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AREVA, business & strategy overview - January 2009 - Appendix 7
AREVA, business & strategy overview - January 2009 - Appendix 7
AREVA, business & strategy overview - January 2009 - Appendix 7
AREVA, business & strategy overview - January 2009 - Appendix 7
AREVA, business & strategy overview - January 2009 - Appendix 7
AREVA, business & strategy overview - January 2009 - Appendix 7
AREVA, business & strategy overview - January 2009 - Appendix 7
AREVA, business & strategy overview - January 2009 - Appendix 7
AREVA, business & strategy overview - January 2009 - Appendix 7
AREVA, business & strategy overview - January 2009 - Appendix 7
AREVA, business & strategy overview - January 2009 - Appendix 7
AREVA, business & strategy overview - January 2009 - Appendix 7
AREVA, business & strategy overview - January 2009 - Appendix 7
AREVA, business & strategy overview - January 2009 - Appendix 7
AREVA, business & strategy overview - January 2009 - Appendix 7
AREVA, business & strategy overview - January 2009 - Appendix 7
AREVA, business & strategy overview - January 2009 - Appendix 7
AREVA, business & strategy overview - January 2009 - Appendix 7
AREVA, business & strategy overview - January 2009 - Appendix 7
AREVA, business & strategy overview - January 2009 - Appendix 7
AREVA, business & strategy overview - January 2009 - Appendix 7
AREVA, business & strategy overview - January 2009 - Appendix 7
AREVA, business & strategy overview - January 2009 - Appendix 7
AREVA, business & strategy overview - January 2009 - Appendix 7
AREVA, business & strategy overview - January 2009 - Appendix 7
AREVA, business & strategy overview - January 2009 - Appendix 7
AREVA, business & strategy overview - January 2009 - Appendix 7
AREVA, business & strategy overview - January 2009 - Appendix 7
AREVA, business & strategy overview - January 2009 - Appendix 7
AREVA, business & strategy overview - January 2009 - Appendix 7
AREVA, business & strategy overview - January 2009 - Appendix 7
AREVA, business & strategy overview - January 2009 - Appendix 7
AREVA, business & strategy overview - January 2009 - Appendix 7
AREVA, business & strategy overview - January 2009 - Appendix 7
AREVA, business & strategy overview - January 2009 - Appendix 7
AREVA, business & strategy overview - January 2009 - Appendix 7
AREVA, business & strategy overview - January 2009 - Appendix 7
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AREVA, business & strategy overview - January 2009 - Appendix 7

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AREVA, business & strategy overview - January 2009 - Appendix 7

AREVA, business & strategy overview - January 2009 - Appendix 7

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  1. Appendix 7 Outlooks China and India
  2. China: strong growth in power consumption Electricity consumption 1995-2020 5622 17.02% 14.44% 12.94% 3631 11.62% 3360 3110 2 880 8.60% 2 670 2 470 2 187 8.61% 1 911 8.10% 7.87% 7.99% 8.04% 8.07% 1 633 1 463 1 347 1 002 1995 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2020 Annual consumption (in TWh) Annual growth Source: “11th Five-Year” Power Grid Development Planning of SGCC and Perspective Target in 2020 > Overview – January 2009 2
  3. 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 – January 2009 3
  4. China: overview of the energy sector Per capita consumption is still low and very disparate Insufficient installed capacity 600 GW installed as of the end of 2006, with a target of 1000 GW by 2020 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 24% of the world market Renewable energies law adopted in 2005 to fight CO2 emissions Renewable energies’ share is expected to rise from 3% in 2003 to 10-12% by 2020 China is already the biggest market for biomass power generation > Overview – January 2009 4
