AREVA Business & Strategy overview. September 2013

Transcription

1 AREVA Business & Strategy overview September 2013

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 shareholders 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 explained or identified in the public documents filed by AREVA with the AMF, including those listed in the Risk Factors section of the 2012 Reference Document registered with the AMF on 03/28/2013 (which may be read online on AREVA s website AREVA makes no commitment to update the forward-looking statements and information, except as required by applicable laws and regulations. AREVA Overview September 2013 p.2

3 Contents Introduction to AREVA Developments at AREVA Action 2016 strategic plan Nuclear: a critical path to the solution Performances and objectives by BG AREVA financials Appendices AREVA Overview September 2013 p.3

4 Energy market fundamentals support development of nuclear and renewables Macroeconomics Energy demand: x2 by 2050 Geopolitics Energy independence and security of supply imperative WEO New Policies Scenario Resources Increasing difficulties in extracting resources leading to higher prices Demand in nuclear energy* +1.9% / year Environment GHG emissions reduction goal of 50% by 2050 Demand in renewable energies* +2.5%** / year Economics Need of mastered, stable and predictable energy costs * Billions of toe ** Including hydraulic energy AREVA Overview September 2013 p.4 Introduction to AREVA

5 change in the energy mix forecast Demand for primary energy in Gtoe per year Compound annual growth rate Coal +0.8% Oil Natural gas Nuclear +0.5% +1.6% +1.9% Renewables +2.4% Gtoe: Gigaton of oil equivalent Source: AIE World Energy Outlook 2012 AREVA Overview September 2013 p.5 Introduction to AREVA

6 Advantages of nuclear power and renewable energies in the electricity mix Resources Reserves Environment Greenhouse gas emissions (g CO 2 / kwh) Economics Electricity production costs ( /MWh) Flexibility Availability Nuclear 100 years Very low ~ 60 Renewables unlimited Very low Wide cost range Expected to decrease intermittency Coal 130 years 800 > 70 Natural Gas 60 years Source : AREVA analysis AREVA Overview - September 2013 p.6 Introduction to AREVA

7 Forecasts converge toward a significant increase in installed nuclear capacity by 2030 Forecasts by international organizations World installed nuclear capacity in 2030 (Net output, GWe) WNA high scenario (2011) 790 IAEA high scenario (2011) 745 WEO 450 ppm scenario (2012) 699 WNA reference scenario (2011) 614 AREVA (2011) 583 WEO - Reference scenario (2012) 551 IAEA low scenario (2011) 500 Installed nuclear capacity, 2011: 368 GW 1. AREVA estimate based on Kepco s announcement of its commercial target (80 reactors by 2030, i.e. 20% of the market). Source: AREVA Strategic Action Plan, 2011; annual reports AREVA Overview - September 2013 p.7 Introduction to AREVA

8 Nuclear scenario: differed but confirmed growth AREVA 2011 scenario (GWe) Reassessed at end-june 2011 Change in global installed base (GWe) o.w 47GWe in Japan 20GWe in Germany AREVA s s business model allows it to capture market opportunities in all segments AREVA Overview - September 2013 p.8 Introduction to AREVA

9 Major energy policy developments announced since Fukushima Electricity Market Reform (EMR) to support the production of low-carbon power Certification of the EPR reactor: only Gen III+ reactor certified in the UK Construction permit issued to EDF Energy for 2 EPR TM reactors at the Hinkley Point C site Country's nuclear policy confirmed by the French Nuclear Policy Council ASN report on Supplementary Safety Assessments (SSA) and nuclear operator proposals submitted to the ASN after the SSA Cour des Comptes (audit commission) report on costs in the nuclear industry Result of call for tenders in offshore wind Energy transition debate ongoing Nuclear power plant lifecycle extension projects Green light for the start of new reactor projects, with priority given to Gen III Connection to the grid of new Hongyanhe 1 reactor Election of the liberal party, supportive of nuclear energy New nuclear safety authority implemented Application of 4 Japanese utilities to restart 12 reactors 2012 WEO report: strong and stable outlook for the group's business segments AREVA Overview - September 2013 p.9 Introduction to AREVA

10 Update on France: nuclear remains strategic New French government s objective is to reduce France s dependence on nuclear power to 50% by 2025 from the current 75% S&P : In our view, this objective will be tough to implement and subject to political shifts Decisions taken regarding the French nuclear fleet: The oldest French Nuclear Power Plant, Fessenheim, is the only one to be shut off during the 5-years mandate of the government Flamanville 3 will be completed Strong support from the French government to nuclear industry Nuclear is an industry for the future A. Montebourg, French Economic Regeneration Minister Nuclear is an industry that has a future [ ] and on which we will continue to rely sustainably D. Batho, former Minister of Ecology National Energy Debate: draft law proposal during fall 2013 AREVA Overview - September 2013 p.10 Introduction to AREVA

11 Offshore wind market (Europe) Renewable Energies market: accelerated growth expected Estimated average annual market size in volume Sources: IEA World Energy Outlook for CSP and Bioenergy, AREVA forecasts for Offshore Wind (WEO does not distinguish onshore/offshore) Solar CSP market (World) Bioenergy market (World) (MW) (MW) (MW) 4,700 Other Asia / Oceania India China Europe North America Middle-East and Africa 5,160 7,317 Other Asia / Oceania Middle-East / Africa India Latin America Europe Other Europe North America 2,340 France Germany UK 1,010 1,561 China AREVA s s positioning on renewable market: selected growing activities AREVA Overview September 2013 p.11 Introduction to AREVA

12 AREVA is a global leader in solutions for power generation with less carbon > 80% of group revenues come from recurring activities AREVA Overview September 2013 p.12 Introduction to AREVA

