AREVA, Business & Strategy Overview - Novembre 2009
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AREVA, Business & Strategy Overview - Novembre 2009

AREVA, Business & Strategy Overview - Novembre 2009

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AREVA, Business & Strategy Overview - Novembre 2009 Presentation Transcript

  • 1. AREVA Business & Strategy overview November, 2009
  • 2. Notice ► 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 my 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, 2009 (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. AREVA Overview – November 2009 p.3
  • 3. Contents ►Introduction to AREVA ►Performances and objectives by division ►Delivering profitable growth ►AREVA latest financial results ►Appendices AREVA Overview – November 2009 p.4
  • 4. AREVA is a global leader in solutions for CO2-free power generation 75,400 people 100 countries REACTORS NUCLEAR AND RENEWABLE ENERGIES FUEL FABRICATION USED FUEL RECYCLING ENRICHMENT RENEWABLE SERVICES ENERGIES CHEMISTRY TRANSMISSION & DISTRIBUTION MINING TRANSMISSION & DISTRIBUTION OTHER SOURCES OF €13,160M Sales (2008) ELECTRIC POWER Divestment of T&D activities in progress €1,181M EBITDA (2008) AREVA Overview – November 2009 p.5 5
  • 5. AREVA is at the forefront of technology in CO2-free generation Front End Plants Ultracentrifugation EPR AREVA has the most efficient the first Generation III+ reactor under ultracentrifugation technology construction (4 units) A range of reactors to meet customer needs PWR PWR BWR 1,600+ MWe 1,100+MWe 1,250+MWe Back End Renewable Energy Unchallenged leadership Only true "designed Ownership of range of for offshore" wind critical Biomass turbine technologies © AREVA © AREVA AREVA Overview – November 2009 p.6
  • 6. AREVA is the only fully integrated player on the nuclear power value chain JNFL Mining / Natural uranium Conversion / Front End chemistry Enrichment Natural uranium fuel Reactors and Services Treatment Back End Recycling Presence Recent strategic move / Potential move Source: AREVA estimates development AREVA Overview – November 2009 p.7
  • 7. AREVA is now developing a portfolio of Renewable energy solutions Wind power Bioenergies Energy Carrier & Storage Off-shore wind turbine Specialized EPC for Developer of marketable designer and biomass fired solutions to foster manufacturer power plants renewable penetration Renewable BU is looking for opportunities to leverage its EPC know-how into solar thermal Off-shore wind leading Ownership of range of Fuel cell design and prod. technology with strong critical technologies Development of next position in Europe Innovative partnerships generation storage Vertically integrated in with utilities solutions and H2 prod. blades 2007: Multibrid acquisition 2004: T&D biomass integration 2001: Helion creation 2009: PN Rotor acquisition 2008: Koblitz acquisition 2008: ADAGE JV creation AREVA Overview – November 2009 p.8
  • 8. AREVA integrated model offers a key competitive advantage CONVERSION REACTORS RENEWABLE URANIUM ENRICHMENT FUEL NEW BUIDS AND SERVICES BACK-END ENERGIES EXAMPLES NPCIL Discussions or negotiations in progress JV or existing contract AREVA Overview – November 2009 p.9
  • 9. The group benefits from a strong and successful culture of partnerships* Since 2004, long-lasting partnerships to develop mines in Canada Consolidation in the fuel cycle Equity stakes in Georges Besse II (GBII) new enrichment plant Strengthening Heavy component manufacturing site in the US of industrial and engineering capacities JV in engineering in China 1250+ MWe boiling water reactor Reactor development 1100+ MWe pressurized water reactor Partnership in biomass in India Renewables Development of the biomass market in the United States AREVA Overview – November 2009 *Non exhaustive list p.10 10
  • 10. AREVA captures growth through its low carbon strategy aligned with world energy challenges World energy sector challenges Global energy mix Billions of metric tons of oil equivalent / year ► Energy demand will increase 50 % by 2030 18 17,0 Population will increase by 2 Energy efficiency 2,5 billion people 15 and storage Human Development will 3,4 Renewables increase energy intensity 12 11,7 +5%/y 1,5 ► Peak oil and gas is a reality and 1,4 Nuclear 0,7 substitution is necessity 9 2,4 3,0 Natural gas Total Oil and Gas production will start to decrease in 15 years 6 4,0 4,3 Oil Electricity demand will grow by a factor of 2 by 2030 3 3,1 2,4 Coal ► Carbon emissions must be cut by half to stabilize climate change 0 2006 2030 Source: World Energy Outlook 2008 stabilization 450 ppm” scenario, AREVA AREVA Overview – November 2009 p.11
