AREVA in 2007, growth and profitability

AREVA in 2007,growth and profi tability

ACTIVITY AND SUSTAINABLE DEVELOPMENT REPORT

AREVA33, rue La Fayette – 75009 Paris – FranceTel.: +33 1 34 96 00 00 – Fax: +33 1 34 96 00 01www.areva.com

Energy is our future, don’t waste it!

If you only have a moment to devote to this report, read this.

Our energies have a future.A future without CO2

OUR MISSIONEnable everyone to have access to ever cleaner, safer and more economical energy.

OUR STRATEGYTo set the standard in CO2-free power generation and electricity transmission and distribution.

■ Capitalize on our integrated business model to spearhead the nuclear revival:– build one third of new nuclear generating capacities;– make the fuel secure for our current and future customers.

■ Ensure strong and profi table growth in T&D.

■ Expand our renewable energies offering.

With manufacturing facilities in 43 countries and a sales network in more than 100, AREVA offers customers reliable technological solutions for CO2-free power generation and

electricity transmission and distribution. We are the world leader in nuclear power and the only

company to cover all industrial activities in this fi eld.

Our 65,000 employees are committed to continuous improvement on a daily basis,

making sustainable development the focal point of the group’s industrial strategy.

AREVA’s businesses help meet the 21st century’s greatest challenges: making energy

available to all, protecting the planet, and acting responsibly towards future generations.

no.1 worldwidein the entire nuclear cycle

no.3 worldwidein electricity transmission and distribution

Backlog

€39.83BSales

€11.92BOperating income

€751MNet income

€743M

+55.4%

OUR PERFORMANCE IN 2007

+9.8%

+84.6%

+14.5%

Customers across the globe

Europe and CIS

MANUFACTURING OPERATIONSAustria, Belgium, France, Germany, Greece, Hungary, Italy, Kazakhstan, the Netherlands, Norway, Poland, Russia, Slovakia, Spain, Sweden, Switzerland, Turkey, United Kingdom

56% of sales

71% of employees

Asia-Pacifi c

MANUFACTURING OPERATIONSAustralia, China, India, Indonesia, Japan, Malaysia, Pakistan, Singapore, Thailand

19% of sales

11.5% of employees

Africa and Middle East

MANUFACTURING OPERATIONSCentral African Republic, Ivory Coast, Egypt, Namibia, Niger, South Africa, Sudan, United Arab Emirates

8% of sales

4% of employees

North and South America

MANUFACTURING OPERATIONSArgentina, Brazil, Canada, Chile, Colombia, Mexico, United States, Venezuela

17% of sales

13.5% of employees

The integrated offer serving energy professionals

CO2-FREE POWER GENERATIONSOLUTIONS

Nu

cléaireTran

smissio

n &

Distrib

utio

nN

uclear

Transm

ission

& D

istribu

tion

SERVICES

DISTRIBUTION

RENEWABLE ENERGIES

TRANSMISSION

OTHER SOURCES OF ELECTRIC

POWER

REACTORS

SOLUTIONS FOR RELIABLE ELECTRICITY TRANSMISSION AND DISTRIBUTION

USED FUEL RECYCLING

FUEL FABRICATION

MINING

ENRICHMENT

CHEMISTRY

AT A GLANCE• Number 1 worldwide in the front end

of the nuclear cycle.

• Production facilities in Europe, North America, Asia and Africa.

• Customers: leading nuclear power plant operators.

STRATEGIC PRIORITIES• Increase mineral resources and production.

• Replace and expand production capabilities in conversion and enrichment.

• Strengthen positions in fuel fabrication by renewing our product portfolio.

SUSTAINABLE DEVELOPMENT GOALS• Minimize the environmental impacts of disposal

of mill tailings and nitrates and reclaim mine sites after closure.

• Maintain a high level of safety in the use of raw materials and components.

• Reduce greenhouse gas emissions.

• Contribute to the economic and social development of communities in which we do business.

• Continue to monitor employee health.

• Apply eco-design concepts to new products and plant projects.

• Successfully transfer expertise related to changing technologies.

AT A GLANCE• Number 1 worldwide in pressurized water reactors

(in terms of installed capacity) and the only company in the world with four Generation III reactors under construction or on order (EPR).

• World’s leading supplier of nuclear equipment and services.

• Turnkey supplier of wind turbines and biomass power plants.

• Main manufacturing plants in France, Germany and the United States; additional plants in India and Brazil (biomass fi eld).

• Customers: leading operators of electric power reactors, wind farm developers and operators of biomass-based cogeneration plants.

STRATEGIC PRIORITIES• Successfully complete the fi rst EPR projects (France,

Finland, China).

• Broaden the reactor offering by drawing on industrial partners.

• Strengthen engineering capabilities and secure the supply chain.

• In reactor services, offer customers integrated services that optimize their fl eet operations.

• Support R&D efforts on new generations of reactors and their applications.

• Become a recognized player in renewable energies.

SUSTAINABLE DEVELOPMENT GOALS• Widely institute the use of eco-design approaches

for products and services.

• Continue to improve environmental management systems and safety at major construction sites.

AT A GLANCE• Number 1 worldwide in the treatment and

recycling of used nuclear fuel.

• Leader in used fuel transportation and storage.

• Main plant sites: La Hague and Melox, France.

• Customers: leading nuclear plant operators.

STRATEGIC PRIORITIES• Strengthen used fuel treatment and recycling

operations in France.

• Market the technologies owned by the group worldwide.

• Strengthen the leadership position in used nuclear fuel storage.

• Market products and services related to the transportation of fuel and nuclear materials.

SUSTAINABLE DEVELOPMENT GOALS• Keep the environmental impacts of releases

as low as possible.

• Limit the volume of operating waste that does not meet near-surface disposal acceptance criteria.

• Keep worker exposure to radiation as low as reasonably achievable.

• Maintain a high level of nuclear and occupational safety during nuclear materials transportation.

AT A GLANCE• Number 1 worldwide in market management

software and grid management software, number 2 in high voltage products, number 3 in medium voltage products.

• Manufacturing operations in more than 40 countries.

• Customers: 30,000 diversifi ed customers, including integrated utilities, transmission and distribution companies, electricity-intensive industries and other infrastructure companies, and distributors.

STRATEGIC PRIORITIES• Pursue efforts to improve processes, redeploy

manufacturing facilities and optimize the business portfolio.

• Accelerate growth by intensifying marketing and sales and increasing manufacturing capacities, and through selective acquisitions in high-growth regions (China, India, etc.) or in certain market segments (high voltage, automation systems, etc.).

SUSTAINABLE DEVELOPMENT GOALS• Expand eco-design approaches.

• Reduce direct emissions of greenhouse gases linked to SF6 releases.

• Widely institute environmental management and occupational safety systems.

Nuclear Transmission & Distribution

Harvesting business synergies for maximum competitiveness

€3.14B in sales

26% of consolidated sales

12,577 employees

FRONT END• Uranium ore exploration, mining

and concentration.• Uranium conversion and enrichment.• Nuclear fuel design and fabrication.

€2.72B in sales


16,500 employees

REACTORS AND SERVICES• Design and construction of nuclear

reactors and other CO2-free power generation systems.

• Supply of products and services for nuclear power plant maintenance, upgrades and operations.

€1.74B in sales


10,638 employees

BACK END• Treatment and recycling of used

nuclear fuel.• Cleanup of nuclear facilities.• Nuclear logistics.

€4.33B in sales


25,248 employees

TRANSMISSION & DISTRIBUTION• Supply of products, systems and services

for electricity transmission and distribution networks.

Sustainable development is a keystone

of AREVA’s industrial strategy for achieving

growth that is profi table, socially responsible

and respectful of the environment.

To translate this choice into reality, AREVA

integrates sustainable development into

its management practices via a continuous

improvement initiative revolving around

ten commitments.

ENVIRONMENTAL PROTECTION

Limit our environmental impacts by reducing our consumption of natural resources, controlling our releases and optimizing our waste management.

FINANCIAL PERFORMANCE

Ensure the group’s sustainability through long-term profi table growth.

INNOVATION

Develop and harness best-in-breed technologies to anticipate customer needs and increase our cost-competitiveness while complying with nuclear safety, occupational safety and environmental protection requirements.

GOVERNANCE

Manage our operations responsibly in accordance with the group’s values, and assess and truthfully report on our performance to shareholders and all stakeholders.

CONTINUOUS IMPROVEMENT

Implement a continuous improvement initiative based on practices shared throughout the group.

RISK MANAGEMENT AND PREVENTION

Establish and maintain the highest level of nuclear and occupational safety in all of the group’s operations to preserve public and worker health, and to protect the environment.

COMMUNITY INVOLVEMENT

Participate in the economic and social development of the communities in which the group operates.

DIALOGUE AND CONSENSUS BUILDING

Establish stakeholder relations based on trust.

COMMITMENT TO EMPLOYEES

Promote our employees’ professional development and provide good working conditions.

RESPECT FOR THE ENVIRONMENTAREVA Way,

a commitment to sustainable development

EC

ON

OM

IC

DE

VE

LO

PM

EN

T

SOCIAL/SOCIETAL EXPECTATIONS

CUSTOMER SATISFACTION

Listen to our customers, anticipate their needs, support their growth, and increase and measure their satisfaction.

11 – AREVA 2007

For more information

REQUEST THE REFERENCE DOCUMENT

www.areva.com

12 Message from the Chairman of the Supervisory Board

14 Message from the Chief Executive Offi cer

18 Key data

22 2007 highlights

26 Corporate governance

30 Organization of the group

32 Share information and shareholder relations

Leader and expert38 Solutions for CO2-free power generation

52 Solutions for reliable electricity transmissionand distribution

To be and to act58 Governance

60 Continuous improvement

62 Financial performance

64 Innovation

66 Customer satisfaction

67 Commitment to employees

70 Environmental protection

73 Risk management and prevention

75 Dialogue and consensus building

77 Community involvement

79 Auditors’ report

81 Reporting methodology

83 Data verifi ed in 2007

84 Glossary

89 To learn more

contents

AREVA 2007 – 1312 – AREVA 2007

Message from Frédéric Lemoine,Chairman of the Supervisory Board

AREVA, embracing corporate responsibility

With the concept of Global Corporate Responsibility becoming the new imperative, from Davos to the United Nations, it is only fi tting that I should reaffi rm our awareness of our many responsibilities towards our stakeholders. In this area as in others, I believe that we are among the leaders.

Responsibility towards our customers fi rst, who must meet the challenges of growing demand for energy and who have the right to expect the best of our technologies and know-how.

Responsibility towards our shareholders as well. Most recently, through clear and balanced governance, the Supervisory Board was able to approve a strategic plan prepared by the Executive Board which gives AREVA a clear path forward through 2020, with a more detailed map for the next fi ve years. In a time of great change marked by the dramatic expansion of nuclear power and electricity supply systems, this is highly useful to the company, for it allows us explain our substantial need for fi nancing to our shareholders, now and in the future.

Responsibility, too, towards the national community and our European partners. For AREVA is simultaneously a French success story, owing much to government

initiatives over the past fi fty years, as well as a truly European champion of industry in our partnerships and our markets, and a world leader in all of our businesses.

Responsibility towards our employees, obviously, for they are the source of our success and deserve to share even more in the results. More than 65,000 people worldwide make up a growing and profoundly changing population to which the company is highly attentive and whose representatives to the Supervisory Board, elected by the employees in 2007, very effectively relay their outlook and expectations.

But I am not afraid to say that our most important responsibility is for the economic development of humanity and the environmental preservation of our planet. I visited many of our 60 industrial sites over the past three years and I think that this feeling is becoming more deeply ingrained in all of us over time. The environmental situation is always on our minds.

In fact, we have entered a new era of environmental awareness all over the world. Climate change is no longer contested and human societies are now intuitively aware that natural resources are imperiled and know that they will

be depleted eventually. This is true in every country, as recent changes in Chinese environmental policy demonstrate. We need to remember that the world’s proven oil reserves represent only forty years of supply, according to the experts, while natural gas may last sixty to a hundred years and coal about two centuries.

Nuclear energy is an answer that should be considered without prejudice. This form of energy has the lowest CO2 emissions – a critical factor in the fi ght against the greenhouse effect. The ore containing this energy, uranium, is plentiful and will be used even more parsimoniously as the century progresses.

Our technologies and research programs focus on recycling used nuclear fuel into fresh fuel, a subject of keen interest to major countries around the world.

While nuclear power is an important solution for the future, it is not the only solution. Other answers are quickly emerging in renewable energies, where AREVA is active in wind power, biomass and fuel cells.

Energy conservation is another area with enormous potential. We are able to make a contribution here as well,

through our electricity transmission and distribution operations, by setting up power systems that are better managed and less conducive to waste.

You will see in this report how all of AREVA’s units are making very appreciable progress in preserving our planet’s resources, including water, paper and energy, and how each of us is working to control our environmental footprint.

Our convictions and our consistency depend on it. AREVA’s plans depend on it. Our global responsibility depends on it. Our shared future depends on it.

“Our most important responsibility is towards the economic development of humanity and the environmental preservation of our planet.”

AREVA 2007 – 1514 – AREVA 2007

Message from Anne Lauvergeon,Chief Executive Offi cer

2007: the year everything speeded up…

For those who doubted the nuclear revival, for those who still believed in cheap energy, for those who continued to deny the truth of climate change, reality hit hard in 2007.

The metamorphosis of the energy landscape continued with a speed that took most observers by surprise. The United States, Canada, the United Kingdom, South Africa, India, China … These major countries worked relentlessly to boost their energy production, spurred by the same concerns: maintaining the competitiveness of their industries and the purchasing power of their citizens, defending the security of energy supply, and fi ghting climate change. In 2007, for the fi rst time in history, a government – that of the United Kingdom – made carbon gas emissions reduction the leading reason for its pro-nuclear power decision.

In this fast changing environment, the AREVA group stepped up the pace of growth even more and is leading the race. Our sales rose by almost 10% in 2007 to 11.9 billion euros. Operating income grew 2.6% to 751 million euros. And the volume in backlog jumped 55% in just twelve months.

A winning integrated offerIn the nuclear business, our team scored numerous successes, including a contract worth more than 1 billion euros to provide enrichment services to KHNP of South Korea, or the contracts in Sweden to refurbish the Oskarshamn nuclear power plant and extend the service life of the Ringhals 4 power plant. The most signifi cant event in the back end of the cycle was the contract awarded by a new customer, SOGIN of Italy, to treat used fuel from three former nuclear power plants.

These are major deals, but they received less media coverage than our new nuclear power plant orders. The contract to supply the nuclear steam supply system for the EPR to EDF’s Flamanville 3 unit marked the group’s 100th reactor order. In China, AREVA signed a historic 8 billion euro contract with CGNPC to build two EPRs and supply the materials and services needed to operate them. Also in China, we joined with China National Nuclear Corporation (CNNC) to perform feasibility studies on the construction of a used nuclear fuel treatment and recycling plant. This global agreement secures long lasting roots in a country that is developing one of the largest nuclear programs in the world.

The magnitude of this agreement also confi rms the relevance of our integrated offer covering the entire nuclear cycle and its appeal on international markets. So far, 80% of our customers have ordered at least three products or services from the group’s value chain.

The Chinese contract also illustrates the advance our EPR system has gained over its competitors of the same generation. This is why, in a booming market and with forecasts for more than 200 new reactors to be built by 2030, I wish to emphasize once more the competitive advantage the OL3 project represents for us. This Finnish EPR, the fi rst of many, gives our team and our subcontractors a head start in acquiring the expertise needed to sustain the nuclear revival around the globe. It is also a world class commercial showcase. The nature of the diffi culties encountered during project execution, which were explained with complete transparency, did not in any way alter our customers’ confi dence in this reactor.

“Our success demonstrates the relevance of our integrated business model, which covers the entire nuclear cycle.”

AREVA corporate headquarters in Paris (France).

16 – AREVA 2007 AREVA 2007 – 17

Message from Anne Lauvergeon,Chief Executive Offi cer

Notable contracts were also won in the fi eld of renewable energies, which round out our offering of CO2-free power generation solutions. These include an order for six biomass plants in Brazil and Thailand, and a 500 million euro contract to supply offshore wind turbines in Germany. More than ever, our goal is to pursue signifi cant growth on these markets.

The Transmission & Distribution division (T&D) achieved our profi t goals one year ahead of schedule. A sensible marketing strategy yielded numerous contracts in fast growing markets. In China, a fi rst contract in high voltage direct current gave us a foothold in this promising segment. In the Middle East, we multiplied our contracts and strengthened our leadership position in one of the world’s largest markets in terms of growth. The Canadian aluminum producer Alcan selected our technology to convert alternating current into direct current at some of its Quebec facilities. Overall, the backlog for the T&D business was up a record 40%, while operating margin posted new growth of 9.2%. This improvement is a direct consequence of our repositioning on dynamic markets and the efforts made over the past four years to reduce and adjust our cost structure.

Substantial capital spendingIn 2007, we continued to implement the capital investment program launched in previous years.

Above all, we are investing in human capital. More than 11,500 people of diverse backgrounds and national origins joined our team this year. To attract the talent needed for our fast growing businesses, we entered into partnerships with 80 schools and universities around the globe. This paid off, particularly in France, where the Universum survey ranked AREVA the fi fth most desirable employer for the most prestigious engineering schools.

Our production Capex climbed to 1.3 billion euros in 2007. In mining, our program to increase uranium production capacity has shifted into high gear. In Canada, we began operating the Midwest mine with our partners Denison and OURD Ltd. In Niger, we secured our long-term presence by signing a win-win agreement with the government covering the terms for purchasing uranium from the existing mines and allowing us to mine the Imouraren deposit, discovered by our geologists. AREVA will invest a total of 1 billion euros

to bring this uranium mine, the second largest in the world, into production. In addition to the benefi ts this agreement brings to the economy of Niger, we will continue to support local development through programs in the fi elds of health, education, training and access to water and energy for the local population.

In uranium conversion – the processing step after mining –, AREVA launched the Comurhex II project, with commercial production scheduled to start in 2012. In enrichment, construction of the Georges Besse II plant continues, on time and within budget.

The T&D division made signifi cant investments as well. Production capacity and manpower will increase signifi cantly at our high voltage gas insulated switchgear center of competence at Aix-les-Bains, France. The construction of two new buildings and 120 new hires are slated for 2008. In China, our objective is to double our sales of T&D equipment. We inaugurated the fi fth manufacturing plant for gas insulated switchgear in Suzhou and signed a joint venture agreement with Sunten Electric, making us the leader on the Chinese market for dry transformers.

For high-tech groups such as ours, investment in R&D is critical. Our total R&D spending came to 813 million euros in 2007, or 6.8% of sales – an increase of 21.5% from 2006. Most of this was allocated to mineral exploration, certifi cation of the EPR and ultra high voltage.

Strategic developmentThe development of international partnerships is the most important pillar of the group’s strategy to increase production capacity. We made decisive steps forward in this area in 2007. Our pooling of resources with Mitsubishi Heavy Industries to design an advanced Generation III reactor in the 1,100 MW range took shape with the creation of a joint subsidiary based in Paris, ATMEA.

In used nuclear fuel recycling, we strengthened our partnership with JNFL, another major Japanese nuclear company. In the United States, the Department of Energy awarded a contract to the INRA alliance led by AREVA, Mitsubishi Heavy Industries, JNFL, Washington Group International, BWX Technologies and Battelle to study the development of a used fuel treatment plant and an advanced generation reactor to recycle the fuel. The same approach was used in the T&D business, which formed

an agreement signed with the European Metalworkers Federation (EMF) whose top priority is the equal treatment of employees, irrespective of gender, age, political persuasion, religious beliefs, physical characteristics or ethnic origin. We are determined that this approach will be implemented in every country in which the group operates.

The dialogue established between AREVA and its stakeholders continued with the organization of a second Stakeholders Session. We were the fi rst in the world to create health observatories near our mine sites under the aegis of national authorities. The UN Global Compact recognized our commitment to the fi ght against Aids when it made a case study of our program in Niger. As an extension of the patronage program we set up several years ago, we created a corporate foundation to support local humanitarian initiatives in the fi elds of development, health and childhood. The foundation focuses specifi cally on projects that facilitate universal access to energy.

Meeting the challenges of the 21st centuryBecause energy is everyone’s concern, because our group is a world leader on rapidly expanding markets, because our integrated offer is unique and admired, AREVA attracted a lot of attention in 2007. Our brand is thriving, recognized and attractive for our customers, our shareholders and our current and future employees… We are enthusiastically turned to the future in a world that offers AREVA plenty of new opportunities for profi table growth.

a joint venture with Russian aluminum giant UC Rusal. The T&D division will be the preferred supplier to Rusal for turnkey projects and electrical equipment and services. Our policy of targeted acquisitions was instrumental in strengthening our production capabilitiesin several strategic sectors. Our successful takeover of the Canadian fi rm UraMin, which owns deposits in South Africa, Namibia and the Central African Republic, enables us to secure and diversify our uranium supply. Production is scheduled to begin in Namibia in 2009.

Following through on our plan to strengthen our position in renewable energies, we acquired a 51% equity interest in Multibrid, a German company specialized in multi-megawatt offshore wind turbines. A few months earlier, our friendly takeover bid on wind turbine manufacturer REpower, in which we already held a 30% interest, was stalled when the Indian group Suzlon outbid us. Nevertheless, this transaction ended favorably for the group, with our equity interest quadrupling in value.