13 AREVA in figures 45.4bn backlog at 12/31/2012 Geographic distribution of 2012 revenue 9.342bn in revenue in ,513 employees Europe 61% 61% Incl. France 36% Incl. O/w Germany France 35% 9% O/w Germany 11% in 25 countries 900 experts 8,000 patents North & South America 19% 17% 2% Africa & Middle East 18% 20% Incl. O/w Japan 5% 8% Asia Pacific 5% of sales devoted to R&D AREVA Overview September 2013 p.13 Introduction to AREVA

14 AREVA benefits from well established leading positions across the nuclear power chain Market share in key markets by BG Reactors & Mining Front End Back End Services Company [Mkt. Shr] Company [Prod. Capacity / Mkt. Shr] Company Company [Mkt. Shr] Conversion Enrichment Fuel Treatment Recycling [16%]¹ [16%] [20,000 Mt] [26MSWUs ] [37%] [100%] [14%] [14,000 Mt] [16MSWUs ] [32%] [12,500 Mt] [4MSWUs] [3MSWUs] 2 [13%] AREVA is one of the leaders on each market segment AREVA provides products and services to 360 reactors worldwide out of Production available : share of uranium production marketed / distributed (AREVA estimates from companies reports and WNA) 2. Enrichment capacity is low for AREVA in 2012 because of GBI -> GBII transition 3. As at December 31, 2012 Figures as presented in AREVA s 2012 Reference Document AREVA Overview September 2013 p.14

15 AREVA relies on a unique integrated business model Mining / Natural Uranium Front-End Conversion/ Chemistry Enrichment Natural Uranium fuel Reactors and Services Presence across the full nuclear value chain Unrivalled skill base know-how and ability to offer a wide range of services to its customers (one stop shopping) Back-End Treatment Recycling Presence Recent move Current attempt from competitors to replicate AREVA s business model AREVA s Business Model allows it to capture market opportunities in all segments and to benefit from a diversified operating profile AREVA Overview September 2013 p.15 Introduction to AREVA

16 relying on solid foundations: recurring operations Recurring operations: 85% of group s revenue Presence of AREVA in nuclear reactors lifecycle (% of AREVA 2012 revenue) Renewable energies Nuclear new builds Recurring operations Construction Reactors and Services Operations Reactor life extension Decommissioning 8% Mining 15% Back End 3% Front End 22% 5 4 Reactors and Services 29% 3 2 Back End 14% AREVA Overview September 2013 p.16 Introduction to AREVA

17 Backlog at June 30, 2013 Backlog: 5 years of revenue in backlog In value Number of years of 2012 sales revenue in backlog Coverage of 2013 sales revenue forecast (rounded) Mining 11.4bn 8 c. 90% Front End 17.8bn 9 c. 80% Reactors & Services 7.8bn 2 c. 75% Back End 5.7bn 3 c. 80% Renewable Energies 0.7bn 1 c. 75% AREVA Overview September 2013 p.17 Introduction to AREVA

18 95% of all nuclear utilities are AREVA customers AREVA references: 98 reactors built 4 reactors under construction Europe, CIS and Africa 188 reactors in operation ~140 reactors served by AREVA 114 for services 135 for fuel North and South Americas 130 reactors in operation ~130 reactors served by AREVA 126 for services 100 for fuel Asia 119 reactors in operation ~90 reactors served by AREVA 17 for services 90 for fuel AREVA provides products and services to 360 reactors worldwide * * As at December 31, 2012 AREVA Overview September 2013 p.18 Introduction to AREVA

19 An engineering force without equivalent Map of engineering and project resources Germany Finland France Slovakia 6,500 professionals 740 experts 2,500+ projects in hand United States China Partnerships with the world s leading research laboratories AREVA Overview September 2013 p.19 Introduction to AREVA

20 Contents Introduction to AREVA Developments at AREVA Action 2016 strategic plan Nuclear: a critical path to the solution Performances and objectives by BG AREVA financials Appendices AREVA Overview September 2013 p.20

21 Safety: the linchpin of AREVA's development Safety of our customers Safety of our operations Safety of our products Providing support to utilities: demonstrating and strengthening the safety of their facilities Maintaining the highest level of safety throughout the lifecycle of its nuclear facilities A portofolio of Gen III+ reactors with the highest standards of safety AREVA Overview September 2013 p.21 Developments at AREVA

22 Backlog: nearly 5 years of revenue (in bn) Progress towards the financial targets of Action Very strong sales revenue growth (in m) %* LFL Marked increase in restated EBITDA** (in m) 725 including 300m from OL3 insurance indemnity Dec June 2012 Dec June m 473 H H Very significant improvement in restated free OCF** (in m) H H H H m * +10.0% in reported data ** Restated for asset disposals in 2012 AREVA Overview September 2013 p.22 Developments at AREVA

23 A half-year period marked by development in the nuclear market Developments concerning the installed base worldwide February: connection to the grid of new Hongyanhe 1 reactor in China March: construction permit issued to EDF Energy for 2 EPR TM reactors at the Hinkley Point C site in the UK May: authorization by the Belgian regulator for the restart of the Doel 3 and Tihange 2 reactors in Belgium February/June: operations suspended at 4 reactors in the United States July: application of 4 Japanese utilities to restart 12 reactors Developments concerning the fuel cycle market May: announcement by USEC of the shut down of the Paducah gaseous diffusion enrichment plant in the United States June: Franco-Japanese statement on cooperation to prepare for the restart of the Rokkasho-Mura recycling plant in Japan June: announcement by E.ON, RWE and the British and Dutch governments of their intention of selling their shares of Urenco AREVA Overview September 2013 p.23 Developments at AREVA

