation does not 1. release greenhouse gas: life cycle greenhouse gas emissions very low Low price of generation 2. almost immune to uranium price fluctuations Fossil resources are limited 3. and uranium conventional resources are 200 times 2008 demand Energy security of supply 4. uranium is present in stable countries > Overview – April 2009 4
    4. Nuclear power cost competitiveness Full Cost of Generation Including CO2 Costs* (Rebased on nuclear) CO2 Cost 126 109 100 Combined Gas Coal Nuclear Cost Comparison for Europe Average MWh cost CO2 emission cost (25€/t CO2 ) for new plants Nuclear € 50 - € 65 NS zzz € 5 - € 10 € 65 - € 82 Combined cycle gas € 15 € 55 - € 75 Coal Sources: Enel (July 2008), E.On (April 2008), UBS (January 2009) * Based on UBS Estimates for Europe (Global Nuclear Power - January 2009).Main technology-specific assumptions include: - an economic life of 50 years for nuclear power plants, 40 years for coal power plants, and 30 years for combined gas power plant, - size of 1,500 MW for nuclear power plant, 750 MW for coal plant and 425 MW for combined gas plant, and a CO2 price of €25/t > Overview – April 2009 5
    5. Nuclear power cost of generation: limited dependency on fuel price evolution Combined Cycle Gas Hard Coal Turbine (CCGT) Nuclear MWh cost split MWh cost split MWh cost split Fixed operating Fixed operating costs Fuel & Other costs Fixed operating variable costs Carbon Carbon costs Capital cost Capital 6% 2% cost 12% 10% 15% 25% 20% 33% 70% 70% Fuel & Fuel & 35% Other Other Capital variable variable cost costs costs Sources: Based on E.On estimates for Europe (January 2009) , with Carbon at 20 €/t > Overview – April 2009 6
    6. Nuclear power: a critical part of the solution in the UK “The Government’s conclusion is that nuclear power is: Low-carbon – helping to minimise damaging climate change Affordable – nuclear is currently one of the cheapest low-carbon electricity generation technologies, so could help us deliver our goals cost effectively Dependable – a proven technology with modern reactors capable of producing electricity reliably Safe – backed up by a highly effective regulatory framework Capable of increasing diversity and reducing our dependence on any one technology or country for our energy or fuel supplies.” UK Government White Paper (2007) > Overview – April 2009 7
    7. Appendix 2 Situation regarding nuclear in the various regions
    8. The nuclear market place : 436 nuclear reactors in 2009 and more to come from the East 126 67 130 10 2 2 CIS & Eastern Europe North America Western Europe 109 28 Southern & Eastern Asia 0 2 Africa & Middle East 4 1 South America In service Under construction Source: WNA (January 2009) > Overview – April 2009 9
    9. Installed capacity in main countries Gross capacity Gross generation Gross capacity Gross generation (GWe) (TWh) (GWe) (TWh) 2008 2007 2008 2007 2008 2007 2008 2007 France* 65.9 65.9 438.6 439.1 Canada 15.4 15.0 94.0 94.0 Germany 21.5 21.4 148.7 140.5 United States 107 105.8 842.4 843.0 Russia 23.2 23.2 162.3 158.3 Mexico 1.4 1.4 9.8 10.4 United Kingdom** 12.5 11.9 39.4 58.6 Brazil 2.0 2.0 14.0 12.4 Ukraine 13.8 13.8 89.8 92.7 Argentina 1.0 1.0 7.4 7.2 Sweden 9.6 9.4 66.9 66.9 Spain 7.7 7.7 60.0 55.0 TOTAL 126.8 125.2 967.6 967.0 Belgium 6.1 6.1 45.8 48.2 Source: Nucleonics Week, March 2008, restated by AREVA. Finland 2.8 3.0 23.0 23.4 Other 17.7 17.4 135.4 125.9 Gross capacity Gross generation TOTAL 180.8 179.8 1,209.9 1,208.6 (GWe) (TWh) 2008 2007 2008 2007 * Excluding Phoenix, considered a research reactor. ** Data incomplete for Britain (only Jan-Sep 2008 total available for British Energy Portion) Japan 49.6 49.9 251.7 278.7 Source: Nucleonics Week, restated by AREVA China 9.0 9.1 42.6 62.9 India 4.1 4.1 15.5 17.8 South Korea 18.4 18.4 151.0 142.9 Taiwan 5.1 5.1 40.8 40.6 Pakistan 0.5 0.5 1.9 2.5 TOTAL 86.8 87.1 503.5 545.4 Source: Nucleonics Week, March 2008, restated by AREVA. > Overview – April 2009 10
    10. Appendix 3 Front End business details
    11. New mines will be necessary to meet Uranium demand World Uranium Supply and Demand 100000 90000 80000 70000 60000 tU 50000 40000 30000 20000 10000 0 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 Production from existing mines Recycling (Mox, RepU, off-spec) Russian HEU (existing agreement) Inventory reduction/adjustment Demand to be covered by new projects Consumption (WNA Upper Scenario 07) source: WNA 2007 > Overview – April 2009 12
    12. Conventional fissile resources represent more than 200 years of 2009 world demand CATEGORY of Uranium resources (million tons = Mt) Conventional Identified (deposits) Undiscovered Reasonably 1 Based on direct Speculative Prognosticated Inferred Cost of recovery geological Assured Resources Resources evidence Resources $/kgU Resources 2 3 1 2 Based on indirect geological evidence < 40 1.77 1.20 3 Extrapolated 1.95 values 0.83 40 to 80 0.65 4.80 0.74 80 to 130 0.27 0.82 - - ? 2.97 > 130 Unconventional 3.34 2.13 2.77 7.77 Subtotal General total 5.47 10.54 15 to 25 16,009,100 t General total of conventional resources: less than 66,000 t World demand in 2009*: Resources: > 200 times 2009 demand + With Gen IV Fast Breeder Reactor, resources are virtually unlimited *WNA estimate for 2009 Source: Nuclear Energy Agency \"Uranium 2007: Resources, Production and Demand\" > Overview – April 2009 13
    13. Improved security of supply with Uranium Developed countries and China depend largely on oil & gas supplied from unstable areas Russia 8% 12% North America 1% 22% Kazakhstan 20% 11% Uzbekistan 5% China Middle East 24% Alegria 24% 4% 2% 2% 3% 3% 5% Mexico 4% Niger 3%1% 7% 28% 3% Venezuela Indonesia Other 3% 1% 4% Namibia Australia 1% 10% 70% of oil reserves 28% 20% and 40% of gas reserves Key areas of production (in % of global production) Uranium (2008 Data) 38% Oil (2007 Data) Gas (2007 Data) Sources: AREVA, IEA > Overview – April 2009 14
