AREVA, Business & strategy overview - January 2009

AREVA Business & Strategy overview January 2009

Disclaimer Forward-looking statements This document contains forward-looking statements and information. These statements include financial forecasts and estimates as well as the assumptions on which they are based, statements related to projects, objectives and expectations concerning future operations, products and services or future performance. Although AREVA’s management believes that these forward-looking statements are reasonable, AREVA’s investors and investment certificate holders are hereby advised that these forward- looking statements are subject to numerous risks and uncertainties that are difficult to foresee and generally beyond AREVA’s control, which may mean that the expected results and developments differ significantly from those expressed, induced or forecast in the forward-looking statements and information. These risks include those developed or identified in the public documents filed by AREVA with the AMF, including those listed in the “Risk Factors” section of the Reference Document registered with the AMF on April 15, 2008 (which may be read online on AREVA’s website, www.areva.com). AREVA makes no commitment to update the forward- looking statements and information, except as required by applicable laws and regulations. > Overview – January 2009 3

Agenda 1. Group’s overview: financial performance and strategy 2. Performances and objectives by division 3. Financials > Overview – January 2009 4

AREVA provides solutions for CO2 free electricity generation, transmission and distribution €11,923M sales (2007) Nuclear 71,000 people 100 countries Transmission & Distribution > Overview – January 2009 5

AREVA is Nr 1 in Nuclear and Nr 3 in T&D Geographic sales 2007 Sales by business No. 1 worldwide in Nuclear Africa & Middle 2007 market size: Europe East €25bn (excl. France) €7,6bn 7% Americas 64% Market share: 25-30% 29% No.1 in Europe and the US 17% No.1 in Plants / Fuel No.1 in the Back End 19% No. 3 worldwide in T&D 28% Asia-Pacific €4,3bn 2007 market size: France €53bn 36% Market share: 8-10% ( vs ABB: 24%, Siemens 18%) > Overview – January 2009 6

Key figures H1 2008 vs H1 2007 FY 2007 vs FY 2006 ∆ FY ∆ 08/07 H1 2008 H1 2007 2007 In millions of euros 07/06 Backlog 38.123 33.553 +13.6% 39.834 +55.4% Revenue 6.168 5.373 +14.8% 11.923 +9.8% Operating income 539 207 +€332m 751 +84.6% % of revenue 8.7% 3.9% +4.8 pts 6.3% +2.6 pts Consolidated net income 760 295 +€465m 743 +14.5% Earnings per share €21.45 €8.31 +€13.14 €20.95 +€2.64 Free operating cash (521) (513) (1.985) flow* Debt / equity ratio** 30.1% 6.1% 26.2% * EBITDA +/- change in Operating WCR – Operating CAPEX net of disposals ** including minority interests but excluding minority put options > Overview – January 2009 7

AREVA is the only fully integrated player on the Nuclear value chain NG 3 t hi rke a CO O A tac 4 rs ib EC C EV I Ma /B P MH he EN ME sh Hi AE US AR Ot A 07 / UR CA To GE ND 20 Mining / Natural 20-25% 65,000 t 15-20% 5-10% 20-25% 25-30% Uranium Conversion/ Front End 25-30% 60,000 t 20-25% 5-10% 25-30% 20-25% Chemistry 45m Enrichment 20-25% 20-25% 20-25% 25-30% 5-10% SWUs 1 * Natural Uranium 30-35% 10-15% 15-20% 10-15% 6,800t 20-25% fuel (UO2) * 10-15% 35-40% €15 bn Reactors & Services 20-25% 15-20% 5-10% 31,150 t2 * Back End 10-15% Treatment 70-75% 10-15% JNFL * 25-30% Recycling 2,260 t2 1-5% (Belgonuclear) 65-70% (MOX fuel) JNFL 1 Separative Work Units 2 Cumulated, Recent strategic moves worldwide – AREVA Estimate 3 Nuclear Decommissioning Authority (Uk) * Figures unidentified or not disclosed 4 AtomEnergoProm (Russia) > Overview – January 2009 8

Electricity will require $ 14 trillion investments Estimated energy market investments 2007 – 2030 (cumulated) Total 26,3 Trillion $ Coal 3 % 52 % Electricity Gas 21 % Production 6 600 Md $ T&D 7 000 Md $ 24 % Oil $13,600Bn < 1 % Biofuels Power generation and T&D are the key pillars of AREVA’s growth AIE – World Energy Outlook 2008 > Overview – January 2009 9

