Areva Dec0506

Business & Strategy overview Solutions for power generators and distributors

November 2006

Agenda

1. Group’s overview 2. Market trends for electrical sector 3. Strategy and objectives 4. Outlook

2

> Group Overview – November 2006

AREVA provides technological solutions for CO2-free power generation and Transmission & Distribution 2005 Sales by business

€6,9bn

N°1 worldwide in Nuclear

68%

2004 market value: €23bn

Geographic sales Other

7%

Asia

France

12% 33%

Market share: 30% 18%

€3,2bn

N°3 worldwide in T&D

32%

2005 market value: €42bn

Americas

30%

Market share: 8~9% ( vs ABB: 18~19%, Siemens ~13%)

X Breakdown of AREVA sales in 2005 (€10,125M)

3

> Group Overview – November 2006

Europe (Excl. France)

AREVA is ranked first worldwide in nuclear

Sales in the nuclear business in millions of euros X No.1 worldwide; No.1 in Europe and the US X No.1 in Plants / Fuel X No.1 in the Back End

7000

6000 2019 5000

4000

3000

3 270

X No. 3 worldwide X No. 2 in Plants / Fuel

330

1 322 2000

1328

1000 1 386

1 652

1 317

T

W

1 160

1 143

1 135

798

689

0

Areva

FAAE

West + Westinghouse + Toshiba Tosh

Front end (excl. fuel) 4

> Group Overview – November 2006

MHI

HITACHI HITCHI

USEC

GE Nuclear

URENCO

Reactors & Services + Fuel

431

292

CAMECO

AECL

Back end

AREVA is present on each segment in its businesses

Energy

Investments

ENRICHMENT CHEMISTRY

X STMicroelectronics*

(11% via holdings)

FUEL FABRICATION

X Eramet*

MINING

(26%)

REACTORS X SAFRAN

(7.4%)

* Consolidated at xx% RECYCLING MOX FUEL FABRICATION

X

34% in AREVA NP SERVICES

USED FUEL MANAGEMENT

OTHER SOURCES OF ELECTRIC POWER

TRANSMISSION DISTRIBUTION

5

> Group Overview – November 2006

2005 Key data by division

Current operating income by division €746M

Sales by division €10,125M Transmission & Distribution

Front-End

32%

Transmission & Distribution

Front-End

13%

26%

47% Back-End

19% Back-End

6

> Group Overview – November 2006

28%

23% Reactors & Services

12% Reactors & Services

Key financial data Sales

€10,125M (+3.7% like-for-like*)

Strong organic growth Current operating income

€746M / 7.4% of sales (+1.5% vs. 2004**)

Stable overall – Improvement in T&D Consolidated net income

€1,049M**** (+133% vs. 2004*)

Up significantly, due in particular to sale of FCI Free operating cash flow

€783M (stable vs. 2004*)

Stable at exceptionally high level Net debt

€268M (vs. €566M at 01.01.05)

Financial structure remains very strong Dividend proposed to AGM*** of May 2, 2006 Dividend up 2.9% compared with 2004

€9.87

Comparable exchange rates and consolidated group. ** Adjusted for FCI disposal *** Annual General Meeting of Shareholders **** Includes net income from the disposal of FCI in 2005 representing €528M

7

> Group Overview – November 2006

A strong balance sheet In billions of euros At 6/30/2006

Goodwill

2.2

Shareholders’ equity

6.5

Fixed assets

4.4 0.2

Minority interests

End-of-life-cycle assets

4.9

4.6

Provisions for end-of-life-cycle obligations

Shares of associates

1.4

2.5

Other provisions

Financial assets

2.4

0.9

Assets

= 15.3 =

WCR

Liabilities

Net debt* 0.588 incl. 1.08 for Siemens

** put

(*): Net debt = financial debt including interest-bearing advances + minority interest holders’ puts - HFT securities - fin. current account assets ** : Siemens 34% share in AREVA NP