    14. Mining: solid fundamentals in a more volatile environment Market trend AREVA performance Solid fundamentals: AREVA reserves and resources in 2008 Utilities want to secure supplies and future Replacement of mined reserves expansion of nuclear fleet AREVA reserves/resources constitute 10% Price drops in 2008 of the world’s identified resources 31% increase in exploration expenses, Spot: average of $62/lb in 2008 vs. $99/lb to €56M in 2007 4% increase in production, to 6,303 MTU Volatility due primarily to investment fund sales Increase in production costs of around 15%, comparable to the average Long-term: average of $83/lb in 2008 for the industry vs. $91/lb in 2007 Stable average AREVA sales prices Prices stable for the past 5 months at $70/lb LT & spot Ux prices, 2001- 2008 $36* $36.90* $23* 150 Peak – July 07: Long-term Spot $138/lb LT $95/lb Spot 100 50 2006 2007 2008 Current - Feb. 09 Spot $47/lb LT $70/lb * per lb U3O8 0 > Overview – April 2009 15
    15. Enrichment services requirements should rise Full use of current capacities 80 70 60 MSWU MSWU 50 GBII plant - France 40 30 20 Capacity of 7.5M SWU 10 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Cumulative capacities WNA 2007 scenario - Upper of global players WNA 2007 scenario - Reference First SWU production in 2009 Rise in spot SWU prices to $160 as of 12/31/2008 (vs. $143 early 2008) SWU rates ($) Cost and schedule 160 on track 140 120 100 80 60 2000 2001 2002 2003 2004 2005 2006 2007 2008 Spot restricted Source: Ux / TradeTech > Overview – April 2009 16
    16. 135 out of 305* PWR and BWR reactors in operation worldwide are fueled by AREVA NL GB SWEDEN (1P/1) (1P/1) (3P/3, 4B/7) BELGIUM FINLAND (5P/7) (0B/2) FRANCE GERMANY (~53P/58) (11P/11, ~4B/6) JAPAN SPAIN (2P/21, 2B/32) (1P/6,1B/2) USA CHINA SWITZERLAND (18P/69, (6P/7) ** (3P/3, 1B/2) TAIWAN 11B/35) (0P/2, 4B/4) * Map (283) + Mexico (2B), Slovenia BRAZIL (1P), South Korea (16P), India (2B) (2P/2) ** and Pakistan (1P) : sources AIEA, WNA as of October 2007 ** Local fuel makers using Framatome ANP technology SOUTH AFRICA (2P/2) AREVA provides fuel for 92% of its installed basis and 21% for its competitors’ installed basis > Overview – April 2009 17
    17. AREVA covers more than 40% of fuel global needs for BWR and PWR (excluding VVER) Europe USA Asia 2,127 T/y 2,257 T/y 1,483 T/y 12% 18% PWR 4% 22% 82% 78% 84% 1,800 T/y 1,434 T/y 874 T/y 11% 29% BWR 17% 27% 41% 10% 61% 32% 72% 327 T/y 823 T/y 609 T/y AREVA Westinghouse + Enusa GNF Genusa Others Source : Nuclear Assurance Corporation (Fuel Trac édition 10/2008); Average value over 2008 +/- 1 year > Overview – April 2009 18
    18. Appendix 4 Reactors & Services business details
    19. O&M recurring expenses should remain relatively stable and high USA: around $10-11Bn of nuclear O&M recurring expenses in 2007 for a production in the range of 843 Bn kWh / y * O&M expenses are expected to trend upward in coming years Europe: Operating & Maintenance ~0,4€ cents/kWh expenses per kWh Operating Training 40% Logisitcs ... Maintenance, repare, ~0,6€ cents/kWh spare parts replacement, recurring engineering and 60% upgrade Maintenance * NEI, Nucleonics Week (March 2009) > Overview – April 2009 20
    20. A significant share of O&M expenses are outsourced by the utilities Full Time Equivalent workforce internal + external for 1,000 MWe installed 900 800 700 600 500 400 300 200 100 0 EDF US (Navigant Consult.) US (Duke estimate) FTE Internal FTE External The trend should amplify in the coming years Source: Nuclear Engineering International – december 2004 / AREVA > Overview – April 2009 21
    21. Main components of PWR coolant system 5 1 Reactor vessel 2 Control rod drive mechanisms 3 3 Steam generator 2 4 Reactor coolant pump 5 Pressurizer 4 1 > Overview – April 2009 22
    22. PWR steam generator FUNCTIONS Design Commissioning to transfer heat and ensure leak-tightness between the primary (P) and secondary (S) circuits DUTY mechanical effects of the circulating P and S flows chemical effects of the P and S fluids nominal and transient temperatures and pressures on P and S sides MATERIALS nickel-based alloy (tubes), low internal alloy carbon steel (structures) with a stainless steel layer the water chamber (P side) DIMENSIONS & WEIGHT: height: 20 to 22 meters diameter: 3.5 to 5 meters Heat transfer surface: weight (empty): 300 to 420 metric tons 4,700 to 7,000 square meters > Overview – April 2009 23
    23. The EPRTM: increased power and safety - extended life expectancy over the most recently built reactors EPRTM N4 Thermal Power MW 4500 4250 Electrical Power MW 1650 1450 Thermal Efficiency % 36.8 34 Number of fuel assemblies 241 205 Limitation of severe accidents consequences ++ + Redundancy factor 4 2 Average burnup of reloads GWd/t >60 45* Service lifetime years 60 40 * Maximum burnup rate currently allowed by the French safety authority > Overview – April 2009 24
    24. Typical cost breakdown of a Nuclear Power Plant of the EPRTM type NUCLEAR ISLAND: 55-60 % AREVA CONVENTIONAL ISLAND 15-20 % Alstom, Siemens BOP 5-15 % CIVIL WORKS Customer 10-20 % > Overview – April 2009 25
    25. 50% of WW nuclear fleet is over 25 years old 129 reactors out of 439 are over 30 years old Pyramid of ages – 439 nuclear plants – WW nuclear fleet (Data as of January 2008) 35 3233 30 24 23 25 Number of Reactors 22 21 22 20 18 20 16 15 14 1414 15 12 1011 11 10 9 10 7 7 6 6 6 6 5 5 5 324 443 4 4 3 5 2 11 0 1 6 11 16 21 26 31 36 41 Age (in years) A need for re-investments in the existing fleet Source: IEAE International Status & Prospects of Nuclear Power (February 2009) – Data as of January 2008 > Overview – April 2009 26
