AREVA SA and NEW CO - webcast.areva.comwebcast.areva.com/20160615/market_update_meeting/... ·...

AREVA SA and NEW CO2016-2020 roadmaps

Philippe Knoche, Chief Executive Officer

Stéphane Lhopiteau, Chief Financial Officer

June 15, 2016

Roadmaps | June 15, 2016 | p.2

Disclaimer (1/2)

By attending the meeting during which the presentation was made, or by reading this presentation, you agree to be bound by the following

limitations and restrictions.

This document was prepared by AREVA exclusively for the purposes of the "2016-2020 roadmaps" meeting, which will be held on June 15, 2016.

AREVA's operations, financial situation and results, as well as the risk factors related to it, are described in the AREVA Reference Document, which was

filed with the Autorité des marchés financiers (AMF) on April 12, 2016 under number D. 16-0322 (the Reference Document), which is available on the

AMF website (www.amf-france.org) and on the AREVA website (www.AREVA.com).

This document does not constitute a prospectus under the meaning of the directive 2003/71/EC of November 4, 2003. This document does not contain,

does not constitute, is not part of and should not be considered as an offer, an invitation or a solicitation for an investment in financial securities in

France, the United States or any other jurisdiction. Any offer of AREVA's financial securities may only be made by virtue of offering documents

specifically prepared for that purpose. Any investment decision should be made only on the basis of offering documents specifically prepared for that

purpose. This document has not been authorized or approved by any regulatory authority.

AREVA's financial securities have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the Securities Act) and may

be offered, sold or subscribed in the United States only in the framework of an exemption or a transaction not subject to the registration requirements of

the Securities Act. AREVA has no intention of registering all or part of an offer in the United States or of carrying out an offer of financial securities in the

United States.

The distribution of this document and of the information it contains may be the subject of legal restrictions in other countries. Persons who might come

into possession of it must inquire as to the existence of such restrictions and comply with them. Any breach of these restrictions is liable to constitute a

violation of applicable rules in the countries concerned. AREVA assumes no responsibility as regards a violation of these restrictions.

This document only includes summary information and is not intended to be exhaustive. The information contained in this document has not been

verified independently. No warranty, express or implied, is given as to, and you should not go by, the fair presentation, exactness, exhaustiveness or

veracity of the information or opinions contained in this document. AREVA and its associates and their respective executives, officers, employees and

counsel shall not be held responsible in any manner (for negligence or otherwise) for a loss of any kind resulting from the use of this document or of its

content, or related in any way to this document.


Disclaimer (2/2)

Subject to what is expressly indicated in this document, the information contained in this document is given as of the date of said document. The

information contained in this document may be updated, revised, verified or amended without notice and may be significantly modified. AREVA and its

affiliates together with their respective executives, officers, employees and counsel are under no obligation to update or keep up-to-date the information

contained in this document or to communicate or provide to persons who have received this document additional or supplemental information in this

regard. The opinions expressed in this document may be modified without notice. The information contained in this document should not be considered

as warranties as to the future development of AREVA's operations, financial situation or results.

The market data and certain forecasts included in the presentation were derived from studies, estimates and reports as needed, and from external

market studies, public information and publications on the industry concerned. AREVA and its associates together with their respective executives,

officers, employees and counsel have not independently verified the veracity of this market data and these forecasts, and no warranty is given in this

regard. These data and forecasts are provided for information only.

Some of the information included in the presentation and other information published or that will be published by AREVA is not historical fact but forward-

looking information. This forward-looking information refers to the future prospects, developments and commercial strategies of AREVA and is based on

an analysis of future result forecasts and estimates of amounts that cannot yet be determined. By nature, the forward-looking information includes risks

and uncertainties insofar as they refer to events and depend on circumstances that may or may not occur in the future. AREVA draws your attention to

the fact that the forward-looking information does not constitute warranties as to AREVA's future performance and financial situation, AREVA's results

and cash flows, and that the development of the industrial segment in which AREVA operates may differ significantly from forward-looking information

mentioned in this document. Moreover, even if AREVA's financial situation, results and cash flows and the development of the industrial segment in

which AREVA operates are consistent with the forward-looking information mentioned in this document, these items might not be representative of

results or developments of later periods. AREVA makes no commitment to revise or confirm the forecasts and estimates of analysts or to make public

any revision of forward-looking information in order to reflect the events or circumstances that might occur subsequent to the date of this document, valid

only on June 15, 2016. These risks and uncertainties include the risk factors described in chapter 4 of the Reference Document.