24 Safety Security Transparency Commercial Selectivity priority given Debt in capital to value management spending creation Improving our performance Safety Alliance: a continuing success Commercial achievements in H Japan: Hitachi-GE Nuclear Energy, Ltd. and AREVA sign an agreement to improve nuclear plant safety by suppying filtered containment venting systems (FCVS) United States: AREVA and PEICO form an alliance to operate regional emergency response centers China: AREVA signs a contract with China Nuclear Power Engineering Co., Ltd and Jiangsu Nuclear Power Corporation (JNPC) to supply backup diesel generators for units 3 and 4 of the Tianwan power plant Czech Republic: AREVA is awarded a contract to supply hydrogen recombiners to the four reactors of the Dukovany nuclear power plant More than 100 projects in 19 countries for around 50 power companies, representing 290 million in orders since the start of the program (vs. more than 170m at year-end end 2012) AREVA Overview September 2013 p.24

25 Safety Security Transparency Commercial Selectivity priority given Debt in capital to value management spending creation Improving our performance Forward Alliance: the launch of a new program Helping utilities extend the operation of their reactors Providing personalized assistance to our customers to ensure the long-term operating safety of their nuclear fleets in accordance with international regulations Three priorities: Support provided during the license renewal process recommended by the IAEA Assistance for safety reviews of major components Products and solutions meeting project requirements Offering integrated solutions based on AREVA's "aging management" activities Forward Alliance catalog: more than 25 products, services and solutions for extended operations AREVA Overview September 2013 p.25

26 Contents Introduction to AREVA Developments at AREVA Action 2016 strategic plan follow-up Nuclear: a critical path to the solution Performances and objectives by BG AREVA latest financial results Appendices AREVA Overview September 2013 p.26

27 Safety Security Transparency Commercial priority given to value creation Selectivity in capital spending Debt management Installed Base: profitability doubled by 2016 New Builds: becoming the technology leader 7.7bn over the period i.e. -34% vs Several projects suspended Disposal plan > 1.2bn over the period Fully self-financed Capex on a cumulative basis Improving our performance - 1bn in annual operating costs and - 500m change in WCR by 2015 Concrete progress along all strategic lines AREVA Overview September 2013 p.27 «Action 2016» strategic plan

28 Safety Security Transparency Commercial priority given to value creation Selective capital expenditure Debt management Improving our performance AREVA Overview September 2013 p.28 «Action 2016» strategic plan

29 Safety Security Transparency Commercial Selectivity priority given Debt in capital to value management spending creation Improving our performance Good visibility for the Installed Base business Main contracts signed in the 1 st half of 2013: Fuel Cycle Installed Base services AREVA Overview September 2013 p.29

30 Safety Security Transparency Commercial priority given to value creation Selectivity in capital spending Debt management Improving our performance Major advances in China April 25, 2013: signature of strategic agreements with Chinese partners Back End: signature of a letter of intent between AREVA and CNNC for the supply of a used fuel treatment-recycling facility R&S: industrial and operational cooperation agreement between CGNPC, EDF and AREVA concerning Taishan in particular AREVA Overview September 2013 p.30

31 Safety Security Transparency Commercial priority given to value creation Selectivity in capital spending Debt management Improving our performance Major advances in Japan June 7, 2013: signature of strategic agreements with Japanese partners JNFL: joint statement of cooperation to prepare for the commercial restart of the Rokkasho-Mura used fuel recycling plant in Japan ATOX: cooperation agreement for the creation of a joint venture dedicated to the joint development of innovative solutions focused initially on rehabilitation of the Fukushima site AREVA Overview September 2013 p.31

32 Safety Security Transparency Commercial Selectivity priority given Debt in capital to value management spending creation Improving our performance Gen III+ reactors: unequaled cumulative experience Major construction progress during the half-year period... 85% Olkiluoto 3 complete at June 30, 2013 (AREVA scope of work) 51% Flamanville 3 Taishan 1&2 complete at June 30, 2013 (AREVA scope of work) 86% complete at June 30, 2013 (AREVA scope of work design and engineering) - Achievement of more than 50% of hydraulic testing of piping - Installation of control rod mechanisms - Continuation of transfers from the construction phase to the testing phase July 2013: dome installation Copyright EDF - Unit 1: heavy components installed - Unit 2: delivery of heavy components under way Copyright TNPJVC and in the new builds market May: start of exclusive negotiations with Turkey for the construction of 4 ATMEA1 reactors * Percentage of completion including last amendment, although not yet in backlog AREVA Overview September 2013 p.32

33 Safety Security Transparency Commercial priority given to value creation Selective capital expenditure Debt management Improving our performance AREVA Overview September 2013 p.33 «Action 2016» strategic plan

34 Safety Security Transparency Commercial priority given to value creation Selectivity in capital spending Debt management Improving our performance Selectivity in capital spending Adapting our investment program to new market conditions ~ 1.6bn Acquisition of AREVA NP shares -34% ~ 10.0bn Gross operating Capex ~ 2.0bn ~ 5.7bn ~ 7.7bn Cumulative Safety Maintenance Priority strategic investments Cumulative Cigar Lake Imouraren Comurhex II Georges Besse II ATMEA Renewables AREVA Overview September 2013 p.34 «Action 2016» strategic plan