  5. China: AREVA’s positions More than 2,600 employees: 2000 employees for T&D More than 780 million euros sales in 20071 JV AREVA- DONGFANG (DEC) Reactor Coolant Pumps Company Ltd SNE (Shenzhen Nuclear Engineering) Nuclear services 1 Sales by destination in 2007 (not including the products manufactured in China and exported overseas) > Overview – January 2009 5
  6. China: AREVA T&D’s operations in China China’s T&D market represents 24% of the world market Substantial capital expenditure is required in light of the country’s rising energy consumption More than 322 million euros in sales in 20071 Breakdown of the Chinese T&D market in 2007: ABB 12% SIEMENS 7% AREVA 3% Local players = Others Japan-Korea 49% 70% of the market 4% Other MNCs 2% XD Group 9% TBEA 4% XJ Group 2% TWBB Nari PingGao 2% ShenGao 3% 2% 1% 1) Sales by destination in 2007 (not including products manufactured in China and exported overseas) > Overview – January 2009 6
  7. China: T&D Market Growth T&D Market Drivers Fast industrialization (2007 Industrial production growth: +17%) 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 (UHV and HVDC opportunities) 2007 annual capacity increase = 90 GW (~ UK installed capacity) > Overview – January 2009 7
  8. China: AREVA T&D’s goals Develop new partnerships with Chinese companies and institutes Seize opportunities that could lead to manufacturing capacity increases, whether through internal or external growth Increase localization in China in research and manufacturing, and continue to improve related service quality in China Develop solutions to meet the challenge of electricity transmission over very long distances (HVDC, etc.) > Overview – January 2009 8
  9. China: nuclear power’s share is expected to quadruple by 2020 Total installed capacity in 2006: 600 GW, mostly thermal Nuclear 1.5% Hydraulic 22.8% Thermic 75.7% Nuclear power’s share is still limited in China: 9 GW, corresponding to 1.5% of total installed generating capacity in China Objective: 6% by 2020, i.e. 60 GW > Overview – January 2009 9
  10. China: nuclear civilian sites 11 reactors in operation – 6 under construction > Overview – January 2009 10
  11. 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 – January 2009 11
  12. China: the largest contract ever signed in the nuclear business Construction of 2 EPR nuclear islands Material and Services for 15 years of operation Bn €8 Discussions to start on cooperation for treatment and recycling > Overview – January 2009 12
  13. 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 local boiler engineering and sourcing competences, combining AREVA mastered technology and low cost manufacturing, Booking a first boiler order in 2008 Reaching 10% share of the domestic biomass boiler market by 2012 > Overview – January 2009 13
  14. India: to sustain the growth in consumption, capacities need to be multiplied by 5 Power consumption should grow by 7% p.a. from 2004 to 2032 CAGR 7% p.a. 778 GW 3,630 TWh 153 GW 590 TWh 2004 2007 2012 2022 2032 2007 2012 2022 2032 Thermal Hydroelectric Renewables Nuclear Thermal Hydro Renewables Nuclear Source: Planning Commission of India – August 2006 Source: Government of India -Planning Commission August 2006 Key drivers Capex requirement Population growth (x 1.5 from 2000 This scenario is based on 6 to 8 GW to 2050) of additional LWR imports in the next 10 years GDP growth (8% per year in this scenario) It is also assumed that capital Increase in electricity access (57% of the expenditure is shared with private sector rural households and 12% of the urban households had no access to electricity in 2000) > Overview – January 2009 14
  15. India: T&D investments are expected to reach €31Bn between 2007 and 2012 Market drivers T&D planned investment* (€Bn, 2007-2012) 12.2 +21% Transmission Network +13% 8.8 Distribution Network +50% 10.5 Rural Electrification 31.5 Total investment Planned * T&D investment including cables and OH lines Source: Indian Planning Commission, Aug2006 > Overview – January 2009 15