This document is a free translation into English from the original, which was prepared in French, and is provided solely for the convenience of

English speaking readers. Whilst every effort has been made to ensure that the English version is a faithful and accurate translation of the

French text, in all matters of interpretation of information, views or opinions expressed therein, the French version takes precedence over this

translation.


Confirmation of the capital restructuring plan

The group’s capital restructuring has begun, in line with the

communication of February 26, 2016:

► Proposed sale of AREVA NP, Canberra and AREVA TA

► Proposed creation of a new, more profitable, less risky

company focused on fuel cycle operations

► Rebuilding of financial strength through capital increases(a)

and proceeds from asset sales

(a) Subject to approval by the European Commission


Our roadmap for returning to the path of profitability and cash flow generation

► Scope redefinition: plan to create a specific entity, currently called “NEW CO",

refocused on the Mining, Front End and Back End businesses, and withdrawal

from AREVA NP, AREVA TA, Canberra and Renewables

► Strengthening of the balance sheet: plan for capital increases(a) for AREVA SA

and NEW CO in the total amount of 5 billion euros and proceeds from planned

asset sales

Strategic

refocusing

► Market: a growing nuclear segment in the medium term related to rising demand

for electricity, particularly in Asia, where the nuclear fuel cycle industry is

developing, offering opportunities in the Front End and the Back End

► Assets: a player with solid market positions, technology leadership, strong

innovation capabilities and industrial high-performance, enabling it to capture any

market recovery

NEW CO

outlook



STRATEGIC REFOCUSINGDetailed roadmap and implementation


Mining Front End

Chemistry /

Enrichment

Back End

International projects

Recycling

Dismantling & Services

Logistics

AREVA NP, excluding

OL3 project (Reactors &

Services, Fuel)

Operations sold,

discontinued or held for

sale

Corporate and

other operations

Corporate

AREVA Med

AREVA TA

(Propulsion and

Research Reactors)

Canberra

(Nuclear

Measurements)

Mining

OL3 project Renewable Energies

NEW CO

AREVA

Scope redefinition: creation of NEW CO entity, refocused on the nuclear fuel cycle

Fuel cycle engineering


Scope redefinition:summary of pre-transaction capital structure

AREVA TA

FRENCH STATE,

CEA & BPI

AREVA SA

AREVA ENROTHER

SUBSIDIARIES

AREVA NC

(FRONT END

& BACK END)

86.5%

AREVA

MINES

83.6% 100% 100% 100%

AREVA NP

including OL3

OTHER

SHAREHOLDERS

13.5%

100%100%

CANBERRA(b)

(b) Sale of Canberra planned before contributions to NEW CO

100%


AREVA TA

AREVA SA

AREVA ENROTHER

SUBSIDIARIES

AREVA NC

(FRONT END

& BACK END)

AREVA

MINES

100% 100%

AREVA NP

including OL3

OTHER

SHAREHOLDERS

100%100%

NEW CO100%

83.6%

86.5%13.5%

100%

Scope redefinition: creation of NEW CO through a transfer of operations

FRENCH STATE,

CEA & BPI


Scope redefinition: debt transfer simultaneous with assets transfer(c)

AREVA SA NEW CO

SHARE OF DEBT

SHARE OF DEBT

OTHER SUBSIDIARIES

AREVA MINES

AREVA TA

AREVA ENR

AREVA NP

including OL3

(c) Subject to consultation of Employee Representative Bodies

AREVA NC

(FRONT & BACK END)


► Repayment capability of both entities

► Valuation of operations contributed to NEW CO

► Consent of creditors concerned

► Allocation of capital increases(a)