35 Safety Security Transparency Commercial Selectivity priority given Debt in capital to value management spending creation Improving our performance Gross operating Capex ( bn( bn) Average per year Capital spending trend c 2.0bn c. 1.9bn -5% Capex fully funded from operations: c. 1.3bn -32% overall on the Action 2016 period ( ) each year as from 2013 onwards * Safety, security, maintenance Other Georges Besse II Significant decrease of the annual value of capital spending in 2014 with the completion of the Georges Besse II plant * excluding the acquisition of AREVA NP shares AREVA Overview September 2013 p.35 «Action 2016» strategic plan

36 Safety Security Transparency Commercial Selectivity priority given Debt in capital to value management spending creation Improving our performance Group s strategic Capex Achievements Georges Besse II 3.7mSWU at end June 2013 (>1/2 of total capacity) Comurhex II 60% of the renovation phase completed Cigar Lake Production expected end Q Operating license obtained on June 17, 2013 Imouraren Launch of mining operations and overburden removal in the first pit First ore to be mined in 2015 Nearly 60% of total Capex focused on 4 sites AREVA Overview September 2013 p.36

37 Safety Security Transparency Commercial Selectivity priority given Debt in capital to value management spending creation Improving our performance Good progress on our key capital projects Mining Front End Cigar Lake Imouraren Georges Besse II Comurhex II Operating license received June 17, 2013 Start of production scheduled for end of 2013 Start of mining operations and initial stripping of the first pit First ore extraction scheduled for 2015 North Unit startup on March 29, 2013 More than 50% of nominal capacity already in production At Malvési, start of transfer to the operator of the CXII operating system on July 20, 2013 AREVA Overview September 2013 p.37

38 Safety Security Transparency Commercial priority given to value creation Selective capital expenditure Debt management Improving our performance AREVA Overview September 2013 p.38 «Action 2016» strategic plan

39 Safety Security Transparency Commercial priority given to value creation Selectivity in capital spending Debt management Improving our performance Financial structure objectives : Fully self-finance cumulative Capex* : Limited use of external financing Maintain an appropriate level of shortterm liquidity Maintain a solid financial structure *vs 33% over period AREVA Overview September 2013 p.39 «Action 2016» strategic plan

40 Asset disposal program ahead of schedule December 14, 2011: 01dB-Metravib > 1.2bn January 30, 2012: Sofradir May 16, 2012: ERAMET June 1, 2012: AREVA Lesedi June 11, 2012: Millennium August 28, 2012: La Mancha August 2013: TechnoPlus Industries June 2013: decision by Astorg Partners not to finalize the acquisition of Canberra, citing a lack of adequate financing. For the near future, Canberra remains fully integrated in the AREVA group objective for disposals has been exceeded AREVA Overview September 2013 p.40

41 Further strengthening of financial structure 1,400 1,200 1, ,400 1,200 1, Schedule of main financial obligations ( m at September 30, 2013) Bonds EIB* Unused short-term financing facilities ( m at September 30, 2013) Bilateral lines of credit Syndicated lines of credit Increase in shareholders equity through December m capital increase Strengthening of liquidity and lengthening of debt maturity profile March 8, 2012: 400m bond issue (maturity: October 5, 2017) March 21, 2012: 200m private placement maturing in 10 years August 2013: completion of a 500-million bond issue (7-year maturity) September 2013: completion of a private placement of a 5-year, JPY 8-billion bond issue (~ 60M) Syndicated facility ( 1,250m) extended to 2018 No major debt refinancing required before 2016 No debt subject to financial covenant Average debt maturity > 6 years Opportunistic approach to debt management Net cash available ** at June 30, bn * BEI/EIB: European Investment Bank ** Cash, cash equivalents and other current financial assets minus current borrowings AREVA Overview September 2013 p.41

42 Safety Security Transparency Commercial Selectivity priority given Debt in capital to value management spending creation Improving our performance S&P assessments and key messages On September 24, 2013, S&P reaffirmed AREVA s rating at BBB- / A-3 with stable outlook Management s efforts to stem debt increases through disposals, capital expenditure control, and other measures. Tight control of capital expenditure, and the company s commitment to reaching and sustaining positive free operating cash flows (FOCF) from 2015 The stable outlook reflects our forecast that AREVA will generate at least 1.1 billion EBITDA, in line with management's guidance, and limit debt increases. Improving trends for EBITDA and FOCF in 2014 AREVA s sources of liquidity will cover its liquidity needs for the next 12 months by more than 1.5x. Three-notch uplift for likely extraordinary state support This reflects our opinion that there is a "high" likelihood that the French government would provide timely and sufficient extraordinary support to AREVA in the event of financial distress AREVA Overview September 2013 p.42 «Action 2016» strategic plan

43 Rating outlook Extracts from S&P s latest report on AREVA We could raise the rating, if AREVA s profitability improved sustainably, such that the EBITDA margin surpassed 13% and the return on capital was at least a mid-single-digit figure An upgrade would also hinge on AREVA achieving and sustaining positive free cash flow and improving its adjusted FFO-to-debt ratio to 15%-20% We might lower the rating, if AREVA s EBITDA did not surpass 1.1 billion in 2013 or, in our view, would not increase sustainably in 2014 Ratings downside could also materialize if debt increases in the second half of 2013 If we believed the likelihood of state support for AREVA had reduced, although currently not envisaged, we would also lower our long-term rating on AREVA AREVA Overview September 2013 p.43

44 Safety Security Transparency Commercial priority given to value creation Selective capital expenditure Debt management Improving our performance AREVA Overview September 2013 p.44 «Action 2016» strategic plan

45 Safety Security Transparency Commercial Selectivity priority given Debt in capital to value management spending creation Improving our performance The 5 pillars for performance improvement Improving our performance Safety Security Operations & Customers Economic competitiveness Technology & Innovation People Nuclear & occupational safety are our absolute priorities Doing it right the first time and on schedule Generating cash to ensure our future Using advanced technologies to create value for our customers Skilled teams dedicated to success AREVA Overview September 2013 p.45 «Action 2016» strategic plan