In the transmission and distribution fi eld, our position on the market for ultra high, high and medium voltage equipment was strengthened by the acquisition of two Italian companies, VEI Power Distribution and Passoni & Villa, which were joined in early 2008 by the Finnish company Nokian Capacitors.

Responsible growthIn 2007, we continued to deploy our AREVA Way total management method, developed as part of our sustainable development policy. Key indicators point to the continuous improvement of our performance. Our action plan led to a reduction in the group’s already limited greenhouse gas emissions from operations as part of an ambitious multi-year emission reduction program.

We also acquired greenhouse gas emission quotas corresponding to the group’s direct emissions for the year. And we took practical steps to remain carbon neutral in 2008 and beyond, thereby becoming one of the fi rst industrial groups to achieve such a result anywhere in the world.

In employee relations, AREVA wants to build a solid contractual foundation enabling representatives of the employees, management and human resources to work closely together. Our European Work Council is a key player in this dialogue. It took an active role in preparing

“Our policy of targeted acquisitions was instrumental in strengthening our production capabilities in several strategic sectors.”

18 – AREVA 2007 AREVA 2007 – 19

Key data

SALES BY BUSINESS 36%Transmission& Distribution

64%Nuclear

SALES BY REGION

19%Asia-Pacific

8%Africa and Middle East

28%Europe excluding France

17%North and South America

28%France

Backlog

€39.83B

+55.4%The backlog reached a record level of 39.83 billion euros as of December 31, 2007, for 55.4% growth since the end of 2006.

Total R&D spending

€813M

+21.5%

Sales

€11.92B

+9.8%Consolidated sales came to 11.92 billion euros in 2007, compared with 10.86 billion euros in 2006, an increase of 9.8% in reported data and of 10.4% like-for-like.This high level of growth comes from strong business in the Reactors and Services division (+15.2%) and the Transmission & Distribution division (+16.7%).

Number of employees

65,583 I +7.3%The group had 65,583 employees as of the end of 2007, compared with 61,111 employees as of the end of 2006, a 7.3% increase. This change is mainly due to the growth of the group’s operations and the hiring that went with it. In 2007, 11,514 new employees joined the group.

WORKFORCE BY REGION

4%Africa

and Middle East

49%France

22%Europe excluding France

13.5%North and South America

11.5%Asia-Pacific

2006 2007

1.2482.889

NET OPERATING CAPEX (in €Bn)

Net operating Capex

€2.89B I +56.8%Net operating Capex for the group was up sharply in 2007, rising 56.8% from 2006 Capex. This change is the result of a sharp increase in Capex in the Front End division attributable to the acquisition of UraMin and continued construction of the Georges-Besse II plant, and increased capital spending in the Transmission & Distribution division with the acquisitions of Passoni & Villa and VEI Distribution.

Dividend

€6.77voted by the Annual General Meeting of Shareholders of April 17, 2008

OPERATING INCOME

(in €M)

2006 2007

Operating income

€751M I +84.6%Operating income came to 751 million euros in 2007, giving operating margin of 6.3% compared with 3.7% in 2006. This increase refl ects improved profi tability in the Front End division and the Reactors and Services division in particular.

407

751

CONSOLIDATED

NET INCOME (in €M)

2006 2007

Consolidated net income

€743M I +14.5%Consolidated net income rose to 743 million euros in 2007, compared with 649 million euros in 2006, i.e. a 14.5% increase.

649743

Key data

WATER CONSUMED EXCLUDING

COOLING WATER (in millions of m3)ENERGY CONSUMED EXCLUDING

EURODIF (in GWh)PAPER CONSUMED

(in kg per employee)

The installation of a closed loop cooling system at the Chemistry business unit’s Comurhex Malvési site was one of the highlights of 2007. In just fi ve months of operation, it reduced water consumption by 585,000 m3, bringing the site’s total water consumption down by 36% as a result. From 2006 to 2007, after adjustment of raw data by business, water consumption dropped 14%.

FREQUENCY RATE FOR WORK-RELATED

ACCIDENTS WITH LOST TIME FOR

AREVA GROUP EMPLOYEES

SEVERITY RATE OF WORK-RELATED

ACCIDENTS WITH LOST TIME FOR

AREVA GROUP EMPLOYEES

For AREVA, occupational safety is an ever-present concern, whether for its own employees or those of its subcontractors. Our goal does not change: zero accident.In 2007, the group achieved an average accident frequency rate of 3.55, two and half times less than in 2003. The accident severity rate target for 2010 has already been met and even exceeded. However, there were unfortunately six fatal accidents among the group’s employees and subcontractors last year. Audits and action plans have been rolled out to strengthen risk identifi cation and management.

Safety Direct greenhouse gas emissionsThe AREVA group’s direct emissions of greenhouse gases (GHG) in 2007 represented 990,836 metric tons of CO2 equivalent, 18.5% less than in 2006, after adjustment of raw data by business. Fossil fuels accounted for 36% of these emissions, while sulfur hexafl uoride (SF6) represented 20% and nitrous oxide (N2O) 39%. SF6 emissions were cut back sharply in 2007 following modifi cations in 2006 to the treatment process for fl uorine vented by the Comurhex Pierrelatte site. N20 emissions come mainly from precipitation and calcining operations in the UO3 production process at the Comurhex Malvési site. Observations made using a continuous monitoring system set up in September 2007 helped partially reduce emissions by improving the furnaces’ operating parameters.

AVERAGE RADIATION

EXPOSURE OF EMPLOYEES AND

SUBCONTRACTOR PERSONNEL

The average doses from radiation exposure continued to drop this year. This is a sign of good management of radiation protection in the group.

In 2007, as a result of strong business growth, the Mining business unit became the group’s largest energy consumer. The Treatment busi-ness unit continued to reduce its consump-tion, by 1.6% in absolute terms.Other notable changes were the Equipment business unit’s ramp-up of Creusot Forge and Eurodif’s drop in consumption due to eco-effi ciency improvements at its facilities. In 2007, a total of 2,925,200 MWh of energy was consumed, excluding Eurodif, repre-senting a 5% reduction in relation to 2006, after adjustment of raw data by business.

Paper consumption continues to drop. Paper reduction programs are being implemented in every one of the group’s entities. By way of example, reconfi guring printers for two-sided printing resulted in the following reductions from 2006 to 2007:• Comurhex Malvési (Chemistry BU): – 10.4%

less paper purchased due to a 10% reduc-tion in per person consumption;

• Sully-sur-Loire (Nuclear Services BU): – 21.1% less paper purchased due to a 23.9% reduc-tion in per person consumption; and

• Mâcon (Products BU): – 17.1% less paper purchased due to a 19.7% reduction in per person consumption.

Total tons consumed, after adjustment of raw data by business, dropped 14.7% from 2006 to 2007.

20 – AREVA 2007 AREVA 2007 – 21

2005 2006 20072007

23.920.6 19.4

2005 2006 20072007

2,895 2,806 2,925

2005 2006 20072007

32.5 3124.6

DIRECT EMISSIONS OF GHG

(in thousands of metric tons of CO2 equivalent)

DIRECT GHG EMISSIONS BY DIVISION

IN 2007

60%Front End

24%T&D

6%R&S

10%Back End

Radiation protection

22 – AREVA 2007 AREVA 2007 – 23

J A N U A R Y F E B R U A R Y M A R C H A P R I L M AY J U N E J U LYA U G U S T S E P T E M B E R O C T O B E R N O V E M B E R D E C E M B E R

JANUARY

AREVA WINS TWO CONTRACTS FOR A COMBINED VALUE OF AROUND 400 MILLION EUROS for upgrades to unit 2 of the Oskarshamn power plant and life extension of the Ringhals power plant. This success strengthens the group’s presence in the Swedish nuclear market.

FEBRUARY

AREVA TO BUILD SIX BIOMASS POWER PLANTS, four in Brazil and two in Thailand, for a total of more than 70 million euros. The 10 and 12 MW power plants will operate mainly with wood waste and rice husks.

MARCH

BRITISH UTILITY E.ON UK AWARDS CONTRACT TO AREVA for the design, supply, installation and start-up of onshore and offshore substations for two large wind farms.

J A N UA R Y F E B R UA R Y M A R C H A P R I L M AYJUNEJULYAUGUSTSEPTEMBER O C T O B E R N OV E M B E R D E C E M B E R

MAY

AREVA LAUNCHES COMURHEX II PROJECT to give the group new ura-nium conversion facilities. This 610 million euro in-vestment will strengthen AREVA’s world leadership position in conversion.

JUNE

SUPPORTED BY MAJOR EUROPEAN UTILITIES, AREVA applies for generic design acceptance for its EPR from the UK regulatory authorities. The acceptance process will be conducted jointly with EDF.

KHNP OF SOUTH KOREA,one of the world’s leading generators of nuclear power, signs a contract with AREVA valued at more than one billion euros to provide ura-nium enrichment services.

AREVA JOINS WITH UC RUSAL OF RUSSIA, THE WORLD LEADER IN ALUMINUM. The 50/50 joint venture will become the preferred supplier of turnkey projects and electrical equipment and services in the fi eld of electricity transmission and distribution to UC Rusal’s facilities.

AUGUST

AREVA ACQUIRES THE MEDIUM VOLTAGE OPERATIONS OF VEI POWER DISTRIBUTION S.P.A. This acquisition helps the group strengthen its presence on the global electricity distribution market and become one of the leaders of this segment in Italy and Malaysia.

2007 highlights

APRIL

AREVA WINS A CONTRACT OF MORE THAN 100 MILLION EUROS TO BUILD A GAS-INSULATED HIGH VOLTAGE SUBSTATION in Saudi Arabia and to refurbish 15 other substations.

AREVA ACQUIRES A 51% STAKE IN MULTIBRID, a designer and manufacturer of multi-megawatt offshore wind turbines. The deal bolsters the group’s stra-tegic position in CO2-free power generation.

AREVA DONGFANG, A SUBSIDIARY OF AREVA AND DEC, receives a letter of intent to supply 18 reactor coolant pumps to Chinese utility CNPEC. The contract is valued at more than 100 million euros.

EDF CONTRACTS WITH AREVA FOR THE NUCLEAR STEAM SUPPLY SYSTEM OF THE FLAMANVILLE EPR IN FRANCE. This is the 100th reactor order for the group and the second EPR under construction in the world.

SEPTEMBER

JULY

AREVA SIGNS AN AGREE-MENT TO ACQUIRE PASSONI & VILLA, a world leader in the manufacture of high voltage bushings active in more than 60 countries. The group is now number three worldwide in this market segment.

AREVA TO DELIVER A POWER SUPPLY SYSTEM TO ALCAN for its new production site in Canada. The contract, valued at more than 100 million euros, calls for the turnkey construction of a high voltage system to convert alternating current into direct current.

AREVA AND JNFL SIGN A GLOBAL PARTNERSHIP AGREEMENT extending their cooperation in the fi eld of used nuclear fuel recycling. The two groups will jointly strengthen the industrial performance of their sister plants and pool their efforts to promote the closed fuel cycle at the international level.

AREVA AND SOGIN (NUCLEAR PLANT MANAGEMENT COMPANY IN ITALY) SIGN A CONTRACT for more than 250 million euros to treat 235 metric tons of used nuclear fuel.

AREVA SUCCESSFULLY BIDS TO TAKE OVER THE MINING COMPANY URAMIN, an important milestone in its plan to diversify sources and increase production. The deposits identifi ed in South Africa, Namibia and Central African Republic should result in an annual production of more than 7,000 metric tons of uranium after 2012.

24 – AREVA 2007 AREVA 2007 – 25

JANUARYFEBRUARYMARCHAPRILMAYJUNEJULYAUGUSTSEPTEMBEROCTOBERNOVEMBERDECEMBER2008JANUARY

OCTOBER

AS PART OF THE GLOBAL NUCLEAR ENERGY PARTNERSHIP (GNEP), and a team member(1), AREVA signs a contract with the US Department of Energy (DOE) to study the development of a used nuclear fuel treatment plant and an advanced generation reactor to recycle the fuel. GNEP is arguing in favor of closing the nuclear fuel cycle and recycling materials. The program should help improve the United States’ energy independence while meeting growing domestic demand for energy.

(1) AREVA, MHI, JNFL, Battelle, BWX Technologies.

HISTORIC PARTNERSHIP AGREEMENT SIGNED IN CHINA BETWEEN AREVA AND CGNPC in civilian nuclear power. The agreement, valued at 8 billion euros, concerns the construction of two EPRs and the supply of all of the mate-rials and services needed for their operation.

DECEMBER

AREVA AND MHI offi cialize the creation of the ATMEA joint venture. This joint company is starting to develop, license and market the 1,100 MW ATMEA1 reactor, designed to meet world demand for mid-range reactors.

AREVA SUBMITS CERTIFICATION APPLICATION TO THE US NUCLEAR REGULATORY COMMISSION (NRC) for its Generation III+ EPR. The group is the fi rst vendor to join forces with one of its customers(2) for certifi cation, the better to meet its requirements.(2) AREVA and the US utility Constellation Energy formed UniStar Nuclear, a joint venture created to promote the EPR technology and to market a fl eet of standardized reactors in the United States.

JOINT VENTURE ASSOCIATES AREVA, DENISON AND OURD LTD announce their decision to start operation of the Midwest mine in Canada. Located in northern Saskatchewan Province, one of the planet’s richest sources of uranium, the ore will be mined in an open pit operation, producing about 14,000 metric tons of uranium.

China is hungry for electricity. The forecasts see demand for an additional 900 to 1,000 gigawatts (GW) by 2020. Nuclear power is expected to meet part of that demand, and China is expected to triple its nuclear generating capacity to 40 GW by 2020.

AREVA WINS CONTRACT OF THE CENTURY WITH INTEGRATED PROPOSAL

NOVEMBER

2007 highlights

JANUARY 2008

AREVA ACQUIRES Finnish company Nokian Capacitors Ltd, thereby strengthening its position on the booming ultra high voltage market.

TOTAL, SUEZ AND AREVA sign a partnership agreement to make an integrated proposal to the United Arab Emirates for nuclear power generation with the supply of two 1,600 MW EPRs and fuel cycle products and services.

QATAR’S GENERAL ELECTRICITY AND WATER CORPORATION, Kahramaa, awarded a contract valued at around 500 million euros to AREVA’s Transmission & Distribution division, the biggest in its history. The contract calls forthe turnkey supply of 14 gas-insulated substations (GIS) so that it can expand and improve the power grid in the Doha region.

IN NIGER, AREVA RECEIVES GOVERNMENT APPROVAL to launch the project to operate the Imouraren site. The group will double its mining capacities in Niger and create more than 1,400 direct jobs and numerous indirect jobs. In addition, AREVA is raising its purchase prices for uranium from the COMINAK and SOMAÏR mines by about 50% to refl ect higher ore prices.

AREVA ACQUIRES 70% OF KOBLITZ, a Brazilian supplier of integrated solutions for energy production and cogeneration (heat and electricity) from renewable sources.

IN THE UNITED STATES, AREVA WINS major nuclear fuel supply contracts from US utilities Constellation Energy, Tennessee Valley Authority (TVA), PPL Corporation and AmerGen Energy Company. These four contracts represent a combined value of more than 200 million euros.

2007, the year of China

In November, AREVA signed a record-breaking contract in China valued at 8 billion euros – the largest in the history of civilian nuclear power. The end result: delivery of two EPR type reactors to Chinese utility CGNPC at Taishan, in southern China, and fuel supply over a 15-year period.Thirty-fi ve percent of the uranium mined by UraMin, a company acquired in July 2007, was sold to CGNPC.To limit the foreign exchange risk, AREVA made sure that all costs in euros are paid in euros; the remainder is paid in dollars.The contract confi rms the relevancy of the group’s business model as the only company in the industry to cover the entire nuclear cycle. It is also a continuation of AREVA’s long history in China.

With 3,000 employees in the country, the group has been a partner to CGNPC for 20 years and built the second generation Daya Bay and Ling Ao power plants operated by the Guangdong utility. With this record-breaking contract, both companies are entering a new era and have created a 50/50 joint company to provide project engineering.AREVA thus maintains control over technology transfer.Other partnerships were formed as well. AREVA and China National Nuclear Corporation (CNNC) agreed to carry out feasibility studies for the construction of a used fuel treatment and recycling plant. The two companies have also created a joint company in the fi eld of zirconium, used for fuel assembly cladding.

A promising market for AREVA’s T&D division

AREVA’s Transmission & Distribution division is one of China’s leading suppliers of high and medium voltage switchgear and of safety and monitoring equipment and employs 1,800 people in that country. It has eleven sales offi ces, operates fi ve plants, and has created numerous joint ventures with local partners.In 2007, after inaugurating its fi fth Chinese site, a gas-insulated switchgear manufacturing plant in Suzhou, the Transmission & Distribution division created a 50/50 joint venture with Sunten Electric, thereby becoming the Chinese leader in dry transformers and acquiring the means to double its sales in this segment by 2010. Beforehand, the Transmission & Distribution division had formed another joint venture with Wuxi Aluminium Technology, a manufacturer of aluminum castings, which are strategic components for gas-insulated switchgear solutions. Because R&D is crucial to T&D’s development, AREVA created a research center with the University of Tsinghua and concluded a cooperation agreement with the China Electrical Power Research Institute (CEPRI). Through these partnerships, AREVA is strengthening its presence in China and preparing to meet strong demand for electricity transmission and distribution.

26 – AREVA 2007 AREVA 2007 – 27

Corporate governance

Members appointed by the shareholdersFrédéric Lemoine(2)

Chairman of the Supervisory BoardTerm: 2006-2011

Alain BugatVice Chairman of the Supervisory BoardTerm: 2006-2011

Commissariat à l’énergie atomique (CEA)Represented by Olivier PagezyTerm: 2006-2011

Thierry Desmarest

Term: 2006-2011

Oscar Fanjul(2)

Term: 2006-2011

Philippe Pradel Term: 2006-2011

Guylaine Saucier(2)

Term: 2006-2011

Members representing the French state, appointed by ministerial orderBruno BézardTerm: 2006-2011

Pierre-Franck Chevet

Term: 2007-2011

Gérard ErreraTerm: 2007-2011

Luc RousseauTerm: 2006-2011

Members elected by and representing the employeesJean-Claude BertrandTerm: 2007-2012

Gérard MeletTerm: 2007-2012

Alain Vivier-MerleTerm: 2007-2012

SUPERVISORY BOARD(1)

(1) As of March 30, 2008.

(2) Following commonly accepted rules of good governance, particularly those ofthe Bouton Report, individuals who hold less than 10% of the share capital and who have no fi nancial or commercial relationship with the company, either as customer or supplier, are considered independent.

RESPONSIBILITIES

The Supervisory Board exercises ongoing control of AREVA’s management by the Executive Board and approves the group’s overall strategy.

The annual and multi-year budgets of AREVA, of its direct subsidiaries and of the group, are submitted to the Supervisory Board for approval.

MAIN ACTIVITIES IN 2007

• Examination of the REpower deal.

• Approval to carry out the Comurhex II conversion plant project.

• Approval to set up a joint venture between AREVA T&D Holding and Sunten.

• Approval of AREVA’s acquisition of UraMin.

• Approval of AREVA’s acquisition of a 51% stake in Multibrid.

• Approval of the 2008-2012 Strategic Action Plan.

• Approval of the 2008 budget proposal.

• Approval of AREVA’s buy out of 70% of Koblitz.

For complete information on the terms of the members of the Supervisory Board, please see our reference document.

12 meetings

84% attendance rate

Strategy committeeRESPONSIBILITIES

Responsible for advising the Supervisory Board on the strategic objectives of the company and for assessing the risks and merits of major strategic decisions proposed by the Executive Board. Ensures enforcement of the group’s strategic policy. Orders studies as it deems useful and recommends policies as it deems necessary.


• Examination of the 2007-2011 Strategic Action Plan and issuance of concurrence.

• Examination of the REpower affair.

• Issuance of concurrence for acquisition of UraMin.

Audit committeeRESPONSIBILITIES

Assesses and contributes to the defi nition of the group’s accounting, fi nancial and business ethics standards. Ensures their relevance and effectiveness and verifi es internal control procedures. Undertakes studies on particular points at the request of the Supervisory Board or on its own initiative.Reviews the company’s proposed budgets, annual fi nancial statements and multi-year plans.Examines the conclusions of the statutory auditors so as to assist the Supervisory Board in its monitoring and verifi cation mission. Recommends successors or term renewals for the statutory auditors.Examines risk map and assesses resources for risk avoidance.


• Examination of the fi nancial statements for 2006.

• Examination of the status of the OL3 project and of the consolidated fi nancial statements as of June 30, 2007.

• Examination of the 2007 and 2008 budgets.

• Review of the group’s risk map.

• Examination of the 2007 internal audit report and review of the internal audit plan for 2008.

Compensation and nominating committeeRESPONSIBILITIES

Makes recommendations to the Supervisory Board on compensation levels, pension and disability plans, and non-cash benefi ts for corporate executives. Examines the appropriateness and conditions for implementation of stock purchase plans for executives, management and employees.Gives its opinion to the Supervisory Board on appointments of corporate offi cers for fi rst-tier subsidiaries of the AREVA group.Reviews the records of individuals considered for a seat on the Executive Board.


• Issuance of concurrence on the appointment of Mr. Luc Oursel to AREVA’s Executive Board to replace Mr. Vincent Maurel.