Ultimate control of the French State upheld

Interdependence with debt allocation

Scope redefinition:debt allocation would depend on several factors

(a) Subject to the approval of the European Commission


Scope redefinition: 2 capital increases to recapitalize AREVA SA

and give NEW CO a strong balance sheet in line with its ambitions

AREVA SA NEW CO

AREVA TA

AREVA ENR

AREVA NP

including OL3

SHARE OF DEBT

OTHER SUBSIDIARIES

AREVA NC

(FRONT & BACK END)

AREVA MINES

Capital increases in the

total amount of €5 bn(a)

SHARE OF DEBT



AREVA TA

AREVA SA

AREVA ENROTHER

SUBSIDIARIES

AREVA NC

(FRONT END

& BACK END)

AREVA

MINES

100% 100%

AREVA NP

including OL3

OTHER

SHAREHOLDERS

100%100%

NEW CO

83.6% 100%

Scope redefinition: arrival of strategic investors in NEW CO

FRENCH STATE,

CEA & BPI

0-13.5% 86.5-100% 0-33%

STRATEGIC

INVESTORS

a + b ≥ 67%

a

b

a b


AREVA SA

OTHER

SHAREHOLDERS

NEW CO

Scope redefinition: excluding NEW CO, proposed sale of all operations

connected with AREVA SA (except OL3)

FRENCH STATE,

CEA & BPISTRATEGIC

INVESTORS

OTHER

SUBSIDIARIES

AREVA NC

(FRONT END

& BACK END)

AREVA

MINES

100% 100% 100%

AREVA

ENRNEW NP(d)AREVA TA

OL3 project

(option A or B)

15%-25%

(d) NEW NP: AREVA NP operations, excluding the OL3 project

AREVA SA, or its subsidiary, will ensure the successful

completion of the OL3 project, with personnel continuing

to be fully mobilized, in compliance with contractual

obligations


► On January 27, 2016, convergence between AREVA and EDF concerning the sale of

AREVA NP:

EDF offer which puts the value of 100% of the share capital at €2.5 bn

Price supplement mechanism as a function of AREVA NP’s performances

► Work in progress mainly on two main subjects:

Implementation of a legal framework that would allow AREVA NP to be sold with no exposure

to the buyers (EDF and third-party investors) to the OL3 project, in compliance with contractual

obligations to TVO:

o Option A: transfer of the OL3 contract from AREVA NP to AREVA SA, with TVO’s consent and

mechanism for subcontracting to AREVA NP

o Option B: transfer of AREVA NP’s operations to an ad hoc structure sold to buyers, except for the OL3

project and the necessary resources for its completion

Handling of potential consequences associated with the results of the quality audit conducted

in the equipment manufacturing plants

► Sale subject to the acceptability of the Flamanville 3 reactor vessel

► Targeted closing of the transaction: before the end of 2017

Scope redefinition: proposed sale of AREVA NP or its operations


Scope redefinition: plans to sell Canberra, AREVA TA and to withdraw from

the Solar and Bioenergy operations

► Asset sales for a total cash amount of €400m to €500m, including:

Canberra: closing planned for the 2nd half of 2016

AREVA TA: closing planned for late 2016 / early 2017

► Adwen : discussions with our partner Gamesa

► End of remaining renewable energies operations

Solar energy: end of AREVA's operational involvement in solar operations in March 2016

Bioenergy: decision made to cease operations as soon as projects in progress in France and

Asia have been completed (summer of 2016)


Discussions of the French authorities

with the European Commission

Transactions

on share

capital

Q2 2016 20172017H2 2016

Capital

increases(a) for

AREVA SA

and NEW CO

Structuring and, if appropriate,

carving out of NEW NP

Sale of NEW NP(e)

Closing of

Canberra sale

Closing of

AREVA TA sale

Creation of

NEW CO

subsidiary

and transfer

of part of

debt

Target schedule

European

Commission

New NP

sale

Asset

sales

(a) Subject to approval by the European Commission (e) Subject to the conditions mentioned on slide 15