  • 11. The nuclear revival is here AREVA's market scenario for installed capacity (in GWe) Forecasts published by international organizations ► AREVA Mining, Front End Services, Back End 748: IAEA - 2008 – High Estimate 731: WNA2 - 2007- High Estimate ► AREVA Reactors and Services 358 659 678: WEO1- 2008- 450 ppm Policy Scenario 533: WEO- 2008- 550 ppm Policy Scenario ► AREVA Back End 529: WNA - 2007 - Reference 498: DOE3 EIA4 - 2008 Reference Case 262 473: IAEA - 2008 – Low Estimate 373 433: WEO - 2008 – Reference Scenario 190 2008 Plant Life New 2030 closures extension builds AREVA targets 1/3 of the accessible new build market and the leadership in life extension and power uprates 1. World Energy Outlook 2. World Nuclear Association 3. US Department of Energy 4. Energy Information Administration AREVA Overview – November 2009 p.12
  • 12. +8.5% annual growth expected for Renewable energy market through 2030 Capacity installed for renewable energies (GW) 1.000 Tide and Wave 13% Geothermal 11% Solar Biomass 750 Increasing share of “new” Wind offshore 9% Wind onshore renewables (except hydro) from 3% to 13% of total XX% world electricity mix 500 electricity generation 7% A market of ~160 bn$/year capacity of new capacity 250 Strong growth expected in 3% Off-shore wind (~10% p.a.), Biomass (~6% p.a.) 0 2006 2015 2020 2025 2030 Annual new capacity market 115 130 190 (in USD07 billion) Source : WEO 2008, ETP, EIA (2008) AREVA Overview – November 2009 p.13
  • 13. An investment program well under way to capture market opportunities AREVA annual CAPEX1 (€Bn) ► Selling our reactors EPR reactor licensing in the UK, US Assembly capacity for heavy components 2.600 2.358 Developing ATMEA (JV with MHI) 0,1 2,5 … 0,4 1.623 2,0 ► Securing access to uranium Average Developing mining portfolio 0,3 1.112 budget (Canada, Africa, Kazakhstan)… 1,3 per year 0,2 ► Adjusting our enrichment capacity 1,0 Migration to centrifuge enrichment Meeting US demand: GBIII project ► Safety and renovation of our facilities 2007 2008 2009e 2010- 2012 Chemistry (Pierrelatte, Malvési…), La Hague… ► Accelerating Renewable development T&D Nuclear & Renewable Energies Development of existing assets (like Multibrid) “Opportunistic” approach for external growth on selected markets 1 Acquisition of property, plants and equipment and intangible assets AREVA Overview – November 2009 p.14
  • 14. AREVA has a 50-year history of successful nuclear project execution AREVA was created in 2001 by the merger AREVA has never stopped building of companies with a long nuclear history reactors since the 1960’s Reactors built by AREVA or its predecessor Westinghouse companies by commissioning date 120 1 102 1958: Framatome created to operate a 4 Westinghouse reactor license; the technology 3 12 will gradually be improved and become fully 80 owned by Framatome 57 40 5 21 0 Jan 2001 60’s 70’s 80’s 90’s 00’s on- Total going AREVA has never stopped building reactors AREVA has built 91 of the 439 currently active Sept. 2001 reactors AREVA has demonstrated its ability to manage massive construction programs in the 1980’s AREVA has active units in France, Germany, several other European countries, South Africa, 1. Including 7 shutdown and 4 under construction China, Latin America AREVA Overview – November 2009 p.15
  • 15. At least 11 utilities have already selected the EPR reactor by AREVA NPCIL …and are making commitments for the entire fuel cycle CGNPC – China: supply of front end of the fuel cycle through 2026 NPCIL – India: wants to secure reactor supplies for the life of the reactors (60 years) EDF: multi-year contract in the front end and back end (beyond 2030) AREVA Overview – November 2009 p.16
  • 16. AREVA secures financial resources while preserving its credit profile ► Financing plan announced in June 2009 to secure resources for AREVA’s long-term development plan, and strengthen the group’s balance sheet ► Key aspects of the plan include: Opening of AREVA’s capital up to 15% mainly through a capital increase Testing the market for a sale of AREVA T&D Sale of stakes in ERAMET and STMicroelectronics considered (Shares to remain in the public sector) Disposal of Total and GDF Suez shares Continuation of sale of minority stakes in strategic assets for some industrial/ strategic partners ► Standard & Poor’s credit rating in July 2009: Long-term rating: A Short-term rating: A1 Outlook: Stable The announced financing plan will allow AREVA to fulfill its ambitions while maintaining its 'A' corporate credit rating AREVA Overview – November 2009 p.17
  • 17. AREVA current ownership structure Investment Certificate Holders* (free float) 4% Total Calyon Framépargne** EDF ► French Atomic Energy Research Organization, public body established in 1945 CDC 2% CEA ► Active in three main fields : Energy, information and 4% 4% 1% health technologies, defense and national security French State 1% 79% ► By law, CEA must retain the majority of AREVA’s 8% 0.4% capital ► €3.4bn annual spending (2007) ► French financial organization created in 1816, part of the Government institutions under the control of the Parliament ► Invests in long-term projects to serve France’s CDC public interests and economic development; 4% supports public policies, companies and local 79% authorities ► AAA/Aaa with a consolidated balance sheet of CEA* €221bn Total French State: 92% Note: Shareholding structure as as at 29/10/2009 * CEA owns all of the voting rights certificates ** Employees’ shareholding in AREVA AREVA Overview – November 2009 p.18