AREVA’s 2030 scenario: construction or life extension of more than 500 GWe of nuclear power AREVA nuclear projection is in line with international institutions forecasts International institutions Scenario 824: WEO1- 2008- 450 ppm Policy Scenario 748: IAEA - 2008 – High Estimate 731: WNA2 - 2007- High Estimate New build 684: WEO- 2008- 550 ppm Policy Scenario 635 344 Life extensions AREVA’s target Theoretical end of life 529: WNA - 2007 - Reference 498: DOE3 EIA4 - 2008 Reference Case 473: IAEA - 2008 – Low Estimate 372 267 186 433: WEO - 2008 – Reference Scenario 2006 2030 GWe net installed > Overview – January 2009 10

New construction should affect all regions of the world New installed nuclear generating capacity after 2006 by geographic area (2007 - 2030) GWe Net 400 400 350 350 300 300 250 250 200 200 150 150 100 100 50 50 0 0 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 Europe 27 + CIS Asia Africa WORLD N. & S. America Source: AREVA’s estimates > Overview – January 2009 11

The Transmission & Distribution market should continue to grow In €Bn 58% Growth 07-12 2007 25% 2012 33% 29% 33% 19 133% 50% 15 12 12 12 9 9 8 7 7 6 6 4 3 Europe NME China India N. & S. Eurasia EAP America Strong structural trends Modernization of grids and interconnections New generating capacities and related transmission lines Renewable energies and energy efficiency Note: Market Assessment 2007, pre crisis Source: AREVA’s estimates > Overview – January 2009 12

AREVA’s strategy: to set the standard in CO2-free power generation and electricity transmission and distribution Capitalize on our integrated business model to spearhead 1 the nuclear revival Maintain the existing fleets’ safety and performance levels Build 1/3 of new nuclear generating capacities* Make the fuel cycle secure for our current and future customers Ensure strong, profitable growth in T&D 2 Expand our renewable energies offering 3 ...while remaining the leader in safety and security * of the accessible market > Overview – January 2009 13

AREVA heavily invests for securing the future of its customers Technology R&D spending, in millions of euros Mining and conversion 813** New generations of fuel 669* 459 Additional reactor types Generation III treatment and recycling plant T&D: ultra high voltage, new products Fuel cells and improved wind technologies * excluding the acquisition of the ultra-centrifugation technology ** excluding R&D projects acquired through UraMin H1 2008 2006 2007 Human capital Workforce New hires 11,500 71,000 65,500 8,600 6,000 61,100 H1 2008 H1 2008 2006 2007 2006 2007 > Overview – January 2009 14

The investment program is being carried out Strategic objectives and profitability requirements Net capital expenditure ~ €1.4 Bn / year (*) €1.5 - €2.5 Bn / year (**) 2004-2007 2008-2012 (e) (*) incl. acquisitions (**) excl. acquisition Mining projects: Namibia, Canada, Niger Centrifugation technology, front-end industrial capacities (GB II, Comurhex II) EPR certification and ATMEA and SWR development T&D acquisitions (Ritz, Nokian Capacitors, Passoni & Villa, etc.) Development in Renewable Energies: Multibrid, Koblitz, Adage Capacity extension in R&S and T&D > Overview – January 2009 15

An open-ended business model Appropriate strategic partnerships at our customers’ request Excerpts Forgings - 2008 Large forged part Facility to manufacture heavy Creusot procurement components in the US Strategic 2007 Engineering agreement agreement in T&D 2006 - 2007 International Recycling Alliance: closing the cycle in the US 2006 : development of a 1100 MW Generation III + reactor 2005 Construction of EPRs in the US 50/50 ownership of centrifuge 2002 & 2006 technology with URENCO Development and Development and 2004 operation of mines operation of mines in Canada in Kazakhstan > Overview – January 2009 16

Outlook By the end of the current strategic plan (2012) Consolidated sales revenue > €20 billion Double-digit operating margin Free cash flow once again significantly positive > Overview – January 2009 17

Agenda 1. Group’s overview: financial performance and strategy 2. Performance and objectives by division 3. Financials > Overview – January 2009 18