► Plan for capital increases (a):

Commitment from the State

to ensure its full success

Discussions underway with

strategic partners

► Proceeds from sales:

AREVA NP

Canberra, AREVA TA and

others

Resources

2.9

5.0

Requirements

2.3

1.1

0.9

0.8

2.9Repayment of debt

►

►

Interest on debt

Net cash flow from NEW CO

operations

Strengthening of the balance sheet: resources scaled to financing

requirements for 2016-2019

►

Net cash flow from other company

operations (including the

completion of the OL3 project)

►


Sensitivity factors of NEW CO

and proceeds from sales(f)

►

(f) See slide 46


AREVA SA

OTHER

SHAREHOLDERS

NEW CO

Scope redefinition:target structure at the end of the transactions

FRENCH STATE,

CEA & BPI

0-13.5% 86.5-100% 0-33%

STRATEGIC

INVESTORS

OTHER

SUBSIDIARIES

AREVA NC

(FRONT END

& BACK END)

AREVA

MINES

100% 100% 100%

NEW NP(d)

OL3 project(g)

(option A or B)

a + b ≥ 67%

a

b

a b

15%-25%

(d) NEW NP: AREVA NP operations, excluding the OL3 project

(g) AREVA SA, or its subsidiary, will ensure the successful

completion of the OL3 project, with personnel continuing to

be fully mobilized, in compliance with contractual obligations


AREVA SA would be configured to meet its commitments

► AREVA SA , or its subsidiary, would ensure the completion of the OL3 project, for

which the teams remain fully mobilized, with the necessary resources

► Finalize the remaining renewables projects

► Support the ongoing asset sales processes

Mission

Balance

sheet

Shareholders

► Strengthened capital structure, partly from the capital increase(a) and partly from

processes from asset sales in progress

► In a position to repay debt on time and to meet its obligations

► Minority interest in NEW CO


► In connection with the finalization of transactions to redefine the scope of AREVA SA,

the French State ensures that minority shareholder rights under stock market

regulations are respected


NEW CO would bring together the fuel cycle operations

► Combine the nuclear fuel cycle operations (Mining, Front end, Back end)

► Take advantage of any anticipated market recovery, particularly Internationally Strategic

process

Balance

sheet

Shareholders

► Entity that would receive part of the capital increase(a), and in a position to repay debt

on time

► Entity aiming to secure financing in the markets starting 2019 / 2020

► With 15% to 25% of the share capital of AREVA NP or NEW NP, depending on the

sale option chosen

► More financially solid structure to allow the entry of third-party investors / strategic

partners into the share capital in 2017

► Majority held by the French State, directly or via AREVA SA



ON THE PATH TO PROFITABILITY AND CASH FLOW GENERATIONNEW CO: 2017-2020 OUTLOOK


Our ambition: use the value in nuclear materials for development

Consolidate our

fundamentals

Create value with

unique assets

Develop and capture

opportunities

Be the leading player in nuclear fuel cycle operations…

… competitively and profitably...

offering customers innovative

solutions and technologies that

meet their challenges…

to serve the French and

international nuclear industry

Our AMBITION


Crosscutting drivers

Strong position in its markets

Engineering and risk management

Talent and expertise

Global customer solutions

Business drivers

New industrial capacities

Leading-edge technologies

Our ambition is based on distinctive assets and a clear strategic roadmap

► Partnerships in growth

markets, particularly in

Asia

► Innovation (technological

and commercial)

Consolidate our fundamentals

Create value with unique assets

Develop and capture

opportunities

► Safety culture

► Business model resilience

► Backlog visibility

► Performance plan


Consolidatingour foundations


Mining Front End

Chemistry /

Enrichment

Back End

International projects

Recycling

Dismantling & Services

Logistics

AREVA NP, excluding

OL3 project (Reactors &

Services, Fuel)

Operations sold,

discontinued or held for

sale

Corporate and

other operations

Corporate

AREVA Med

AREVA TA

(Propulsion and

Research Reactors)

Canberra

(Nuclear

Measurements)

Mining

OL3 project Renewable Energies

NEW CO

Future AREVA

Fuel cycle engineering

Scope of NEW CO operations


(GW)

0

100

200

300

400

500

600+2.4% p.a.