46 1 Nuclear and occupational safety Aiming for excellence in nuclear and occupational safety at our sites Nuclear safety 1 st Half INES level 2 incidents in H (0 in H1 2012) 9 INES level 1 incidents in H (6 in H1 2012) 73 INES level 0 incidents in H (88 in H1 2012) Occupational safety Number of lost time injuries (AREVA scope) H June 2013: "Safety Month" in more than 120 AREVA sites worldwide AREVA Overview September 2013 p.46

47 Safety Security Transparency Commercial Selectivity priority given Debt in capital to value management spending creation Improving our performance Examples of performance in industrial safety Tangible examples of excellence Lynchburg, Dessel: more than 5 years without a lost time injury Lingen, Karlstein, Bioenergies in Brazil: more than 3 years without a lost time injury Duisburg, Mécachimie: more than 2 years without a lost time injury Jeumont, Mécagest and Creusot Mécanique: no lost time injury in 2012 AREVA Overview September 2013 p.47 «Action 2016» strategic plan

48 2 Operations & Customers Meeting our customers' requirements (1/2) Mining Front End R&S Production: 4,490 MTU produced in H vs. 4,563 MTU in H1 2012* Canada: authorization to process ore from the Cigar Lake deposit and increase in production capacity of the McClean Lake mill from 3,600 MTU per year to 5,900 MTU per year Production: 20 cascades installed at the Georges Besse II plant in H1 2013, raising installed capacity to 57% Belgium: contribution of AREVA's R&S and E&P teams to restart the Doel 3 and Tihange 2 reactors United States: delivery of two steam generators to the Prairie Island NPP Back End Japan: resumption of MOX fuel shipments from France to Japan La Hague: completion of the new glass storage capacity extension share as per financial consolidation (accessible share of production: 4,277 MTU produced in H compared with 4,570 MTU in H1 2012) AREVA Overview September 2013 p.48

49 2 Operations & Customers Meeting our customers' requirements (2/2) RE Offshore Wind: Production: 17 turbines produced at the Bremerhaven plant in H (vs. 17 in H1 2012) Analysis and possible replacement of turbine components before their offshore installation after a supplier reported possible quality defects France: AREVA selected by the GDF Suez - EDP Renewables consortium as exclusive turbine supplier for a total of 1,000 MWe of installed capacity at the Tréport project (Haute Normandie France) and the Ile d Yeu and Noirmoutier (Pays de La Loire France) projects United Kingdom: pre-selection of AREVA for 2 major projects Solar: Reliance project (India): startup of receptor manufacturing line in January 2013 for the solar power plant under construction Saudi Arabia: signature of a strategic partnership with PCMC Bioenergies: 2 biomass power plant contracts in Thailand and in France, plus a contract to expand a biomass power plant in Brazil Energy storage: completion of tests for the 2 nd in Corsica (France) phase of the Myrte program AREVA Overview September 2013 p.49

50 85% Percentage of completion at 06/30/2013 (AREVA scope) Olkiluoto 3 AREVA Overview September 2013 p.50 Primary cooling system and components - Installation of reactor vessel internals - Installation of mechanisms in the vessel head Instrumentation and control system - Detailed architecture submitted for final approval - Electrical power supply system in service for one division; the other three are scheduled for completion in the 1 st half of 2013 Preparations for commissioning - Mechanical testing for fuel handling and technological waste packaging systems in progress - Operating and maintenance procedure documentation in process Relations with TVO - Call for more active cooperation from TVO

51 51%* Percentage of completion at 06/30/2013 (AREVA scope) Flamanville 3 Engineering work in progress to prepare the Commissioning documentation and integrate changes required for startup Steam generators, pressurizer and reactor coolant pump casings tested and in storage Ongoing assembly and installation of the nuclear island's electro-mechanical components Installation of the first control cabinets of the SPPA-T200 operational I&C system Installation of the first primary cooling system components: reactor vessel annular support, pump support frames and steam generators Civil engineering: 93% complete (not part of AREVA's scope of work) AREVA * Overview Percentage September of completion 2013 including last amendment, although p.51 not yet in backlog

52 86% Percentage of completion at 06/30/2013 (AREVA scope design and engineering work) Taishan 1&2 Procurement: 93% of orders placed / Engineering: 84% complete Submittal of the Final Safety Analysis Report (FSAR) Main components Taishan 1 Taishan 2 Main control room installed Polar crane installed and testing initiated Polar crane in service Dome installed Reactor vessel installed Pressurizer/4 steam generators brought into place AREVA Overview September 2013 p.52 Completion of welding of reactor coolant system Main control room hoisted and brought into place Copyright TNPJVC

53 3 Economic Competitiveness 55% of our objectice achieved, 85% secured Objective: - 1bn in annual operating costs by 2015 Objective Achieved (1) Secured (2) Identified (3) (1) Contribution to savings achieved from actions implemented by end 2012 (based on annual costs) (2) Contribution to savings secured from actions implemented by end 2012 (based on annual costs) (3) Contribution to savings from actions identified at end 2012 (based on annual costs) 1bn ~ 450m ~ 550m ~ 300m ~ 550m Additional actions over and above the initial objective 30% of the 2015 objective secured through actions implemented at the end of June % of the 2015 objective achieved through actions implemented at the end of June objective End 2012 End June 2013 By 2015 AREVA Overview September 2013 p.53