Front End division - AREVA invests in Mines and Enrichment Strengths & issues Sales – 2007 split Nr 1 worldwide in the overall front-end Mining Integrated player: ability to secure clients’ 23% access to front end Fuel* 36% Chemistry Strategic partnership with clients through 8% (* 34% commercial agreements and/or equity in AREVA NP) deals 34% Strong position in fuel assemblies Enrichment Challenge : impact of commodities & production costs increase Key financials Strategic priorities in millions of euros 2006 2007 H1 2008 Double uranium production by 2012 and Order book 11,335 20,960 19,108 increase resources Sales revenues 2,919 3,140 1,488 Production ramp up : Trekkopje, Katco, Imouraren, etc. Operating income 456 496 400 % Sales 15.6% 15.8% 26.9% Succeed in the construction of enrichment Op. FCF before tax (186) (1,672) (46) facilities in France and in the US > Overview – January 2009 19

AREVA develops a uniquely diversified portfolio to make the fuel cycle secured for its customers Kazakhstan Canada Mining & global fuel Development (Shea agreement signed Creek, Millennium, etc.) Katco production Exploration since 1964 ramp-up / license Mongolia for 4,000 tU obtained Exploration Exploration Morocco Agreement signed with Office Jordan Chérifien des Exploration JV to be Phosphates created with the Jordan Atomic Energy Niger Commission Imouraren mining permit obtained Exploration since 1950 Australia Exploration UraMin since 1969 Namibia - Trekkopje: mining permit obtained / 1st production ~12,000 in 2009 ~ 6,000 Production Central African Republic - (metric tons of U) Bakouma: agreement on deposit 1 mining conditions 2007 2012 Exploration > Overview – January 2009 20

Making the fuel cycle secure for our customers Adapting our production facilities and customers partnerships Conversion GB2 - Construction site France: Comurhex II project • Capital investment of €610M launched in 2007 • New plants at the Tricastin and Malvési sites Enrichment France: GB II Investment of close to €3B Capacity of 7.5 million SWU Modularity enabling production to start in 2009 United States (Bonneville, Idaho): “Eagle Rock” Investment of close to €2B Capacity of 3.0 million SWU Production to start in 2014-2015 Strategic agreements and partnerships with utilities to secure Eagle Rock, Idaho their access to the fuel cycle Suez acquired a 5% equity interest in GBII enrichment facility Innovation Capacity Productivity > Overview – January 2009 21

Reactors & Services division - Still mostly recurring, but new built is there Strengths & issues Sales – 2007 split Renewable Energies ~100 GW installed capacity WW – 26% total 1% CIS Nuclear measures 80% sales are recurring and 20% concern projects AREVA TA 6% 6% (new reactors and plant modification) 11% The first company to have Gen.III+ reactors under Reactors* construction (Finland, France, China) 8% Equipment* 39% Fleet of reactors developed/under development to address market needs (EPR, ATMEA, SWR) 29% Ability to anticipate the nuclear renaissance (* 34% (industrial capacity and human resources) in AREVA NP) Nuclear services* Strategic priorities Key financials Increase margins in recurring business (first in millions of euros 2006 2007 H1 2008 Gen III+ dilute margin) Order book 4,413 7,640 7,633 Deliver on OL3, Flamanville and Taishan Complete the design the ATMEA PWR/SWR Sales revenues 2,312 2,717 1,466 BWR reactor through JV with MHI and E.ON Operating income (420) (179) (258) Strengthen heavy components fabrication % Sales (18.2% (6.6%) (17.6%) capacities on growing markets Op. FCF before tax (350) (528) (407) Develop Renewable Energies Business Unit Optimise cost structure > Overview – January 2009 22

Reactors and Services is mostly a recurring business Prospects % of 2007 sales Service life extension Servicing and operation of for installed baseload in the US existing reactors Recurring Business development in U.S. Large equipment replacement business and Asia (vessel inspections, steam > 80% generators, etc.) Strong European market share On-site maintenance services of sales Development of innovative contracting mechanisms such Open-ended engineering services as “alliancing” Dismantling services Uprating, upgrading and life extension Non-recurring Reactor new builds Contracts in progress: EPR construction in Finland, in Design, safety analysis business France and in China and construction of new reactors < 20% Long term opportunities: new and first reload construction, likely in UK, in of sales Italy, in India, in South Africa and in the US > Overview – January 2009 23