20352030202520202015

Existing nuclear plants

New power plants

A resilient business model founded on the installed base and on the growth of the fleet

Source: WNA

Nuclear generating capacity destined to grow... ... both in the Front End and the Back End

The increased number of reactors in

operation generates growth in:

The Mining and Front End markets

(demand for Uranium, Conversion and

Enrichment)

Markets in the Back End of the cycle

(used fuel management, logistics)

The closure of power plants also

generates business for NEW CO in the

Back End operations (dismantling, logistics,

waste management…)

1

2

1

2

Projected nuclear generating capacity by 2035


2015 revenue by business

A balanced revenue profile by business and by region

2015 revenue by region

Mining

Front End

35%

26%

Back End

38%

2%20%

22%

Africa and

Middle East

North & South

America

France: 40%

Asia-Pacific

16%

Europe outside France


Backlog by business(h) (€bn) Backlog(h) by customer

Mining

Front End

Back End

10.1

11.5

11.7

€33.6bn

Total

backlog(h):

(h) As of March 31, 2016

A strong backlog offering 8 years of visibility

54%

8%

6%

3%

2%2%

25%

Other

clients

Client 1

Client 6

Client 4

Client 3

Client 2

Client 5


An ambitious performance plan supported by tangible results and an operational excellence program

272

Achieved 2015

58

96

+€16m

03.31.16

421

268

62

91

12.31.15

405

251

03.31.16

103

12.31.15

210

79 NEW CO

IFRS5

Objective 2018

1,000

50%

50%

Secured

Identified

In place

2016 2017

€500 m

New savings identified to meet the cost reduction objective

of €500m for NEW CO

251

547

+€38m

103

193

509

236

89

184

(i) Data as of December 31, 2015 ajusted from the cycle engineering, transfered from AREVA NP to NEW CO

(i)(i) (i)


153127

108134

15 15 12 1610

40

80

120

160

200

2012 2013 2014 2015

Level 0 Level 1 Level 2

Safety and Security, indelible components of our DNA

► Maintaining the highest level of safety in

products, facilities, operations and

solutions

Operational excellence initiative incorporating

best practices identified and deployed by WANO

Widespread deployment of the Safety Excellence

program to strengthen skills in operational risk

management

Nuclear safety (j)

► Ensure the safety of employees and

subcontractors

A safety level above the best international

standards

Industrial accidents reduced 30% since 2012

through the Safe Together program

One goal: to be among the world's best companies

in the chemistry sector

Occupational safety (j)

(j) NEW CO scope only

0

1

2

3

2010 2011 2012 2013 2014 2015

FR1 (number of AREVA accidents with lost

time)

Industry benchmark

Chemistry benchmark

INES events

1.91.3

2.0 2.0

1.1

1.7


Creating valuewith differentiating driversCrosscutting drivers


OT

HE

R

MINING Natural uranium ~15%(2)

FRONT

END

Conversion ~20%(3)

Enrichment ~15%(3)

BACK

END

Treatment and

Recycling~70%(4)

Storage ~30%(5) Holtec, NAC, GNS

Logistics services ~20% GEODIS, Daher, AUAM, RSB, Edlow

Dismantling n.a. Highly fragmented market

(1) Global market share estimated by AREVA

(2) In proportion to available share

(3) In proportion to installed capacity

(4) In the light water reactor fuel market (LWR)

(5) In the dry storage market (excluding Russia)

(1)

#1

#1

#3

#3

#2

#1

NEW CO is in the top 3 worldwide in each of its businesses


Proven engineering expertise whose operational excellence ensures risk management

LA HAGUE:

three generations of nuclear fuel recycling plants

Georges Besse II: latest generation

enrichment plant

at the Tricastin site

A wide range of solutions, including consulting services, engineering

studies, construction and testing, turnkey

projects and a variety of other services

40 years of operating experience in the design and construction of complex

projects and in support for the operation of

major sites (modifications, adaptations,

shutdown, dismantling scenarios, etc.)