54 33 Economic Competitiveness Increasing our economic competitiveness Cost reduction examples in the BGs and the support functions Mining Front End R&S Cominak/Somair: reduction of the cost of reagents Katco: optimization in acid consumption Lingen: organizational simplification and reengineering Tricastin: improvement of high-voltage power lines to reduce power interruptions Equipment: transfer of the management team to the production sites in Burgundy Installed Base: standardization of studies and improved mobilization and demobilization of workers in steam generator replacement projects Back End RE Group BG: pooling of information systems D&D: decontamination of Pu glove boxes at the Melox site to reduce disposal costs Solar: closing of the receptor tube plating factory in Las Vegas and restructuring of the business Reduction in the number of legal entities: 276 at the end of June 2013 vs. 295 at the end of June 2012 Cost of support functions reduced by about 40 million in H (vs H1 2012): 12.4% of revenue vs. 13.2% at December 31, 2012 and 14.8% at June 30, 2012 AREVA Overview September 2013 p.54

55 4 Technology & Innovation Strategic development revolving around innovation Completion of construction of the ARCoLab laboratory for AREVA Med and Roche (France) Two patent applications filed for the development of new highselectivity molecules to extract uranium in phosphoric environments Agreement between EDF/AREVA and the Bahrah National Institute of Technology (NIT) to develop advanced nuclear expertise in Saudi Arabia NRC certification of the ARCADIA core simulation code (reactor core simulation software) Robots provided to map Fukushima contamination in Japan Prototype manufactured for the new M wind turbine Launch of Innov'Action to coordinate innovation initiatives in the group AREVA Overview September 2013 p.55

56 5 People Human Resources Workforce at year-end H H1 2013* Mining 5,496 4,597 * At constant consolidation scope Front End Reactors & Services Back End Renewable Energies Corporate TOTAL AREVA Overview September 2013 p.56 8,738 8,629 15,956 15,723 11,058 11,605 1,403 1,440 4,556 4,451 47,206 46,445

57 5 People Developing the group's talents Developing expertise 933,000 hours of training (34 hours per employee per year in France) Facilitating the transfer of knowledge 1,600 people in work/study programs (5% of the workforce in France) Hiring operating staff Fostering professional and geographic mobility More than 330 people hired with open-ended contracts in France Objective of 80% of positions filled through internal mobility during the year Promoting diversity Employment rate of people with disabilities: 4.57% Listening to employees Voice of Employees in 2013: 48% participation, up compared with 2012 AREVA Overview September 2013 p.57

58 5 People Major success of the employee stock purchase plan Terms AREVA Overview September 2013 p.58 86% of the workforce eligible: France, Germany, United States Subscription price: per share Outcome 14,600 employees subscribed, i.e.36% of the eligible workforce (39% in France) 84% of the reserved shares were subscribed Average subscription amount: 2,200 Share of capital held by employees: about 1.2% Cash raised: 45 million euros Strong show of support for the group business plan

59 Contents Introduction to AREVA Developments at AREVA Action 2016 strategic plan Nuclear: a critical path to the solution Performances and objectives by BG AREVA financials Appendices AREVA Overview September 2013 p.59

60 Key competing dimensions for electricity generation Stakeholders Governments Utilities Consumers Economic Low cost of electricity & robust profitability Electricity cost certainty Reliable Security of supply Safety & performance Sustainable Low environmental impact Recyclable AREVA Overview September 2013 p.60 Nuclear: a critical part of the solution

61 AREVA s new nuclear offering is competitive vs. other electricity production technologies Baseload operations total power generation cost in Europe 1 ( /MWh) / MWh ~ EPR TM target CCGT Coal Onshore wind (intermittent) 1. LCOE includes production costs on the whole life cycle of an production asset (construction, operation, maintenance, fuel, dismantling) ; it is the minimum power price beyond which a project is profitable AREVA Overview September 2013 p.61 Nuclear: a critical part of the solution

62 Nuclear, unlike coal/gas technologies, has limited dependency on fuel and carbon prices Methodology The production cost (also called Levelised Cost Of Electricity) includes all the expenses related to the power plant from its construction to the operation and final decommissioning. It is the minimum electricity price beyond which a project is profitable Typical breakdown of production costs Western Europe baseload operations % The production cost is a common standard in the power industry. It is a relevant indicator to compare the cost of electricity and attractiveness between different technologies with different lifetimes and cost structures EPR TM Target Coal Gas CCGT Onshore Wind Carbon Fuel Capital & Operations Source: AREVA analysis Carbon value 25 /tco 2 AREVA Overview September 2013 p.62 Nuclear: a critical part of the solution

63 Low carbon technologies are significantly more sensitive to financing conditions Nuclear CCGT Coal Onshore wind Discount rate EPC price Construction duration Load factor Input price / O&M CO 2 price Little sensitive Very sensitive AREVA Overview September 2013 p.63 Nuclear: a critical part of the solution

64 The cost of nuclear power is structurally stable and predictable Impact of doubling fuel and carbon prices on production costs Base % +83% Nuclear Coal Gas-CCGT Onshore Wind CO 2 price x2 Fuel price x2 Base case 1. Respective cost of each technology. Base case assumptions on commodity prices: gas 11 $/MMBtu, coal 110$/t, uranium 8 /MWh, carbon 25 /t. NB: commissioning in Western Europe baseload operations Source: AREVA analysis AREVA Overview September 2013 p.64 Nuclear: a critical part of the solution

65 Nuclear cost stability contributes to electricity prices stabilization Evolution of industrial electricity prices 1 in France and Italy Correlation with oil prices 2010 /MWh $ 2010 /bbl Electricity mix Renewables Fossil Italy Renewables Fossil Electricity - France 2000 Electricity - Italy 2005 Oil 0 Nuclear France 1. Including taxes Source: AREVA analysis, Enerdata AREVA Overview September 2013 p.65 Nuclear: a critical part of the solution