    26. EDF nuclear power plant lifespan EDF objective: bring lifespan of French nuclear fleet significantly beyond 40 years 18 nuclear units will reach a lifetime of 40 years between 2015 and 2020 Shutdown of such units would imply a major investment programme in new nuclear units Investment necessary to allow a significant extension of lifespan beyond 40 years include Investment in asset maintenance to be carried out every year, including replacement of major components Ten-year inspection: with significant programmes to improve safety Total investment associated EDF estimates: c. €08 400 M per unit spread out several years (900 MW unit) International benchmark: c. US$ 500/kW (from 40 to 60 years), ie c. US$ 450 M for a 900 MW unit Source: EDF (January 2009) > Overview – April 2009 27
    27. EDF 5 Years Nuclear Capital Expenditures Plan EDF recurring nuclear capital expenditures are expected to rise in the coming years with increasing nuclear reactors maintenance & life extension spending EDF 5 years nuclear capital expenditures in France* Recurring share of nuclear capital expenditures *Excludes Penly EPRTM Project Source: EDF, January 2009 > Overview – April 2009 28
    28. EDF nuclear plant scenario starting in 2020 Renewal over 30 years (2020-2050) Construction of about 2,000 MW/year MWe installed 70,000 60,000 Life extension past 40 years 50,000 40,000 Generation 4 30,000 Current Nuclear Fleet with 40-year service life 20,000 Generation 3 + 10,000 Years 0 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060 Average plant life: 48 years Generation 3+: EPRTM Source: EDF > Overview – April 2009 29
    29. Appendix 5 Back End business details
    30. Recycling is a competitive solution compared to direct disposal Recycling Competitiveness Uncertainty Reduction Recycling reduces the risks associated A 1994 OECD study shows that the overall with the uncertainty surrounding costs of recycling and direct disposal are disposal costs more or less identical A study conducted by BCG (Boston Consulting Group) in the US in 2006 shows the costs of recycling and direct disposal to be comparable RECYCLING DIRECT DISPOSAL RECYCLING DIRECT DISPOSAL Controlled Strong Total costs Total costs costs uncertainty surrounding costs Plutonium & Uranium Credits UNCERTAIN UNCERTAIN COSTS COSTS Interim Storage ⊳ Interim Storage Recycling ⊳ Transports Transports ⊳ Packaging Waste disposal ⊳ Waste CONTROLLED Disposal COSTS CONTROLLED COSTS Source: BCG, AREVA Source: International Benchmark AREVA > Overview – April 2009 31
    31. In Back End, AREVA is the specialist of spent fuel management Considerable barriers to entry for recycling: Technical and technological know-how Regulations Capital requirements AREVA is Nr 1 worldwide in terms of effective production Effective reprocessing capacity for light Cumulative effective production, water reactors spent fuel as of dec. 2008 ~24,540 mt 1,700 mt / y 900 mt / y 800 mt / y 4,200 mt Max. 400 mt / y 4,010 mt 420 mt Japon / AREVA BnFL / Minatom / Rokkasho Mura AREVA BnFL Minatom JNFL COGEMA - La Hague Sellafield Chelyabinsk (starting 2006) Up today, AREVA reprocessed c.75% of the spent fuel worldwide, Technology transfer i.e 24,500 mt out of 33,200 mt Source: AREVA, World Nuclear Association > Overview – April 2009 32
    32. AREVA Logistics Activities TN International (France), TRANSNUCLEAR Inc. (USA) and TRANSNUCLEAR Ltd. (Japan) Design & licensing of dry storage and transport casks Manufacturing of dry storage casks Organization of Transports Cask maintenance operations on site LMC (France) Road transport of radioactive materials Operations on railway and maritime facilities Maintenance of safety vehicles MAINCO (France) Management of site supply chain Specific handling operations MECAGEST (France) Manufacturing of mechanical and welded components (cask baskets, vitrified and compacted waste containers, etc.) 226 transports organized and 88 casks manufactured in 2008 > Overview – April 2009 33
    33. AREVA key objectives in logistics business Market development Innovation and marketing Develop logistics activities Maintain Research & Development consistently with the back-end sector efforts to offer innovative solutions for priorities our customers in both back-end and front-end People Operations performance Develop new fleets while securizing Develop our internal resources to procurements and sea transportation anticipate our needs capacities > Overview – April 2009 34
    34. Used fuel: towards new packagings TN 12/1, 1980s MARK II, 1980s-2000s (IAEA 1985) TN12/2 TN13/2 TN 1, 1969 TN17/2 In compliance with IAEA 2005 Burn-up: 70 000 MWd/t Enrichment: 5% Compatible with EPRTM TN 112, 2008 TN G3, 2015-2018 (IAEA 2005) > Overview – April 2009 35
    35. Nuclear Site Value Development AREVA considers nuclear site value development as a fully- fledged industrial activity Dedicated entity created in 2008: the Nuclear site Value Development Business Unit Role of the entity: Promote AREVA’s 20 years experience and expertise in this field Within AREVA, develop steer project progress and standardized methods and techniques Key figures 1,400 employees working on 6 sites 4 major projects underway for both AREVA and the French Atomic Commission (CEA) Cadarache: A first for MOX plant dismantling > Overview – April 2009 36