  • 18. Contents ►Introduction to AREVA ►Performances and objectives by division ►Delivering profitable growth ►AREVA latest financial results ►Appendices AREVA Overview – November 2009 p.19
  • 19. AREVA group structure Back End Transmission Front End Reactors & Services Nr 1 in used & Distribution Nr 1 worldwide in the overall Front-End Nr 1 worldwide in the overall R&S nuclear fuel Nr 3 worldwide in management overall T&D Conversion, Reactors Renewable Mines Mines Enrichment & Fuel & Services Energies • Plants • Mineral Exploration • Mines • Equipment • Wind Power • Recycling • Products • Mining Operations • Chemistry • Nuclear Services • Bioenergies • Logistics • Services • Ore Processing • Enrichment • Nuclear • Fuel Cells • Nuclear Site Value • Systems Measurement Development • Site Reclamation • Fuel • Automation • Consulting & • Engineering Information Systems • Clean-up • AREVA TA AREVA Overview – November 2009 p.20
  • 20. Front-End division AREVA invests to maintain leadership in Mines and Enrichment Sales – 2008 split Nr 1 worldwide in the overall Front-End ► Mining: explores, extracts and processes uranium ore, from Mining which nuclear fuel is made. The BU then reclaims mining 23% sites once production is finished Fuel ► Chemistry: converts natural uranium (U3O8) into uranium 37% hexafluoride (UF6) required for enrichment Chemistry ► Enrichment: Increasing the proportion of U235 found in 8% natural uranium from 0.7% to 3%-5% in order to manufacture fuel for nuclear reactors ► Fuel: designs, manufactures and sells nuclear fuel Enrichment assemblies for pressurized water reactors (PWR), boiling 32% water reactors (BWR) and research reactors Key financials In millions of euros 2007 2008 Change ORDER BOOK 21,085 26,897 +27.6% SALES REVENUES 3,140 3,363 +7.1% OPERATING INCOME 496 453 -8.7% % Sales 15.8% 13.5% -2.3 pts OP. FCF BEFORE TAX (1,672) (609) +€1,063M AREVA Overview – November 2009 p.21
  • 21. A uniquely diversified mining portfolio Canada Kazakhstan ►Development (Shea Creek, Kiggavik etc.) ►Exploration since 1964 ►Mining & global fuel agreement signed Mongolia ►Cigar Lake production to start after 2012 ►Katco production ramp-up / license for (+2,600 tU) 4,000 tU obtained ►Sainshand ►Exploration ►Exploration Morocco Niger ►Agreement signed with Office Chérifien Somaïr & Cominak mines des Phosphates Imouraren mining license obtained - Start up 2013-14 (+ 5,000 tU) AREVA Resources Southern Africa Democratic Republic of Congo ►Namibia - Trekkopje: mining permit obtained / 1st production ►Mining partnership expected in 2010 ►+3,000 tU production expected Australia ►Central African Republic -Bakouma: government ►Exploration since 1969 agreement obtained ►+2,000 tU production expected ~12,000 ►South Africa – Ryst Kuil Production ~ 6,300 ►Exploration (metric tons of U) 2008 2012 AREVA Overview – November 2009 p.22
  • 22. Production ramp up and new mines are already necessary to meet Uranium demand… Uranium supply and demand - Kt U, WNA 2009 report - By 2015, Uranium production to be In 2008, 33% of current covered by new projects should supply was met with represent 21% of the supply and result secondary sources and in a mining output increase of 51% inventory reduction 80.000 75.000 70.000 65.000 60.000 55.000 Demand 50.000 45.000 Production to be covered by new projects 40.000 Inventory reduction 35.000 30.000 Other secondary supplies (tails reenrichment, DOE sales) 25.000 20.000 Recycling (MOX, RepU, …) 15.000 Russian HEU 10.000 Production from existing mines 5.000 0 2008 2009 2010 2011 2012 2013 2014 2015 AREVA Overview – November 2009 p.23
  • 23. All producers have undergone significant increase in their operating costs, and junior companies have more suffered from the volatility of the spot price Change in cost of sales Change in selling price 2008 vs 2006 in % 2008 vs 2007 en % 70 67% 29% 30 27% 60 55% 52% 20 50 10 5% 40 0 30 - 10 20 - 20 -16% 10 -19% - 30 -23% 0 AREVA ERA Cameco Denison Paladin Uranium AREVA ERA Cameco One ►Emerging producers have been strongly impacted ► All producers experienced cost increases due to: by spot price volatility due to a limited backlog Inflation on direct costs (equipments, reagents, salaries highly exposed to market conditions and royalties) Tax increases ►AREVA's backlog ensures positive exposure Existing mines getting more difficult to operate (ore depth, to market evolution thanks to a mix of fix / long grade,…) term pricing New mines requiring more investments (bigger size, lack ►AREVA’s selling price has progressed as low price of infrastructure / utilities, material cost inflation) legacy contracts are being replaced with new ones AREVA Overview – November 2009 p.24