• Issuance of concurrence on the 2006 bonus set for the members of the Executive Board and on the updating of their fi xed and variable annual compensation.

• Examination of the mobility policy for senior executives of the AREVA group.

• Decision to use an independent agency to search for at least one additional independent director.

End-of-life-cycle obligations monitoring committeeRESPONSIBILITIES

Helps monitor the dedicated asset portfolio set up to cover future cleanup and dismantling expenses.Examines estimated future cleanup and dismantling expenses based on a multi-year schedule, methods used to set up, manage and monitor funds earmarked to cover these expenses, and the corresponding fi nancial asset management policy.


• Examination of the estimate of end-of-life-cycle liabilities and earmarked assets as of year-end 2006.

• Examination of the selection criteria used by asset managers for each asset category.

• Examination of the triennial report on the valuation of long-term expenses for licensed nuclear facilities.

• Review of the liability coverage and asset allocation policy and of the revised method for determining the discount rate.

• Examination of the main changes in assumptions to be used to revise the end-of-life-cycle provisions for the La Hague site.

• Examination of cash fl ow forecasts for 2007, of fi nancial income related to end-of-life-cycle operations and of the current status of dedicated mutual funds.

4 meetings

85% attendance rate

8 meetings

93% attendance rate

3 meetings

100% attendance rate

3 meetings

87% attendance rate

THE AREVA VALUES CHARTERAREVA’s values are the essence of the group’s sustainable development strategy. They include integrity, an acute sense of professionalism, responsibility, sincerity, partnership, profi tability and customer satisfaction. Respect for human rights, made clear from the Charter’s preamble, is woven throughout the AREVA Values Charter, which also refers explicitly to the United Nations Global Compact and to the Guidelines for Multinational Enterprises of the Organization for Economic Cooperation and Development. A veritable set of standards that enter into the scope of audits, the Values Charter is applicable to all of the group’s executives and employees. Management is responsible for implementing the Values Charter at every level. The Charter encompasses our values, our action principles and our rules of conduct.The group’s Business Ethics Advisor, appointed by the Chief Executive Offi cer, advises management in the event of confl icts concerning the application of the Values Charter, designs and oversees training programs in ethics and group values in liaison with AREVA University, and provides leadership for a network of coordinators in the fi rst-tier subsidiaries.

To learn more• The AREVA Values Charter

is available at www.areva.com

• The principles of the United Nations Global Compact may be found at www.unglobalcompact.org

• The OECD guidelines for multinational enterprises are available at www.oecd.org

Corporate governance

28 – AREVA 2007 AREVA 2007 – 29

EXECUTIVE BOARD(1)

Executive Board membersAnne LauvergeonChief Executive Offi cer of AREVATerm: 2006-2011

Gérald ArbolaChief Operating Offi cer of AREVATerm: 2006-2011

Didier BenedettiChief Operating Offi cer of AREVA NCTerm: 2006-2011

Luc OurselPresident and Chief Executive Offi cer of AREVA NPTerm: 2007-2011

RESPONSIBILITIES

Full powers are vested in the Executive Board to act on behalf of the company in all circumstances with regard to third parties, excepting powers expressly attributed by law to the Supervisory Board and to the Meetings of the Shareholders.

The Board meets as often as the company’s interests dictate.

SCIENCE AND ETHICS COMMITTEE

RESPONSIBILITIES

AREVA’s Science and Ethics committee supports the group’s reviews of major social issues linked to the energy sector and formulates recommendations to the Chairman of the Executive Board.


• Nuclear non-proliferation.

• AREVA’s innovation policy.

• The rational in long-term energy choices and the impact of European policy.

• The potential for use of nuclear in the medical fi eld.

• Communications in the fi eld of advanced technology.

INDEPENDENT MEMBERS

Roger Balian Chairman of the Société française de physique, Member of the Académie des sciences

François Balle Professor at the University of Paris II, former Member of the Conseil supérieur de l’audiovisuel

Geneviève Barrier-JacobProfessor Emeritus at the Faculté Necker-Enfants Malades, former Director of the Samu de Paris emergency medical service and former Vice Chairman of the Comité national consultatif d’éthique

Christian de BoissieuChairman of the Conseil d’analyse économique, Professor at the University of Paris I–Panthéon Sorbonne

Édouard Brezin Professor Emeritus at the Université Pierre et Marie Curie, Member of the Laboratoire de physique théorique de l’École normale supérieure, Honorary Professor at École Polytechnique, Member of the Académie des sciences

Georges Charpak Nobel Prize in Physics

Jean-Marie Colombani Journalist, Chairman of JMC Média

François Ewald Professor at the Conservatoire national des arts et métiers, Chairman of AREVA’s Science and Ethics committee

James Lovelock Companion of Honour, Commander of the Order of the British Empire, Member of the Royal Society, Honorary Visiting Fellow of Green College, Oxford University

Roland Masse Member of the Académie des technologies, former Chairman of the Offi ce de protection contre les rayonnements ionisants (OPRI)

Érik Orsenna Writer, Member of the Académie française

Michel Serres Science historian, Member of the Académie française

Alain Touraine Sociologist, Chief Scholar at the École des hautes études en sciences sociales

Maurice Tubiana Former Chairman of the Académie de médecine, Member of the Académie des sciences, Honorary Director of the Institut Gustave Roussy, Honorary Chairman of the Centre Antoine-Béclère, Honorary Chairman of AREVA’s Science and Ethics committee

AREVA MEMBERS

Anne Lauvergeon Chief Executive Offi cer

Alain Bucaille Senior Vice President, Research and Innovation

Bernard de Gouttes Chief Legal Counsel

Olivier LoubièreBusiness Ethics Advisor


• Examination of the REpower project.

• Approval of the Comurhex II project.

• Organization of the Renewable Energies business unit.

• Approval of the 2008-2012 Strategic Action Plan.

• Approval of the acquisition of UraMin.

• Issuance of concurrence on AREVA’s acquisition of a majority interest in Koblitz.

(1) As of March 30, 2008.

30 – AREVA 2007 AREVA 2007 – 31

Organization of the group*

Front EndMining, Chemistry, EnrichmentOlivier Mallet

FuelRalf Güldner

Reactors and ServicesPlantsClaude Jaouen

EquipmentGuillaume Dureau

Nuclear ServicesJoël Pijselman

Nuclear MeasurementFrédéric Van Heems

Consulting and Information SystemsKhaled Draz

AREVA TADominique Mockly

Renewable EnergiesBertrand Durrande

Back EndRecycling, Logistics, Nuclear Site Value DevelopmentJacques Besnainou

EngineeringChristian Petit

CleanupYves Lapierre

Corporate Departments

Transmission & DistributionProductsGhislain Lescuyer

ServicePhilippe Samama

SystemsMichel Augonnet

AutomationAnil Chaudhry (acting)

AuditMarc Andolenko

CommunicationsJacques-Emmanuel Saulnier

DevelopmentFélicité Herzog

FinanceAlain-Pierre Raynaud

Human ResourcesPhilippe Vivien

Information SystemsBenoît Tiers

International and MarketingJean-Jacques Gautrot

Legal AffairsBernard de Gouttes

Protection of Persons and Corporate AssetsThierry d’Arbonneau

Purchasing Patrick Champalaune

Research and InnovationAlain Bucaille

Scientifi cPhilippe Garderet

Senior Manager Career Development and University Robert Pistre

Strategic Risks, Contracts and Claims ManagementJosé-Luis Carbonell

StrategyFrançois-Xavier Rouxel

Sustainable Development and Continuous ImprovementJean-Pol Poncelet

2

Gérald Arbola

Chief Operating Offi cer

Member of the Executive Board

3

Alain-Pierre Raynaud

Chief Financial Offi cer

4

Didier Benedetti

Chief Operating Offi cer of AREVA NCMember of the Executive Board

5

Philippe Guillemot

Chairman and Chief Executive Offi cer of AREVA T&D

6

Luc Oursel

President and Chief Executive Offi cer of AREVA NP Member of the Executive Board

7

Philippe Vivien

Senior Executive Vice President, Human Resources

EXECUTIVE COMMITTEE

1

Anne Lauvergeon

Chief Executive Offi cer and Chairman of the Executive Board

3 4 7 1 5 2 6

* As of March 30, 2008.

32 – AREVA 2007 AREVA 2007 – 33

Share informationTrading exchangeEuronext

MarketEuronext Paris – Compartiment A

IndexSBF 120 / MID CAC 1001,429,108 investment certifi cates listed

Total number of outstanding shares and ICs: 35,442,70134,013,593 shares1,429,108 investment certifi cates1,429,108 voting right certifi cates

CodesISIN FR: 0004275832Reuters: CEPFI. ABloomberg: CEI

Custodian servicesCACEIS CTInvestor Relations14, rue Rouget-de-l’Isle92130 Issy-les-Moulineaux Cedex 09FranceTel.: +33 1 57 78 34 44Fax: +33 1 57 78 34 00E-mail: [email protected]

SHAREHOLDERS

AS OF DECEMBER 31, 2007

Commissariat à l’énergie atomique 79% French state 5% Erap 3% Caisse des Dépôts et Consignations 4% IC holders (fl oat) 4% EDF 2% Framépargne(1) 2% Total 1%

(1) Framépargne: fund in which AREVA employee shares are held under the Group Savings Plan. Some of the shares (0.89%) are held by Calyon, the bank that ensures the liquidity of the Framépargne fund.

€6.772007 dividendThe General Meeting of Shareholders of April 17, 2008 approved a dividend of €6.77 per share or investment certifi cate. This dividend corresponds to a distribution rate of 32.3 % of consolidated net income for 2007 and will be paid on June 30, 2008.

IC trading data2007 2006 2005

Price at December 31 (in euros) 785.0 563.0 405.5

Market capitalization at December 31 (in billions of euros) 27.82 19.95 14.37

High (in euros) 831.5 650.0 460.5

Low (in euros) 552.5 403.0 301.0

Average daily volume (in number of ICs) 7,067 5,255 7,127

Net earnings per share or IC (in euros) 20.96 18.31 29.6

Net dividend (in euros) 6.77 8.46 9.87

€100

€200

€300

€400

€500

€600

€700

€800

€900

2/29/2008

12/31/200712/31/200612/31/200512/31/200412/31/200312/31/200212/31/2001

9/03/2001

Share information and shareholder relations

IC PRICE SINCE THE GROUP’S ESTABLISHMENT

Since AREVA’s establishment on September 3, 2001 until February 29, 2008, the price of the company’s investment certifi cate has risen by 387.5%, outperforming the CAC 40, which gained 3.5% over the same period, and the EuroStoxx 50 index, which gained 0.9%. In 2007, the investment certifi cate posted growth of 39.06%, compared with 0.69% for the CAC 40 and 6.79% for the EuroStoxx 50 index.The average daily volume traded was 7,067 ICs in 2007, compared with 5,255 ICs in 2006 and 7,127 ICs in 2005. In terms of value, the average daily volume traded came to 5.1 million euros in 2007, up from 2.7 million euros in 2006 and 2.5 million euros in 2005.

87%French state

4%Listed ICs

AREVA IC

CAC 40

4% OF AREVA’S SHARE CAPITAL IS TRADED ON EURONEXT PARIS IN THE FORM OF INVESTMENT CERTIFICATES (IC), I.E. SHARES WITHOUT VOTING RIGHTS. THE AREVA IC IS INCLUDED IN THE SBF 120 INDEX OF EURONEXT PARIS.

Investment certifi cate price in 2007

+39.06%

34 – AREVA 2007 AREVA 2007 – 35

Calendar

June 30, 2008Dividend payment for 2007

July 24, 2008First half 2008 sales

August 29, 2008First half 2008 income

October 23, 2008Third quarter 2008 sales and related information

Contacts

Isabelle CoupeyVice President, Financial Communications and Investor RelationsTel.: +33 1 34 96 14 [email protected]

Manuel LachauxFinancial Information and Analysis ManagerTel.: +33 1 34 96 11 [email protected]

Pauline BriandMarketing and Retail Shareholding ManagerTel.: +33 1 34 96 14 [email protected]

Share information and shareholder relations

The purpose of fi nancial communications is to provide accurate information to shareholders and investment certifi cate holders on the group’s markets, businesses, fi nancial performance and strategy.

Financial information is of major importance to AREVA. Any information of a fi nancial, business, organizational or strategic nature that may be of interest to the fi nancial community is provided through press releases, nearly 50 of which were published in 2007.

Every year, the group holds an information meeting on its fi nancial performance and a telephone conference to comment on half-year results. The AREVA Technical Days program was launched in 2002 to introduce the group’s businesses and technologies. Since then, six sessions have been held, each time with 100 to 150 people attending, including analysts, investors, journalists and fi nancial investment advisors.

The sixth session took place in India in April 2007. It provided an opportunity to review the Transmission & Distribution division and to give an overview of India’s energy challenges. The group also organized fi ve plant tours in 2007 for analysts and investors.

The fi nancial communications team met more than 1,000 analysts and investors in key fi nancial centers in 2007 during road shows, private meetings and plant tours.

Several publications and media are used to disseminate fi nancial information, including the reference document, the activity and sustainable development report, and the website www.areva.com. Individuals interested in receiving press releases by e-mail may register on the group’s website, which also features a schedule of upcoming events and announcements.

Shareholders have 24-hour access to a dedicated e-mail address and a reduced toll number in France.

Financial communications program

1,000 analysts and investors encountered in key fi nancial centers

More than

50 press releases published

Nearly

plant tours organized for analysts and investors5

Our objective: to implement best practices in online fi nancial communications

www.areva.comThe mission of the website is to provide comprehensive information on the group’s news and operations. The Finance section, dedicated to the fi nancial community, presents AREVA’s businesses in the context of global energy challenges, the group’s strategic objectives, and the fi nancial performance of its divisions’ operations. To ensure that information is widely available, this heading also offers rebroadcasts of presentations of fi nancial results and topical presentations given during plant tours.

Retail Shareholder Relations

(in France only)

[email protected]

Leader and expert

AREVA 2007 – 37

AREVA turned six years old in 2007. Six years in which we pooled the group’s know-how and launched decisive investments to bring to the world market comprehensive solutions for CO2-free power generationand grid infrastructure.

38 – AREVA 2007 AREVA 2007 – 39

SOLUTIONS FOR CO2-FREE POWER GENERATION

Investment, operation mining:AREVA goes into high gear

AREVA’s customers plan ahead. They want more and more uranium and are ordering it earlier and earlier. In 2007, the Front End division’s backlog jumped 33% to 88,000 met-ric tons of uranium, 60% of which will be delivered after 2012. AREVA’s ambition is to give customers the assurance that they will always have enough fuel to operate their power plants. Already the third largest ura-nium producer in the world, the group has decided to expand its mining investment program signifi -cantly. The goal: to boost produc-tion while diversifying sources of supply. The acquisition of the Canadian fi rm UraMin in August 2007 meets this two-pronged strategic target. With deposits in Namibia, South Africa and the Central African Republic,

UraMin has a production potential of 7,000 metric tons of uranium per year. This momentous investment was not the only excellent news of 2007. In Kazakhstan, the Katco joint ven-ture inaugurated the new Tortkuduk plant in July and marked its fi rst full year of production. AREVA also received several per-mits to launch new projects. In Niger, the group received the green light from the government to mine the Imouraren deposit, thus secur-ing its mine operator position in that country for decades to come. In Canada, AREVA began operating the Midwest mine, in which it has a 69.16% interest, in December. Also in Canada, the Nunavut government approved the feasibility study for the Kiggavik project in September on behalf of the Inuit community.

Ensuring fuel supply, now and in the future

The UraMin acquisition strengthens long term uranium production The acquisition brings three new large-scale mining projects to AREVA: Bakouma in the Central African Republic, Ryst Kuil in South Africa, and especially the gigantic Trekkopje deposit in Namibia. This is a strategic investment for the group and constitutes a guarantee of supply for its customers. This was demonstrated by the contract signed in November with CGNPC, the electric utility of Guangdong Province, China, assuring among other things fuel supply corresponding to 35% of UraMin’s production.

If more nuclear power plants are built, more fuel will be needed to operate them. The nuclear revival has focused electric utilities’ attention on uranium inventories. After a long period of low prices, this sudden interest caused uranium prices to explode, with prices rising tenfold from 2003 to 2007. Enough to accelerate the necessary investments in exploration and mining.

5,000 metric tons of uranium mined per year at full capacity, more than one billion euros invested… the Imouraren site is the largest commercial mining project ever contemplated in Niger. It is part of the win-win partnership between the group and the government of Niger signed in January 2008. With Imouraren, AREVA will double its mining capacity in Niger and create more than 1,400 direct jobs and numerous indirect jobs. The group is also raising its purchase prices for uranium from the COMINAK and SOMAÏR mines to refl ect the increase in ore prices. Meanwhile, it plans to pursue its community development activities in Niger, including irrigation projects and vocational training.

Uranium ore processing plant operated by SOMAÏR (Niger).

Production

Development

Mining

Corporate offi ce

AREVA IN NIGER

40 – AREVA 2007 AREVA 2007 – 41


Construction of the huge Georges Besse II plant continued in 2007. This is a major milestone in the plan to replace enrichment production capability in terms of both size and modularity, and because the ultracentrifugation technology selected will consume 50 times less electricity than the current process.

In ultracentrifugation, rows of cylinders or “bowls” are installed. They separate

uranium hexafl uoride molecules by spinning at

very high speed. The heavier particles,

containing the uranium-238 isotope, are projected to

the walls of the bowl. The lighter molecules,

containing uranium-235, remain near the center. The proportion of light,

fi ssile molecules increases from one bowl to the next, thus enriching the mixture.

Georges Besse II, a technology shift that conserves huge quantities of energy In 1978, the gaseous diffusion pro-cess used in AREVA’s Eurodif plant at the Tricastin site in France was the best technology available to en-rich natural uranium and turn it into an effi cient fuel. The time having come to replace its production equipment, AREVA opted for ultra-centrifugation, a process that uses 50 times less energy. The Georges Besse II plant also features an in-novative modular design. The fi rst

production lines are scheduled to start up in the fi rst half of 2009. Plant construction and ramp-up will continue until full production ca-pacity of 7.5 million SWU is reached in 2016. With this capital project, the group, as the world leader in en-richment with a 23% market share, will be able to guarantee the long term security of supply on which its customers are counting for their own capital projects.

Ensuring fuel supply, now and in the future

URANIUM CONVERSION is a key step in the nuclear fuel production cycle. It concentrates uranium stripped from the ore in the form of uranium hexafl uoride, ready for enrichment.

Reinforcing a leadership position on the conversion market AREVA, the world leader in conversion with a 26% market share, has launched a 610 million euro capital spending project to replace production capability known as Comurhex II. The project will upgrade the Malvési and Tricastin sites in France, which provide the two phases of conversion. Once completed, production capacity will rise to meet the growing demand for nuclear fuel. The plants will deploy new, more effi cient technologies that consume less water, energy and raw materials, and will release fewer effl uents and fl uorine. Construction began in the summer of 2007; commercial production is slated for 2012.

Demand is rising in the United States The United States is one of the most promising markets for the nuclear industry, in every step of the fuel cycle. And with the support of its US customers, AREVA is able to offer solutions for every step.To meet demand for new enrichment capacity, AREVA is contemplating the construction of its own plant in the US, patterned after Georges Besse II. This represents an investment of 2 billion dollars. Submittal of the license application to the US Nuclear Regulatory Commission (NRC) is slated for 2008. The plant would have a production capacity of 3 million Separative Work Units (SWU).

The clean room of the Georges Besse II plant (France).

View of Georges Besse II plant construction (France).

Feed

Enriched uranium

Depleted uranium

42 – AREVA 2007 AREVA 2007 – 43Tubing a steam generator for an EPR.


42 – AREVA 2007

A new range of reactors led by the success of the EPR

Offering the best of Generation III reactors

For a power grid to incorporate a reactor with a capacity as high as 1,600 MW, two conditions must be met: a robust grid capable of accommodating it and substantial demand for electricity. For some countries in Southeast Asia, Eastern Europe and North America, 1,000 MW may be enough.

AREVA and MHI created ATMEA to develop mid-range reactors To offer an advanced reactor on the medium-size reactor segment, AREVA and Mitsubishi Heavy Industries (MHI) created a 50/50 joint venture in December called ATMEA. It is aiming to become the world leader on the medium power market. The partners are working together on the design of ATMEA 1, an 1,100 MW Generation III+ pressurized water reactor. The new reactor will combine the nuclear technologies of AREVA and MHI and will feature advanced safety and security systems, high thermal effi ciency and a fl exible operating cycle ranging from 12 to 24 months. Like the EPR, it will use less fuel and lower fuel costs while reducing waste volumes and environmental impacts. The two groups decided to pool their experience and resources to bring this new range to market quickly. ATMEA is expected to set a record for a license application submittal, slated for the end of 2009.

View of the Olkiluoto construction site (Finland).

Most of the nuclear power plants in operation were built in the 70s and 80s.The United States, the United Kingdom, France and Japan will have to extend the life of their existing plants and build new reactors.With the power plants planned in China, the Middle East, South Africa and elsewhere, some 100 to 300 reactors will be built between now and 2030.