  16. India: AREVA T&D has a strong competitive position Major land marks: T&D India Market share 2007 70% market share in the EMS ABB segment for Transmission networks 20% Others Supplied and commissioned India’s 40% first 765 kV substation in 2007 for AREVA NTPC Sipat plant 15% 20% of HVDC inter-regional linkages Largest number of GIS references Siemens L&T 12% in India 2% CGL BHEL 6% 5% Network Consultancy contract for Reliance Energy’s Delhi & Mumbai networks ; 1st of its kind in India Source: AREVA. Market share calculation based on 2007 orders Modernization of Bhutan’s electrical network for 2 cities > Overview – January 2009 16
  17. India: AREVA benefits from an historical presence in India since 1950s’ New Power transformer Greenfield plant Dehli, Noida BANGALORE PONDY Naini Baroda Kolkata CHENNAI CHENNAI Bangalore Chennai Pondicherry KOLKATA KOLKATA 8 manufacturing sites 3,500 employees NAINI NOIDA, DELHI Full fledge local player covering UHV, HV, MV, Systems and Automation > Overview – January 2009 17
  18. India: strong growth of nuclear generated power is expected over the 25 next years Nuclear percentage should rise Nuclear generated from 3% to 10% electricity should multiply of the power mix by 20 by 2032 3% 13% 439 TWh 1% 375 TWh 84% 11% 10% 2004 1% 78% Thermal Hydro 17 TWh Renewables France 2032 Nuclear 2004 2032 in 2007 Source: Planning Commission of India – August 2006 Source: Planning Commission of India – August 2006 > Overview – January 2009 18
  19. 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,… 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. NPCIL plans to build 16,000 MWe in new nuclear capacity from 2007 to 2012 > Overview – January 2009 19
  20. 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 – January 2009 20
  21. 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 Since 2005, discussions between India and several NSG member states are taking place, for an agreement on safeguarding civilian nuclear facilities and fissile material paving the way for a new consensus within NSG Summer 2008: India has obtained a green light from AEIA and the NSG has validated an exceptional arrangement to permit its members to deal with. Some countries has already signed MOU with India to put in place framework agreement of cooperation. > Overview – January 2009 21
  22. India: success of the discussions with NSG members AREVA July 2006: AREVA visit Feasibility report for 6 GW 1st Indian India/USA statement: nuclear test American July 2005 Nuclear Congress vote: cooperation December 2006 agreements with France 2006 2007 2008 1974 2005 Bilateral cooperation: India / France statement: India / Canada (PHWR) September 2005 India / France (FBR) Nuclear cooperation India / USA (BWR) G. Bush visit: agreements March 2006 with US AREVA Feasibility V. Poutine visit: report for EPR February 2007 February 2006: July 2008: AEIA green President Chirac visit light > Overview – January 2009 22
  23. India: key challenges for AREVA For Nuclear: Successfully license the EPR with the Indian nuclear regulatory authority within a reasonable timeframe 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 – January 2009 23
  24. Appendix 8 Financials
  25. Share in net income of associates Change 2006 2007 07/06 In millions of euros ST Microelectronics 98 (25) (124) Eramet group 106 153 47 Other 15 20 5 TOTAL 220 148 (72) The negative results of ST Microelectronics (-161% compared with 2006) are offset in part by Eramet's positive performance > Overview – January 2009 25
  26. Minority interests in subsidiaries' earnings Change 2006 2007 07/06 In millions of euros AREVA NP (57) (17) 41 AREVA NC 62 129 67 AREVA T&D 15 23 8 AREVA TA 4 3 (1) TOTAL 24 139 115 Increase in the EURODIF profit (AREVA NC) Reduction of AREVA NP losses > Overview – January 2009 26
