AREVA: successfully facing current industry challenges

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2 AREVA: successfully facing current industry challenges Kepler Cheuvreux Autumn Conference September 20 th, 2013

3 Agenda Introduction Our markets & recent evolutions Action 2016: executing our strategy to strengthen our leading positions Turnaround in performance: on track to achieve our objectives Financial outlook Appendix AREVA Presentation September 2013 p.2

4 Leader in low-carbon power generation AREVA Presentation September 2013 p.3

5 45.4bn backlog at 12/31/2012 Revenue by region in 2012 AREVA in figures 9.342bn in revenue in m restated EBITDA in ,513 employees in 25 countries 900 experts 8,000 patents 19% North & South America Europe 61% 2% Africa & Middle East o.w. France 35% o.w. Germany 11% 18% Asia - Pacific o.w. Japan 5% o.w. China 10% 5% of sales devoted to R&D* * Including capitalized R&D AREVA Presentation September 2013 p.4

6 Agenda Introduction Our markets & recent evolutions Action 2016: executing our strategy to strengthen our leading positions Turnaround in performance: on track to achieve our objectives Financial outlook Appendix AREVA Presentation September 2013 p.5

7 Convincing AREVA 2011 scenario, in line with international organizations AREVA 2011 scenario (GWe) Change in global installed base (GWe) Reassessed at end-june 2011 o.w 47GWe in Japan 20GWe in Germany our market: the worldwide nuclear installed base Nuclear installed base: over 50% growth expected by 2030 AREVA Presentation September 2013 p.6

8 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 Presentation September 2013 p.7

9 Uranium* Spot price LT price Lower market prices but little impact on the group's operations Market trends June 2012 June 2013 $50.75/lb $61.25/lb $39.60/lb $57.00/lb AREVA performance 11.5% increase year on year in AREVA's average sales price Enrichment** Spot price LT price $130/SWU $143/SWU $112/SWU $119/SWU Georges Besse II production already sold at c. 90% for c. 85% for at guaranteed prices The long-term contract model with customers in the Mining and Front End BGs is bearing fruit AREVA Presentation September 2013 p.8 * Sources: UxC / TradeTech ** Source: UxC

10 Offshore wind market (Europe) Renewable Energies: growth expected on our markets 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) 7,317 Other Asia / Oceania India Other Asia / Oceania India 4,700 Other Europe China Europe North America Middle-East and Africa 5,160 China 2,340 France 1,561 Germany 1,010 Europe UK North America Middle-East / Africa Latin America AREVA s s positioning on renewable market: selected growing activities AREVA Presentation September 2013 p.9

11 Significant developments in 2013 in the renewable energies market Customers recognize the value of AREVA s offer Competitive landscape changing Customers still face challenges to launch projects Recent examples Offshore Wind : selection by the GDF Suez EDP Renewables consortium as exclusive turbine supplier (1,000 MWe) Bioenergy: selection by neoen for the construction of a biomass co-generation power plant in Commentry (Allier France) Incumbents terminate or dispose of some activities (e.g. Siemens/Solel and ABB/Novatec in solar) Financial difficulties for some competitors Delays in projects financial close Political announcements/rumors on changes in tariffs/regulation Delays in grid connection AREVA Presentation September 2013 p.10

12 Agenda Introduction Our markets & recent evolutions Action 2016: executing our strategy to strengthen our leading positions Turnaround in performance: on track to achieve our objectives Financial outlook Appendix AREVA Presentation September 2013 p.11

13 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 10 Recurring operations Construction Operations Reactor life extension Decommissioning Reactors and Services 8% Mining 15% Back End 3% 6 Front End 22% 5 4 Reactors and Services 29% Back End 14% AREVA Presentation September 2013 p.12

14 Delivering on ACTION 2016 strategic axes Safety Security Transparency Commercial priority given to value creation Selectivity in capital spending Debt management Nuclear and occupational safety Performance improvement Operations and Customers Economic Competitiveness Technology and Innovation People AREVA Presentation September 2013 p.13

15 Fuel cycle: integrated offers Adapting our offering to meet customers requirements Services: Safety Alliance & Forward Alliance Back-end: treatment solutions & dismantling expertise Current targets: Utilities with small reactors fleet New comers in nuclear Major successes: Monticello reactor (USA) : 5 fuel reloads (incl. enriched uranium) ($500m) United Arab Emirates: supply of enriched uranium for the first 8 years of operation (> 400m) providing a comprehensive range of products, services and solutions to help utilities meet every-increasing safety requirements Since its launch: more than 100 projects in 19 countries for around 50 power companies meeting utilities needs to extend the lifecycles of their reactors while improving their safety through the end of the operating period joint statement of cooperation with JNFL to prepare for the commercial restart of the Rokkasho-Mura used fuel recycling plant (June 2013) cooperation agreement with ATOX for the creation of a JV dedicated to the joint development of innovative solutions focused initially on rehabilitation of the Fukushima site (June 2013) creation of an expertise dismantling center (2012) AREVA Presentation September 2013 p.14