AREVA’s goal is to build one third of new nuclear generating capaci-ties worldwide in the years to come. In fact, it has already surpassed this goal: of the eight new reactors under construction or on order in the world today, four were designed by AREVA. This fi gure underscores the group’s leadership in the design and construction of Generation III reactors. With the success of the EPR and the development of the ATMEA 1 reactor, designed in part-nership with MHI of Japan, AREVA offers its customers a range of reactors from which to choose. The EPR is a Generation III+ reactor based on pressurized water tech-nology, the most prevalent in the world. With 1,600 MW of generating capacity, it optimizes fuel perfor-mance while reducing uranium consumption and generating less waste. The Finnish utility TVO was the fi rst to choose the EPR, which is now under construction at its Olkiluoto site about 150 kilometers

from Helsinki. Measures have been taken to accelerate construction, with the goal of connecting the reactor to the grid in 2011. In 2007, rebar was laid and concrete was poured for the outer structure, numerous components were deliv-ered, and a fi rst steam generator and reactor vessel were manufac-tured for the future power plant, one of only two Generation III reac-tors under construction in the world. Construction of the second one has just begun in France. In Janu-ary 2007, the group signed a con-tract with EDF to supply the nuclear steam supply system for the Flamanville EPR in Normandy. The fi rst concrete was poured at the end of 2007 and component manufac tu ring has been launched, along with engineering and pro-curement.In China, AREVA will build two EPRs for the Guangdong utility CGNPC and supply all of the products and services needed for their operation.

44 – AREVA 2007 AREVA 2007 – 45



The EPR tomorrowThe nuclear fl eet of the United States – the largest in the world – will have to be replaced if not expanded. New reactor construc-tion is expected to start very soon, possibly as early as 2010, and AREVA is getting ready for it. With the US utility Constellation Energy, it created the joint venture com-pany UniStar Nuclear to market, certify and build the EPR in the United States. The certifi cation request was submitted to the US Nuclear Regulatory Commission (NRC) in December. The NRC review could take about two years. Without waiting, fi ve major US utilities have already expressed their interest in the US EPR. Most recently, PPL Corpora-tion announced in December that it would submit a combined con-struction and operating license application (COL) to the NRC for an EPR at the Susquehanna site near Berwick, Pennsylvania. On another continent, South Africa is launching a new nuclear program.

Two reactor vendors, including AREVA, made the short list to respond to a call for tender issued in November.The United Kingdom has the world’s ninth largest reactor fl eet. In January 2008, after a two year democratic consultation, the UK government led by Gordon Brown offi cially announced the relaunch of the British nuclear power program. Supported by 11 major British utilities and already established in Great Britain with 1,900 employees, AREVA is well placed to supply EPRs for the majority of the new fl eet to be built in the UK. The group hopes to build at least four reactors, and probably six. The licensing phase is set to begin in 2008.

AREVA joins forces with Total and Suez for a nuclear power plant project in the United Arab Emirates The three partners will make an integrated proposal for nuclear power generation to the UAE, including the supply of two 1,600 MW EPRs along with fuel cycle products and services.Suez has outstanding expertise as a nuclear power plant operator gained from designing and operating Belgium’s entire reactor fl eet. Total has already managed numerous industrial projects in the Persian Gulf in close partnership with the authorities and businesses of the UAE. Total and Suez are already partners in power generation and water desalination at the Taweelah power plant, which produces about 20% of Abu Dhabi’s electricity.Partnered with these top-tier companies, AREVA will contribute its know-how in integrated offers for nuclear islands and the fuel chain.

Sweeping projects in China and IndiaIn India, 68% of all electricity is generated with coal. In China, that percentage rises to 79%. With demand for energy growing exponentially in both countries, nuclear power is essential to future growth. China has set a goal of tripling its nuclear generating capacity by 2020 and increasing it tenfold by 2030. As of the end of 2007, six new reactors were already under construction or in the proposal phase, including two EPRs. India, meanwhile, is constantly short of electricity despite its enormous generating capacity. The government wants to add 40 GW to its nuclear generating capacity by 2020, or the equivalent of 25 to 30 new reactors. AREVA is getting ready to play a major role in these projects. But the expansion of civilian nuclear power in India depends on the creation of an international legal framework. The process of integrating India into the international civilian nuclear community has begun. France and India signed a joint declaration in February 2006 and are expected to sign a bilateral agreement in the near future. In addition, the United States and India signed an agreement for cooperation concerning the peaceful uses of nuclear energy in 2007. This agreement must still be approved by the US Congress.

Representation of the primary, secondary and auxiliary systems of an EPR.


46 – AREVA 2007 AREVA 2007 – 47


Shortly after acquiring Sfarsteel, AREVA invested 25 million euros at the Creusot site. The objective is to install three large scale blast furnaces and towers to increase production capacity for very large forgings, particularly for the EPR.

Considerable human and industrial resource requirements

Designing, optimizing and building the hundreds of nuclear reactors planned around the globe in the next 20 years will take trained, experienced engineers and techni-cians. AREVA is planning ahead for this revolution and investing in human capital by stepping up its hiring program considerably. A lean manufacturing program was launched to optimize and resize production capacity at AREVA’s sites. The JNSM plant in France, which designs and manufactures reactor safety components, is getting ready to invest in production capa-bilities to be able to equip four to fi ve nuclear reactors per year, dou-ble its existing capacity.

Suppliers must also be prepared to ramp up production. The group is providing ongoing assistance to help them adapt their know-how and production tools to the new state of affairs in the nuclear indus-try. To secure its supply of key components, the group acquired Sfarsteel, a manufacturer of very large forgings near Le Creusot, France. This strategic supplier, which employs 400 people, is now fully integrated into the group’s manufacturing organization.

AREVA is getting bigger in renewable energies The future of energy lies in CO2-free power generation. This includes nuclear power as well as renewable energies, in which AREVA wants to be a major industrial player. In October 2007, the group strengthened its wind power expertise with the acquisition of a 51% interest in Multibrid, a German manufacturer of offshore wind turbines. This company is growing quickly – from 60 employees in 2007 to a projected 100 employees in 2008 – and brings two trail-blazing offshore wind farm projects to AREVA: Borkum West II (400 MW) in Germany and Côte d’Albâtre (105 MW) in France. In January 2008, AREVA banked on Brazil with the acquisition of 70% of Koblitz, a supplier of biomass and cogeneration power plants and small hydro plants. This acquisition is consistent with AREVA’s development strategy in CO2-free energies. It also strengthens the group’s position in a country in which renewable energies generate 90% of the electricity (80% of which is from hydropower) and where the use of sugar cane as fuel is expected to grow by 50% over the next fi ve years.

High-bay building for heavy component manufacturing at the Chalon Saint-Marcel plant (France).

AREVA 2007 – 49


48 – AREVA 2007

Fuel recycling is gaining ground

Prices for uranium are soaring, stockpiles are diminishing and the disposal of used nuclear fuel is increasingly problematic. The recycling practiced in France by AREVA will gain ground in other countries as well, including those that were strongly in favor of the direct disposal of used fuel up until now.

With 90% of world production in 2007, AREVA is the undisputed leader in used nuclear fuel recy-cling. Its La Hague and Melox plants in France have set the stan-dard in this field. In Japan, a rep-lica of the UP3 unit of the La Hague plant was built at the Rokkasho Mura site. AREVA’s capabilities and know-how on proven technology make its offering unique and pro-vide a response to customer con-cerns. As vast nuclear power programs are revived around the globe, other recycling plants are expected to take shape. In November, AREVA and China National Nuclear Cor-poration (CNNC) agreed to carry out joint feasibility studies for the construction of a used fuel recyc-ling plant. A month earlier, the US Department of Energy signed a contract with AREVA and its indus-trial partners in the International Nuclear Recycling Alliance (INRA), including Mitsubishi Heavy Indus-tries (MHI) and JNFL of Japan, and WGI, BWXT and Battelle of the United States. The objective:

to study the development of a used nuclear fuel recycling plant in the United States that would provide fuel for a Generation IV reactor. The contract is part of the Global Nuclear Energy Partnership (GNEP) presented by the Bush Administration in February 2006. The La Hague and Melox plants will also benefit from renewed global interest in recycling. In May, AREVA signed a contract for more than 250 million euros with Sogin of Italy for the treatment (separa-tion of reusable materials before recycling) of 235 metric tons of used nuclear fuel. AREVA is negotia-ting with some large international power companies, which are also expected to entrust their used fuel to the La Hague and Melox plants.

AREVA,leader in recyclable energy

SINCE 2001, AREVA HAS BEEN WORKING ON A NEW CONCEPT FOR A COMPLETELY INTEGRATED RECYCLING PLANT to co-extract and co-convert uranium and plutonium. The fi rst industrial unit should be ready in 2020.

Third generation recycling is under way The plants that China and the United States are thinking of building are based on “third generation recycling.” They would use the COEX™ process (for co-extraction) developed by AREVA in partnership with the CEA. In this process, the uranium and plutonium are extracted and converted together in the same production line rather than processed separately. This eliminates the fl ow of pure plutonium, a prerequisite for responding to the nuclear non-proliferation concerns of the US market. By integrating the entire production chain, this process also generates large economies of scale.

Used fuel storage pool, La Hague plant (France).

MOX, an increasingly widespread fuel Thirty years ago, France opted to recycle its nuclear fuel. This approach maximizes the energy potential of the used fuel. In fact, 96% of the fuel that supplied electricity for three to fi ve years consists of materials that are still reusable (95% uranium and 1% plutonium), which can be recycled into fresh mixed oxide fuel (MOX), a mixture of uranium and plutonium. The recycling process involves separating the fi nal waste from the reusable materials, which is done at the La Hague site, and then converting those materials into fuel in the Melox plant at Marcoule. Not only does this produce recycled fuel, it also reduces fi nal waste volumes by 80% and waste toxicity by 90%. Ten percent of France’s electricity is generated by MOX fuel. Worldwide, MOX currently represents 2% of the nuclear fuel used. This percentage will increase to 5% by 2010, according to the World Nuclear Association. The fuel could also be used in Generation IV reactors.

AREVA 2007 – 51


AREVA,leader in recyclable energy

50 – AREVA 2007 MOX fuel rods.

52 – AREVA 2007 AREVA 2007 – 53


Supporting infrastructure development in emerging countries

Ensuring powergrid reliability

It is in India that power consumption will increase the most by 2030, with average growth of 7% per year.

Over the next fi ve years, 31 billion dollars will be devoted to modernization of the Indian power grid.

INVESTMENTS

India, a base for the Middle East and Central Asia AREVA sited most of its new transmission and distribution production capacity in India in 2007. The T&D division will build three new plants there in the next two years for high voltage transformers in Baroda, transformer equipment in Hosur, and additional production capacity for high voltage disconnectors in Chennai. These new units will join the group’s existing 8 manufacturing sites and 22 sales offi ces. The division plans to invest 4 billion rupees in India (about 70 million euros) over the next three years to serve markets in the Middle East and Central Asia while meeting local demand.

WORLD ELECTRICITY SUPPLY AND DEMAND (in tWh)

Total energy consumption will increase 54% from 2004 to 2030. But world electricity consumption will double over the same period, as will power generation.

Source: Reference scenario of the International Energy Agency, World Energy Outlook 2007.

Europe, Asia, the Americas… Every-where one turns, the construction of new electric power infrastructure is booming. The market is especially dynamic in developing countries, where demand for electricity is growing three times as fast as in OECD countries. For example, each year China installs capacity equiva-lent to France’s entire electric power generation. AREVA’s Transmission & Distribu-tion division is participating actively in this development. In 2007, it won two contracts, one for 100 million and the other for 67 mil-lion euros, in Saudi Arabia. The fi rst contract is for the construction of a high voltage substation and the refur-bishment of 15 substations as part of an industrial development project in the Jubail region. The second is for the construction of a high voltage gas-insulated substation for an au-tonomous power generation project in the Jizan region, in the south of the country. AREVA is installing local generating capacity and signing joint venture agreements with strategic partners to support the growth of these markets. In April, the T&D division inaugurated its fi fth site in China, a gas-insulated switchgear manufacturing plant in Suzhou. A month later, it signed agreements to create a 50/50 joint venture with Sunten Electric. With this transac-tion, the group is set to become the Chinese leader in dry transformers, Sunten’s specialty.

In Russia, where demand is mainly from industry, AREVA chose to part-ner with Rusal RC, the world leader in aluminum, thereby becoming the preferred supplier to the Russian company with 500 million dollars in orders anticipated over the next fi ve years. In November, the group announced that it was investing more than 20 million euros in new manufactur-ing lines at its center of competence in Aix-les-Bains, France. This project includes an ambitious hiring pro-gram, with 120 new employees in 2008 expected to join the 720 peo-ple already employed at the site. In December, the division signed three cont rac ts fo r a to ta l o f 300 million euros with Gecol, the state-owned electric utility of Libya, to strengthen the country’s power grid. On January 14, 2008, AREVA’s T&D division was awarded the larg-est contract in its history by Kahra-maa, the General Electricity and Water Corporation of Qatar. This 500 million euro contract is part of the program to expand Qatar’s electricity transmission system and includes the turnkey supply of 14 gas-insulated substations to expand and strengthen the grid in the Doha region.

2004 2030

demandsupply

14,37617,400

28,09333,800

OSKF 550 transformers in a high voltage test lab in Shanghai (China).

ULTRA HIGH VOLTAGE means developing “energy superhighways” capable of carrying more than 6 GW of power, the equivalent of four EPRs, over hundreds or even thousands of kilometers on a single line. AREVA is ready to tackle this technological challenge.

Ultra high voltage, scaled for the immensity of AsiaHow does one deliver electricity from the coal-fi red power plants located near mines in central China to the large urban centers of Guangdong and Shanghai, thousands of kilometers away? The answer is ultra high voltage. This technology involves raising electric voltage to up to 800,000 volts in direct current, and to more than one million volts in alternating current. For several years, the T&D division’s research and development teams in Stafford (UK) and Villeurbanne (France) have been working to develop equipment suited to this change of scale. Some products are ready now, but international standards for ultra high voltage must still be decided. And those standards are being written in China, where 15 superhighways for direct current are planned.

AREVA 2007 – 55


54 – AREVA 2007

Lhasa

TianjinShijiazhuangTaiyuan

HohhotBaotou

Yinchuan

Lanzhou

Chengdu

Chongqing

ÜrümqiYining

Xining

Shenyang

Harbin

Changchun

Fushun

Nanjing

Tsingtao

Hefei

GuangdongNanning

KunmingGuiyang

Changsha

Fuzhou

HangzhouShanghai

Nanchang

Wuhan

ZhengzhouXi’an

Jinan

Hong KongMacao

Kashi

ShacheBeijing

BANGLADESH

MYANMAR

THAILAND

CAMBODIA

LAOS

TAIWAN

PHILIPPINES

SOUTHKOREA

NORTHKOREA

BHUTAN

MONGOLIA

RUSSIA

NEPAL

INDIA

VIETNAM

Renewed profi tability The objective of the fi rst three-year plan for AREVA’s T&D division was to regain profi tability and achieve operating margins equivalent to those of its major competitors. This goal was met a year ahead of schedule, in 2006. The number one goal now is to set the standard for quality, innovative solutions and price competitiveness in the eyes of large power producers. While manufacturing costs are constantly targeted by all division units, maintaining technology leadership and marketing excellence are equally important. As part of the continuous improvement initiative, the in-depth survey of division customers conducted in 2007 will be refl ected in new action plans.

Boosting external growthTo remain a leader on the world mar-ket for electricity transmission and distribution, estimated at 43 billion euros in 2006, AREVA is pursuing a strategy of highly selective acquisi-tions and partnerships. It is target-ing companies located in strategic countries and regions which round out its product portfolio or ensure security of supply for the division’s key components. One such acquisi-tion was the Finnish company Noki-an Capacitors, in December 2007, which strengthens the group’s posi-tion on the booming energy quality market. The division will capitalize on the experience and know-how of the Finnish company in the capaci-tor fi eld to supplement its offer and broaden its customer base.

The other two acquisitions in 2007 were: – Passoni & Villa, a world leader in high voltage bushings, in February. This is a strategic acquisition for the division that helps ensure security of supply on the very concentrated high voltage component market. Moreover, the company’s technolo-gy expertise in the 800 kV segment supplements that of AREVA; – VEI Power Distribution’s medium voltage operations, in August. With this acquisition, the group strength-ens its presence on the world mar-ket for electricity distribution and becomes one of the leaders on this segment in Italy.

Ensuring power grid reliability

2009: Yunnan – Guangdong2011: Xiangliaba – Shanghai2012: Jingping – East China2014: Xiluodu – Hunan2015: Humeng – Shandong2015: Nuozhadu – Guangdong2015: Xiluodu – Hanzhou2015: Irkutsk – Beijing*

2016: Humeng – Tianjing2016: Jinsha River I – East China2018: Humeng – Liaoning2018: Jinsha River II – Fujian2018: Hami-Central China2019: Jinsha River II – East China

Source: AREVA.* China-Russia.

Cities linked by ultra high voltage direct current: service date

Fifteen electric superhighways planned in China

High voltage disconnectors in Itajubo (Brazil).

To be andto act

With our leadership position comes responsibility. We know that nuclear power has a role to play in meeting the planet’s energy challenges. We will draw on our proven practices in the fi elds of safety and quality to help meet them. Sustainable development is a rallying point for all of our employees, backed by a tradition of thoroughness and risk management. To make this choice a reality, sustainable development is integrated into AREVA’s business strategy and management practices via a continuous improvement initiative: AREVA WAY

GOVERNANCEIMPROVEMENT

PERFORMANCEINNOVATION

CUSTOMER SATISFACTIONCOMMITMENT TO EMPLOYEES

ENVIRONMENTAL PROTECTIONPREVENTION

DIALOGUEINVOLVEMENT

AREVA 2007 – 57

AREVA’s commitment to governance is founded on a set of rigorous ethical standards structured by its Values Charter, which has been distributed to all of its employees and brought to the attention of its suppliers.

Implementation of the Values CharterPublished in 2004, the Values Charter explains the group’s values, action principles and rules of conduct. The senior managers, whether from the group, its subsidiaries or its business units, are responsible for implementing this Charter.

UPCOMING MILESTONES

Recommend the e-learning program on ethics to new engineers and managers in the group.

Participate in events celebrating the 60th anniversary of the Universal Declaration of Human Rights, especially in coordination with the BLIHR.

Contribute to the completion of the new “BLIHM matrix.”

OBJECTIVES

Deploy an in-house e-learning program on ethics.

Participate actively in the Business Leaders Initiative on Human Rights (BLIHR) and in the French-speaking BLIHR section.

Continue to integrate respect for human rights into our management system.

Respecting human rights, everywhere and at all times

the group is helping to develop and apply practical tools within the scope of the BLIHR. AREVA took part in developing a more operational version of the BLIHR matrix in 2007. This matrix defi nes the principles and actions to be instituted for each human rights topic, distinguishing between what is essential and what goes beyond that. The group also supported the creation of a French-speaking corporate human rights working group called Entreprises pour les droits de l’homme (EDH). The 2007-2008 work program has already been launched.

In addition, AREVA actively supports the Extractive Industries Transparency Initiative (EITI). Promoted by the G8 and bringing together governments, businesses and elements of civil society, this initiative reinforces transparency and good governance in countries rich in natural resources. The AREVA mining subsidiaries in Niger have been participating in the various committees and sub-committees set up since 2007, and the group’s local operating unitin Kazakhstan is currently undergoing EITI accreditation. AREVA’s business ethics advisor joined the EITI’s international steering committee at the end of 2007.

Employee ownership of company objectives: a best practiceANF, a German subsidiary of AREVA, produces nuclear fuel elements. It has set up a process at its three sites in Duisburg, Karlstein and Lingen designed to help employees take ownership of the company’s objectives. Everyone is involved, from the CEO to the plant operators. Once the business unit objectives have been defi ned, they are explained to the operational personnel, who in turn defi ne their own objectives. These objectives are then rolled up via representatives to the department managers and middle management before being presented to top management. The objectives must meet “SMART” quality criteria: Specifi c – Measurable – Achievable – Relevant – Time-bound. They are published on the intranet, along with progress to date, updated every quarter. This good business practice has proven very effective since it was launched in 2002.

decision-making. More than 350 managers had completed the training as of the end of 2007.

An e-learning program was set up to reach the greatest possible number of employees. Armed with the success of the pilot module, launched in the US in 2006 and completed by more than 4,500 employees, an international version was created, with British employees its fi rst users.

AREVA, committed to human rights and environmental protectionThe Values Charter places great emphasis on human rights and environmental protection framed in terms of the group’s commitments and actions. In October 2007, AREVA was asked to chair the executive committee of the Conference Board’s Global Council on Business Conduct, which brings together about thirty multinational companies. AREVA is the only non-US member on the committee. AREVA is also an active partner of the Business Leaders Initiative on Human Rights (BLIHR), an association of multinational companies that have joined together to promote and urge respect for human rights in the workplace and to facilitate their integration into management systems. In addition to sharing its experience with others,

AREVA attends the Global Compact Leaders SummitAs a board member of the United Nations Global Compact since 2006, Anne Lauvergeon attended the GC Leaders Summit held July 5-6, 2007 in Geneva chaired by UN Secretary-General Ban Ki Moon. The summit brought together nearly 1,000 attendees from 90 countries to focus on “Facing Realties:Getting Down to Business.” The subject of corporate social responsibility was much debated. Anne Lauvergeon gave a speech on climate change and corporate environmental responsibility, and appealed to everyone to get involved. She said “Environmental responsibility

is neither a marketing tool nor a

meaningless catchphrase for AREVA.