  27. Change in sales revenue 2007/2006 like-for-like 2007 2006 In millions of euros Sales Sales Change in Change in Change in Sales revenue revenue exchange consolidation valuation revenue like-for-like rates scope method (reported) Front End division 3,140 2,838 (78) (32) 29 2,919 Reactors & Services division 2,717 2,359 (39) 86 0 2,312 Back End division 1,738 1,896 (6) 0 (5) 1,908 Nuclear 7,595 7,093 (123) 54 24 7,138 T&D division 4,327 3,708 (41) 25 0 3,724 Corporate and Other 1 1 0 0 0 1 Consolidated 11,923 10,801 (164) 79 24 10,863 > Overview – January 2009 27
  28. Income statement 2007 2006 In millions of euros Sales revenue 11,923 10,863 Other income from operations 21 55 Cost of sales (9,183) (8,698) Gross margin 2,762 2,220 Research and development expenses (421) (355) Marketing and sales expenses (529) (493) General and administrative expenses (881) (778) Other operating income and expenses (123) (56) Operating income before restructuring expenses 808 538 Restructuring and early retirement costs (57) (131) Operating income 751 407 Income from cash and cash equivalents 37 50 Gross borrowing costs (110) (78) Net borrowing costs (73) (29) Other financial income and expenses 138 126 Net financial income 64 97 Income tax (81) (51) Net income of consolidated businesses 734 453 Share in net income of associates 148 220 Net income from continuing operations 882 672 Net income from discontinued operations - - Less minority interests (139) 24 Net income attributable to equity holders of the parent 743 649 35 442 701 35 442 701 Average number of shares outstanding 20.95 18.31 Basic earnings per share (1) 20.95 18.31 Diluted earning per share Adjusted for net income of discontinued operations (1) > Overview – January 2009 28
  29. Balance Sheet (1/2) ASSETS 12/31/07 12/31/06 (In millions of euros) Non-current assets 21,425 17,350 Goodwill on consolidated companies 4,377 2,515 Other intangible assets 2,729 1,175 Property, plant and equipment 4,204 3,814 Including: End-of-life-cycle asset (AREVA share) 174 198 End-of-life-cycle asset (third party share) 2,491 2,091 Assets earmarked for end-of-life-cycle operations 2,873 2,986 Investments in associates 1,558 1,521 Other non-current financial assets 2,588 2,376 Deferred tax assets 604 873 Current assets 9,251 8,543 Inventories and work-in-process 2,817 2,306 Trade accounts receivable and related accounts 3,884 3,604 Other operating receivables 1,402 1,121 Current tax assets 94 116 Other non-operating receivables 141 142 Cash and cash equivalents 634 962 Other current financial assets 279 292 Assets of operations held for sale - - Total assets 30,676 25,893 > Overview – January 2009 29
  30. Balance sheet (2/2) 12/31/07 12/31/06 LIABILITIES AND EQUITY (In millions of euros) Equity and minority interests 7,464 7,016 Share capital 1,347 1,347 Consolidated premiums and reserves 3,925 3,619 Deferred unrealized gains and losses 1,117 1,131 Currency translation reserves (138) (25) Net income attributable to equity holders of the parent 743 649 Minority interests 470 294 Non-current liabilities 11,951 8,351 Employee benefits 1,175 1,122 Provisions pour end-of-life-cycle operations 5,075 4,585 Other non-current provisions 121 113 Long-term borrowings 4,302 1,407 Deferred tax liabilities 1,277 1,124 11,261 10,526 Current liabilities Current provisions 1,823 1,788 Short-term borrowings 613 712 Advances and prepayments received 4,172 4,185 Trade accounts payable and related accounts 2,565 2,093 Other operating liabilities 1,921 1,650 Current tax liabilities 127 74 Other non-operating liabilities 41 23 Liabilities of operations held for sale - - Total liabilities and equity 30,676 25,893 > Overview – January 2009 30