    36. Focus on radioactive waste management Framework French Law of June 28, 2006 (1/3) Program law: Provides a framework for the management of all radioactive waste Sets the schedule for management of this waste Institutes the principle of a National Management Plan Principle: One waste category = One disposal method Key milestones: Opening of the geologic repository in 2025 ⇒ Parliamentary debate and vote in 2015 (retrievability) ⇒ > Overview – April 2009 37
    37. Focus on radioactive waste management Framework French Law of June 28, 2006 (2/3) ► A definition that reinforces the use of used fuel treatment: “The reduction of the quantity and harmfulness of radioactive waste is sought, particularly through used fuel treatment and the processing and packaging of radioactive waste” ► An obligation to “clean up the past”: “Owners of long-lived medium-level waste produced before 2015 must package it no later than 2030” ► Effective framework for foreign fuel treatment ► A standard solution: decision to dispose of long-lived medium- and high-level waste packages beginning 2025 > Overview – April 2009 38
    38. Focus on radioactive waste management Framework French Law of June 28, 2006 (3/3) Obligation to create a long-term management fund and related management rules Fund localized in companies Concerns the dismantling and disposal of long-lived medium- and high- level waste No transfer to the State (responsibility, fund) Very strict framework (amount, exposure, oversight by special commission) Note: Evaluation of disposal costs by an ad hoc working group led by the administration One of the world’s most comprehensive law in this field : Stabilizes the future and controls the fundamentals > Overview – April 2009 39
    39. Radioactive waste French classification Long-lived Short-lived Waste (half-life > 30 years) (half-life < 30 years) category VLL Morvilliers Disposal Center, in operation since 2003 (very low level) A La Manche Disposal Center, Sub-surface storage center, full, closed (1969-1994), in (low level - opening slated for 2013 300-year monitoring period LL) B Soulaines Disposal Center, (medium in operation since 1992 level - ML) C Deep disposal center, decided by the law of June 28, 2006 (opening slated for 2025) (high level - HL) Underground Laboratory in Bure (Meuse – Haute Marne) > Overview – April 2009 40
    40. Appendix 6 T&D business details
    41. T&D investments will outpace GDP growth in the near future More networks inter-dependency to cope with potential shortages More economical exchanges of electricity Economy More interconnections of networks with + globalization different phases or frequency Increased needs in Automation Old equipments in Western countries Under-investments following privatization leading to recent black-outs (Italy, US, …) Past investment + Lower grid / generation spare margin consequences Need for refurbishment investments Needs in Automation Integration of renewables Increase in T&D + intensive sources Need to connect distributed energy of electricity systems to the grids Expected strong growth of Wind with high T&D investments requirements Growth Urbanization fostering need of safer / of electricity cleaner energy + in global energy Long term shortage in Oil& Gas primary mix sources of energy Global warming leading to CO2 emission reduction objectives GDP growth Source: AREVA > Overview – April 2009 42
    42. AREVA T&D commercial achievements & strategy of selective acquisition and partnerships in 2008 Major commercial achievements Significant contracts with Dubai Electricity (UAE), StatoilHydro (UK), UTE (Melo - Uruguay), National Grid/RTE (IFA2000 - UK/France), etc. N° in India 1 New leadership position in HVDC (excl. China) Major strategic moves Acquisitions to increase our products portfolio: Waltec (Brazil), RB Watkins (USA) and Nokian Capacitors (Finland) Strategic partnerships with GE (India) and Shanghai Electric (China) Production capacity increases to support growth 12 Greenfields in China, India, Poland and Turkey Extension of key units in France, Switzerland and Germany, etc. > Overview – April 2009 43
    43. Key Strategic Moves in 2008 PTR/Shanghai Electric Group DSC/Hengchi DSC/Sino American Nokian PDS-GIS/Huadian GIS/Jinxin DSC-PDS/Leekeen Nxtphase RB Watkins T&D India/GE India Waltec Acquisitions Partnerships €290m full-year sales impact Joint-Ventures > Overview – April 2009 44
    44. New leadership positions established Disconnectors HVDC* EMS High Voltage Direct Current GIS Energy Management Systems Gas-Insulated Substation SPS Aluminum Instrument Transformers *Excluding China Special Products Suppliers > Overview – April 2009 45
    45. Enlarged products portfolio MaxSine SVC GIS F35-5 bay 100% Vegetable oil Power Transformer Top core Current Transformer PACiS 4.5 MS 3000 Monitoring Power transformer PIX High for Nuclear Segment > Overview – April 2009 46
    46. AREVA’s smart grid vision • Defense plan • React in real-time Blackout Blackout • Online Stability prevention Customers needs Enablers prevention • Closed Loop Control New technologies capabilities Reliability • Nuclear • Centralized / and Quality CO22free energy CO free energy Decentralized Renewable sources sources • Micro–renewable integration integration • Energy storage Stability + • Infrastructure (incl. long distance, both energy & Transmission Transmission communication) Environmental optimization optimization • Network management Energy policies / concerns Regulatory push Energy • Infrastructure ( to enable bi-directional efficiency Distribution Distribution power flows, optimization optimization communication) • Network management Market efficiency • Electric cars • µ-production and µ-grid New consumption New consumption • Deregulated environment modes integration modes integration • Smart appliances & and management and management buildings > Overview – April 2009 47
    47. Appendix 7 Outlook China