It’s a conviction, a commitment, concrete

processes and actions implemented

at every level of our industrial and

commercial activities.”

Every year they must sign a letter of compliance with the Charter, accompanied by an ethics report on actions taken, any irregularities encountered and the corrective measures applied. The Charter is available in 13 languages. Since 2007, the annual individual assessement interview has systematically included a section on the Values Charter.

In parallel, AREVA has launched several actions focusing on ethics and values to mobilize employees and managers. An international ethics awareness program is a way of reminding them that ethics must always be part and parcel of their

58 – AREVA 2007

1 GOVERNANCE

AREVA 2007 – 59

60 – AREVA 2007

2 CONTINUOUS IMPROVEMENT

AREVA 2007 – 61

AREVA’s continuous improvement initiative is the daily, concrete, operational expression of the group’s strategic commitment to sustainable development. Designed to be fully integrated into the group’s management cycle, AREVA Way is a genuine sustainable development management system.

A mature initiativeAREVA Way came of age in 2006 in terms of its deployment in the group’s operational and functional entities. In 2007, the initiative covered more than 85% of the group’s workforce. The process has been ongoing for four years, and in 2008 will focus on the commitments of customer satisfaction, governance, and fi nancial performance.

OBJECTIVES

Continue to deploy AREVA Way self-assessments at all group sites.

Increase the establishment of certifi ed and integrated management systems (environmental, quality, occupational safety).

Roll out a process for exchanging best practices among all of the group’s sites.

Adapt the AREVA Way model to account for additional requirements arising from the group’s policies.

Audit the self-assessment process and make the results verifi able.

Launch Sustainable Generation groups in North America and Latin America.

Carrying on with the AREVA Way process

Two drivers were rolled out in 2007 to leverage AREVA Way’s impact. The group recently implemented a single software program to manage all of its performance improvement activities. Fortifi ed by the experience gained by AREVA’s T&D division, where it has been used for more than three years, the software is used to report on action taken at every level of the organization to meet the group’s performance improvement objectives.

New performance indicators were introduced in 2007. These new indicators supplement the traditional fi nancial and extra-fi nancial performance indicators, enabling corporate management to ensure that each entity has balanced performance in all three fi elds of sustainable development.

Second AREVA Sustainable Development Awards (ASDA)To encourage the group’s employees to get actively involved in its sustainable development initiative, AREVA holds its Sustainable Development Awards – ASDA – every two years. This competition rewards the projects and initiatives that best incorporate the economic, environmental and social pillars of sustainable development. For the fi rst time, the jury was opened in 2007 to well-known fi gures outside AREVA, who shared their positive impressions.

« It was an ideal situation for me to be able to “peek under the hood” and see

how AREVA is translating some of its principles into an operational format.

AREVA is thoughtful and promotes discussions on these issues. »

Margaret Flaherty, WBCSD

Revising the AREVA Way modelThe AREVA Way model is the backbone for the continuous improvement initiative and is structured around AREVA’s ten sustainable development commitments. By performing a self-assessment in each entity based on this model, which contains 121 assessment criteria, the drivers for improving performance can be identifi ed and incorporated into performance improvement plans. AREVA Way is both a means for communicating the group’s general guidelines and a management system.To remain consistent with the group’s policies and changes in its environment, the model is revised every two years. In 2007, major content changes were made in four fi elds: purchasing, marketing, innovation and continuous improvement.New subjects were also added, such as professional equality between men and women, design-to-cost, organizational and human factors, etc. The revision occupied more than 50 AREVA experts and required more than 1,600 working hours. In the end, 45% of the criteria were modifi ed, a third of which were completely reworked.

Targeted programs to build professionalismWith its businesses booming, AREVA must do everything it can to maintain a high level of skills among its employees. The support functions, through which the group implements its policies, rely on coordinators to apply them within each operational entity. Each entity has gone beyond traditional training programs to design an approach to skills-buildingin the form of a professional program specifi c to its challenges and organization.In 2007, the Sustainable Development and Continuous Improvement department, in charge of quality, nuclear safety, occupational safety and the environment, compiled its list of reference skills. A total of 30 key jobs and 19 skills were identifi ed and described. The training requirements for a thousand engineers and managers all over the world were identifi ed and special sessions were developed and organized in several countries, usually in partnership with AREVA University. The Human Resources department played a key role in this process. More than 35 training sessions lasting from one to fi ve days have been scheduled for 2008, with room for 10 to 20 people at each session.

The consolidated results of self-assessments (about 100 criteria graded on a scale of 1 to 4 for AREVA’s ten sustainable development commitments) show that the best practices endorsed by the AREVA Way model had reached a stage of structured deployment (score of 2 or more) in more than 80% of all cases. In more than a third of the cases, the results revealed a positive local impact on the performance of the group’s entities (score of 3 or more).

AREVA Way self-assessment scores

UPCOMING MILESTONES

Adapt the continuous improvement policy to AREVA’s ongoing industrial growth.

Set up a peer review process to make it easier for line managers to share experience on deployment of AREVA Way.

Build the professionalism of the continuous improvement network.

Identify 100 new BIPs(1) in 2008.

BIP BlogOne of AREVA’s strengths lies in its ability to pool its experience and turn it into opportunities for performance improvement. That is what the “Best ideas and practices” (BIP) initiative is all about. Launched in 2006 by the group’s experts, 73 BIPs have already been validated through this initiative and 29 more will be soon. Once the BIPs have been chosen, data on each are entered into a database that can be accessed by all employees via the intranet. A blog-style interface allows employees to share their opinions on these best practices and the identifi cation process.The blog also acts as a valuable go-between for employees looking for ideas that are not in the database. Together, BIPs and Blog provide a vital service: they simplify the fi rst contact, leading to the replication of best practices from one site to next.

Not applied Level 1 Level 2 Level 3 Level 4

10

2004

2005

2006

2007

3 2

32 29

2117

3743

46In percentage

45

33

3 3 3 4

2721

17

4

(1) Best ideas and practices.

62 – AREVA 2007

3 FINANCIAL PERFORMANCE

AREVA 2007 – 63

New jump in fi nancial performanceAREVA’s growing backlog is evidence of the strength of its integrated model. The group is pursuing its objective for profi table growth against a backdrop of nuclear revival that entails substantial capital spending. It is capitalizing on its unique position as an integrated player in every stage of the nuclear cycle and has been rewarded with additional improvement in its performance indicators: – since the end of 2006, backlog has risen 55.4% to the record level of almost 40 billion euros at the end of 2007. This performance refl ects in part the signature of a contract in November with the Chinese utility CGNPC totaling 8 billion euros – another record-breaker – with 1 billion euros to go to local suppliers; – sales are up 9.8% based on reported data, driven primarily by the Reactors and Services division (+17.5%) and the T&D division (+16.2%);– operating margin improved, to 6.3%

OBJECTIVES

Deploy the “Sustainable Development Declaration for Suppliers” and perform audits of selected suppliers to verify performance.

2012 fi nancial objectives

Sales of more than 20 billion euros.

Double-digit operating margin.

Largely positive free operating cash fl ow.

Sustaining fi nancial performance

of sales, compared with 3.7% in 2006, for 751 million euros in operating income. Operating margin from nuclear operations rose to 6.8%, an increase of 2.5 points, sustained by consistently positive contributions from the Front End division and the improved profi tability of the Reactors and Services division. Operating margin was down slightly in the Back End division. Operating income for the T&D division doubled as the successful multi-year optimization plan delivered operating margin of 9.2% (compared with 6.7% in 2006); – net income rose to 743 million euros, up 14.4% from that of 2006.

An ambitious capital spending programLooking ahead to market growth, AREVA embarked on an ambitious capital spending program several years ago, particularly in the front end. A highlight of 2007 came with the 1.6 billion euros acquisition of UraMin, a mining company established in Africa. Other signifi cant

Lean manufacturing Lean manufacturing consists of optimizing production based on methodical analysis of tasks and workfl ows (added value or not, cycle time, etc.). This method requires strong involvement by the production team to conduct analysis and search for ways to prevent defects, overproduction, excess inventories, unnecessary transportation, excessive processing and wait times. The Melox plant’s Lean TPM project was instrumental in optimizing facility maintenance, achieving a 60% reduction in maintenance hours, while making a substantial contribution to a 50% capacity increase at the existing facility from 2004 to 2006.

investments include the Comurhex II project to replace and upgrade production capacity in the chemistry business and the new Georges Besse II enrichment plant, scheduled to start production in 2009. In the Reactors and Services division, investments involved EPR certifi cation in the United States and the United Kingdom. The group also strengthened its position in the high-growth renewable energies market with the acquisition of 51% of Multibrid, a German company specialized in offshore wind turbines. The Transmission & Distribution division pursued its program of targeted acquisitions to meet two objectives: round out its portfolio of products and technologies, particularly in ultra high voltage, and increase its capacity in key regions, particularly China. AREVA plans to continue its program of organic capital spending, in line with its strategic objectives. Capital spending is expected to climb to an average of approximately 2.2 billion euros per year over the 2008 to 2012 period. Targeted acquisitions meeting the strategic and fi nancial criteria may also be considered.

A strong balance sheet, foundation for growthAREVA’s growth requires a healthy fi nancial position, a vital asset in a capital-intensive industry. Customers require guarantees so that they themselves may commit to large-scale projects spanning long periods.

As of December 31, 2007, the group had net debt of 1.954 billion euros, for a debt-equity ratio of 26%. Adjusted for the value of Siemens’ put option on its equity interest in AREVA NP, net debt rises to 4.003 billion. Because it is strong fi nancially, AREVA is able to fund the dismantling of its nuclear sites. The group set up a 2.6 billion euro provision backed by a portfolio of fi nancial assets totaling 2.9 billion euros to maintain a coverage ratio that exceeds the requirements of the French Waste Law.

Operating excellence: a collective goalThe AREVA Way initiative urges every one of the group’s entities to commit to a performance improvement program balanced on the three pillars of sustainable development. The plant sites especially are concerned by all of the ten commitments. To comply with them, they can tap into policies defi ned at the group level that lay out the objectives and the means of achieving them. Financial performance, one of the ten commitments, rests in particular on effi cient production tools and on meeting quality, cost, schedule and customer satisfaction criteria. Improving business and technical processes by defi ning and sharing proven methods and best practices are identifi ed drivers for achieving operating excellence. Identifi ed methods include lean manufacturing, which seeks out and systematically eliminates ineffi ciencies and measures the cost of non-quality.

UPCOMING MILESTONES

Establish the operating excellence initiative in group entities.

Incorporate lessons learned and feedback from external stakeholders to pursue the “Sustainable Development Declaration for Suppliers” initiative.

Implement the group’s strategic objectives and continue the capital spending program needed to achieve them.

More suppliers subscribe to AREVA’s sustainable development commitmentAREVA’s “Sustainable Development Declaration for Suppliers” lays down the group’s requirements concerning human rights, labor standards, health and safety, nuclear safety, environmental protection and community involvement. Suppliers are invited to subscribe to this initiative. As of the end of 2007, 69% of AREVA’s purchases by volume were made from participating companies, compared with 46% in 2006. To ensure that these practices are applied, the group is developing a method to detect potential variances and, if necessary, to assist the supplier in its performance improvement initiative. AREVA relies on dialogue with stakeholders brought together by Comité 21 to ensure the success of this initiative.

Chinese suppliers participatein AREVA training On December 17 and 18, 2007, twenty Chinese suppliers of AREVA’s T&D division participated in a training given in Shanghai by Environment department experts. This event is one way in which the group is supporting its suppliers for sustainable development and continuous improvement, particularly in the environmental area.

64 – AREVA 2007

An optimized certifi cation processCertifying, promoting and marketing a fl eet of standardized Generation III EPRs in the United States: that is what UniStar, the joint company created by AREVA and electric utility Constellation Energy in 2006, has set out to do.A partnership of this kind between a reactor constructor and its customer is highly unusual – and, in this case, effective! In December 2007, AREVA submitted its application for certifi cation to the US Nuclear Regulatory Commission (NRC), which weighed in at a hefty 12,000 pages, including NRC recommendations. AREVA invested more than 200 million dollars in this project and mobilized a team of 380 employees to be able to build new EPRs for the world’s largest nuclear power program.

AREVA 2007 – 65

4 INNOVATION

One side of the equation for our planet’s energy future can be stated simply enough: rising demand together with diminishing natural resources and too many greenhouse gas emissions… But solving the equation is more complex, because it involves connecting all the links in the energy chain, from generation to distribution. To help meet these challenges, AREVA is mobilizing innovation in every form.

Safer, more effi cient electricity generation and transmission todayThe AREVA group Research & Innovation organization is shared by all subsidiaries, providing a crosscutting vision that is vital to the design of new technologies meeting today’s energy and environmental challenges: to conserve natural resources,

UPCOMING MILESTONE

Pursue our innovation activities, without losing sight of customer requirements, focusing on partnerships, eco-design, mid to long range planning, and information and communication technologies.

OBJECTIVES

Broaden the renewable energies strategy.

Expand eco-design practices to all new products.

Develop an eco-design plan for nuclear fuel based on lifecycle analysis and R&D projects.

Meeting the energy challenges of tomorrow

minimize fi nal waste, increase energy effi ciency, and guarantee system safety and reliability – all while reducing costs.Increasing fuel burn-up is a way to meet these criteria. Burning nuclear fuel more effi ciently increases the energy effi ciency of power plants and reduces waste production.AREVA’s research teams are already working on more effi cient fuel assemblies and reactors, and successfully so. A fuel assembly can deliver twice as much power today as it did 30 years ago.The EPR will also contribute by boosting energy effi ciency even more. It consumes 15% less uranium for the same amount of electricity generated and can operate entirely with mixed oxide fuel (MOX) fabricated from recycled materials. In comparison, existing reactors can accommodate no more than 30% MOX. With a higher load factor, the EPR is also more energy effi cient.Great strides are being made in electricity transmission and distribution as well. The goal is to transport more electricity more reliably over increasingly complex supply systems. AREVA is developing intelligent power distribution tools for the network called “fl exible alternating current production systems”, or Facts. Facts act in real time on variations in current traveling through the network, reducing the risk of congestion and even blackouts. AREVA is also working on very high voltage to transmit large quantities of electricity over long distances to urban centers with a minimum of line losses.

The group’s Transmission & Distribution division is developing new equipment for these energy superhighways of the future, which will soon appear in China and India.

CO2-free electricity and even less waste tomorrowThe marketing phase for third generation reactors is now in full swing, yet already AREVA is working side-by-side with the CEA in an international R&D program on fast neutron reactors. By 2040, the program should produce a new generation of reactors and related treatment processes. These reactors will be capable of burning up nearly all of the uranium in the fuel rather than just the fi ssile portion, which represents only a few percent of the enriched uranium. This will drastically reduce the amount of waste produced. For this program, AREVA and the CEA are conducting joint research on sodium-cooled fast neutron reactors, especially concerning the safety of the fuel core.For a hydrogen economy to become a reality, a CO2-free process will be required to produce this clean energy carrier.A very good solution would be to replace the current process – catalytic reforming of methane – with water electrolysis, with nuclear power plants supplying

the necessary electric power.AREVA has invested in a program that should lead to the best choice of electrolysis technology before 2011.

AREVA is working on safer, more effi cient processes in the back end of the cycle as well.In 2007, the group partnered with the CEA to present a new concept for a treatment and recycling plant to co-extract and co-convert uranium and plutonium. Instead of being treated separately, the two elements are extracted and converted together, thereby reinforcing non-proliferation measures.AREVA is ready to undertake immediate industrial development. Based on customer requirements, the fi rst plants are expected between 2015 and 2020.

For AREVA, innovation means industrial and commercial partnerships and pooling experience – sometimes with its own competitors.

Partnered for innovation with Mitsubishi Heavy IndustriesThe group joined with Japanese reactor vendor MHI to develop a new range of mid-sized (1,100 MWe) Generation III+ pressurized water reactors. In December 2007, the partnership between AREVA and MHI produced their 50/50 joint company, ATMEA, which is developing the ATMEA 1 reactor combining the nuclear technologies of both companies.Like the EPR, ATMEA 1 will feature advanced safety systems and reduce fuel consumption and costs.With the combined experience of both partners, ATMEA will be in a position to fi le a license application in record time by the end of 2009.

AREVA engaged in important fuel cell work through its subsidiary HélionClean, silent and highly energy effi cient fuel cell technology is destined to become a key component of the future energy mix.The group plans to transform a technological reality into an industrial one, armed with technical successes that open up signifi cant prospects for commercial development in the fi elds of safety (back-up generators) and transportation.In early 2008, AREVA brought its experience to institutions of higher education in the form of a test bench and a full set of fuel cell educational materials developed jointly with the Institut Universitaire de Technologie and the École Polytechnique of Marseilles and with the École des Mines of Paris.

66 – AREVA 2007 AREVA 2007 – 67

5 CUSTOMER SATISFACTION

Anticipating customer expectations

OBJECTIVES

Track the implementation of performance improvement actions emerging from customer surveys.

Revitalize the customer listening process and reaffi rm our bias towards the customer.

Defi ne and implement the action plan resulting from the T&D division’s customer survey.

Continue to roll out innovative products, systems and services.

AREVA’s commercial policy is to build trust through stable, long-term relationships with its customers. Evaluations are regularly performed to measure their level of satisfaction as precisely as possible. In doing so, the group’s business units get a better grasp of how the market is evolving and can respond to new requirements.

A structured process for listening to the customerAREVA regularly conducts customer satisfaction surveys. The survey method is constantly being enriched and adapted to suit the needs of the business units. Close to a thousand interviews covering all of the group’s operations were conducted from 2003 to 2007.

Commercial success through long-standing relationshipsIn June 2007, AREVA and the South Korean electric utility KHNP – one of the four leading nuclear power generators worldwide, with a fl eet of 20 reactors – signed a uranium enrichment contract for more than 20 years and valued at more than 1 billion euros. Both the quality of relations between AREVA and KHNP since the early 1980s and the constant commercial presence and contact with Korean nuclear players – despite the limited amount of business – were instrumental in winning this major contract. The group won over the customer through the competitiveness of its proposal and guarantees concerning the long-term reliability of its production resources, particularly with the near-term startup of the Georges-Besse II enrichment plant, in response to KHNP’s desire to diversify its long-term sources of supply.

In 2007, the survey process continued to evolve to reach more of our contacts among our customers.

The surveys have led to the establishment of several performance improvement plans, while more than 500 local initiatives and 5 cross-cutting projects were launched.

Sharing a commitment to sustainable development with our customersIn 2007, AREVA analyzed how its key customers incorporate sustainable development into their business strategy and stakeholder communications. The objective was to gain a better understanding of their level of involvement in sustainable development and identify areas of potential convergence between their initiatives and those of AREVA.

The results revealed just how seriously our customers take sustainable development. Several of them have even received awards in this fi eld. Energy effi ciency in particular is one of their key concerns, with many increasingly moving into low carbon and renewable energies. Their strong dedication to meeting stakeholder expectations is based on values and commitments that are close to those of AREVA.

UPCOMING MILESTONES

Make the most of convergence on sustainable development between AREVA and its customers.

Expand the coverage of customer satisfaction surveys by increasing the number of interviewees.

6 COMMITMENT TO EMPLOYEES

AREVA’s labor policy is anchored in ongoing dialogue with employee representatives. For example, in France as in Europe generally, major aspects of working life, such as training, mobility and professional development programs, are covered by contractual commitments. Every two years, AREVA conducts in-house surveys to gain a better grasp of employee expectations and opinions on their working conditions. The fi rst survey, conducted group-wide in 2006, had a participation rate of more than 70%. The survey fi ndings, structured around AREVA’s 10 sustainable development commitments, served as a basis for managers to defi ne action plans in each entity.

More than one person hired every hourTo be equal to strong market growth and the demographic challenges this presents, the group has launched an ambitious recruitment program. More than 11,500 people joined the group in 2007 – that is more than one new employee every hour – a third of whom are engineers and managers and 21% of whom are women (compared with 19% in 2006). The group has taken a series of actions to attract top candidates. In France, to strengthen its ties with higher education, a hundred “ambassador” employees were tasked with maintaining regular relations with their alma maters.

UPCOMING MILESTONES

Continue to recruit, integrate and develop employees to keep pace with growth and demographic renewal.

Facilitate the integration and continued employment of workers with limited abilities.

Expand the EOS 2008 survey to include all group employees worldwide.

Shorten the 2010 deadline for accident frequency and severity rate objectives by 18 months.

Roll out the health policy established in 2007.

Demonstrate our ability to limit employee exposure to 20 mSv/year.

OBJECTIVES

Formalize the group’s commitments to hiring the disabled for the next three years.

Implement the diversity indicator scorecard.

Obtain OHSAS 18001 certifi cation for all sites with signifi cant environmental aspects (SEA) by the end of 2007.

Achieve an average frequency rate of < 3 for work-related accidents and an average severity rate of < 0.15 by 2010.

Ensure that no employee is exposed to a dose of more than 20 mSv/year.

