0
Appendix 1
Nuclear: a critical part of the solution
Worldwide demand for electricity
                                                                  to double by 2030
    W...
Nuclear power: a critical part of the solution
                                    for power generation

              Nuc...
Nuclear power cost competitiveness
                                            Full Cost of Generation Including CO2 Costs...
Nuclear power cost of generation:
                        limited dependency on fuel price evolution

                    ...
Nuclear power: a critical part of the solution
                                                      in the UK

    “The G...
Appendix 2
Situation regarding nuclear in the various regions
The nuclear market place : 436 nuclear reactors
            in 2009 and more to come from the East
      126              ...
Installed capacity in main countries

                                 Gross capacity           Gross generation          ...
Appendix 3
Front End business details
New mines will be necessary to meet
                                                           Uranium demand

           ...
Conventional fissile resources represent
                     more than 200 years of 2009 world demand
                   ...
Improved security of supply with Uranium
     Developed countries and China depend largely on oil & gas
     supplied from...
Mining: solid fundamentals in a more
                                                           volatile environment
     ...
Enrichment services requirements
                                                                                should ri...
135 out of 305* PWR and BWR
     reactors in operation worldwide are fueled by AREVA
                                  NL
...
AREVA covers more than 40% of fuel global
                      needs for BWR and PWR (excluding VVER)
                   ...
Appendix 4
Reactors & Services business details
O&M recurring expenses
                               should remain relatively stable and high

     USA: around $10-11Bn ...
A significant share of O&M expenses
                                            are outsourced by the utilities
     Full ...
Main components
                                       of PWR coolant system



     5
                                   ...
PWR steam generator


                                                  FUNCTIONS
     Design                       Commis...
The EPRTM: increased power and safety - extended
     life expectancy over the most recently built reactors


            ...
Typical cost breakdown of a Nuclear Power Plant
                                   of the EPRTM type
      NUCLEAR ISLAND:...
50% of WW nuclear fleet is over 25 years old
                                                      129 reactors out of 439...
EDF nuclear power plant lifespan

     EDF objective: bring lifespan of French nuclear fleet significantly beyond 40
     ...
EDF 5 Years Nuclear
                                                    Capital Expenditures Plan
     EDF recurring nucle...
EDF nuclear plant scenario starting in 2020
     Renewal over 30 years (2020-2050)
     Construction of about 2,000 MW/yea...
Appendix 5
Back End business details
Recycling is a competitive solution
                                         compared to direct disposal
           Recycl...
In Back End, AREVA is the specialist
                                                      of spent fuel management
      ...
AREVA Logistics Activities
        TN International (France), TRANSNUCLEAR Inc. (USA) and TRANSNUCLEAR Ltd.
        (Japan...
AREVA key objectives in logistics business

            Market development               Innovation and marketing
     Dev...
Used fuel: towards new packagings



                                             TN 12/1, 1980s

                        ...
Nuclear Site Value Development


     AREVA considers nuclear site value development as a fully-
     fledged industrial a...
Focus on radioactive waste management Framework
                        French Law of June 28, 2006 (1/3)



     Program ...
Focus on radioactive waste management Framework
                          French Law of June 28, 2006 (2/3)


     ► A def...
Focus on radioactive waste management Framework
                         French Law of June 28, 2006 (3/3)

     Obligatio...
Radioactive waste French classification

                                                                          Long-li...
Appendix 6
T&D business details
T&D investments will outpace GDP growth
                                             in the near future
                  ...
AREVA T&D commercial achievements & strategy of
                 selective acquisition and partnerships in 2008
     Major...
Key Strategic Moves in 2008

                                                      PTR/Shanghai Electric Group
           ...
New leadership positions established
                Disconnectors
                                                       ...
Enlarged products portfolio




           MaxSine SVC

                                               GIS F35-5 bay


   ...
AREVA’s smart grid vision
                                                                            •       Defense plan...
Appendix 7
Outlook China
China: strong growth in power
                              consumption despite slow down in 2008