Recognized skills in international

project management and execution

MFFF: MOX Fuel Fabrication Facility in

the US

ROKKASHO-MURA:

fuel recycling plant in Japan patterned

after La Hague

> 90%OTD for the

past 2 years

> at the benchmark of

the category

Operational excellence


A new dynamics and human assets for performance

Drastic organizational simplification (elimination of

hierarchical level - BBZ approach to support functions)

Steady reduction (5 to 6% / year) of personnel costs

Development of an industrial vision for NEW CO 2025

shared at every level of the company

Sustained pace of internal

transformations

Network of high-level technical experts (> 1,100)

System for monitoring and renewing critical skills

Deployment of digitalization

Launch of "simplification of internal operations" projects

Generalization of operational excellence and continuous

improvement in 2016-2017

From skills management to cultural

transformation

Refocusing of the People Reviews on replacement plans,

key jobs and talents

Promotion of a culture of "change-makers" (training and

learning network for young managers)

Greater selectivity and requirements for setting

objectives and assigning variable components

Strengthening of economic criteria for activating

collective incentive-based profit-sharing

A common base of managerial values and related rules

for compliance

Promotion of social dialogue in conducting change

(2015 Employment Agreement)

Strengthening of prevention systems for occupational

risk and occupational stress

Low levels of absenteeism and accidents

Social dialogue

Mobilization of human potential


Creating valuewith differentiating driversBusiness drivers


Market deterioration since 2011...

... recovery expected

Demand supported by increased Chinese

requirements and by the upcoming restart

of the Japanese fleet

Need for new capacity in the medium term,

particularly in Uranium

(k) UxC - Market 2015 (Uranium Composite Midpoint, Conversion EU Mid Midpoint scenario, Enrichment Mid Midpoint )

Drop in economic demand in a post-

Fukushima environment, especially in Japan;

wait-and-see position of buyers

Build-up of inventories linked in particular to

opportunistic buying behaviors

Low production elasticity due to long

investment cycles and the cost structure of

assets

Market recovery expected inthe front end of the fuel cycle

0

20

40

60

80

2011 2013 2015 2017 2019 2021 2023 2025 2027 2029

Ura

niu

m

(in

$/lb

. U

3O

8)

Co

nv

ers

ion

(in

$/k

g)

En

rich

me

nt

(in

$/S

WU

)

Historical

dataForecasts(k)

2030

Spot Long term

0

5

10

15

20

25

2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2030

0

30

60

90

120

150

2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2030


A diversified and competitive portfolio of mining assets

Operating mines

representing a

combined

capacity of 20.9K

MTU/year(l)

A successfully

renewed portfolio:

Cigar Lake

brought into

production in

2015 (production

higher than

forecasts)

Some of the

most effective

teams of

geologists and

mining

techniques

Strong growth potential

(l) including 11K MTU consolidated in AREVA's share

A promising and

geographically diversified

project portfolio (Canada,

Niger, Kazakhstan,

Mongolia…)

In Mining, a rich and diversified portfolio of assets and projects

Operating Projects Exploration

KAZAKSTAN1 mine and 1 plant

(operated by AREVA)

• KATCOAREVA share (JV): 51%

AREVA share (Conso): 100%

CANADA2 mines (operated by Cameco)

1 plant (operated by AREVA)

• MC ARTHUR AREVA share: 30.2%

• CIGAR LAKE AREVA share: 37.1%

NIGER2 mines and 2 plants (operated

by AREVA)

• SOMAIR AREVA share (JV): 63.4%

AREVA share (Conso): 100%

• COMINAKAREVA share: 34%

Producing mines


Mining, a profitable business that generates cash flow

► Outlook for the Mining business over the 2017-2020 period

Backlog covering nearly 80% of sales, expected to be stable in

relation to 2015, with limited market price exposure during that

period

Stable production volumes over the period

EBITDA margin maintained at a high level of around 40%

Annual investment budget down over the short term in relation to

the 2012-2015 period, then rising at the end of the period

80%of 2017-2020 sales

covered by the backlog

40%EBITDA margin

► Post-2020 outlook for the Mining business

Market dynamics and prices upheld by the growth of the global

nuclear fleet

Need to open new mines in the medium term, based on market

conditions


In the Front End, industrial assets meeting highest safety and performance standards