    48. China: strong growth in power consumption despite slow down in 2008 Electricity consumption 1995-2020 Source: China Electricity Council (CEC) , Market Study, Financial Crisis Impact Study > Overview – April 2009 49
    49. China: the energy challenges 70% of coal reserves Secure economic growth Better developed 80% of hydraulic Regions resources Minimize energy dependency Ensure sustainable development Ensure social stability by reducing disparities: electricity for all at an affordable price Take action on environmental issues, both for existing pollution and global warming Expand the interconnection market (HVDC) for electricity transmission to densely populated, developed areas Nuclear power and advanced T&D technologies have a major role to play > Overview – April 2009 50
    50. China: overview of the energy sector Per capita consumption is still low and very disparate Insufficient installed capacity 792 GW installed as of the end of 2008, with a target of 1500 GW by 20201 A promising market China’s capital spending on new generating capacity and in the transmission and distribution sector is expected to rise to 50 billion dollars per year from 2006 to 2010. China’s electricity transmission and distribution market represents 25% of the world market Renewable energies law is effective since 2006 to encourage renewable energy resources Renewable energy is expected to reach 10-12% of total installed power capacity by 2020 China is to become the first market in Renewable Energy from 2010 1 Source: China Electricity Council and World Nuclear Association > Overview – April 2009 51
    51. China: AREVA’s positions More than 2,900 employees, of which 2,800 employees for T&D More than 735 million euros sales in 2008 Reactors & Services T&D 29% T&D 47% 24% Front-End AREVA’s Sales split > Overview – April 2009 52
    52. China: AREVA T&D’s operations in China China’s T&D market 2008 represents 25% of the world market and is expected to keep growing despite of current financial crisis Substantial capital expenditure is required in light of the country’s rising energy demand at above 10% CAGR 2006-2010 More than 365 million euros in sales in 2008* Breakdown of the Chinese T&D market in 2008: ABB 15% Local players = SIEMENS 7% 70% of the market Others 44% AREVA 3% Japanese/Korean 3% Other MNCs 3% XD Group 8% XJ Group 2% TBEA 5% ShenGao Nari TWBB 1% PingGao 3% 2% 4% *Sales by destination in 2008 (not including products manufactured in China and exported overseas) > Overview – April 2009 53
    53. China: T&D Market Growth T&D Market Drivers Fast industrialization (2008 Industrial production growth: +13%) Urbanization and improved living standards Need for infrastructures and appliances 51,0% 52% 50,0% 50,4% 50% 48% 47% 48% 45% 46% 44% 43% 44% 41,8% 40,5% 42% 40% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Urbanization rate Need to efficiently connect distant power generation and main consumption centers over long distance (UHV and HVDC opportunities) 2008 annual capacity increase = 90 GW (~ UK installed capacity) > Overview – April 2009 54
    54. China: nuclear power’s share is expected to quadruple by 2020 Total installed capacity in 2008: 792 GW, mostly thermal China Installed Generating Capacity (2008) Nuclear 1.5% Hydro 20% Wind 1.7% 77% Fossil Fuel (gas, coal, oil) Nuclear power’s share is still limited in China: 9 GW, corresponding to 1.5% of 2008 total installed generating capacity in China Objective: 5% by 2020, i.e. 70 GW Source: China Electricity Council > Overview – April 2009 55
    55. China: nuclear civilian sites 11 reactors in operation – 18 under construction > Overview – April 2009 56
    56. China: AREVA role in the development of the nuclear fleet Built by AREVA Qinshan I - 1991 A strong presence in the newly built plants Significant Participation Daya Bay - 1994 (Supply, assistance, …) Projects to come Qinshan II phase 1 – 2002; 2004 200x Commissioning date Qinshan III – 2002; 2003 Ling Ao I – 2003 Tianwan – 2007 Ling Ao II – 2010; 2011 Qinshan II phase 2 – 2011; 2012 A wide offer Hongyanhe – 2012; 2013 of services, equipments and fuel Taishan – 2013; 2014 for the whole fleet Other project Gen 2 & 3 1990 2000 2010 2015 > Overview – April 2009 57
    57. China: the largest contract ever signed in the nuclear business Construction of 2 EPRTM nuclear islands Material and Services for 15 years of operation €8 Bn Discussions to start on cooperation for treatment and recycling > Overview – April 2009 58
    58. China: renewable energies outlooks AREVA Bioenergy 600 to 900 MW to be installed yearly to reach 20 000 MW installed capacity by 2020 Annual market turnover related to boiler island expected to exceed 200 M€ by 2012 No market saturation foreseen before 2012. AREVA’s technology, based on its operating feedback, is an asset in the stiff competition with local boiler manufacturers AREVA aims at: Developing boiler engineering competences, combining AREVA mastered technology and low cost manufacturing Low cost sourcing for oversea projects > Overview – April 2009 59
    59. Appendix 8 Outlook India
    60. India: massive growth of nuclear generated power is expected over the next 40 years Nuclear percentage should rise Nuclear installed capacity from 3% in 2008 to 25% should multiply by more of the power mix in 2050 than 10 by 2050 15% 66 GWe** 3% 4% 50 GWe 68% 10% 25% 2007 20 GWe Others Coal 75% Other Renewable 4 GWe Hydraulic Nuclear 2050 France 2020 2008 2050 Oil in 2008 Source: Indian Office of the Minister of State for Commerce & Power (February 2009), Nucleonics Week Key drivers Population growth (x 1.5 from 2000 to 2050) GDP growth (7.5% per year in 2008, and c.6% expected in 2009*) Increase in electricity access (44% of Indian households have no access to electricity in 2008) * Economist Intelligence Unit, February 2009 ** Nucleonics Week, March 2009 > Overview – April 2009 61