16 Applying our unique experience on ongoing new builds projects EPR TM : most advanced technology in terms of construction worldwide Unique lessons learnt between OL3 and Taishan 85 % Olkiluoto 3 complete at June 30, 2013 (AREVA scope of work) 51 % Flamanville 3 complete at June 30, 2013 (AREVA scope of work) Cost savings / Optimization Procurement Organization Construction Engineering 86 % Taishan 1&2 complete at June 30, 2013 (AREVA scope of work design and engineering) -15% cost of nuclear island between 2008 and 2012 AREVA Presentation September 2013 p.15

17 Staying ahead of the competition in major NNB* tenders United Kingdom EPR TM certification 2012 Ongoing EPR TM sales negotiations: Hinkley Point C 1-2 (EDF) Finland EPR TM certification 2005 EPR TM reactor under construction: OL3 (TVO) EPR TM calls for tender: OL4 (TVO) United States 3 rd phase of EPR TM licensing process completed China EPR TM certification 2009 EPR TM reactors under construction: Taishan 1-2 (CGNPC) EPR TM sales negotiations planned: Taishan 3-4 (CGNPC) France EPR TM certification EPR TM reactor under construction: FA3 (EDF) ASN issues favorable opinion on ATMEA1 reactor Progress / ongoing negotiations Ongoing bids Future tender opportunities Turkey Ongoing 4 ATMEA1 sales negotiations India Ongoing EPR TM sales negotiations: Jaitapur 1-2 (NPCIL) * NNB: Nuclear New Builds AREVA Presentation September 2013 p.16

18 Renewing our production capacities Mining Front End Cigar Lake Imouraren Georges Besse II Comurhex II Operating license received June 17, 2013 Start of production scheduled for end of Q 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 Focusing on strategic investments and future profitable assets AREVA Presentation September 2013 p.17

19 A targeted offer Adapting our renewable offering to market environment with strong technological content relying on commercial references recent successes Bioenergy Power Generation Acquisition of a leading biomass torrefaction technology 500+ projects worldwide totalizing over 2.5 GW 35 years of experience September 2013: contract for a co-generation power plant in France Offshore Wind Power Generation A light-weight structure Supplying and installing 120 turbines with a 600 MW output (Global Tech 1 & Borkum West 2) July 2013: selection by the GDF Suez EDP Renewables consortium as exclusive turbine supplier Concentrated Solar Thermal Flat mirrors and variable steam Reliance project in India July 2013: signature of a strategic partnership with PCMC Membrane technologies for electrolysis stacks and fuel cells Myrte storage system (500 KWc) July 2013: PED certification for its electrolysis stack Storage Applying AREVA s historical nuclear expertise in renewable development AREVA Presentation September 2013 p.18

20 Agenda Introduction Our markets & recent evolutions Action 2016: executing our strategy to strengthen our leading positions Turnaround in performance: on track to achieve our objectives Financial outlook Appendix AREVA Presentation September 2013 p.19

21 First half of 2013: the turnaround in performance continues Very strong sales revenue growth: +13.0% like for like Marked increase in EBITDA* Very significant improvement in free operating cash flow; positive free operating cash flow in the 2 nd quarter Good progress on the cost reduction plan Continued turnaround in a still uncertain market; confirmation of our profitability and cash generation targets * Excluding OL3 insurance indemnity awarded in H AREVA Presentation September 2013 p.20

22 Significant progress accomplished throughout transition period Backlog: nearly 5 years of revenue (in bn) Very strong sales revenue growth (in m) +10% ,997 4,329 4, % in nuclear operations between H and H June-11 June-12 June-13 H H H Marked increase in restated EBITDA** (in m) including 300m from OL3 insurance indemnity 217 H H m 473 H Very significant improvement in restated free OCF** (in m) H H H m * +10.0% in reported data ** Restated for asset disposals in 2012 AREVA Presentation September 2013 p.21

23 Cost savings: 55% 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 Presentation September 2013 p.22

24 Free operating cash flow: half of Capex self-funded In millions of euros 473 Losses on disposals of PP&E Change in operating WCR Free operating cash flow before tax +6 Gross Capex % self-funded vs. 36% in H Disposals of fixed assets EBITDA Positive free operating cash flow over Q for the group and over H as a whole (+ 62m) for nuclear activities AREVA Presentation September 2013 p.23