Chemistry / Conversion

Chemistry / conversion represented 19% of

revenue in the Front End in 2015

CXII plant nearing completion (phase 1

completed at Malvési, end of construction at

Pierrelatte in 2018)

Enrichment represented 81% of revenue in

the Front End in 2015

GB II plant operational

(capacity of 7.5 million SWU reached in 2016)

A high-performance chemical process

that reduces environmental impacts

-75%

-66%

…of nitric acid

Illustration: reduction(m)of the consumption…

…of ammonia

Ultracentrifugation, a benchmark

enrichment technology

50% held by AREVA (ETC subsidiary)

ensuring optimum operating costs

(m) In relation to CXI

Enrichment


In the Front End, gradual return to cash flow generation with the end of massive investments

► Outlook for the Front End business over the 2017-2020 period

Backlog covering close to 80% of sales for the 2017-2020 period

Revenue of €950m to €1 bn, consistent with the expected outflow of

backlog

EBITDA margin maintained at a high level of around 25%, with a

significant low point in 2018 due to the Comurhex I / Comurhex II

transition

Sharp downturn in the capital expenditure program after 2018

80%of 2017-2020 sales


25%EBITDA margin

► Post 2020 outlook for the Front End business

Growth of business and prices, led by the growth of the global

reactor fleet

Advantage of having new, high-performance industrial plants


New opportunities in the Back End to meet the challenges of the end of the cycle

Growing inventory of used fuel

Used LWR fuel inventory Annual amount of used

LWR fuel unloaded

400

350

300

250

200

150

100

50

0

ktHM

+70%

20302013

North America

Europe

Russia & CIS

Asia

Rest of world

12

10

8

6

4

2

0

2013

ktHM/year

+90%

2030

Sharply rising number of

reactors to be dismantled

Source: IEA World Energy Outlook 2015, New Policy Scenario

Cumulative nuclear capacity withdrawn by region (GW)

12

30

35

66

14

813

17

Eastern Europe

Russia

Rest of world

Japan

Western Europe

United States

2026-2040

86

3

2015-2025

62

1

3


Unique assets in the Back End to capture market opportunities

Recycling Logistics Dismantling

La Hague and Melox: only plants

in the world to operate at a very

large industrial scale

Unrivalled experience in the

design and operation of nuclear

fuel cycle industrial sites

Only player to provide all

logistics services (multi-modal

transportation, casks, storage…)

Very high added-value expertise

in fuel cycle logistics and waste

management

Recognized skills in engineering,

project management and work in

highly radioactive environments

Unique know-how deployed at

the group's industrial sites (La

Hague…) at customer sites (CEA

and EDF)

Prospects for partnership with China and Japan,

which have made a strategic choice in favor of the close

cycle

Growth areas in Europe and the

EU, prospects for partnership in

the UK


In the Back End, a profitable growth, led by developing markets, particularly in Asia

► Outlook for the Back End business over the 2017-2020 period

Operations ensured by long-term contracts in France and by a backlog

representing close to 70% of sales over the 2017-2020 period

Average sales growth over the period of more than 5% / year, led by

Asia (China and Japan) and by the United Kingdom and the United

States

EBITDA margin improvement of more than 15% in 2020, due in

particular to exports

More significant future investment cycles, but largely financed by

customers

>15%EBITDA margin

► Post-2020 outlook for the Back End business

Business growth and increased profitability linked to the ability to win

international contracts

~ 70%of 2017-2020 sales(n)