  31. Cash flow statement and net debt 2006 2007 In millions of euros Ebitda (excluding end-of-life-cycle expenses)* 1,292 1,335 % of sales revenue 11.9% 11.2% Gain (loss) on disposal of operating assets (50) 1 Change in operating WCR (352) (432) Net operating Capex (1,248) (2,889) Free operating cash-flow before tax (358) (1,985) End-of-life-cycle obligations 72 171 Net financial Capex 170 (131) Dividends paid (429) (345) Net reclassifications (mutual funds) 0 0 Revaluation of minority put options (liability) (41) (932) Other (income tax, non-operating WCR, etc.) (10) 85 Change in net cash position (597) (3,137) Net debt at December 31 (865) (4,003) > Overview – January 2009 31
  32. Segment reporting (1/2) 2007 Corporate, Reactors and In millions of euros Front End Back End T&D Other and Consolidated (except number of employees) Services Eliminations Contribution to consolidated 3,140 2,717 1,738 4,327 1 11,923 sales revenue Income items Operating income 496 (179) 203 397 (166) 751 % of sales revenue 15.8% (6.6%) 11.7% 9.2% immaterial 6.3% Ebitda (ex. end-of-life-cycle) 731 (125) 440 426 (137) 1,335 % of consolidated revenue 23.3% - 4.6% 25.3% 9.8% immaterial 11.2% Net Capex (2,260) (322) (81) (193) (33) (2,889) Cash flow items Change in operating WCR (139) (81) (186) (5) (20) (432) Free operating cash flow (1,672) (528) 172 233 (190) (1,985) PPE and intangible assets 4,894 1,141 1,897 1,053 2,325 11,310 Capital employed* 5,134 178 (646) 816 344 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 – January 2009 32
  33. Segment reporting (2/2) 2006 Corporate, Reactors and In millions of euros Other and Front End Back End T&D Consolidated (except number of employees) Services Eliminations Contribution to consolidated 2,919 2,312 1,908 3,724 0 10,863 sales revenue Income items Operating income 456 (420) 273 191 (94) 407 % of sales revenue 15.6% (18.2%) 14.3% 5.1% 3.7% immaterial Ebitda (ex. end-of-life-cycle) 630 7 443 258 (46) 1,293 % of consolidated revenue 21.6% 0.3 23.2% 6.9% immaterial 11.9% Net Capex (750) (341) (77) (95) 14 (1,248) Cash flow items Change in operating WCR (28) (21) (205) (67) (29) (352) Free operating cash flow (186) (350) 156 94 (72) (358) PPE and intangible assets 2,321 918 1,954 961 1,341 7,502 Capital employed* 2,464 (67) (719) 705 318 2,701 Other Number of employees 61,111 11,995 14,936 10,697 22,988 495 * Capital employed at the end of the period > Overview – January 2009 33
  34. ROACE (1/2) Average capital Net operating ROACE employed income In millions of euros 2006 2007 2006 2007 2006 2007 Nuclear 1,602 3,172 247 429 15.4% 13.5% T&D 661 761 127 265 19.3% 34.8% Other 52 331 (67) (111) Immat. Immat. Consolidated 2,315 4,264 308 583 13.3% 13.7% ROACE = Operating income / average capital employed (beginning - end of period) Capital employed = Net PPE and intangible assets + operating WCR – Provisions for contingencies and losses Net operating income = Operating income less pro forma income tax Pro forma income tax = tax calculated based on the average income tax rate applicable to all group entities, except those subject to a specific tax rate (Eurodif in particular) > Overview – January 2009 34
  35. ROACE (2/2) CONSOLIDATED 2006 2007 In millions of euros Net operating income 308 583 Net intangible assets 1,175 2,729 Goodwill used in ROACE calculation 1,614 2,520 Property, plant and equipment 3,814 4,204 Customer prepayments on assets (978) (907) Operating WCR 85 368 Provisions for contingencies and losses (3,007) (3,088) Capital employed 2,701 5,826 Average capital employed 2,315 4,264 ROACE 13.3% 13.7% > Overview – January 2009 35
  36. 2007 sales revenue by BU (1/2) 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 – January 2009 36
  37. 2006 sales revenue by BU (2/2) Reactors and Services Front End division Renewable energies Consulting/Information 1% Nuclear Systems Mining measurement 7% 20% Fuel 8% AREVA TA 43% 14% Chemistry 8% Equipment 11% Plants 32% Nuclear services Enrichment 28% 29% Back End division Transmission & Distribution Services Cleanup 11% 6% Engineering 4% Automation Products Logistics 12% 45% 9% Systems Treatment- 32% Recycling 78% > Overview – January 2009 37

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