Being an attentive and responsible employer

AREVA trains South African engineers and managersAREVA has been a partner to the South African nuclear industry for more than 20 years and is participating actively in its development. In May 2007, the group and the University of Paris I Panthéon-Sorbonne jointly inaugurated the “Project Leaders for South Africa” master’s program for South African engineers and managers.This novel program, conducted by AREVA University, includes a semester of courses, team projects, and a fi ve-month internship in a French or European company. An executive of the AREVA group is assigned as mentor to each student and provides support throughout the program.After graduating, the program participants will bring their skills to South African companies and administrations.As underscored by Mrs Mjoli-Mncube, economic advisor to the vice president of South Africa, “this

educational program contributes

to the fi ght against poverty and

to development, not just in South

Africa, but all across the continent.”

68 – AREVA 2007 AREVA 2007 – 69

Striking a balance between work and personal lifeAREVA provides a wide range of personal services to its employees, including daycare centers, sports facilities and concierge services (dry cleaning, babysitting, help with school…). The fi rst daycare center was inaugurated in 2002. Today there are seven of them, at the group’s new Paris headquarters, at several locations in the Paris area, elsewhere in France, and in Erlangen, Germany.

This dynamic recruitment program is being implemented in countries in which the group is based, which are experiencing strong growth. In India, for example, the T&D division entered into partnerships with eight major technology institutes. The use of innovative tools is also on the agenda. In June 2007, AREVA participated in the fi rst European online job fair on Second Life.All of these initiatives are bearing fruit. Students at France’s top engineering schools rank the group fi fth as a preferred employer.

Diversity, a corporate assetAREVA knows that diversity is an asset to the company and has made it a key component of its human resources policy. Close attention is paid to employment of the disabled, among others. In France, AREVA signed a three-year agreement in 2007 with quantifi ed commitments for its sites, such as 90 jobs and 90 internships for the disabled.Each site has designated an employee champion for the disabled to spearhead these actions. Echoing this program, AREVA’s purchasing policy favors the use of sheltered companies. In the fi eld of gender equality, AREVA targets equal pay in all of its hiring. AREVA uses work-study opportunities to leverage its diversity policy and promote equal opportunity. In 2007, some 1,000 people representing 3% of the permanent workforce took

advantage of these opportunities. An equivalent number of coaches were trained to support these young people from a variety of backgrounds.

Training, a springboard for professional developmentCareer development plans are defi ned during the annual employee interview. Training programs aim, among other things, at encouraging employees to take charge of their development and at creating professional development paths. These paths represent a more strategic distribution of the 900,000 hours of training provided by the group each year. An effort was made to provide more information to employees about the training opportunities available to them.

Two thousand individual training requests were submitted in 2007, three times more than in the previous year. The AREVA Job Institute was also created to develop professional development paths in the areas of processes, services, engineering and maintenance.

Health: going well beyond the regulatory requirements The health program’s three priorities for the 2008-2011 period go well beyond the regulatory requirements in formalizing the group’s health commitments and defi ning ways of measuring performance. The fi rst priority is employee exposure to noise, hazardous chemicals, and ionizing and non-ionizing radiation. Performance improvement actions are aligned with the world’s most stringent regulations. A second priority relates to deployment of health programs linked to local public health issues, particularly the fi ght against HIV/AIDS, a fi eld in which the group is heavily involved. The third priority aims to improve working conditions. Part of this involves giving personal attention to individuals in diffi culty and keeping them employed.Detailed performance indicators will be used to measure the effectiveness of this program, with an application guide soon to be available for all AREVA sites. The health network was defi ned in 2007 and will be deployed operationally beginning in 2008.

11,514new hires in 2007

6 COMMITMENT TO EMPLOYEES

The obsession for occupational safetyFor AREVA, occupational safety is an ever-present concern, whether for its own employees or those of its subcontractors. Our goal does not change: zero accident. In 2007, the group achieved an average accident frequency rate of 3.55, two and half times less than in 2003.Even though the severity rate for 2010 has already been achieved and even exceeded, events in 2007 provide a sobering incentive to intensify efforts. Last year, the group sadly reported six fatal accidents among its subcontractors’ employees. Audits and action plans have been implemented to strengthen risk identifi cation and management.In the knowledge that any occupational safety policy must be supported and promoted at the highest level of the company to be truly effective, AREVA University has set up a safety management training program for executives.New initiatives were taken in 2008, particularly with regard to preventing risks related to human and organizational factors.

The highest level of radiation protectionThe group’s operations require careful attention to radiation protection. In France, new regulations issued in 2007 were implemented rapidly and in a coordinated manner at AREVA plants and sites.The group applies the 20 mSv limit in every country in which it is based, even when local regulations tolerate higher doses. AREVA’s radiation protection managers meet regularly to facilitate implementation of this policy. AREVA has also demonstrated its ability to achieve a steady reduction of exposure to its employees and those of its subcontractors. Although the 20 mSV level was exceeded for 13 workers of a newly acquired subsidiary, the local regulations were nonetheless respected. By strengthening their information processes, newly acquired companies are expected to adopt group practices more quickly.

Promoting road safetySafety does not end at the doors of the group’s plants and offi ces. To raise employee awareness of road hazards while commuting to work or traveling on business, AREVA conducted an information campaign covering the elementary rules for driving safety. A whole set of tools in 12 languages – display panels, posters, stickers, etc. – was provided to safety coordinators and managers. Local employee representatives and health services took part in this initiative.

70 – AREVA 2007 AREVA 2007 – 71

7 ENVIRONMENTAL PROTECTION

AREVA is reducing its environmental footprint year after year using tools and action to control the impacts of its operations. Because the stakes linked to climate change, biodiversity preservation and sustainable management of natural resources are getting higher, the group is reinforcing its commitment in those areas.As of the end of 2007, 82% of the sites with signifi cant environmental aspects (SEA) were ISO 14001 certifi ed, including 100% of the nuclear sites and 74% of the

UPCOMING MILESTONES

Deploy the 2008-2011 environmental program.

Obtain ISO 14001 certifi cation for all new sites with signifi cant environmental aspects (SEA) within three years of acquiring them.

Carry out 80 environmental assessments in 2008.

Update site performance improvement plans.

Continue to reduce SF6, N2O and CO2 emissions in compliance with the carbon neutrality commitment.

Set up a standard environmental liabilities management plan.

Propose uses for recyclable materials in the nuclear industry.

OBJECTIVES

Set performance improvement objectives for radioactive waste management.

Implement the 2007-2010 environmental policy.

Continue to set up environmental management systems (EMS).

Carry out 50 environmental reviews.

Examine the soil management component in more detail.

Reduce our environmental footprint, focusing on major contributors.

Continue efforts to limit greenhouse gas emissions.

Shrinking our environmental footprint

non-nuclear sites. New SEA sites have to obtain such certifi cation within three years.All industrial SEA sites – including licensed nuclear facilities and mine sites – are expected to have carried out specifi c soil management actions before 2011. Launched in 2007, this initiative includes subsoil diagnostics, updating reports and, if necessary, setting up a plan to monitor environmental liabilities and manage them over the long term.

Committed to carbon neutralityAREVA is the fi rst major industrial group to achieve carbon neutrality in its operations. To accomplish this, it combined a far-reaching multi-year program to reduce its own greenhouse gas (GHG) emissions (less than 1 million metric tons of CO2 equivalent emitted in 2007) and voluntarily offset its residual emissions. For the offset, the group joined with Eco-Act to acquire carbon credits for the 2008-2010 period. The partnership’s goal is to choose and support low CO2-emitting economic development projects, mainly in countries in which AREVA does business. The projects should have a strong social focus, e.g. building cold storage warehouses without power units in Niger or providing Brazilian industries with biomass equipment.

Sharing a culture of environmental stewardshipThe Environment network’s training program has two goals: build professionalism within the network and create a shared culture of environmental stewardship. In 2007, specialists from the Environment department coordinated topical training meetings on the major environmental issues of the 21st century and on AREVA’s commitment in that regard. 75 people attended the meetings, which took place in fi ve sessions worldwide: two in France, one in Frankfurt, Germany, one in Charleroi, USA, and one in Shanghai, China.

Mine reclamation at Cluff LakeThe Cluff Lake uranium deposit in the Canadian province of Saskatchewan ceased production at the end of 2002. Mill dismantling and site reclamation began after an environmental assessment, public debates and regulatory inspections. Project Manager Gerry Acott used the image of the trapper to illustrate the spirit of the project: “He was here before us, lived on the site throughout the mining

operations and will be here when we leave. We want to leave a safe site for the sake

of the site itself, for future populations, and for wildlife.” The rehabilitation work, which included demolition of the plant, covering the tailings and replanting the area with local vegetation, is now over. Rehabilitation was planned from the beginning of the project, which stands as a model of its kind.

100%

80%

60%

40%

20%

0%

■ Baseline 2004

■ Achieved 2005

■ Achieved 2006

■ Achieved 2007

GHG

–39%

Non-recycled conventional waste

–39%

Energy –18%Water –34%

Paper –37%

Water

The main driver for performance improvement was the adoption of a closed-loop cooling system that practically eliminates water tapping in the environment. The operation reduced water consumption by 36% at the Comurhex Malvési uranium conversion site in France.

Energy

Most of the gains came from eco-effi ciency diagnostics and action plans. At the Eurodif site in France, natural gas consumption dropped 90% by making two major changes to site utility management.

Greenhouse gases (GHG)

The drop in the group’s emissions in 2007 was mainly due to the elimination of SF6 releases from the uranium chemistry facilities by changing the treatment process for fl uorine vented by the facilities.A plan going into effect in 2008 will drastically reduce N2O releases at the Malvési site. As a result, almost no more greenhouse gases linked directly to the processes will be emitted by the nuclear cycle operations.

AREVA’S SHRINKING ENVIRONMENTAL FOOTPRINT, 2004-2007 (at constant sales)

72 – AREVA 2007

7 ENVIRONMENTAL PROTECTION

Managing radioactive wasteFor comprehensive management of its radioactive waste, the group uses a reporting system that includes the different waste management methods and the status of the facilities (in operation or undergoing dismantling). For example, it tracks legacy waste retrieval and packaging programs, and waste from facility operations or dismantling.The group has invested at several sites to improve radioactive waste storage and packaging and to prepare for the removal of dismantling waste from ongoing and future work sites. Several large-scale operations are in progress, including:– the construction of a building in 2007 to retrieve and process radium-bearing waste at the Cezus Jarrie site;– the decontamination and recycling in 2007 of 400 metric tons of contaminated lead in new nuclear facilities at the Marcoule site;– a feasibility study concluded in December 2007 on the project to dismantle the Eurodif plant at the Pierrelatte site during the 2013-2015 time frame; – optimized treatment of very low level waste at the La Hague site before shipment to the Andra disposal facility.The group’s sites received certifi cates of acceptance to the Andra very low level waste disposal facility, allowing many shipments of a variety of waste.

Before risk can be managed, it must fi rst be identifi ed and characterized at all of the group’s sites using proven methods. The actions taken comply with the ALARA principle (as low as reasonably achievable), taking economic and social factors into account.

Optimizing the application of safety requirementsThe 40 site inspections performed in 2007 were based on 4 topics: fi re hazard control, criticality control, safety while performing services in customer facilities, and radioactive waste and effl uent management. The inspections revealed a strong point shared by all: the organization and practices of the entities are capable

UPCOMING MILESTONES

Deploy the additional indicators for safety performance tested in 2007.

Deploy the human and organizational factors initiative throughout the group.

Support risk assessment initiatives at SEA sites.

Revise hazards studies to comply with regulatory changes.

OBJECTIVES

Test the application of additional indicators for safety performance.

Distribute the handbook for human factors integration and assess the potential for extending it to other fi elds.

Deploy event analysis training integrating the human factors component.

Strengthen knowledge of national safety regulations in countries in which AREVA does business.

Complete deployment of simplifi ed risk assessments and health hazards assessments at SEA sites.

Anticipating risks

of ensuring that safety requirements are taken into account correctly and applied. Two areas for improvement emerge from these inspections: the strengthening of training on safety and human and organizational factors, and the expansion of experience sharing. A total of 81 events were reported in 2007. On the International Nuclear Event Scale (INES), 64 were ranked level 0 and 17 were ranked level 1, including 4 that actually occurred in 2006. The number of incidents was stable and none were ranked as level 2.

Human and organizational factors integrationTo err is human, and humans are fallible… but they are also necessary to the process

Human factors integration in the United StatesThe group’s nuclear fuel fabrication business in the United States, Fuel America, sought to understand the root causes of quality and safety problems so as to take corrective action at the appropriate line level. Launched in 2003, its Human Performance initiative focuses on individual and collective performance. It is one of the group’s most advanced initiatives on the subject today. The initiative involves employing human error indicators, measuring performance improvement, and comparing its results with those of other organizations to pinpoint performance improvement opportunities. The results are encouraging: the human error rate dropped 50%, performance improved noticeably and clear areas for improvement in terms of working conditions and organization emerged. The key to success has been the involvement of managers, who coordinate the program and determine the action to be taken and training content. The initiative is even more exemplary for its approach, organization and results than for its originality.

AREVA 2007 – 73

8 RISK MANAGEMENT AND PREVENTION

The Concord site cuts down on ether useIn Canada, Canberra Concord manufactures radio assay equipment such as radiation detectors and walk-through detectors for employee radiation protection. Manufacturing this type of equipment requires the use of highly fl ammable, toxic ether to clean the copper components. Canberra partnered with its supplier to identify a substitute cleaner that not only has excellent cleaning properties, but is non-fl ammable, much less toxic, and usable in an automatic cleaning machine as well. Changing cleaners and automating the process has reduced the fi re risk and employee exposure to toxic products. The new cleaner is also recyclable, compensating for its higher cost. Moreover, with the automated process, the cleaning operation takes only half as much time.

Keeping radiological impacts as low as reasonably achievableAs part of its continuous improvement initiative, the group set goals to keep radiological impacts as low as reasonably achievable and to expand harmonization of the radiological impact assessment models to all sites with radioactive releases. Specifi cally, at 0.01 mSv, the annual radiological impact of the La Hague site on the surrounding populations is only one-fi fth of what it was 30 years ago. This is much lower than the regulatory limit of 1 mSv/year, which is the equivalent of one day of exposure to the region’s natural radioactivity. The assessment models used at La Hague were extended to the group’s other major nuclear sites, taking specifi c local characteristics such as life styles and consumption habits into account. The impacts there are also very low, at less than 0.01 mSv.Radiological impact assessments are supplemented by environmental radioactivity monitoring. AREVA takes some 100,000 samples at 1,000 locations for analysis every year. The analytical results are published on the group’s websites and shared with local stakeholders. Reconfi guration of storage areas to limit the radiation exposure at the site boundary, begun in 2005, was completed in 2007.

74 – AREVA 2007 AREVA 2007 – 75

8 RISK MANAGEMENT AND PREVENTION

of managing risk. This is the challenge of human factors integration: taking this duality into account to reduce errors and make the most of human capabilities to anticipate and correct situations. First and foremost, this requires understanding and taking into account four performance factors: individuals, ergonomics, interactions within the team and cultural and organizational factors. The anomalies then need to be corrected at the right level of management, and risk situations improved for quality, occupational safety, nuclear safety, health, and environmental protection. Above all, managers must create the conditions that will help to change attitudes (personal involvement, making use of social skills within the organization). Line managers, corporate managers

and specialist staff put their heads together to come up with a human factors integration project for AREVA that builds on the group’s lessons learned, to be rolled out in the operating entities in 2008.

Environmental reviews as a barometerThe purpose of environmental reviews is to assess the level of performance and maturity of site environmental practices. They are based partly on documentation reviews and partly on observations in the fi eld. A site’s major risks will determine the specifi c topics covered during the site visit. Each environmental review leads to a report identifying the site’s strengths and weaknesses.

Managing fi re hazards, an obligation for AREVAAn uncontrolled fi re can lead to the dissemination of hazardous materials. AREVA sites are exposed mainly to the risk of electrical fi res or fi res caused by fl ammable liquids or pyrophoric metals. The group’s goal is to prevent any fi res from starting and, in the case of incipient fi re, to limit its spread and consequences. AREVA worked with Andra, the CEA and EDF to develop a Fire Prevention Guide that includes a risk analysis method. As part of R&D work on electrical cabinet fi res conducted with the French radiation protection and nuclear safety institute IRSN, tests were performed to optimize the use of ventilation in buildings on fi re. The tests took place in a station with three halls and a corridor resembling those of a nuclear facility. Based on previous studies on fi res due to solvents, the La Hague site developed a strategy to manage the ventilation in buildings where solvents might catch fi re.

The 90 reviews performed in 2007 identifi ed best practices for risk reduction linked to the disposal of hazardous materials. Reviews are performed at least every three years for sites with signifi cant environmental aspects (SEA) and once a year for Seveso, nuclear and mining sites.

AREVA has always considered it important to maintain dialogue with its stakeholders so as to understand and integrate their expectations into its strategy and answer questions raised by its operations.

Mapping of local stakeholders taken to the international levelIn 2003, AREVA developed a mapping methodology for local external stakeholders to help the sites compare their perceptions of local stakeholder expectations with their real expectations. Priority was given to the major nuclear sites and sites regulated under Seveso laws.In 2007, local stakeholder mapping was deployed on an international scale and then broadened to include sites that carry signifi cant economic weight. Five new sites took part in this exercise, one in the US, two in Canada and two in Germany. In all, almost 280 stakeholders from some 20 of the group’s sites in France, Britain, Germany, Canada and the US were interviewed by an independent expert. The stakeholder maps were used to develop “dialogue action plans” that will be examined regularly by the group’s sustainable development teams.

UPCOMING MILESTONES

Update local stakeholder mapping performed at least three years ago.

Continue to implement “dialogue action plans” at all sites and monitor their progress.

Hold a third Stakeholders Session with the group’s stakeholders.

Set up health observatories around the main mining sites, beginning with Niger and Gabon, before the end of 2008.

OBJECTIVES

Report on the information exchanged during the second Stakeholders Session, improve the process, and expand the initiative to other regions.

Continue the practice of solicited ratings.

Continue to deploy stakeholder mapping.

Implement “dialogue action plans” at the local level.

Building relationships of trust with stakeholders

9 DIALOGUE AND CONSENSUS BUILDING

Dialogue to strengthen knowledge of the group’s operationsIn view of the nuclear revival in the United States and to meet growing recruitment needs in the western part of the country, AREVA developed relations with the farming community of Sunnyside Washington, population 15,000, near the Richland site. Working closely with the teachers of Sunnyside High School, the group is identifying students with a clear interest in the nuclear industry. AREVA gave a comprehensive overview of its operations and arranged a tour of the Richland manufacturing facilities and meetings with employees in various job categories to help these students identify job opportunities in the nuclear industry and gain a better understanding of what the jobs are all about.

76 – AREVA 2007 AREVA 2007 – 77

9 DIALOGUE AND CONSENSUS BUILDING

Cleanup BU assessed by VIGEOAREVA asked VIGEO to conduct a second solicited rating to assess the Cleanup business unit’s level of social responsibility. The fi rst rating targeted the uranium mining business. The audit measured the level of social responsibility in four fi elds: human resources, human rights, the environment, and market performance. On a scale of 1 to 4, with 4 being the highest level and refl ecting “advanced commitment,” the Cleanup business was given a rating of between 2 and 3, depending on the fi eld. This rating gave the Cleanup business unit a clear idea of the improvements still to be made.

10 COMMUNITY INVOLVEMENT

Taking action on AREVA’s responsibility to society goes beyond the traditional borders of its industrial operations. Over and above its economic infl uence, the group’s community involvement policy makes it an important element in all aspects of local development.

An engine for economic developmentThe mission of AREVADELFI, the group’s risk capital company, is to support economic development in regions in which the group conducts business. Ever since it was established in 1998, AREVADELFI has invested some 10 million euros to help get more than 100 projects off the ground, representing a total of 2,295 jobs. In 2007, AREVADELFI focused on technology and innovation projects in regions where it had not yet been involved. Of the 70 projects reviewed, 16 were selected, leading to the creation of 400 jobs. The competitiveness clusters created by the French government in 2006 constitute regional development tools for industry. AREVA heads up two of them: the nuclear cluster of Burgundy, in the Saône-et-Loire department, and the Trimatec cluster in the Rhone Valley. Within this framework, research and development programs have been set up and bring the group together with small and mid-sized local businesses, to the mutual benefi t of both sides. AREVA has become a champion for enterprise park initiatives that provide business premises

UPCOMING MILESTONES

Involve employees in sponsorship programs supported by the AREVA Corporate Foundation.

Continue to internationalize projects in line with the consolidated group’s new borders.

Support a dozen large-scale development projects, in terms of jobs, via AREVADELFI.

Provide economic development support in departments hosting the Bure disposal site in France.

OBJECTIVES

Continue humanitarian aid activities, with greater employee involvement.

Increase the internationalization of projects.

Inform the public about the activities of the AREVA Corporate Foundation.

Supporting development in communities where the group does business

and enterprise project support. In 2007, AREVA took part in creating a new enterprise park in Saint-Dizier, France, centered on the energy sector, which will ultimately create 100 jobs. Two other parks in which the group is involved, Le Creusot (600 jobs) and Pontarlier (200 jobs), are completely full and have achieved economic stability. New projects in Mâcon and Cherbourg are under review.The group continues to be an active supporter of local economic development near the deep disposal laboratory for radioactive waste in Bure, France. In 2007, it completed the construction of its national archive center in Houdelaincourt, where 10 permanent jobs were created.