  • 24. AREVA is leading the way in enrichment capacity renewal Georges Besse II Eagle Rock Enrichment Facility ► Installation start-up by end 2009 ►Installation start-up by 2014 ► Essential investment for global balance of ►A capacity of 3.2 MSWU (by 2018) approved the enrichment market with modular by NRC and on-going discussion about capacity to meet market requirements production extension up to about 6 million At least 7.5 MSWU (by 2016) SWUs ► Based on the best existing available ►Proven ETC centrifuge technology, already technology (ETC – TC12) licensed by the NRC Georges Besse II: Eagle Rock Enrichment Facility: 90% of capacity already sold 50% of capacity already sold until 2020 beyond 2020 AREVA Overview – November 2009 p.25
  • 25. The Nuclear Renaissance is tightening the market, resulting in upward price pressure Long term market trends Enrichment prices ($/UTS) ►Robust enrichment demand due to new reactor constructions worldwide 200 High case and improved performance (load 180 factors, higher burn up, potential power uprates) 160 140 Base case ►Fifty percent of current capacity to be replaced, increasing risk 120 and market volatility 100 ►SWU prices will remain high due 80 to the uncertainty of the new investments based on unproven technology 0 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 AREVA will benefit from huge sources of demand with its new facilities becoming available in conjunction with market growth Source: UxC 2009 Q1 AREVA Overview – November 2009 p.26
  • 26. Reactors & Services division Still mostly recurring, but new build is there Sales – 2008 split Nr 1 worldwide in the overall Reactors & Services ► Plants: design, construction and commissioning of nuclear Nuclear Equipment islands, and monitoring, replacement, upgrades and services 9% renovation of installed base 26% AREVA TA ► Equipment: manufacture of key components for nuclear 12% power plants CIS ► Nuclear services: reactor optimization services 5% ► Nuclear measurement: design and construction of systems Reactors Renewable and devices designed to measure radioactivity 38% energies ► Consulting and Information Systems: IT services Nuclear 5% measures ► AREVA TA: design, production and maintenance of nuclear 5% reactors for research and for the propulsion of submarines Key financials and aircraft carriers ► Renewable Energies: design and construction of systems using either wind power, biomass or hydrogen energy In millions of euros 2007 2008 Change ORDER BOOK 7,640 7,850 +2.7% SALES REVENUES 2,717 3,037 +11.8% OPERATING INCOME* (179) (687) -€508M % Sales (6.6%) (22.6%) -16.0 pts OP. FCF BEFORE TAX (528) (591) -€63M *Including the €749M OL3 Provision in 2008 and €292M in 2007 AREVA Overview – November 2009 p.27
  • 27. EPR is a proven reactor with an outstanding safety level Safety first and foremost Performance with certainty Designed to achieve outstanding Project certainty: integrated supply safety: the EPR design benefited chain, licensed in 2 countries and from the scrutiny of both the already under construction in 3 German, French and Finnish safety authorities Evolutionary design based on the best of French (N4) and Best-in-class airplane crash German (Konvoi) technologies protection High output: 1600 MWe+ Severe accident prevention: quadruple redundancy, optimal High availability during 60-years combination of active and passive service life: 92%+ safety systems Enhanced fuel utilization Severe accident mitigation: advanced core catcher & radionucleides filtration AREVA Overview – November 2009 p.28
  • 28. EPR projects all over the world Amarillo Power Emirates NPCIL Under construction Ongoing projects or discussions Some EPR projects under discussion do not appear on this slide AREVA Overview – November 2009 p.29
  • 29. Benefits from the most advanced Gen 3+ project… despite OL3 specific situation Olkiluoto 3 project status: … but a slower than planned progress Stage of completion unmatched in the due to client’s conduct world for Generation III+ plant ► More than 90% of orders and procurement ► TVO’s inappropriate behavior with regards placed to contract management generates uncertainties on the final cost of the project and the commissioning ► Engineering more than 80% complete ► AREVA has sent proposals to TVO in order to get back ► Civil works on main buildings 73% complete to the methods of execution that are in line with usual practices for major projects ► Dome placed on September 6, 2009 ► AREVA will only commence the final phases ► Components manufactured of the construction when TVO has agreed upon the proposals that have been made or issued contract amendments that provide for the requested modifications ► AREVA has recorded an additional provision of 550 million euro, bringing the estimated result at completion to (2.3) billion euro* ► Claims amounting to 1 billion euro have already been sent to TVO by the AREVA-SIEMENS consortium ► Additional claims are being prepared, and in accordance with the applicable accounting principles, AREVA has not accounted for these positive elements. © AREVA * this amount does not include TVO’s claim because the AREVA-SIEMENS consortium deems that the allegations presented in this claim are without foundation and without value with respect to the contract and to Finnish law AREVA Overview – November 2009 p.30