AREVA is present on the key battlefields Main nuclear programs announced worldwide France UK Flamanville 3 (EPR) under Finland construction Target* : 10 GWe by 2020 Olkiluoto 3 (EPR) under France announces a 2nd EPR selected by EDF and E.ON construction EPR by 2017 for their UK projects Canada Target* : more than 8 GWe from 2014 China Call for tender 23 reactors under in progress construction o/w 2 EPRs Target* : 60 GWe by 2020 US 32 COL** applications in progress EPR selected India by 5 utilities 6 reactors under construction Target* : 60 GWe by 2030 Discussion between Italy AREVA and local utilities Target* : 8 to 10 new large reactors Emirates by 2030 Preparation of the EPR project with 1 SUEZ and TOTAL Countries where EPR are under construction (*) : Nuclear generation capacity announced by countries Countries where big nuclear programs are announced (**) : Construction and Operating License > Overview – January 2009 24

Bridging the Gap: Supply Chain Certainty An integrated manufacturing approach Continuous deliveries of quality products and process improvements for existing plants and new build projects Chalon Saint Marcel 2900m² 30 years of operations extension in 2006 Workshop: 39 000 m² Reactor Pressure Vessels, Steam Generators, Pressurizers, Safety Injection Accumulators Sfarsteel (Creusot Forge) AREVA Heavy forging and machining since 2006 Workshops: 85 000 m² (4 sites) Newport News Start of operation: 2012 Workshop: 300,000 ft² $363M Reactor Vessels, Steam announced Generators, and Pressurizers 2008 We’re not just building a plant, we’re building an industry > Overview – January 2009 25

Expand our renewable energies offering Bioenergies Wind power Hydrogen power Design & deliver biomass Supply energy Become a major player fired power plants world for transportation in offshore wind energy wide and manufacturing 51% of Multibrid in Germany Presence in Brazil, Western Helion, France Europe and India 5 MW off-shore specific Strong R&D capability JV Adage with Duke Energy design (PEM technology) in the US Selected for 3 major wind 98 power plants in operation; parks 2,430 MWe > Overview – January 2009 26

Back End division - An unchallenged leadership Strengths & issues Sales – 2007 split Cleanup Engineering 3% 6% Nr 1 worldwide Logistics Highly recurrent sales due to long term 13% contracts: backlog runs through 2015 Main investments completed Technology transfer through long term 78% partnership: e.g Japan (Rokkasho Mura) Treatment- Recycling Key financials Strategic priorities Renew reprocessing and recycling in millions of euros 2006 2007 H1 2008 contracts Order book 6,375 6,202 5,591 Optimize industrial efficiency of the two main plants (La Hague and Melox) Sales revenues 1,908 1,738 930 Market closed-cycle technologies in Operating income 273 203 175 the new US (GNEP) and China back- % Sales 14.3% 11.7% 18.8% end policies Op. FCF before tax 156 172 73 Capitalize on AREVA trade mark to win management contracts > Overview – January 2009 27

Back End market combines reprocessing, final disposal and “wait-and-see” solutions mt of heavy metal/year ? Difference in costs between RUSSIA 2,500 closed and open cycles is CHINA impactless on the kWh cost UK OTHERS Back-end cost represent less 2,000 FORMER EASTERN than 6% of the overall BLOCK COUNTRIES nuclear kWh cost JAPAN 1,500 USA (to date) When choosing the closed ASIA cycle: 1,000 96% of the materials SPAIN can be recycled SWITZ. FRANCE BELGIUM AREVA wastes volumes are divided 500 customers by a factor 4 to 5 GERMANY SWEDEN Radio-toxicity of long term FINLAND 0 wastes is reduced Reprocessing Final Mixed solutions by a factor 10 Recycling Disposal (closed cycle) (Open cycle) > Overview – January 2009 28

International recognition for AREVA’s leadership 5 contracts awarded by the DOE Savannah River: construction of a MOX plant for the disposition of U.S. defense plutonium Savannah River : treatment and disposal of Hot testing at Rokkasho radioactive liquid wastes at the DOE Mura (sister plant of La Savannah River Site in South Carolina Hague) Hanford Tanks: participation in site cleanup and dismantling AREVA signs another series of contracts to deliver MOX Global Nuclear Energy Partnership: contract extension for feasibility studies on the closed fuel through 2020 cycle Yucca Mountain: management of the used nuclear fuel depository project Sellafield site: AREVA and partners selected CNNC – China: progress on feasibility Management and operation of the Cumbria site studies for an 800 MT as part of the UK Nuclear Waste Management recycling plant consortium (low-level radioactive waste) > Overview – January 2009 29