Creation of the AREVA Corporate FoundationAREVA has always had a policy of sponsorship in three areas, identifi ed through consultation with its employees: North/South development, knowledge sharing, and energy and climate change. In 2007, the group set up a corporate foundation, to anchor this policy.By creating the foundation, AREVA offers its employees the opportunity to get involved in a variety of humanitarian programs on a volunteer basis.The programs must be in line with the foundation’s areas for action: access to education, health, and CO2-free energy. In 2007, the Foundation supported several fl agship projects: operation of “Green

Established health observatories near the mine sitesIn 2007, under the aegis of the national authorities and with the participation of scientifi c organizations and NGOs, AREVA proposed to create health observatories near the mine sites it operates or has operated. The fi rst two units are being established in Niger and Gabon, and are expected to be completed before the end of 2008. The objective is to provide medical care to former employees of the mines, in compliance with French regulations, to record any pathologies, and to launch epidemiological studies if necessary. To meet public and stakeholder expectations, the group hopes to expand this health monitoring program to all of the mines it operates around the world, particularly in Canada and Kazakhstan.

An intranet site devoted to dialogue and consensus buildingLaunched in 2007, this intranet site gives the group’s sites and plants information and practical advice to formalize and improve the organization of dialogue with local external stakeholders. Numerous tools are provided, such as examples of best practices and action plans, as well as contextual information on stakeholder relations, etc. A methodology for stakeholder mapping, based on maps developed previously for about twenty of the group’s plant sites, is available to sites and plants that need to identify and quickly describe their key local contacts.

AREVA 2007 – 7978 – AREVA 2007

Santa Clauses,” a project organized by the Secours populaire, the fi ght against exclusion and illiteracy in the shantytowns of São Paulo, construction of a solar-powered school in the Himalayas, a micro-credit program to allow rural populations in China to acquire renewable energies… to mention but a few.

New initiatives to fi ght AIDSAREVA has been committed to the fi ght against AIDS for several years. Further action was initiated in 2007. In China, a campaign to prevent AIDS was conducted among employees at the Suzhou and Shanghai sites. In France, an in-house

awareness raising campaign launched in 2006 continued, supported by the group’s health network. In the Ivory Coast and India, HIV/AIDS evaluation campaigns were conducted at the group’s sites and gave rise to a series of recommendations.In Niger, AREVA started implementing the triennial agreement to prevent AIDS and provide care for its victims signed with the government and the public interest group Esther. With the latter’s support, 122 people infected with HIV had been treated at the Agadez regional hospital center as of the end of 2007. The agreement constitutes the fi rst co-investment program in the world signed between an African government and a large private group.

A solar-powered school in the HimalayasThe AREVA Corporate Foundation is taking action in favor of child education. It is providing support for the construction of a solar-powered school in the Himalayas, a project led by the “Tisser la Paix” (“Weaving Peace”) association. The school is located in the Nubra Valley, a dry, mountainous region where minimum temperatures range from –20° C to –35° C in the winter. But an average of 300 days of sunshine per year means that the school can be heated with solar energy. As a result, 250 children will be schooled during the winter months, leaving them free during the three summer months to help their parents.

The AREVA Foundation also supports programs to combat HIV/AIDS among destitute populations in South Africa.

A “green coal” machine in South AfricaSince 2004, AREVA has been working in partnership with the NGO Pro Natura to develop an industrial process to produce “green coal.” The goal is to design a production-scale machine to convert agricultural waste or renewable biomass into briquettes of “green coal” that can be used like charcoal. Teams from AREVA and the South African company NESCA cooperated on developing the machine, for which a prototype was successfully produced in 2007. An 18-month trial phase began in 2008. Several companies have already confi rmed their interest in the machine, capable of producing economical and environmentally friendly energy for 15,000 homes. This project opens broad perspectives for access to energy by the people of developing countries.

10 COMMUNITY INVOLVEMENT

Auditors’ reporton selected environmental, social and safety indicators for 2007

At the request of the AREVA group and in our capacity as the group’s statutory auditors, we performed a review aimed at providing:• a reasonable level of assurance on the

“Direct greenhouse gas emissions” indicator identifi ed by the symbol in the table on page 83 for fi scal year 2007; and

• a moderate level of assurance on the 11 environmental, social and safety performance indicators (“the data”) selected by the AREVA group and identifi ed by the symbol in the table on page 83 for fi scal year 2007.

These data, which are the responsibility of the Sustainable Development and Continuous Improvement department, were prepared in accordance with internal procedures for measuring and reporting sustainable development and continuous improvement indicators, available for consultation at the Sustainable Development and Continuous Improvement department and on the group’s website. The reporting procedure described on page 81 explains the reporting methodologies related to the data used to calculate the published indicators, most notably the indicators relating to the radiation exposure and the radiological impact at the La Hague site. It is our responsibility to express a conclusion on the selected data based on our review. The conclusions formulated hereafter relate to these data alone and not to the entire sustainable development report.

Nature and scope of workWe performed the following proceduresin order to provide an assurance that the selected data do not contain any material misstatements.

The work performed for the data identifi ed by the symbol enable us to express a moderate level of assurance for the selected entities; the work performed on the data identifi ed by the symbol is more extensive and enables us to express for the fi rst year a reasonable level of assurance.• We assessed the procedures for

reporting and measuring environmental, social and safety indicators with regard to their relevance, reliability, neutrality, understandability and completeness.

Regarding the radiological impact of the La Hague site, we based our work on the opinion expressed by the Groupe

Radioécologique Nord-Cotentin in its January 2007 report related in particular to the methodology for calculating the data(1).• We performed interviews at the

Sustainable Development and Continuous Improvement department, the Environment department, the Health and Safety department, the Human Resources department, and in 12 selected entities(2) with the persons involved in the application of the procedures.

• We performed tests on the application of the procedures based on a sample of 10 sites(3) accounting for 6% to 53% of the group’s consolidated data.

(1) “ Appréciation par le GRNC de l’estimation faite par AREVA NC des doses auxquelles la population a été exposée du fait de l’activité exercée sur le site de La Hague au cours de l’année 2005.”

(2) Mining, Chemistry, Enrichment, Equipment, AREVA TA, Treatment, Logistics, Recycling, Systems, Products, Services and Automation business units.

(3) Mining BU (Katco site in Kazakhstan), Chemistry BU (Comurhex Malvési and Comurhex Pierrelatte sites in France), Enrichment BU (Socatri site in France), Equipment BU (Saint-Marcel site in France), AREVA TA BU (TA Cadarache site in France), Treatment BU (AREVA NC La Hague site in France), Logistics BU (LMC site in France), Recycling BU (Melox site in France), Products BU and Services product line (Gebze site in Turkey).

• We tested the calculations on a sample basis and verifi ed the reporting of data by the selected entities and at various consolidation levels.

To assist us in conducting our work, we referred to the environmental and sustainable development experts of our fi rm.

Environmental indicators

Water consumption (excluding cooling water) (m3)

22% Quantity of hazardous and non-hazardous waste (MT)

6% Energy consumption (excluding Eurodif) (MWh)

37%

Direct greenhouse gas emissions (MT of CO2 equivalent)

53% VOC emissions (MT) 11%

Safety indicators

Number of accidents with lost time for subcontractor personnel

16% Total individual external doses to group employees from occupational exposure to radiation (man-mSv)

12%

Social indicators

Total hours worked 14% Employees as of December 31 13%

80 – AREVA 2007 AREVA 2007 – 81

Auditors’ reporton selected environmental, social and safety indicators for 2007

Reporting methodology

The indicators published in this report are used to measure the main impacts and sustainable development challenges associated with the operations of the AREVA group. These indicators were developed by a group of experts representing our different businesses and departments, and refl ect, in particular, GRI(1) and WBCSD(2) recommendations as well as applicable legislation, such as the French law on New Economic Regulations. The AREVA group was established in September 2001 and began instituting performance indicators in 2002, its fi rst full year of operation.The indicators presented in this report concern the data for fi scal years 2006 and 2007 submitted to the statutory auditors for review. Our reporting period is the calendar year (January 1 to December 31).Indicators for dosimetry data are from a 12-month period that may be different from the calendar year.

ScopeAll of the group’s worldwide operations are covered in this report. By “group”, we mean AREVA, its subsidiaries and all of the operational and functional entities of the group in which our interest is 50% or more as of December 31, 2007.

(1) Global Reporting Initiative (www.globalreporting.org).(2) World Business Council for Sustainable Development

(www.wbcsd.ch).(3) An entity has operational control of the source of an impact

when it has decision-making authority for operating procedures causing those impacts or emissions, i.e. when the responsibility for the impacts and emissions is explicitly mentioned in the contract terms and conditions governing the right to operate the source involved and/or it is has a permit to operate that source from the administration (or its equivalent outside France).

(4) Intergovernmental Panel on Climate Change (IPCC).

The full consolidation method is used (data from majority-owned subsidiaries is fully consolidated).By “operations”, we mean the operations of all industrial sites and offi ce building sites with a surface area of more than 1,000 m2 subject to sustainable development reporting.Beginning with 2007 reporting, offi ce building sites with a total surface area of less than 1,000 m2 must report safety data.The main changes in the consolidated group in 2007 were:– integration of offi ce building sites (more

than 1,000 people);– creation of the Renewable Energies

business unit (three sites in India, Brazil and Germany, more than 80 people); and

– acquisition of Lesedi (one site in South Africa, AREVA NP, more than 277 people).

MethodologyThe measurement methods used for environmental, social and safety indicators and the related reporting procedures are documented in an AREVA sustainable development and continuous improvement measurement and reporting procedure.

This procedure is provided to anyone, at any level, involved in developing and reporting data; it is updated in the fi rst quarter of the year and may be consulted on the group’s website, www.areva.com.The reporting procedure was not modifi ed in 2007 compared with 2006.The previously reported fi gures for 2006 were corrected when possible to take changes in scope and methodology into account.The overall uncertainty on the measurement of total greenhouse gas emissions is less than 10%. This fi gure is based on AREVA group estimates of uncertainties by type of industrial process and by type of greenhouse gas following the “Good Practice Guidance and Uncertainty Management in National Greenhouse Gas Inventories” of the IPCC(4).Concerning the quantifi cation of volatile organic compound emissions (VOC), the strengthened deployment of VOC inventories at some sites resulted in a broader accounting of emission sources, explaining in part the variation in data from 2006 to 2007.

CO

MM

EN

TS

Mazars & Guérard

Jean-Luc BarletPartner

Salustro ReydelMember of KPMG International

Denis MarangéPartner

Philippe ArnaudPartner

Environment & Sustainability department

Units whose sale was in progress and irreversible in 2007 were not included in the scope of environmental reporting. An additional criterion was used for mining operations, i.e. the group’s operational involvement(3). As a result, we included data from the minority subsidiaries Cominak (Niger) and AMC (Sudan) in the environmental, health and safety indicators. The goal is to cover the entire group. This is not always possible, for various material reasons, particularly at small sites with limited administrative resources. To assess the gaps in relation to this goal, the exhaustiveness of reporting is measured in percentage of affected employees. The coverage rate (CR) corresponding to each indicator is provided in the summary data table (page 83 of this report).

Observations on the proceduresIn 2007, the group continued to improve the reliability of the data reporting process. In particular, AREVA included new entities (corporate entities and marketing and sales entities of the T&D division) in the reporting process and further raised awareness, among persons in charge of validating and verifying data consistency, of the work to be performed to ensure the reliability of the validations at the business unit and professional expert levels.

The procedures relating to the reporting protocol for the selected data enabled us to make the following observations:

Neuilly-sur-Seine and Paris-La Défense, March 19, 2008

The statutory auditors,

Deloitte & Associés

Pascal ColinPartner

Eric DugelayPartner

Environment & Sustainability department

• the application of the data verifi cations provided in the reporting tool should be strengthened at the level of the business units and professional experts, as well as at certain sites;

• the defi nition of the “volatile organic compounds (VOC) emissions” indicator must be clarifi ed in the reporting procedures to enable the group’s sites to prepare an inventory of substances in a consistent and comprehensive manner; and

• the reporting scope for the “employees as of December 31” indicator of the Sustainable Development and Continuous Improvement department must be made consistent with that taken into account in the reporting of the Human Resources department.

ConclusionReasonable assuranceIn our opinion, the data identifi ed by the symbol were prepared, in all material respects, in accordance with the above-mentioned reporting criteria.

Moderate assuranceBased on the work performed, we did not identify any material misstatements likely to call into question the fact that the data identifi ed by the symbol were prepared, for the selected entities,in accordance with the above-mentioned reporting criteria.

82 – AREVA 2007 AREVA 2007 – 83

Reporting methodology

2007

Data Unit Assurance 2006 2007 Corporate Depts.

Front End

Reactors and

Services

Back End

T&D Coverage rate(1)

Number of sites with ISO 14001 certifi cation

Number 105 115 28 24 9 54 100%

Volume of water consumed (excluding cooling water)

m³ 20,600,920 19,438,368 59,706 15,439,960 2,191,420 597,200 1,150,081 100%

Energy consumed (excluding Eurodif)

MWh 2,806,108 2,925,200 26,906 1,355,926 425,485 774,462 342,420 100%

Direct emissions of greenhouse gases

Metric tons CO2

equivalent

1,118,137 990,836 585 597,812 54,227 103,838 234,374 100%

Emissions of volatile organic compounds (VOC)

kg 1,079,906 1,173,128 4,840 972,911 10,374 29,900 155,102 100%

Radiological impact of the AREVA NC La Hague site(2)

mSv 0.009 0.009 0.009 100%

Total conventional waste (normal and exceptional operations)

MT 131,714 179,121 863 118,264 19,652 4,572 35,770 100%

Total individual external dose to AREVA group employees over 12 consecutive months

mSv 19,157 18,760 2 4,871 8,264 5,623 100%

Accident frequency rate with lost time for employees of the AREVA group

% 4.66 3.55 0.87 3.82 2.93 4.45 3.99 99%

Number of accidents with lost time involving subcontractor personnel working at an AREVA group site

Number 237 285 2 76 66 47 94 98%

Accident severity rate for employees of the AREVA group

% 0.14 0.11 0.01 0.14 0.08 0.20 0.09 100%

Percentage of women engineers and managers (excluding executives)

% 16.9 16.7 30.2 14.3 15.9 19.5 11.5 100%

Percentage of women in non-management positions

% 17.4 18.4 59.3 13.1 23.8 16.5 16.3 99%

Moderate assurance Reasonable assurance

(1) In % of the AREVA group’s total workforce.

(2) See note on methodology on page 82 of this report for an explanation of the methods used to calculate this indicator.

The other sustainable development indicators are available on the AREVA group’s website.

The quantities of drainage water from mining operations are included in the indicator “volume of water taken from the water table” and are not included in the indicator “total water consumption (excluding cooling water),” except for the share used on site. The calculation of internal and external doses is based on methods developed by AREVA in accordance with applicable regulations. Practical measurement methods may differ by site; those concerning external doses are currently the subject of comparative analyses aimed at gradually bringing them into alignment, as a function of local regulatory requirements.The mean internal and external dose calculation includes all monitored personnel, including personnel that received a non-detectable dose or no dose at all. The internal doses used to calculate the mean dose to the group’s employees from occupational exposure to radiation were not reviewed by the auditors for confi dentiality reasons. For this indicator, the review is therefore limited to the sum of individual external doses resulting from occupational exposure to radiation by the group’s employees.A method developed jointly by AREVA and IRSN is used to calculate the radiological impacts of the AREVA NC La Hague site: “Methodology for calculating the impacts of liquid and gaseous releases from the AREVA NC La Hague plant on the reference populations.”

In application of the plant license order, the estimate of doses to the public is assessed by a mixed group of experts called the Groupe Radioécologie Nord-Cotentin (GRNC). In its January 2007 report, the GRNC analyzed AREVA NC’s quantifi cation of released activity, modeling of pathways in the environment, and estimates of doses to the public. The GRNC considers the approaches and reported results to be consistent with the methodology that it recommends using and that the resulting estimates are correct.The radiological impact thus calculated for the most affected reference group is 0.009 mSv, or 10/1,000th of the regulatory limit of 1 mSv. Since the modeling includes meteorological data averaged over a period of fi ve years (1992-1997), AREVA NC conducted a sensitivity analysis of the calculation based on actual meteorology in fi ve villages near the plant. For 2007, the radiological impact thus calculated ranges from 0.0024 to 0.014 mSv, depending on the village. These fi gures are the same order of magnitude as that calculated for the reference group. They are still less than 15/1,000th of the regulatory limit.

Independent verifi cationThe statutory auditors Deloitte & Associés, Mazars & Guérard and Salustro Reydel provided independent verifi cation of reporting procedures for selected key environmental, social

and safety indicators for 2007. These indicators are identifi ed by the symbols

or in the table (page 83 of this report). The type of verifi cations performed and the fi ndings thereon are presented on pages 79-80 of this report.

CompletenessThe purpose of this report is to explain our businesses’ main sustainable development challenges and to provide an analysis of their social and environmental performance.The report does not enter into detail on the local impacts of the various sites, which are addressed in specifi c reports that are gradually being published by the sites with signifi cant environmental aspects.

Data verifi ed in 2007 at 10 sites by the statutory auditors Salustro Reydel, member of KPMG International, Deloitte & Associés and Mazars & Guérard

84 – AREVA 2007 AREVA 2007 – 85

Glossary

ANDRA (AGENCE NATIONALE POUR LA GESTION DES DÉCHETS RADIOACTIFS)Public industrial and commercial agency with oversight by the Ministries of Indus-try, Research and the Environment. Andra operates independently of waste genera-tors. Formed in 1991, the agency has three areas of responsibility:• an industrial mission, by which the

Agency provides for the management, operation and monitoring of radioactive waste disposal centers, designs and builds new centers for waste that is not acceptable in existing facilities, and defi nes radioactive waste packaging, acceptance and disposal specifi cations in accordance with nuclear safety rules;

• a research mission, by which Andra par-ticipates in and contributes to research programs pertaining to the long-term management of radioactive waste, in particular in cooperation with the French Atomic Energy Commission (CEA); and

• an information mission, in particular through the development of a register of all radioactive waste.

BIOFUELLiquid fuel produced by the conversion of vegetable matter produced by agri-culture (beets, wheat, corn, rape seeds, sunfl ower seeds, potatoes, etc.). Biofuels are associated with a source of renewable energy.

BIOTOPEA biological environment presenting stable habitat conditions to a set of plant and/or animal species.

BLACKOUTA widespread power outage that occurs after a purely local power outage and affects the whole grid, cutting off electric-ity to an entire region.

CENTRIFUGATIONEnrichment process in which a gaseous mixture of isotopes is spun at very high speed, using the centrifugal force to modify the composition of the mixture.

CO2

Carbon dioxide, a greenhouse gas pro-duced primarily by burning fossil fuels (coal, oil, natural gas, etc.).

COREArea in a nuclear fi ssion reactor com-prising the nuclear fuel and arranged to foster the fi ssion chain reaction.

DGSNR (DIRECTION GÉNÉRALE DE LA SÛRETÉ NUCLÉAIRE ET DE LA RADIOPROTECTION)French government agency reporting to the Ministers of Industry, the Environment and Health. Its specifi c functions are to defi ne and implement policy in the fi elds of nuclear safety (civilian applications) and radiation protection and, in particular, to verify safety-related measures taken, contemplated or implemented by opera-tors in the nuclear sector, and to monitor liquid and gaseous effl uent and waste from licensed nuclear facilities.

DISPOSAL OF RADIOACTIVE WASTE(SEE ALSO STORAGE)Radioactive waste management operation consisting of disposing of packaged waste in a specially designed area that will ensure safety without time limitation.

DOSEUnit of measure used to characterize human exposure to radiation. The term “dose” is often erroneously used in place of “dose equivalent.”• Absorbed dose: amount of energy

absorbed by living or inert matter exposed to radiation. It is expressed in grays (Gy).

• Dose equivalent: the same absorbed dose may have different effects on a living organism, depending on the type of radiation involved (X-rays or alpha, beta or gamma radiation). A dose multi-plier, or “quality factor,” is used to take these differences into account in calculat-ing the dose, giving a “dose equivalent.”

• Effective dose: sum of weighted dose equivalents delivered to various tissues and organs by internal and external irradiation. The effective dose unit is the sievert (Sv).

• Lethal dose: fatal dose of nuclear or chemical origin.

• Maximum allowable dose: dose that must not be exceeded for a given period of time.

DOSIMETRYAn assessment or measurement method used to determine the radiation dose absorbed by a substance or an individual.

ECO-DESIGNRefers to the integration of the environment into the design of goods and services. All products affect the environment at one point or another in their life cycle. The goal of eco-design is to reduce those impacts while preserving, or indeed improving, product utility. In the eco-design process, environmental parameters are added to other design parameters, such as technical feasibility, cost effectiveness, and customer requirements.

ECO-EFFICIENCYWhen a company wants to reduce its en-vironmental impacts as well as its costs, it initiates an eco-effi ciency process. This process involves an analysis of the environmental impacts of its products, processes and services.

ELECTRICITY DISTRIBUTION NETWORKNetwork that delivers electricity locally to end-users: industries, businesses, service providers, residences, etc. Elec-tricity is distributed at medium voltage (12-24,000 V) and gradually reduced to low voltage at the point of end use (230 V in Europe, 110 V in the United States).

ELECTRICITY TRANSMISSION NETWORKNetwork for electricity transmission from the power plant to the distribution network. It covers large geographical areas. The transmission network includes high voltage and very high voltage power lines, transformers and switchgear equipment.