  • 30. AREVA EPR fleet is being deployed Flamanville (France): Taishan (China): supply of Nuclear Steam supply of 2 nuclear islands Supply System ► 70% of orders placed by AREVA and 30% by our partner within the consortium ► On the AREVA perimeter ► Engineering close to 30% complete 70% of orders placed ► As planned start of engineering Engineering 65% complete in China with our partner CGNPC ► Civil work progress (not AREVA scope) ► Significant civil work progress by the customer ► Preparation of the “first concrete” milestone © EDF © CGNPC / SHEN ZUOBIN AREVA Overview – November 2009 p.31
  • 31. Back-End division An unchallenged leadership Sales – 2008 split Nr 1 in used nuclear fuel management ► Recycling: a full service of fuel recycling, including Mixed Logistics Engeeniring Oxide fuel and Reprocessed Uranium fuel production 14% 6% Cleanup ► Logistics: design and supply of casks for the transportation 3% and storage of radioactive materials; also safe and secure transportation and logistics services Nuclear Site Value Development ► Nuclear site value development: performance-based project Recycling (Decommissioning) management for Dismantling and Decommissioning programs; 63% 14% development of integrated and innovative solutions for both AREVA and external customers ► Cleanup: operation of dismantling and waste processing facilities, specialized nuclear maintenance ► Engineering: engineering services contributing to the design Key financials and construction of installations for global nuclear operators In millions of euros 2007 2008 Change ORDER BOOK 6,202 7,784 +2.7% SALES REVENUES 1,738 1,692 +11.8% OPERATING INCOME 203 261 +28.6% % Sales 11.7% 15.4% +3.7 pts OP. FCF BEFORE TAX 172 422 +€250M AREVA Overview – November 2009 p.32
  • 32. A strong and unique industrial base Reprocessed Uranium Recycling Plant dismantling Fuel Fabrication ►La Hague ►La Hague ►Romans Fuel treatment First generation RepU fuel fabrication plant dismantling ►MELOX ►Tricastin MOX fuel fabrication ►Marcoule RepU Enrichment UP1 Treatment and Conversion plant dismantling ►Cadarache (performed by Front End with recycled MOX plant dismantling uranium supplied by Back End) La Hague plant Melox plant Production capacity: 1 700 tons of Production capacity: 195 tons of used fuel MOX fuel AREVA Overview – November 2009 p.33
  • 33. Worldwide recognition of AREVA’s leadership in Back End Japan USA ►A total of 3 000t of Japanese nuclear fuel ►MOX Fuel Fabrication Facility under has been recycled at La Hague to date construction for DOE ($5Bn) ►MOX fuel fabrication and transportation to ►60% of dry storage market for US utilities Japan started in 2008 ►Significant presence on major DOE sites ►Successful technology provider for the Rokkashomura recycling plant (based on La Hague model) Europe Asia Pacific ►EDF: framework agreement for comprehensive 14% recycling services until 2040 Americas 7% ►Other utilities: over 6,000t of fuel recycled (EON, RWE, Suez, SOGIN, etc.) and 300 casks sold 21% 58% France ►Sellafield site Management & Operations Europe – ►Management of World’s largest civilian D&D program Excl. France % of total 2008 sales AREVA Overview – November 2009 p.34
  • 34. T&D division Long term outlooks positive in spite of crisis Sales – 2008 split Nr 3 in the overall Transmission & Distribution Systems ► Designs and manufactures a complete range of high and medium voltage equipment, systems and services on a global 31% basis: To transmit and distribute electricity from the power plant to the end-user Automation To optimize power grids Products 10% 53% ► Installs complete systems and supplies services for every Services market segment: transmission, distribution and power- 6% intensive industries Key financials In millions of euros 2007 2008 Change ORDER BOOK 4,906 5,715 +16.5% SALES REVENUES 4,327 5,065 +17.0% OPERATING INCOME 397 560 +41.1% % Sales 9.2% 11.1% +1.9 pts OP. FCF BEFORE TAX 233 (20) -€253M AREVA Overview – November 2009 p.35
  • 35. T&D attractive perspectives ► AREVA T&D commands leading positions on key products (like disconnectors, Gas Insulated Switchgears, or Instrument Transformers) and key markets (like in India) ► Despite challenging short-term market conditions, long-term perspectives remain highly attractive Products replacement & networks upgrade in Europe and in the USA Massive investment needs in Asia and India in both transmission & distribution products and systems Rising energy efficiency/ savings requirements worldwide ► The deadline for binding offers was November 9th ► AREVA received today 3 offers from: - Alstom/Schneider - General Electric - Toshiba/INCJ AREVA is now assessing these offers AREVA Overview – November 2009 p.36