66 Thanks to its low variable costs, nuclear power is always dispatched Power price formation merit order Illustrative figure in a context of liberalized electricity market Variable costs ( /MWh) Nuclear gross margin Min. Demand Capacity demand (marginal plant) Max. Market price Price formation: in standard conditions, the wholesale electricity price is set at the variable costs of the marginal plant Nuclear plant output: thanks to its low variable costs, nuclear operates at its maximum availability Power market mechanisms lead to high and robust revenues for nuclear power plants Nuclear Coal Gas-CCGT Peak Available capacity Source: AREVA analysis AREVA Overview September 2013 p.66 Nuclear: a critical part of the solution

67 Primary uranium resources are well distributed and sufficient for Gen 3 Uranium resources are sufficient for Gen III Conventional fissile resources based on today s consumption (years 1 ) % Uranium resources are well distributed Share of resources (%) 500 Conventional fissile resources represent more than 250 years of today s world demand X 50 80% 60% Asia & Oceania Africa Middle-East % Eurasia % Europe Central & South America Identified resources Undiscovered resources Gen IV potential 0% Oil Coal Gas North America Uranium 1. Resources valuation based on 2009 world uranium consumption Source: IEANA-NEA Redbook 2009, US-DOE EIA AREVA Overview September 2013 p.67 Nuclear: a critical part of the solution

68 Nuclear power allows for a 20% reduction of worldwide power sector emissions Worldwide greenhouse gas emissions from electricity generation gco2eq/kwh 1,250 1, Avoided emissions Ø % 20% 40% 60% 80% 100% Share of electricity production (%) Hydro Nuclear Renew. Gas Oil Coal + 1,600 Mt of CO 2 avoided each year by nuclear power, equivalent to US road transportation system emissions Source: AREVA analysis, World Energy Outlook 2010, International Transport Forum AREVA Overview September 2013 p.68 Nuclear: a critical part of the solution

69 Contents Introduction to AREVA Developments at AREVA Action 2016 strategic plan Nuclear: a critical path to the solution Performances and objectives by BG AREVA financials Appendices AREVA Overview September 2013 p.69

70 AREVA Business Groups Mining Front-End Reactors & Services Back-End Renewable Energies Mining: Uranium mines exploration and operation activities Conversion and enrichment of the uranium Design of the fuel for the nuclear reactors Design and construction of nuclear reactors Maintenance and modernization of the nuclear power plants Recycling of the used fuel and provider of cleanup and dismantling services Development of wind energy, bioenergy, solar power and hydrogen power solutions AREVA Overview September 2013 p.70 Performance and objectives by BG

71 Mining Business Group Mining Strategic Objectives Achieve the best profitability level Focus capital spending on most profitable assets Uranium mines exploration Projects & techniques Operations Sites rehabilitation Maintain resources and reserves for 20 years of production AREVA Overview September 2013 p.71 Performance and objectives by BG

72 2012 revenue 1.360bn % of consolidated revenue 15% 2012 EBITDA margin 31% A diversified mining portfolio mitigating both country and technological risks Mining 2 nd in uranium production worldwide AREVA is among the lowest-cost uranium producers Canada 2,271 Niger 3,528 Gabon Namibia 251 Kazakhstan 3,661 Jordan Mongolia Central African Republic Australia 2012 cost of goods sold (produced uranium only) 1 (AREVA = base 100) available production (tu) Production, projects & exploration area Projects & exploration area production: 9,762 tu consolidated 9,714 tu available share 0 AREVA Cameco Paladin Uranium One 3 1. Incl. production costs, royalties and transportation costs ; excl. external purchase (e.g. HEU, spot purchase) Source: AREVA analysis based on publicly available data (annual reports) AREVA Overview September 2013 p.72 Performance and objectives by BG

73 AREVA invests to maintain its leadership in Mining A leading player in Mining Explores, extracts and processes uranium ore, from which nuclear fuel is made. The BG then reclaims mining sites once production is finished More than 200,000 MTU delivered to date A diversified mining platform (geographic distribution, technologies, development stage) A dynamic exploration policy Key financials In millions of euros H H Var H1 12/13 ORDER BOOK 10,230 12,036 10,472 11, % SALES REVENUES 1,289 1, % EBITDA m % Sales 34.9% 47.3% 48.8% 38.7% -10.0pts OPERATING INCOME (1,167)* m % Sales (90.5)% 25.9% 15.0% 31.1% +16.1pts OP. FCF BEFORE TAX (178) m *Includes impairments on UraMin assets AREVA Overview September 2013 p.73 Performance and objectives by BG

74 Despite Fukushima an increasing uranium demand Uranium reactors requirements (ktu( ktu) Secondary resources (ktu( ktu) Net demand (ktu( ktu) CAGR* Total Other regions Europe North America +3% +2% -1% +1% Drop of 33% of the secondary resources (mainly linked to the end of HEU program) Russian HEU Increase of ~45% of the net demand before strategic stockpiling Asia +9% *Compound annual growth rate US govt sales Mox, Rep U, tails Source: AREVA Source: WNA 2009 Asia: main growth engine for demand AREVA Overview September 2013 p.74 Performance and objectives by BG

75 AREVA, the world's number 2 producer of uranium in 2010, 2011 and 2012 Production in tons of U Cameco Rio Tinto AREVA Kazatomprom ARMZ Uranium One Marketed share of production, financially consolidated: tu AREVA Overview September 2013 p.75 Performance and objectives by BG