(n) Excluding Dismantling and services sales with a short-cycled business model


Sensitivityfactors


Sensitivity of NEW CO’s cash generation to key assumptions

► EUR / USD exchange rate: sensitivity cushioned by currency hedges

2017-2019 period: +/- 10 cents impacts the financial trajectory by +/- €40 m

2020-2025 period: +/- 10 cents impacts the financial trajectory by +/- €220 m

► Natural uranium price: sensitivity cushioned by the backlog

2017-2019 period: +/- 5 USD / lb. impacts the financial trajectory by +/- €20 m

2020-2025 period: +/- 5 USD / lb. impacts the financial trajectory by +/- €220 m

► SWU price: sensitivity cushioned by the backlog

2017-2019 period: +/- 5 USD / SWU impacts the financial trajectory by +/- €20 m

2020-2025 period: +/- 5 USD / SWU impacts the financial trajectory by +/- €90 m

Economic

assumptions

that could

impact net cash

flow from

company

operations

Specific

strategic

assumptions

that could

impact net cash

flow from

company

operations

► Export business in the Back End: projects in Asia, signature of new contracts

► End-of-lifecycle obligations: sensitivity to interest rates, regulations, advances in

technology

► Installed base safety: strengthening of safety measures by all industry players,

reputation risks

► Successful legal and financial restructuring

► Asset sale prices

► Country risk


Capturing opportunities


Strategic partnership with CNNC, China‘s leader on

nuclear fuel cycle development

Relevance of NEW CO’s operator experience and

technologies to support CNNC in building and

ramping-up China’s nuclear cycle capacities at the

highest level of environmental standards

Historic relationship with Japanese Utilities (40

years), in particular through technological support to

JNFL closed fuel cycle ‘s industrial operations (Rokkasho-

Mura)

Long-term collaboration in Front-End and MOX activities ;

industrial opportunities in Dismantling and

Decommissioning operations

Strong relationship with KEPCO/KHNP, key customer

and partner of NEW CO

Positive dynamic of Japanese

nuclear reactors’ re-start,

supported by a strong political will

to keep nuclear as a major

electricity supply in Japan

electricity mix

Nuclear capacity planned to

increase by 70% up to 37 GWe

by 2029

Major plan for nuclear capacity

build-up (>130GW by 2030),

driven by electricity consumption

growth and CO2 emission

reduction objectives

Growth perspectives NEW CO key strengths

Asia is a major focus of NEW CO’s strategy, with major growth opportunities


Opening up new markets with technology

innovations

AREVA Med is an innovation with major

potential in cancer treatments

► Created in 2009, AREVA Med's operations are

concentrated in the development of new cancer

therapies, in particular alpha therapy based on 212Pb

(lead-212)

► Development of an innovative 212Pb extraction

process, and construction of the world's first

laboratory dedicated to the production of highly pure212Pb

► AREVA Med has 2 production sites:

LMT in Vienne, France since 2013

DDPU in Texas, USA since 2016

► Industrial solution for treating special used fuels

(fresh and used MOX fuel, used research reactor

fuel…)

► High added value for customers, facilitating

financing through customer advances

Illustration in recycling –TCP

NEW CO can capitalize on strong and demonstrated innovation capability


Conclusion


► Unique position on the fuel cycle, anchored in proven technologies and backed by

innovation capabilities

► International presence with solid partnerships, to be a leading player in the nuclear

industry’s development, particularly in Asia

► Operating resilience, with a backlog representing the equivalent of 8 years of revenue

► Improved profitability through an ambitious performance plan and by refocusing on

comprehensive, well-managed operations

ratio of EBITDA to revenue of 25%

ratio of EBIT to revenue of more than 10%

► Strengthened cash generation thanks to a renewed industrial base and plants

capable of operating on a very large scale

A group refocused on the fuel cycle,ready to capture market opportunities

targeted in 2020


Questions & Answers

AREVA SA and NEW CO2016-2020 roadmaps

June 15, 2016

AREVA SA and NEW CO - webcast.areva.comwebcast.areva.com/20160615/market_update_meeting/... ·...

Documents

Transcript of AREVA SA and NEW CO - webcast.areva.comwebcast.areva.com/20160615/market_update_meeting/... ·...