  • 36. Contents ►Introduction to AREVA ►Performances and objectives by division ►Delivering profitable growth ►AREVA latest financial results ►Appendices AREVA Overview – November 2009 p.37
  • 37. AREVA benefits from 50-year history of successful nuclear project execution and a resilient business model Installed base business model ensuring strong cash-flow generation Installed base revenue vs. new builds ► AREVA has never stopped (millions of €) building reactors 14 000 New build ► 80% of the nuclear business 12 000 Installed based business is recurrent 10 000 ► Strong visibility (backlog) 8 000 and recurring cashflow 6 000 ► Capex supported by the sale 4 000 80% of the nuclear business of the new facilities’ future production (example: 90% 2 000 of GBII production through 0 2020 is already in backlog) 2004 2005 2006 2007 2008 2009 2010 2011 2012 Source: AREVA strategic plan AREVA Overview – November 2009 p.38
  • 38. Sustained growth Backlog (€Bn)* Revenue (€MM)* X 2.5 48.2 +34% 13.2 11.9 39.8 10.9 9.8 10.1 25.6 19.6 20.6 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 * excluding FCI - Connector technology division AREVA Overview – November 2009 p.39
  • 39. AREVA’s operating income before OL3 provisions has doubled in 4 years Operating income before OL3 provisions (€M) +82% 1,166 1,011 1,043 OL3 provisions Operating income 292 640 749 607 604 56 751 640 551 407 417 2004 2005 2006 2007 2008 Margin before OL3 5.8% 6.0% 9.3% 8.8% 8.9% provisions (% of sales) AREVA Overview – November 2009 p.40
  • 40. AREVA is taking steps to improve its cash flow generation Cost optimization program Working capital optimization ► Purchasing performance ► A challenging transitory situation ~ €500M Enrichment: buildup in SWU inventory Development of supplier selection panels to prepare the transition GBI - GBII Globalization of negotiations AREVA T&D: temporary impact of Scope: recurring purchases, gradual shift of business to the East capital spending, project procurement ► Control of overheads ► Favorable structural WCR in nuclear ~ €100M business Freeze on hiring for support functions EPR projects structured to have Reduction of travel expenses positive cash curves and subcontractor costs Negative normative WCR in Front-End Greater selectivity in marketing expenses & Back-End €600M €300M in 2009 in 2009 AREVA Overview – November 2009 p.41
  • 41. Strong cashflow generation to finance the group’s investment effort… Operating cash flow vs. net investment evolution 2004-2008 (€M) 2,889 4,757 4,818 1,594 1,454 1,252 1,178 1,248 890 904 1,295 533 426 395 2004 2005 2006 2007 2008 Total 2004-2008 excl. UraMin Operating cash flow before investments Net Investments UraMin acquisition ($2,5Bn) AREVA Overview – November 2009 p.42
  • 42. AREVA’s credit metrics are set to improve in the near future Net Debt structure at June 30, 2009 Net debt (M€) 31.12.08 30.06.09 Borrowings by maturity 30.06.2009 Main Borrowings -3,451 -3,907 664 UraMin Interest bearing advances -727 -743 acquisition Short-term debt debt Short term facilities, overdraft, rolling over -413 -533 miscellaneous 1 950 Cash and cash equivalent, other 1 344 Syndicate 79 1,163 834 loan Canada financial assets BEI 213 400 loan Put option of minority -2,068 -2,065 2009 2010 2011 2012 and later shareholders 1 Net Debt -5,496 -6,414 Borrowings CP program Interest bearing advances Net Debt €6,414M Minimal net debt level Net Debt/Capital ~ 49% in 2010 At 30/06/2009 1. commercial paper program AREVA Overview – November 2009 p.43
  • 43. Optimized liquidity offers flexibility in the timing of the investment plan ► AREVA has a solid liquidity supported by cash, available backstop commitments from banks, and bonds Cash: €600 million at June 30, 2009 €3.0 billion bond issue maturing in 2016, 2019 and 2024 Back up line long term: €2.0 billion syndicated facility maturing in 2014 with no financial covenant Back up line short term: €1.4 billion bilateral committed short term lines (364 days) ► Together with the capital increase and the assets disposal programs, this strong liquidity offers comfort to execute AREVA’s investment plan ► The positive free cash flow generation should be reached by 2012 AREVA Overview – November 2009 p.44
  • 44. AREVA creates value for its shareholders AREVA net income 2004-2008 (€M) 743 649 589 451 451 2004 20051 2006 2007 2008 Margin 4.6% 4.5% 6.0% 6.2% 4.5% (% of sales) Pay-out 80.0% 33.3% 46.0% 32.3% 42.0% AREVA has paid its shareholders more than €2.6Bn since 2001 From 2001 to 2008, the invested rate of return for the investment certificate comes to 16.7% 1. excluding FCI - Pôle Connectique disposal AREVA Overview – November 2009 p.45
  • 45. Contents ►Introduction to AREVA ►Performances and objectives by division ►Delivering profitable growth ►AREVA latest financial results ►Appendices AREVA Overview – November 2009 p.46