     Electricity consum...
China: the energy challenges


                                                                  70% of coal
             ...
China: overview of the energy sector

     Per capita consumption is still low and very disparate
     Insufficient instal...
China: AREVA’s positions
                  More than 2,900 employees, of which 2,800 employees for T&D
                  M...
China: AREVA T&D’s
                                                                                   operations in China
...
China: T&D Market Growth

     T&D Market Drivers

          Fast industrialization (2008 Industrial production growth: +1...
China: nuclear power’s share is expected
                                          to quadruple by 2020

          Total i...
China: nuclear civilian sites
     11 reactors in operation – 18 under construction




      > Overview – April 2009
56
China: AREVA role in the development
                                                    of the nuclear fleet
            ...
China: the largest contract
                                                ever signed
                                  ...
China: renewable energies outlooks

     AREVA Bioenergy

        600 to 900 MW to be installed yearly to reach 20 000 MW ...
Appendix 8
 Outlook India
India: massive growth of nuclear generated power
                     is expected over the next 40 years
            Nucle...
India: Important T&D investments to continue
       T&D Indian 11th Five Years Plan (2008-2012)
     Fresh capacity additi...
India: AREVA T&D has
                                                       a strong competitive position
                ...
India: AREVA benefits from an historical presence
                                  in India since 1950s’


              ...
India: the country has developed a strong nuclear
                                              industry

        India ha...
India: 17 reactors in operation and
                                                       6 under construction

     RAWA...
India: recent evolution of the specific country
     situation relating to non-proliferation commitments

        India di...
India: success of the discussions with NSG
                                                              members
         ...
India: key challenges for AREVA
     For Nuclear:

         Successfully license the EPRTM with the Indian nuclear regulat...
Appendix 9
   Financials
Change in revenue 2008/2007
                                                                 like-for-like


             ...
Non-operating items



                                                                            Change
                ...
Net financial income

                                                                                                 Cha...
Share in net income of associates



                                                              Change
                ...
Minority interests in subsidiaries' earnings



                                                        Change
           ...
AREVA, business & strategy overview - April 2009 - Appendix1
AREVA, business & strategy overview - April 2009 - Appendix1
AREVA, business & strategy overview - April 2009 - Appendix1
AREVA, business & strategy overview - April 2009 - Appendix1
AREVA, business & strategy overview - April 2009 - Appendix1
AREVA, business & strategy overview - April 2009 - Appendix1
AREVA, business & strategy overview - April 2009 - Appendix1
AREVA, business & strategy overview - April 2009 - Appendix1
AREVA, business & strategy overview - April 2009 - Appendix1
AREVA, business & strategy overview - April 2009 - Appendix1
AREVA, business & strategy overview - April 2009 - Appendix1
AREVA, business & strategy overview - April 2009 - Appendix1
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Transcript of "AREVA, business & strategy overview - April 2009 - Appendix1"

  1. 1. Appendix 1 Nuclear: a critical part of the solution
  2. 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. 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. 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. 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. 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. 7. Appendix 2 Situation regarding nuclear in the various regions
  8. 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. 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. 10. Appendix 3 Front End business details
  11. 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. 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 quot;Uranium 2007: Resources, Production and Demandquot; > Overview – April 2009 13
  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. 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. 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. 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. 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. 18. Appendix 4 Reactors & Services business details
  19. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 29. Appendix 5 Back End business details
  30. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 40. Appendix 6 T&D business details
  41. 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. 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. 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. 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. 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. 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. 47. Appendix 7 Outlook China
  48. 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. 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. 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. 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. 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. 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. 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. 55. China: nuclear civilian sites 11 reactors in operation – 18 under construction > Overview – April 2009 56
  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. 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. 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. 59. Appendix 8 Outlook India
  60. 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. 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. 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. 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. 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. 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. 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. 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. 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. 69. Appendix 9 Financials
  70. 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. 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. 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. 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. 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
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