    61. India: Important T&D investments to continue T&D Indian 11th Five Years Plan (2008-2012) Fresh capacity addition is considered to be the main driver for future demand for Electrical Equipments in the T&D segment Funds Capacity Required Transmission Central Sector 750 43 16 State Sector 650 (GW) Distribution 292 * Sub-Station 787 Augmentation 793 198 of S/S (GVA) (Rs Bn) * 292 GVA to be added + 500,000 Nos. of Industrial installations (HT) Source: JM Financial, Planning commission working group report on power sector > Overview – April 2009 62
    62. India: AREVA T&D has a strong competitive position Major land marks: T&D India Market share 2008 70% market share in the EMS segment for Transmission networks AREVA Chinese – Koreans 16.9% Supplied and commissioned India’s 7.7% first 765 kV substation in 2007 for Others NTPC Sipat plant 38.8% ABB 20% of HVDC inter-regional linkages 15.6% Largest number of GIS references in India Network Consultancy contract for Reliance Energy’s Delhi & Mumbai Siemens networks ; 1st of its kind in India L&T 8.8% 2.1% BHEL Modernization of Bhutan’s electrical CGL network for 2 cities 5.2% 4.9 % Source: AREVA. Market share calculation based on 2008 orders > Overview – April 2009 63
    63. India: AREVA benefits from an historical presence in India since 1950s’ Dehli, Noida BANGALORE PONDY Naini Baroda Kolkata CHENNAI CHENNAI Bangalore Hosur Chennai New factories Padappai Pondicherry KOLKATA KOLKATA 8 manufacturing sites 3 new manufacturing sites 4,200 employees NAINI NOIDA, DELHI 22 sales offices Full fledge local player covering UHV, HV, MV, Systems and Automation Map as of end of 2008 > Overview – April 2009 64
    64. India: the country has developed a strong nuclear industry India has developed a strong domestic nuclear industry, drawing on the benefits of earlier cooperation with Canada, France, the United States, Russia… NPCIL is the specialized nuclear utility in India, architect-engineer and operator of 17 reactors (+ 6 under construction) Operating reactors are derivatives of Candu (14) and BWRs (2), but are rather small (160 to 500 MW range) India is developing fast neutron reactors, proof of its technological capability and forward-looking approach Nuclear supply chain in India is dominated by several large public and private industrial groups, like BHEL, Larsen & Toubro, Tata, etc. India now aims to supply 25% of electricity from nuclear power by 2050, from 3% in 2008 > Overview – April 2009 65
    65. India: 17 reactors in operation and 6 under construction RAWATBHATA 1, 2, 3 & 4 NARORA 1&2 740 MW 440 MW 440 MW (5 & 6) Plants in operation KAKRAPAR 1&2 440 MW BWR (320 MW) PHWR (3.760 MW) Plants under construction TARAPUR 1, 2, 3 & 4 KALPAKKAM 1&2 1400 MW VVER (2.000 MW) 440 MW PHWR (660 MW) 500 MW (Fast breeder reactor) FBR (500 MW) fast breeder reactor KAIGA 1, 2 & 3 KUDANKULAM 1&2 620 MW 2000 MW 220 MW > Overview – April 2009 66
    66. India: recent evolution of the specific country situation relating to non-proliferation commitments India did not sign the Nuclear Non-Proliferation Treaty (NPT) and conducted its first nuclear test in 1974 From that time, on-going cooperation between India and other countries was interrupted, and supplier states put in place the NSG (Nuclear Suppliers Group, 45 countries today) to regulate nuclear exports Since adoption of Full-Scope Safeguards in 1992, NSG member states do not allow themselves to export nuclear technology, equipment and fissile material to any country not complying with Full-Scope Safeguards Between 2005 and 2008, discussions between India and several NSG member states took place, for an agreement on safeguarding civilian nuclear facilities and fissile material paving the way for a new consensus within NSG Summer 2008: India obtained a green light from AEIA and the NSG validated an exceptional arrangement to permit its members to deal with. Some countries had already signed MOU with India to put in place framework agreement of cooperation February 2009: India signed a safeguard agreement with the AIEA, allowing individual countries to further trade with India in civilian nuclear field > Overview – April 2009 67
    67. India: success of the discussions with NSG members AREVA February 2009: December 2008: Nuclear safeguards July 2006: Feasibility report for AREVA – NPCIL 300 tU agreement between AREVA visit 6 GW Supply Contract* India and the IAEA India/USA statement: 1st Indian July 2005 nuclear test American Congress Nuclear cooperation vote: December 2006 agreements with France 1974 2005 2006 2007 2008 2009 Bilateral cooperation: February 2009: AREVA India / France statement: India / Canada (PHWR) September 2005 – NPCIL MoU for up to 6 India / France (FBR) Nuclear cooperation agreements with US India / USA (BWR) EPRTM Reactors*** AREVA G. Bush visit: January 2009: AREVA Feasibility March 2006 report for EPRTM – Bharat Forge JV** V. Poutine visit: February 2007 September 2008: End of 34 years Ban July 2008: AEIA February 2006: President from Nuclear green light Chirac visit Suppliers Group * First of its kind MoU between India and a foreign nation ** Joint Venture with Bharat Forge for the production of heavy components of nuclear reactors (to start in 2012) *** Memorandum of Understanding to supply 2 to 6 EPRTM reactors > Overview – April 2009 68