  • 46. H1 09 vs. H1 08: different basis of comparison for Nuclear operations H1 08 H1 09 Exceptional export Front End sales (Asia) Reactors Very favorable Later start of unit and Services seasonal effect outage campaigns Strong concentration Unfavorable production Back End of annual production in H1 distribution (H2 catch-up) H1 2008: more than 80% of operating income from nuclear operations* for 2008 * Income from nuclear operations excluding OL3 AREVA Overview – November 2009 p.47
  • 47. Key data as of June 30, 2009 In millions of euros H1 2008 H1 2009 ∆ 09/08 Backlog 38,123 48,876 + 28.2% Revenue 6,168 6,522 + 5.7% Operating income before OL3 860 566 - 34.2% % of revenue 13.9% 8.7% - 5.2 pts Additional provision for OL3 (321) (550) Operating income 539 16 (523) % of revenue 8.7% 0.2% - 8.5 pts Net income attributable to equity holders of the 760 161 (599) parent €21.45 €4.55 €(16.9) Earnings per share Free operating cash flow* (521) (1,115) (594) 12/31/08 6/30/09 Net debt (**) 5,499 6,414 + 16.6% * EBITDA +/- change in Operating WCR – Capex net of disposals ** Siemens’ put option at its 2007 value, i.e. €2.049B AREVA Overview – November 2009 p.48
  • 48. Backlog growth Backlog(*) Nuclear: + 27.4% to €41.8B (€B) ► Contracts signed in first 9M 2009: Several significant contracts with US, Japanese and European utilities in the Front End + 22% Replacement of 12 steam generators for TVA (USA), KHNP 47.5 (South Korea) and EDF (France) Multiyear umbrella agreement with EDF for services 38.8 5.7 18 reactor coolant pumps for EPCD in China MOX fuel assemblies for Japan 6.0 Fuel contract in Spain with Central Nuclear de Trillo T&D: - 5.6% to €5.7B 41.8 32.8 ► €3.9B in orders booked over first 9M 2009: Supply of high voltage direct current transmission systems in China (HVDC) Supply of HVDC conversion substations in South Korea Supply of 66 kV substations and transformers to Bahrain (EWA) 30/09/2008 30/09/2009 Modernization of the Indonesian grid – “10 GW Program” T&D Nuclear Supply of 4 extra-high voltage stations to PGCIL in India * The backlog value is based on firm orders and excludes unconfirmed options AREVA Overview – November 2009 p.49
  • 49. 5.7% revenue growth (2.8% like-for-like) In millions of euros Exceptional sales of H1 2008 not repeated, + 330 but positive price effects (Front End) + 12.5% LFL1 6,522 Unfavorable production lag (Back End) and seasonal effect (Services) Good project performance in T&D division + 41 (87) + 68 - 1.9% LFL1 - 10.1% LFL1 + 0.6% LFL1 6,168 R&S Back End T&D Front End ∆ H1 09 / H1 08: + €354M + €176M LFL1 H1 2008 H1 2009 1. Like-for-like: at constant consolidation scope, accounting method and exchange rate AREVA Overview – November 2009 p.50
  • 50. Operating income In millions of euros With more than 80% of FY 2008 operating income from nuclear*, H1 2008 was atypical Additional provision for OL3 Unfavorable seasonal effect in H1 2009 539 (R&S and Back End) (53) Agreement with USEC, ending the trade case (350) (Front End) Preparing for the future: R&D, recruitment, Front End organizational strengthening for major projects (EREF, mining projects, etc.) Impact of global crisis on T&D division and renewables (25) (67) Corp. R&S Back End (29) 16 T&D H1 2008 H1 2009 * Income from nuclear operations excluding OL3 AREVA Overview – November 2009 p.51
  • 51. Free operating cash flow before tax In millions of euros 459 (173) (783) (497) + 333 (1,115) (950) Free Capital gains / Change Operating EBITDA Gross Capex Divestitures operating losses in WCR cash flow cash flow ► EBITDA: like operating income, EBITDA is penalized by an unfavorable seasonal effect ► WCR: constitution of SWU inventories tied to the transition from GBI to GBII and use of customer advances in nuclear operations; extension of payment terms and unfavorable payment schedules in T&D division ► Capex: program deployment in Mining, Enrichment and Equipment AREVA Overview – November 2009 p.52
  • 52. Net debt In millions of euros 12/31/2008 31.12.2008 6/30/2009 30.06.2009 Equity at 6/30/09: Rappel : €6.693B Fonds propres au 30.06.09 6 693M (1,115) (313) + 465 (33) 81 (5,499)* Free operating Cash from Dividends Disposals of Other items (6,414)* cash flow end-of-cycle financial assets before tax operations * Siemens’ put included at its 2007 value, i.e. €2.049B AREVA Overview – November 2009 p.53
  • 53. Front End division In millions of euros 6/30/08 6/30/09 ∆ 09/08 Backlog 19,108 27,055 41.6% Contribution to revenue 1,488 1,556 + 4.6% Contribution to operating income 400 348 - 13.1% % of revenue 26.8% 22.4% - 4.4 pts Free operating cash flow before tax* (46) (179) (133) * EBITDA +/- gain on disposals of assets and dilution +/- change in operating WCR – Capex net of disposals ► Several significant contracts with Japanese, South Korean, US and European utilities in H1 2009 ► Revenue: exceptional sales of H1 2008 not repeated ► Operating income: Impact of agreement with USEC ending the trade case Costs related to constitution of transition inventory Overhead expenses generated by major construction projects (EREF, mining projects) ► Impact of equity share taken by Kansai/Sojitz and KHNP in GBII same as in H1 08 (GDF-Suez) ► Free operating cash flow: increase in inventory (SWUs) and deployment of Capex programs in Mining and Enrichment AREVA Overview – November 2009 p.54