25 Financial structure further strengthened 1,500 Schedule of main financial obligations ( m at September 30, 2013) Repurchased bonds Bonds issued March 2013 Bonds issued August 2013 EIB* Asset disposals program: minimum objective of 1.2bn over the period achieved in August 2012 August 2013 : closing of the sale of AREVA s 65.2% share in Technoplus Industries (TPI) to AVA Conseil 1,000 Liabilities management Net cash available ** at June 30, bn 2024 August 2013: completion of a 500m bond issue (7-year maturity) with lowest coupon (3.25%) ever since AREVA has launched its EMTN program September 2013: completion of a 5-year private placement, JPY 8bn bond issue (~ 60m) September 2013: bond buy back on AREVA notes maturing in 2016 and 2017 (~ 330m) * BEI/EIB: European Investment Bank ** Cash, cash equivalents and other current financial assets minus current borrowings AREVA Presentation September 2013 p.24

26 Agenda Introduction Our markets & recent evolutions Action 2016: executing our strategy to strengthen our leading positions Turnaround in performance: on track to achieve our objectives Financial outlook Appendix AREVA Presentation September 2013 p.25

27 Objective: secure our future ACTION 2016 TRANSITION PERIOD SAFE GROWTH AND CASH GENERATION Dec 2011: launching of ACTION 2016 Sept 2013: close to the end of the transition period / cash generation AREVA Presentation September 2013 p.26

28 Our half year 2013 performance confirms our financial outlook H actual 2013 outlook Underlying assumptions Revenue Nuclear: +14.9% LFL Renewables: 214m Nuclear: +3 to 6% LFL Renewables: c. 450m* H comparable to H after a very strong H1 No significant contribution from new contracts EBITDA 473m > 1.1bn Catch-up in Recycling production Ongoing cost reduction plan actions Free operating cash flow before tax - 313m Break-even Positive contribution of WCR with new contracts expected Capex management ( 1bn in H2 2013) At constant consolidation scope and excluding impacts of asset disposals * vs. c. 600m previously AREVA Presentation September 2013 p.27

29 Financial outlook Revenue 2013 outlook Nuclear: +3 to 6% LFL Renewables: c. 450m outlook Nuclear: +5 to 8% per year Renewables: > 1.25bn EBITDA > 1.1bn Free operating cash flow before tax Break-even > + 1.0bn/year starting in 2015 At constant consolidation scope and excluding impacts of asset disposals AREVA Presentation September 2013 p.28

30 Agenda Introduction Our markets & recent evolutions Action 2016: executing our strategy to strengthen our leading positions Turnaround in performance: on track to achieve our objectives Financial outlook Appendix AREVA Presentation September 2013 p.29

31 Contacts & Agenda Contacts Agenda Marie de SCORBIAC VP Financial Communication and Investor Relations + 33 (0) Philippine du REPAIRE Investor Relations Manager + 33 (0) October 24, h45 CEST Press release - Q3 revenue and related information January 30, TBC 17h45 CET Press release sales revenue February 26, TBC 17h45 CET Conference and webcast: 2013 annual results AREVA Presentation September 2013 p.30

32 Commercial dynamism and improved profitability Backlog ( bn) Revenue ( m) +5.3% ,589 8,089 8,529 9,104 8,872 9, Restated EBITDA* ( m) + 586m Restated FCF before tax*( m) , ,090-1, , m *Restated for Siemens impacts in 2011 and capital gains on disposal of stakes in Mining and Enrichment projects AREVA Presentation September 2013 p.31

33 AREVA ownership structure French State 86.5% CEA 68.9% French State 14.3% BPI 3.3% Public 4.0% KIA 4.8% Total 1.0% Employees 1.2% EDF 2.2% Treasury shares 0.2% CEA: BPI: Commissariat à l Energie Atomique et aux Energies Alternatives Banque Publique d Investissement KIA: Kuwait Investment Authority AREVA Presentation September 2013 p.32

34 In millions of euros Net debt 12/31/2012 6/30/2013-3, Restated free operating cash flow before tax Cash flow from end of lifecycle operations Dividends paid to minority interests Income tax Net financial income (cash) -13 Other -4, m AREVA Presentation September 2013 p.33

35 Disclaimer Forward-looking statements This document contains forward-looking statements and information. These statements include financial forecasts and estimates as well as the assumptions on which they are based, statements related to projects, objectives and expectations concerning future operations, products and services or future performance. Although AREVA s management believes that these forward-looking statements are reasonable, AREVA s investors and 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 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 Presentation September 2013 p.34

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