    68. India: key challenges for AREVA For Nuclear: Successfully license the EPRTM with the Indian nuclear regulatory authority Sign final contract with NPCIL for the construction of the 2 first EPRTMs at Jaitapur Set up the announced joint venture with Bharat Forges in order to start the production of heavy forging components for the EPR in 2012 For T&D: grasp market growth Increase capacity: Greenfield, lean manufacturing Cover all market segments by localization of technology and specific developments to address market needs Overall, leverage India to support AREVA strategy worldwide Recruit and retain talents Manufacturing base for other units Engineering resources and R&D centers of excellence Strong supplier base > Overview – April 2009 69
    69. Appendix 9 Financials
    70. Change in revenue 2008/2007 like-for-like 2008 2007 Revenue like- Exchange Consolidation Change in Reported for-like Revenue rate scope impact valuation revenue In millions of euros impact method Front End division 3,363 3,136 (53) 46 4 3,140 Reactors & Services division 3,037 2,739 (47) 19 49 2,717 Back End division 1,692 1,735 (4) 0 0 1,738 Nuclear 8,092 7,610 (103) 65 53 7,595 T&D division 5,065 4,375 (121) 169 0 4,327 Corporate and Other 3 1 0 0 0 1 Consolidated 13,160 11,985 (224) 233 53 11,923 > Overview – April 2009 71
    71. Non-operating items Change 2007 2008 08/07 In millions of euros Operating income 751 417 (334) Net financial income (expense) 64 (29) (93) Share in net income of associates 148 156 8 Income tax (81) (46) 35 Effective tax rate 9.9% 11.8% +1.9 pts Minority interests (139) 91 230 743 589 (154) Net inc. attributable to equity holders of parent > Overview – April 2009 72
    72. Net financial income Change 2007 2008 08/07 In millions of euros End-of-life-cycle operations 107 (57) (164) Including: Income from earmarked portfolio and interest on receivables 175 87 (88) Non-portfolio income 113 182 69 Discount reversal on end-of-life-cycle portfolio and schedule revisions (181) (327) (146) Net borrowing costs (excl. discount/premium) (53) (111) (58) Discount/Premium (20) (16) 4 Income from disposal of securities 3 370 367 Discount reversals on retirement/benefits provision (55) (72) (17) Other financial income and expenses 82 (143) (225) Net financial income (expense) 64 (29) (93) > Overview – April 2009 73
    73. Share in net income of associates Change 2007 2008 08/07 In millions of euros STMicroelectronics (25) (46) (21) Eramet group 153 187 34 Other 20 15 (5) TOTAL 148 156 8 The negative results of ST Microelectronics (-84% compared with 2007) are offset in part by Eramet's positive performance > Overview – April 2009 74
    74. Minority interests in subsidiaries' earnings Change 2007 2008 08/07 In millions of euros AREVA NP (17) (186) (169) AREVA NC 129 76 (53) AREVA T&D 23 32 9 AREVA TA 3 4 1 Other 1 (17) (18) TOTAL 139 (91) (230) > Overview – April 2009 75
    75. Cash flow and net debt 2007 2008 In millions of euros Ebitda (excluding end-of-life-cycle costs)* 1,335 1,181 % of revenue 11.2% 9.0% Gain (loss) on disposal of operating assets 1 (197) Change in operating WCR (432) (451) Net operating Capex (2,889) (1,454) Free operating tax flow before tax (1,985) (921) End-of-life-cycle obligations 171 (115) Net financial Capex (131) (462) Dividends paid (345) (326) Revaluation of minority put options (liability) (932) (19) Other (income tax, non-operating WCR, etc.) 85 (577) Change in net cash position (3,137) (1,496) Net debt (12/31) (4,003) (5,499) > Overview – April 2009 76
    76. Simplified balance sheet at 12/31/09 In billions of euros 4,8 Goodwill 7,3 Equity 8,0 PP&E and intangible assets Provisions for end-of- 5,7 life-cycle operations Assets earmarked for end- Other provisions** 3,3 5,2 of-life-cycle operations 0,1 WCR Investments in associates 1.8 5,5 Net debt* Non-current financial assets 2,2 Assets (simplified) = 21.9 = Liabilities & equity (simplified) * Net debt excluding unexercised put options = borrowings including interest-bearing prepayments – cash – marketable securities – non-trade current account assets ** Including net deferred taxes > Overview – April 2009 77
    77. End-of-life-cycle operations End-of-life-cycle operations at December 31, 2008 In millions of euros 270 The law of June 28, 2006 270 on the sustainable management of radioactive materials and waste requires a 100% reserve ratio by June 28, 2011 for end-of-life-cycle provisions 2 991 using dedicated assets 5 404 4 954 Since 2002, AREVA’s reserve Receivables ratio has ranged from 90% Earmarked portfolio to 110% 1 964 At December 31, 2008, in an environment of severe crisis in financial markets, Assets Breakdown of Provisions AREVA assets it was 92% AREVA Third party share > Overview – April 2009 78
    78. ROACE (1/2) Average Capital Net Operating ROACE Employed Income In millions of euros 2007 2008* 2007 2008 2007 2008* Nuclear 3,172 5,005 429 37 13.5% 0.7% T&D 761 1,086 265 402 34.8% 37.0% Other 331 2,250 (111) (111) - - Consolidated 4,264 8,341 583 328 13.7% 3.9% * Unadjusted for goodwill linked to the Siemens put option > Overview – April 2009 79
    79. ROACE (2/2) CONSOLIDATED 2007 2008 unadjusted for In millions of euros Siemens’ put option Net operating income 583 328 Net intangible assets 2,729 3,089 Goodwill used in ROACE calculation 2,520 4,748* Property, plant and equipment 4,204 4,914 Customer prepayments on assets (907) (941) Operating WCR 368 656 Provisions for contingencies and losses (3,088) (3,430) Capital employed 5,826 9,036 Average capital employed 4,264 8,341 ROACE 13.7% 3.9% * Unadjusted for goodwill related to Siemens’ put option > Overview – April 2009 80