T&D division - Long term outlooks still positive Strengths & issues Sales – 2007 split Services Products A full fledged player: products & solutions 8% for high and medium voltage technologies Automation 11% 49% A global sales force in over 100 countries Strong position in the electrical utilities segment 32% Now Nr 2 in terms of profitability Cyclicality exposure, especially with industry Systems customers Key financials Strategic priorities 2006 2007 H1 2008 Ensure profitable growth in millions of euros Be the benchmark for utilities Order book 3,503 4,906 5,791 Increase market share in selected industry Sales revenues 3,724 4,327 2,284 markets Grow faster than the market by building up Operating income 191 397 253 presence in growth regions and segments % Sales 5.1% 9.2% 11.1% Be a key player in Ultra High Voltage Op. FCF before tax 94 233 (45) Adapt industrial footprint to the market Be Chinese in China Invest in R&D as much as the industry leader > Overview – January 2009 30

T&D: Vitality and solidity of orders booked Orders booked in €M * 3,184 3,166 500 488 2,637 433 2,228 432 2,125 2,033 124 176 1,687 1,630 320 1,676 80 192 95 2,678 2,251 2,205 2,104 1,949 1,713 1,596 1,535 1,495 H1 04 H2 04 H1 05 H2 05 H1 06 H2 06 H1 07 H2 07 H1 08 Current operations quot;Elephantquot; contracts Qatar (**) * Before inter-divisional eliminations ** Exchange rate at 12/31/2007 > Overview – January 2009 31

T&D: objective of double-digit operating margin achieved 18 months early 11.1% 9.9% 8.7% 253 230 5.9% 175 4.2% 119 72 H1 06 H2 06 H1 07 H2 07 H1 08 2006 2007 2008 > Overview – January 2009 32

Profitable growth In millions of euros +18.0% 5 000 + 34.7% 4 000 50% 4,327 3 000 40% 35% 3,724 30% 2 000 3,212 20% 19% 1 000 10% 400 422 339 0% 0 2005 2006 2007 - 10% - 9% ROACE Sales revenue Operating WCR > Overview – January 2009 33

Speeding up the profitable growth dynamic Profitability (operational excellence) 15% 2012 H1 2008 11% €2.3 Bn 2007 Differentiation €4.3 Bn 10% 2006 Profitable growth €3.7 Bn 5% 2004 Competitiveness €3.2 Bn 1% Market share (strategic position) 15% 0% 10% 3 YP2 3 YP 4 YP > Overview – January 2009 34

Agenda 1. Group’s overview: financial performance and strategy 2. Performance and objectives by division 3. Financials at 12/31/2007 > Overview – January 2009 35

2007 key data by division Sales by division Operating income by division €11,923M €751M Transmission & Distribution 4,327 Front-End 3,140 26% 2,717 36% 1,738 496 397 203 -179 23% 15% Front R&S Back T&D Reactors & - end - end Back-End Services Sales Operating income > Overview – January 2009 36

Operating cash flow In millions of euros 2007 2006 +1 1,335 1,292 (50) (432) (352) (1,295*) (391*) (1,248) (358) (2,889) (1,985) Gain/(loss) Gain/(loss) on disposals Change on disposals Change Operating Operating Ebitda Capex Ebitda Capex in WCR in WCR cash flow cash flow (*) excluding Uramin acquisition Increase in EBITDA Change in WCR: use of advances/provisions (Back End/Reactors) Acceleration of Capex program (UraMin) > Overview – January 2009 37

Simplified balance sheet at December 31, 2007 In billions of euros 4.4 Goodwill 7.5 Equity 6.9 PPE and intangible assets Provisions for 5.1 end-of-life-cycle operations Assets earmarked for 5.4 3.8 Other provisions end-of-life-cycle operations 0.5 WCR 1.6 Investments in associates 2.0 Siemens' put option 2.6 Non-current financial assets Assets Liabilities & equity = 20.8 = (simplified) (simplified) Net debt excluding value of Siemens' put option* : €1.954 Bn (and €2.385 Bn at 6/30/08) (*) Net cash excluding put options = cash + cash equivalents + current account assets – borrowings including interest bearing advances > Overview – January 2009 38

Capital structure CDC 4% CEA + FRENCH EDF STATE + ERAP 2% 87% o/w 15% Total in a CEA 1% decommissioning fund Investment Certificate Holders (free float) 4% Employees 2% > Overview – January 2009 39

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AREVA, Business & strategy overview - January 2009

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AREVA, Business & strategy overview - January 2009 Presentation Transcript