  • 54. Reactors and Services division In millions of euros 6/30/08 6/30/09 ∆ 09/08 Backlog 7,633 8,527 + 11.7% Contribution to revenue 1,466 1,506 + 2.8% Contribution to operating income before OL3 63 (58) (121) provision + 4.3% - 3.9% - 8.2 pts % of revenue Additional provision for OL3 (321) (550) Contribution to operating income (258) (608) (350) % of revenue - 17.6% - 40.3% - 22.7 pts Free operating cash flow before tax (407) (595) (188) * EBITDA +/- gain on asset disposals and dilution +/- change in operating WCR – Capex net of disposals ► Orders booked in H1 2009: ► Operating income before OL3 provision: replacement of 12 steam generators unfavorable seasonal impact in Services, (USA, South Korea, France), marketing and R&D development, restructuring multiyear services contract (EDF), of wind turbine projects supply of 18 reactor coolant pumps ► Additional provision of €550M for OL3, for an (China) estimated result at completion of €(2.3)B ► Revenue: solid installed base ► Free operating cash flow: expenses linked business and unfavorable seasonal to OL3 project in Finland, no major payment impact in Services milestones in H1 2009 AREVA Overview – November 2009 p.55
  • 55. Back End division In millions of euros 6/30/08 6/30/09 ∆ 09/08 Backlog 5,591 7,327 31.0% Contribution to revenue 930 843 - 9.3% Contribution to operating income 175 150 - 14.2% % of revenue 18.8% 17.8% - 1.0 pt Free operating cash flow before tax* 73 60 (13) * EBITDA +/- gain on asset disposals and dilution +/- change in operating WCR – Capex net of disposals ► Orders booked in H1 2009: MOX assemblies for Electric Power Development (Japan) and ENBW (Germany) ► Revenue and operating income: later start of production schedule in 2009 than in 2008, when the first half was particularly strong ► Free operating cash flow: EBITDA slightly down (less production in H1 2009) and increase in Capex (development of cold crucible technology) AREVA Overview – November 2009 p.56
  • 56. T&D division In millions of euros 6/30/08 6/30/09 ∆ 09/08 Backlog 5,791 5,967 3.0% Contribution to revenue 2,284 2,614 14.5% Contribution to operating income 253 186 - 26.4% % of revenue 11.1% 7.1% - 4.0 pts Free operating cash flow before tax* (45) (310) (265) * EBITDA +/- gains on asset disposals and dilution +/- change in operating WCR – Capex net of disposals ► €2.9B in orders booked in H1 2009, a drop ► Operating income marked by strong tensions of 9.7% from H1 2008 at constant scope observed on the T&D market in S1 09 and start-up and exchange rates costs for new capacity Steady business in Asia and South America: ► Free operating cash flow: HVDC contracts in China and South Korea greater payment delays and unfavorable payment and transformers for Bahrain schedules in H1 2009 ► Revenue up by 14.5%: good backlog Capex for capacity increases and acquisitions execution by the Products and Systems BUs in Services in the United States and the United Kingdom AREVA Overview – November 2009 p.57
  • 57. Third quarter 2009 revenue climbs Sales by division 7.8% to €3.164 Bn In millions of euros Q3 2008 Q3 2009 ∆ 09/08 ∆ 09/08 LFL* Front-End 714 812 + 13.7% + 12.0% Reactors & Services 729 738 + 1.3% + 0.4% Back-End 322 345 + 7.1% + 6.5% Nuclear Activities 1,765 1,895 + 7.4% + 6.2% % of total revenue 60.1% 59.9% - 0.2 pts - 0.3 pts Transmission & Distribution 1,169 1,268 + 8.4% + 7.5% % of total revenue 39.8% 40.1% + 0.3 pts + 0.3 pts Total 2,935 3,164 + 7.8% + 6.7% France 706 923 + 30.8% - International 2,229 2,241 + 0.5% - ► Strong increase in Front-End sales (+12% LFL*) Mines: sales up with the average uranium sales price improving over the period on a positive contract mix Enrichment: revenue growth fueled by rising volumes and positive export prices ► Reactors & Services sales flat (+0.4% LFL*), with a globally stable contribution of major plant projects ► Back-End sales up 6.5% LFL* with Recycling sales rising over the quarter after a drop in the first half of the year ► T&D sales growth (+7.5% LFL*) driven by sales in Near East, the Middle East and North America * LFL: at constant exchange rates and consolidation scope AREVA Overview – November 2009 p.58
  • 58. First 9 month revenue Sales by division In millions of euros 9M 2008 9M 2009 ∆ 09/08 ∆ 09/08 LFL* Front-End 2,202 2,368 + 7.6% + 4.2% Reactors & Services 2,194 2,245 + 2.3% - 1.1% Back-End 1,252 1,188 - 5.1% - 5.9% Nuclear Activities 5,648 5,801 + 2.7% -0.1% % of total revenue 62.0% 59.9% - 2.1 pts - 2.4 pts Transmission & Distribution 3,454 3,883 + 12.4% + 10.8% % of total revenue 37.9% 40.1% + 2.2 pts + 2.5 pts Total 9,103 9,686 + 6.4% + 4.0% France 2,644 2,687 + 1.6% - International 6,459 6,999 + 8.4% - * LFL: at constant exchange rates and consolidation scope AREVA Overview – November 2009 p.59