    80. Balance Sheet (1/2) ASSETS December 31, December 31, (in millions of euros) 2008 2007 Non-current assets 22,841 21,425 Goodwill on consolidated companies 4,803 4,377 Other intangible assets 3,089 2,729 Property, plant and equipment 4,913 4,204 Including: End-of-life-cycle assets (AREVA share) 189 174 End-of-life-cycle assets (third party share) 270 2,491 Assets earmarked for end-of-life-cycle operations 4,954 2,873 Investments in associates 1,757 1,558 Other non-current financial assets 2,152 2,588 Pension assets 1 - Deferred tax assets 900 604 Current assets 11,804 9,251 Inventories and work-in-process 3,403 2,817 Trade accounts receivable and related accounts 4,486 3,884 Other operating receivables 2,434 1,402 Current tax assets 164 94 Other non-operating receivables 154 141 Cash and cash equivalents 1,050 634 Other current financial assets 113 279 Assets of operations held for sale - - Total assets 34,644 30,676 > Overview – April 2009 81
    81. Balance Sheet (2/2) December 31, December 31, LIABILITIES AND EQUITY 2008 2007 (in millions of euros) Equity and minority interests 7,292 7,464 Share capital 1,347 1,347 Consolidated premiums and reserves 4,455 3,925 Deferred unrealized gains and losses 287 1,117 Currency translation reserves (131) (138) Net income attributable to equity holders of the parent 589 743 Minority interests 745 470 Non-current liabilities 11,795 11,951 Employee benefits 1,268 1,175 Provisions for end-of-life-cycle operations 5,674 5,075 Other non-current provisions 123 121 Non-current borrowings 3,969 4,302 Deferred tax liabilities 760 1,277 Current liabilities 15,558 11,261 Current provisions 2,081 1,823 Current borrowings 2,693 613 Advances and prepayments received 4,752 4,172 Trade accounts payable and related accounts 2,991 2,565 Other operating liabilities 2,884 1,921 Current tax liabilities 104 127 Other non-operating liabilities 53 41 Liabilities of operations held for sale - - Total liabilities and equity 34,644 30,676 > Overview – April 2009 82
    82. Income Statement 2008 2007 In millions of euros Revenue 13,160 11,923 Other income from operations 32 21 Cost of sales (10,906) (9,183) Gross margin 2,286 2 762 Research and development expenses (453) (421) Marketing and sales expenses (607) (529) General and administrative expenses (980) (881) Other operating income and expenses 214 (123) Operating income before restructuring expenses 460 808 Restructuring and early retirement costs (43) (57) Operating income 417 751 Income from cash and cash equivalents 38 37 Gross borrowing costs (148) (110) Net borrowing costs (111) (73) Other financial income and expenses 81 138 Net financial income (29) 64 Income tax (46) (81) Net income of consolidated businesses 343 734 Share in net income of associates 156 148 Net income from continuing operations 498 882 Net income from discontinued operations -- - Les minority interests 91 (139) Net income attributable to equity holders of the parent 589 743 35,442,701 Average number of shares outstanding 35,442,701 Basic earnings per share 16.62 20.95 Diluted earnings per share* 16.62 20.95 * Adjusted for net income from discontinued operations > Overview – April 2009 83
    83. Segment reporting (1/2) 2008 Corporate, Reactors In millions of euros Front End Back End T&D Other and Consolidated (except number of employees) and Services Eliminations Contribution to consolidated revenue 3,363 3,037 1,692 5,065 3 13,160 Income items Operating income 453 (687) 261 560 (170) 417 % of revenue 13.5% -22.6% 15.4% 11.1% - 3.2% Ebitda (excl. end-of-life-cycle) 780 (349) 320 587 (158) 1 181 % of consolidated revenue 23.2% -11.5% 18.9% 11.6% - 9.0% Net Capex Cash flow items (664) (365) (88) (324) (13) (1,454) Change in operating WCR (533) 124 190 (276) 44 (451) (609) (591) 422 (20) (124) (921) Free operating cash flow . 5,595 1,436 1,947 1,308 2,520 12,806 PP&E and intangible assets Capital employed* 6,091 159 (906) 1,356 2 336 9 036 Other Number of employees 14,240 19,477 10,906 29,966 825 75,414 * Capital employed at the end of the period > Overview – April 2009 84
    84. Segment reporting (2/2) 2007 Corporate, Reactors In millions of euros Consolidated Front End Back End T&D Other and (except number of employees) and Services Eliminations Contribution to 3,140 2,717 1,738 4,327 1 11,923 consolidated revenue Income items Operating income 496 (179) 203 397 (166) 751 % of revenue 15.8% - 6.6% 11.7% 9.2% - 6.3% Ebitda (excl. end-of-life-cycle) 731 (125) 440 426 (137) 1,335 % of consolidated revenue 23.3% - 4.6% 25.3% 9.8% - 11.2% Net Capex (2,260) (322) (81) (193) (33) (2,889) Cash flow items Change in operating WCR (140) (81) (186) (5) (20) (432) Free operating cash flow (1,673) (528) 172 233 (190) (1,985) PP&E and intangible assets 4,894 1,141 1,897 1,053 2,325 11,310 Capital employed* 5,135 178 (644) 816 345 5,826 Other Number of employees 65,583 12,577 16,500 10,638 25,248 620 * Capital employed at the end of the period > Overview – April 2009 85
    85. 2008 sales revenue by BU (1/2) Reactors and Services Front End division Renewable Consulting/Information energies Systems 5% Nuclear 5% Mining measurement 23% Fuel 6% AREVA TA 37% 12% Equipment Chemistry 9% 8% Plants 39% Nuclear services Enrichment 26% 32% Back End division Transmission & Distribution Services Cleanup Nuclear Site Value 6% 6% Development Engineering 14% 3% Automation Products Logistics 10% 53% 14% Systems Treatment- 31% Recycling 63% > Overview – April 2009 86
    86. 2007 sales revenue by BU (2/2) Reactors and Services Front End division Renewable energies Consulting/Information 1% Nuclear Systems Mining measurement 6% 23% Fuel 6% AREVA TA 36% 11% Chemistry 8% Equipment 8% Plants 39% Nuclear services Enrichment 29% 34% Back End division Transmission & Distribution Services Cleanup 8% 6% Engineering 3% Automation Products Logistics 11% 49% 13% Systems Treatment- 32% Recycling 81% > Overview – April 2009 87

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