END-OF-LIFE-CYCLE OBLIGATIONSTerm covering all stages following the shutdown of a nuclear or mining facility at the end of its operating life, from fi nal closure to the removal of radioactivity at the site, including physical dismantling and decontamination of all non-reusable facilities and equipment.

ENERGY MARKET MANAGEMENT SYSTEMManagement software for energy mar-kets that allows power generators and distributors to manage their commercial relations more effectively. The software provides strategic planning; deal con-clusion, risk management and optimum processing; and customer account management.

ENRICHMENTProcess by which uranium’s content of fi ssile isotopes is increased. Natural uranium consists of 0.7 % 235U (fi ssile isotope) and 99.3% 238U (non-fi ssile isotope), as well as very small quantities of 234U. The proportion of 235U is increased to around 3-4% to make it usable in a pressurized water reactor.

ENVIRONMENTAL MANAGEMENT SYSTEM (EMS)An environmental management system is a systematic process for identifying and improving environmental performance that may culminate in certifi cation.

EPRNew generation pressurized water nuclear reactor with approximately 1,600 MWe of power.

FLORENCE FORUMA consensus building and regulating process in the electricity fi eld initiated by the European Commission in 1998 which guided the establishment of a single market for electricity.

FUEL ASSEMBLYBundle of fuel rods fi lled with uranium or MOX pellets. The core of a reactor con-tains from 100 to 200 fuel assemblies, depending on the reactor type.

FUEL CYCLEThe combination of industrial operations involving nuclear fuel. These operations include uranium ore mining and process-ing, uranium conversion and enrichment, fuel fabrication, used fuel treatment, recy-cling of recovered fi ssile materials, and waste management. The fuel cycle is said to be “closed” when it includes used fuel treatment and recycling of fi ssile materi-als recovered by such treatment. The fuel cycle is said to be “open” or “once-through” when fuel is disposed of after it has been used in the reactor.

GASEOUS DIFFUSIONProcess for separating molecular species in gaseous form that uses the difference in the velocity of these molecules, due to their different mass and dimensions, and thus the different rates at which they pass through a semi-permeable membrane. This is how the uranium hexafl uorides 235UF6 and 238UF6 are separated, causing enrichment in 235U for nuclear fuel.

GOVERNANCEDesignates the organization of authority within a company (corporate gover-nance) and seeks the right mix of man-agement bodies, oversight bodies and shareholders. In terms of sustainable development, good governance presup-poses transparency, dialogue with stakeholders, and addressing stake-holder expectations. It means corporate commitment to guiding principles, which give rise to internal charters.

GREENHOUSE GASESGases present in the atmosphere that may be produced naturally or by human activity. They create a greenhouse effect, helping to warm the earth and make it livable. But beyond a certain threshold, their build-up in the atmosphere causes global warming, which interferes with the climate. The main greenhouse gases are carbon dioxide (CO2), nitrous oxide (N2O), methane (CH4), hydrofl uorocar-bons (HFC), sulfur hexafl uoride (SF6) and perfl uorocarbons (PFC).

GRI (GLOBAL REPORTING INITIATIVE)Launched in late 1997 by the Coalition for Environmentally Responsible Economies (CERES), an NGO, in partnership with the United Nations Environment Program, the Global Reporting Initiative is actively supported by member companies, NGOs, accounting organizations, labor associa-tions and other interested parties around the world. The GRI developed and disseminated guidelines that provide a framework and a standard format for reporting quantitatively and qualitatively on corporate performance in the three areas of sustainable development.

HALF-LIFEThe time it takes for half of the atoms contained in a given quantity of radioac-tive substance to disintegrate naturally. The radioactivity of the substance is thus divided in half. The radioactive half-life varies with the characteristics of each radioelement:– 110 minutes for argon-41;– 8 days for iodine-131; and– 4.5 billion years for uranium-238.

IAEA (INTERNATIONAL ATOMIC ENERGY AGENCY)The IAEA is an autonomous organiza-tion affi liated with the United Nations. Its role is to increase the contribution of ci-vilian atomic energy to international peace and prosperity, and to ensure that it is used for peaceful purposes.

86 – AREVA 2007 AREVA 2007 – 87

Glossary

IEA (INTERNATIONAL ENERGY AGENCY)The IEA is a multilateral organization that coordinates the energy policies of its 27 member nations. It contributes to the security of energy supply, economic growth and environmental protection. It was established in 1974 as an indepen-dent branch of the Organization for Economic Cooperation and Develop-ment (OECD).

INES (INTERNATIONAL NUCLEAR EVENT SCALE)An international scale used to defi ne the severity of an event occurring in a nu-clear facility.

INTERCONNECTIONConnection between two national pow-er grids or, in some cases, regional power grids, which are generally syn-chronous (50 or 60 Hz). Direct current is needed to connect two asynchronous grids, which is complex and costly to implement.

IPCC (INTERGOVERNMENTAL PANEL ON CLIMATE CHANGE)Multilateral organization established in 1988 by the United Nations Environ-ment Program and the World Meteoro-logical Organization to assess scientifi c data on climate change and report on this subject.

IRSN (INSTITUT DE RADIOPROTECTION ET DE SÛRETÉ NUCLÉAIRE)Organization responsible for conducting research and assessments in the fi elds of nuclear safety, human safety and environmental protection, and nuclear materials transportation safety. The IRSN provides technical support to the DGSNR.

ISO STANDARDSInternational standards. The ISO 9000 standards set organizational and man-agement system requirements to dem-onstrate that a product or service meets customer quality requirements. The ISO 14000 standards set requirements for environmental management organiza-tions and systems designed to prevent pollution and reduce the environmental effects of an activity.

KYOTO PROTOCOLThe Earth Summit held in Rio in 1992 signaled global awareness of the risks of climate change.In 1997, the Kyoto Protocol set limits for signatory countries and penalties for polluting countries that emit green-house gases.

MOX (MIXED OXIDES)A blend of uranium and plutonium oxides used to fabricate certain types of nuclear fuel.

NGO (NON-GOVERNMENTAL ORGANIZATION)Non-profi t association or group that is unaffi liated with States and whose pur-pose is to promote and defend collec-tive interests.

NUCLEAR FUELA nuclide that undergoes fi ssion in a re-actor, thereby releasing energy. By ex-tension, a product containing fi ssile ma-terial which supplies energy in the reactor core by maintaining the chain reaction.

NUCLEAR SAFETY(SEE ALSO SAFETY ANALYSIS REPORT)In the nuclear industry, nuclear safety encompasses all of the measures taken at each stage of the design, construc-tion, operation and fi nal shutdown of a facility to ensure operational safety, pre-vent incidents, and limit their impact.

OECD (ORGANIZATION FOR ECONOMIC COOPERATION AND DEVELOPMENT)International organization formed of the leading industrialized nations, including the European Union, whose purpose is to help member governments develop economic and social policies and to encourage and harmonize member country support to developing countries.

PACKAGINGFuel packaging: special packaging for used fuel to prepare it either for interim storage or for fi nal disposal.Waste packaging: operation consisting of converting waste into a form suitable for transport and/or storage and/or fi nal disposal.• Very low-level radioactive waste (vinyl,

cleaning rags, etc.) is placed in steel drums.

• Low- and medium-level waste is fi rst compacted to reduce its volume as much as possible, then encapsulated in a special material (concrete, bitumen or resin) to form solid blocks capable of withstanding environmental conditions.

• For high-level waste, a glass matrix is used (vitrifi cation process). The vitri-fi ed waste is placed in stainless steel canisters.

PLUTONIUMChemical element with the atomic num-ber 94 and conventional symbol Pu. Plu-tonium -239, a fi ssile isotope, is produced in nuclear reactors from uranium -238.

POWER GRID MANAGEMENT SYSTEMSystems to optimize electricity fl ows, prevent equipment overloads, limit losses and analyze outage risks.

PRIMARY ENERGY – FINAL ENERGYPrimary energy consists of commodities such as oil and natural gas, which must be converted before they can be used, as opposed to fi nal energy, which is ready to be consumed. Final energy is a little more than one-third of primary energy. The difference comes from output loss-es in the energy system.

RADIATION PROTECTIONTerm commonly used to designate the branch of nuclear physics concerned with protecting people from ionizing radiation (also referred to as “health physics”). By extension, the term “radiation protection” covers all of the health measures taken to protect the health of members of the pub-lic and workers from such radiation and to comply with laws and regulations.

RADIOACTIVE WASTENon-reusable by-products of the nucle-ar industry. The four classes of waste are based on radioactivity levels:• very low-level waste (VLLW);• low-level waste (LLW) from operations

and maintenance, such as gloves, booties, face masks, etc., which make up 90% of the waste sent to licensed disposal facilities;

• medium-level waste (MLW), such as dis-mantled production equipment, measure-ment instrumentation, etc. (8%); and

• high-level waste (HLW), mainly fi ssion products that have been separated during used fuel treatment and recy-cling operations (2%).

RADIOACTIVITYEmission by a chemical element of electromagnetic waves and/or particles caused by a change in the confi gura-tion of its nucleus. The emission can be spontaneous (natural radioactivity of certain unstable atoms) or induced (artifi cial radioactivity).Radioactivity has several forms:• emission of alpha particles (combi-

nation of 2 protons and 2 neutrons), called “alpha radiation”:

– the particles making up alpha radia-tion are helium 4 nuclei that are highly ionizing but not very penetrating. A single sheet of paper stops them;

• emission of electrons, known as “beta radiation”:

– the particles making up beta radiation are electrons with a negative or positive charge. They can be stopped by a few meters of air or a single sheet of alumi-num foil;

• emission of electromagnetic waves, known as “gamma radiation”:

– electromagnetic radiation similar to light and X rays. Thick, compact materials (concrete, lead) are needed to stop it. All of these different types of radiation are grouped together under the gen-eral heading of “ionizing radiation.”

The radioactivity of an isolated quantity of an element gradually decreases over time as the unstable nuclei dissipate. The half-life is the time required for the radioactivity of a radioactive substance to decrease by half.

REACTOR, NUCLEAR REACTORSystem in which controlled nuclear reac-tions are conducted, producing heat that is used to make steam to operate a tur-bine, which drives an electric generator. Different reactor types use different fuel, moderators (to control the reaction) and coolants (to remove heat used to gener-ate power). The pressurized water reactor (PWR) currently used by EDF uses slight-ly enriched uranium fuel and pressurized light water as the moderator and coolant.• Boiling Water Reactor (BWR): nuclear

reactor in which boiling pressurized water is used to remove the heat from the reactor.

• Pressurized Water Reactor (PWR): nuclear reactor moderated and cooled by light water maintained in the liquid state in the core through appropriate pressurization under normal operating conditions.

RENEWABLE ENERGIESHistorically, the fi rst energy sources used by man were renewable. Supplied by the sun, the wind, the earth’s heat and water falls, these energies are, by defi nition, naturally replenished after they have been consumed, and are therefore inexhaustible, at least over very large periods of time. There are six types of renewable energy: solar energy, wind energy, hydropower, geothermal energy, biomass and biogas.

SEVESO, SEVESO REGULATIONSEuropean directive aimed at preventing major accidents involving hazardous materials and requiring in particular the development of emergency response/management plans, public information and urban zoning near high-risk indus-trial sites.

SITES WITH SIGNIFICANT ENVIRONMENTAL ASPECTS (SEA)In AREVA’s frame of reference, sites with signifi cant environmental aspects include our nuclear sites, sites with fa-cilities representing major man-made risk per Seveso regulations, mining sites, plants with facilities subject to public inquiry, and industrial or service sites whose consumption, releases and pollution carry signifi cant weight in the group’s environmental accounting.

STORAGE(SEE ALSO DISPOSAL)Temporary repository for radioactive waste.

STORAGE POOLPool in which used fuel is stored after removal from the reactor to allow the as-semblies to lose most of their radioac-tivity through radioactive decay. The water shields personnel from the radia-tion emitted by the used fuel.

SULFUR HEXAFLUORIDE (SF6)Industrial gas classifi ed as a green-house gas with a high global warming potential (22,200 times that of CO2). Widely used in the metallurgical and electronics industry as insulation for electrical equipment.

TRANSFORMER STATION (SUBSTATION)Interface between sections of a power network that operate at different volt-ages. In the substation, voltage is trans-formed and electricity supply fl ows are controlled.

88 – AREVA 2007 AREVA 2007 – 89

Glossary

TREATMENTTreatment of used fuel to extract fi ssile and fertile materials (uranium and pluto-nium) for recycling purposes and to package the different types of waste into a form suitable for disposal. Fission products and transuranics are vitrifi ed.

UNDP (UNITED NATIONS DEVELOPMENT PROGRAM)The UNDP is the United Nations’ world-wide development network. Its role is to help developing countries by providing advice and advocating their cause to secure grants.

URANIUMChemical element with atomic number 92 and atomic symbol U, which has three natural isotopes: 234U, 235U and 238U. The only naturally occurring fi ssile nuclide is 235U, a quality that is exploited as a source of energy.

URANIUM HEXAFLUORIDE (UF6)The uranium contained in nuclear fuel must be enriched in fi ssile 235U. Enrich-ment is achieved by gaseous diffusion or by ultracentrifugation. The uranium is fi rst converted into a gas called uranium hexafl uoride for this purpose.

USED FUELNuclear fuel that has been used in a reactor.

VITRIFICATIONProcess used to solidify concentrated solutions of fi ssion products and trans-uranic elements separated during used fuel treatment by mixing them with a glass matrix at high temperature.

VOC (VOLATILE ORGANIC COMPOUND)Chemical compound, such as gasoline or acetone, that evaporates at ambient temperature. When exposed to sunlight, VOC reacts with other gases in the atmosphere to form ozone and other photo-oxidants.

WBCSD (WORLD BUSINESS COUNCIL FOR SUSTAINABLE DEVELOPMENT)Established in 1995 at the initiative of the International Chamber of Com-merce, the WBCSD brings together some 180 international companies from 35 countries and more than 20 business sectors. It is the international opinion leader on sustainable development issues.

WNA (WORLD NUCLEAR ASSOCIATION)World industrial organization whose purpose is to promote the peaceful uses of nuclear power as an energy re-source in tune with sustainable devel-opment imperatives.

ZIRCONIUMTransition metal, like titanium, discov-ered in 1824 by Berzélius. Zirconium has the atomic number 40 in the periodic table of the elements. It is the alloy base in the cladding of light water reactor fuel elements, chosen for its mechanical strength and corrosion resistance in high temperature water combined with its very low thermal neutron absorption.

To learn more

WEBSITES

AGENCE NATIONALE POUR LA GESTION DES DÉCHETS RADIOACTIFS (ANDRA)Public industrial and commercial organization responsible for radioactive waste disposal in France. Under the government’s oversight, ANDRA is charged with verifying waste quality; designing, siting, building and managing disposal centers, where waste is placed based on its characteristics.

www.andra.fr

ASSOCIATION OF POWER EXCHANGESAPEx was formed to facilitate the development and communication of ideas and practices in the operation of global competitive electricity markets.

www.theapex.org

COMITÉ 21French association established in 1994 to promote implementation of commitments made at the Rio Earth Summit in Brazil.

www.comite21.org

COMMISSARIAT À L’ÉNERGIE ATOMIQUE (CEA)The CEA is a key player in research, development and innovation in three fi elds: energy, information and health technologies, and defense. Its two main objectives are to become the European leader in technology research and to ensure sustainable nuclear deterrence.

www.cea.fr

ELECTRIC POWER RESEARCH INSTITUTE (EPRI)EPRI is a non-profi t energy research consortium. It was founded in 1973 to benefi t utility members and their customers. Its mission is to provide science and technology-based solutions of indispensable value to global energy customers by managing a far-reaching program of scientifi c research, technol-ogy development and product imple-mentation.

www.epri.com

FIEECFederation of electrical, electronic and communication industries. Its members consist of 21 trade associations and 1,100 high-tech companies in the electrical, electronic and communication sectors. It represents these companies before national and European bodies.

www.fi eec.fr

GIMELECFrench industry association for electrical equipment, automation and related services.

www.gimelec.fr

INTERNATIONAL ATOMIC ENERGY AGENCY (IAEA)The IAEA is an autonomous organization affi liated with the United Nations. Its role is to increase the contribution of civilian atomic energy to international peace and prosperity, and to ensure that it is used for peaceful purposes.

www.iaea.org

LARADIOACTIVITE.COMThis site explains what radioactivity is in simple terms, from its discovery to its many applications in science, industry, medicine and daily life.

www.laradioactivite.com

SOCIÉTÉ FRANÇAISE DE L’ÉNERGIE NUCLÉAIRE (SFEN)This association organizes exhibits for the general public and regional, national and international meetings on various nuclear topics.

www.sfen.org

WORLD BUSINESS COUNCIL FOR SUSTAINABLE DEVELOPMENT (WBCSD)The WBCSD has 180 industrial members committed to sustainable development.

www.wbcsd.org

WORLD ENERGY COUNCIL (WEC)The 80-year-old World Energy Council is the world’s foremost multi-energy organization today. The WEC has committees in more than 100 countries, including the leading energy producing and consuming countries, whether for coal, oil, natural gas, nuclear, hydro or renewable energies.

www.worldenergy.org

WORLD NUCLEAR ASSOCIATIONInternational industrial organization whose purpose is to promote the peaceful uses of nuclear power as an energy resource in tune with sustainable development imperatives. The WNA is particularly focused on nuclear power generation and on the nuclear fuel cycle.

www.world-nuclear.org

90 – AREVA 2007

BOOKS

ALL ABOUT NUCLEAR ENERGY, FROM ATOM TO ZIRCONIUMAvailable in May 2008 at:

www.areva.com

Understanding everything about nuclear energy: that’s what this book sets out to do. It provides an overview of energy and elec-tricity and discusses nuclear reactors, the fuel cycle, waste, nuclear safety, radiation protection and public information. This new edition, put together by a group of AREVA employees, was completely revised and new topics were added, such as facility dismantling, non-proliferation and nuclear fusion. Available in French and English, in hard copy and DVD-Rom.

LESSONS FROM MARIE CURIEBy Marie Curie, Isabelle Chavannes, EDP Sciences, 2003.This unpublished book contains the les-sons in elementary physics that Marie Curie gave in 1907 to her daughter Irène and to the children of her colleagues as part of a “teaching cooperative.” Marie Curie put together the ten lessons her-self for children of around ten years old: discerning the air void, how water makes it to the faucet, the Archimedes principle, and others.

NUCLEAR ENERGY IN 110 QUESTIONSDirection générale de l’énergie et des matières premières (DGEMP) (currently being updated; viewable at www.industrie.gouv.fr)

This book aims to offer summary-level information on nuclear energy in simple terms. The status of nuclear power in France and across the globe is described in 12 short chapters, which serve as an introduction to a series of questions refl ecting concerns by average citizens.

NUCLEAR ENERGY TODAYNuclear Energy Agency of the OECD, 2003 – 120 pages, available from the NEA, Le Seine-Saint-Germain, 12, boulevard des Îles, 92130 Issy-les-Moulineaux, France.

This book provides authoritative and factual replies to questions raised about nuclear energy today. Written primarily to inform policy makers, it will also interest industry leaders, academ-ics, journalists and members of the public.

NUCLEAR POWER“Comprendre l’avenir” collection, Éditions Hirlé131, rue Boecklin, 67000 Strasbourg, France.This book is for everyone, from teenagers to professionals in nuclear power, electrici-ty and energy. With its clear, understand-able approach, it’s a good introduction to this industry. From its fi rst applications to power generation, this book explains the technical as well as economic and political aspects of nuclear power. It contains a long discussion of the long-term outlook for nuclear technologies (fast reactors, fusion). The long-term applications of nuclear energy beyond the generation of electricity are also discussed.

ONE PLANET FOR ALLCollective work sponsored by the World Energy Council, 2003, 174 pages, available from the French Energy Council, CME, 3, rue Treilhard, 75008 Paris, France.It shows the linkages with everything in our environment and advances the idea that energy solutions for humanity cannot be discussed without awareness of how energy is used and greater emphasis on the social and sustainable development aspects.

WORLD ATLAS OF SUSTAINABLE DEVELOPMENTÉditions Autrement – 77, rue du Faubourg- Saint-Antoine, 75011 Paris, France.Author Anne-Marie Sacquet, General Manager of Comité 21, presents the world’s major sustainable development themes in this atlas.

To learn more

AREVA

Business corporation (société anonyme) with an Executive Board and a Supervisory Board capitalized at €1,346,822,638 – RCS Paris B 712 054 923

Registered offi ce: 33, rue La Fayette – 75009 Paris – France – Tel.: +33 1 34 96 00 00 – Fax: +33 1 34 96 00 01 – www.areva.com

Published by the Corporate Communications Department – June 2008

Design and production:

Photos and illustrations: AFP / E. Feferberg, AREVA rights reserved, Black Box Images, P. Bourdon, Bureau de Création, Dikdak, EDF / A. Morin, H5,

Image & Process, P. Lesage, G. Liminet, J.-C. Marmara , C. Moreau, Multibrid, N. Petitot, P. Schaff, J.-M. Taillat, S. Toubon, P. Troyanowski, M. Wendzinski.

Printed on paper from sustainably managed forests.

AREVA in 2007, growth and profitability

Business

Transcript of AREVA in 2007, growth and profitability