76 AREVA is a diversified and integrated uranium player Three major types of players in the uranium production industry Share of 2012 production 1 Expected share of 2016 production 1 Nuclear integration Production assets location % 19% Kazakhstan 16% 14% 2 14% 9% 7% 5% 17% 16% 2 19% 7% 5% 5% Canada, Kazakhstan, Niger Kazakhstan, USA, Australia, Russia 2 Canada, USA, Kazakhstan Australia, Namibia Australia Malawi, Namibia Top 5 uranium producers account for ~70% of total production Uranium miners are split into three main exclusive categories: 1. Nuclear specialists, more or less integrated 2. Mining giants for whom uranium is a small part of the business 3. Junior mining company 1. Available production 2. Incl. Uranium One & ARMZ Source: AREVA analysis based on publicly available data (annual reports) analysis of the expected share of 2016 production carried on in 2012 AREVA Overview September 2013 p.76 Performance and objectives by BG

77 A long standing effort and global exploration portfolio is key Major deposits discovered by / with AREVA Gabon Bakouma Exploration budget (M ) Arlit Exploration Staff (# FTE) Cominak Cluff Lake Imouraren Canada 1981 Cigar Lake Quebec AMERICA Since McArthur AREVA exploration portfolio EUROPE Since Shea creek Jordan Senegal Niger CAR Gabon AFRICA Since 1950 Namibia 2003 Dulaan Uul Russia Kazakhstan Mongolia Uzbekistan 2008 Tamgak Deep ASIA Since 1995 Australia OCEANIA Since AREVA Overview September 2013 p.77 Performance and objectives by BG

78 AREVA has an extensive portfolio of mines and projects for the future Trekkopje Bakouma Argentine Somaïr Maintain production at 3,000 tu/yr Katco Increase production à 4,000 tu/yr Cominak McArthur Operator: Cameco Imouraren Cigar Lake / JEB Mine by Cameco Facility by AREVA McClean UG Midwest Mongolia Kiggavik Shea Creek Gabon Australie > 2018 Operating sites Achieve production increase at Somaïr & Katco Manage costs through the operational performance plan Under development projects Deliver on time and on budget Continuous exploration further Investments Depending on uranium price increase Projects pipeline remains «active» AREVA Overview September 2013 p.78 Performance and objectives by BG

79 Two key projects in our mining portfolio Cigar Lake Imouraren Highest grade mine in the world Mine operator: Cameco Mine type: deep underground with freezing panels Shareholders 1 : Cameco (50%), AREVA (37%), others (13%) Ore will be milled at JEB plant (70% AREVA) Reserves 2 : tu Planned production: 6,900 tu p.a. Investment: 2.5bn Production start date (estimated): H Largest mine in the world Mine operator: AREVA Mine type: open pit Shareholders 1 : : AREVA (58%), Kepco (9%), Niger state (33%) Reserves 2 : tu Planned production: 5,000 tu p.a. Investment : 1.9bn Expected operational production start date: 1 st ore in 2015 and 1 st uranium production in end Figures rounded to 100bp 2. After application of metal recovery AREVA Overview September 2013 p.79 Performance and objectives by BG

80 Front End Business Group Front End Strategic Objectives Achieve full production at the Georges Besse II and Comurhex II facilities Optimize industrial scheme to improve competitivity 3 links in the nuclear cycle : 3 stages to convert uranium from the Mining concentrates into Fuel Assemblies Manage the GB I end of operations in safety Grow our Front End activities in Asia AREVA Overview September 2013 p.80 Performance and objectives by BG

81 2012 revenue 2.049bn % of consolidated revenue 22% Front End 2012 EBITDA margin Major player 14% in the front end of the nuclear cycle Currently in transition phase with renewal of industrial tool AREVA Overview September 2013 p.81 Performance and objectives by BG

82 AREVA invests to maintain its leadership in Enrichment Sales 2012 split A leading player in the overall Front-End Enrichment 30% Chemistry: converts natural uranium (U 3 O 8 ) into uranium hexafluoride (UF 6 ) required for enrichment Enrichment: Increasing the proportion of 235 U found in natural uranium from 0.7% to 3%-5% in order to manufacture fuel for nuclear reactors Conversion 13% Fuel 57 % Fuel: designs, manufactures and sells nuclear fuel assemblies for pressurized water reactors (PWR), boiling water reactors (BWR) and research reactors Key financials In millions of euros H H Var H1 12/13 ORDER BOOK 18,071 18,047 18,712 17, % SALES REVENUES 2,282 2, % EBITDA m % Sales 7.9% 14.3% 18.7% 11.3% -7.4pts OPERATING INCOME (765) m % Sales (33.5)% 7.1% 20.4% 6.9% -13.6pts OP. FCF BEFORE TAX (584) (958) (305) (124) + 183m AREVA Overview September 2013 p.82 Performance and objectives by BG

83 Fuel cycle markets: orders postponed in the short term Uranium demand (ktu) Enrichment demand (MSWU) Fuel demand (kthm) Pre- Fukushima Post Fukushima Other regions Pre- Fukushima Post Fukushima Other regions Europe CAGR* +5% +3% +2% -1% Europe CAGR* +5% +4% +5% -1% Pre- Fukushima Post Fukushima Other regions Europe CAGR* +4% +2% +3% -0% 40 North America +1% 40 North America +0% 5 North America -1% 20 Asia +9% 20 Asia +12% Asia +6% Source: AREVA *Compound annual growth rate Asia: main growth engine for demand Europe: drop in demand over the period AREVA Overview September 2013 p.83 Performance and objectives by BG