8

> Group Overview – November 2006

Capital structure

CDC

4% CEA + FRENCH STATE + ERAP

EDF

87%

2%

o/w 15% Total in a CEA decommissioning fund

1% Investment Certificate Holders (free float)

4% Employees

2% 9

> Group Overview – November 2006

Agenda

1. Group’s overview 2. Market trends for electrical sector 3. Strategy and objectives 4. Outlook

10

> Group Overview – November 2006

Worldwide demand for electricity to double by 2030 Worldwide electric power generation (in TWh) gross TWh 35 000 30 000

AFRICA / MIDDLE EAST

1971-2004 : + 3.7% /year

25 000

2004 - 2030 : + 2.3% /year

20 000

ASIA / OCEANIA

15 000 NORTH / SOUTH AMERICA

10 000 5 000 0 1990

EUROPE

1995

2000

X 2004 – Worldwide distribution of electric power mix

2005

2010

Nuclear 16% Coal 39%

Renew.

19% Nat. Gas 19%

Oil 7%

2015

2020

> Group Overview – November 2006

2030

X $10,000bn Investments expected in the electricity sector

$5,600bn in the T&D sector $4,400bn in generation capacities

Sources: IEA-Energy Information (2006), IEA-World Energy Outlook (2004), WNA 2005

11

2025

Global warming: a serious long term challenge

CO2 Concentration in Ice Core Samples and Projections for Next 100 Years CO2 concentration in ice core sample and projection until 2100

700 Projected (2100)

Projection for 2100

650 600

Unit: CO2 (ppm/v) Vostok Record

550

IPCC IS92a Scenario Law Dome Record Mauna Loa Record

500 450 400

2002

Current (2001)

350

1958 1900

300 250 200 150

400,000

300,000

200,000

Years before 1950 Years Before Present

12

> Group Overview – November 2006

100,000

0

Nuclear power: a necessary part of the solution for power generation for 4 main reasons 1.

2.

Nuclear doesn’t release CO2:

Nuclear MWh cost split

no greenhouse effect

Operations & Maintenance

27%

Low price of generation and virtually immune to uranium price fluctuations

14% Fuel

60%

3.

Fossil resources are limited

4.

Energy self-sufficiency:

and uranium conventional resources are 200 times 2005 demand

o/w 6% for uranium

Investment & Decommisioning / spent fuel management

uranium is present in stable countries

Average MWh cost CO2 emission / MWh generated (in kg) for new plants (Europe) Nuclear (uranium @ 40$/lbU3O8)

€ 30

6

Hydropower Combined cycle gas (@ 6$/Mbtu) Wind Coal (@ 50$/ton CIF) Oil Solar

€ 30 € 45 € 50 € 40 € 100 > € 450

4 427 3 to 22 978 891 60 to 150

Sources: AREVA based upon EDF, Ampere Commission, Study for Finnish parliament, UK Royal Academy

13

> Group Overview – November 2006

See appendix 1

Priorities in Nuclear for next decades 1. Improve performances of the existing reactors 2. Extend life duration: e.g 44 of the 103 US reactors already licensed for 60 y Construction needed before 2030

3. Replace existing reactors: 30% of WW capacity 4. Increase the installed capacity:

120 GWe 30 - 360 GWe

WW nuclear installed capacity forecasts (GWe) + 90 %

800

740 700

640

600 500

524

400

418

390

+7%

300 200

2004

2010

WNA 2005 - high WNA 2005 - central

14

> Group Overview – November 2006

2015

2020

IAEA - high IAEA - low

2025

2030

US DOE-EIA - high US DOE – EIA - central

150 - 470 GWe (i.e. ~120 - 400 reactors)

Constant T&D market growth

Market size evolution

42

(in billion euros) 40 36

35

35

36

Average growth ~3-5%

+5%

Average growth 00-05: ~3,7%

2000

15

2001

2002

> Group Overview – November 2006

2003

2004

2005

Mid term Forecast

Agenda

1. Group’s overview 2. Market trends for electrical sector 3. Strategy and objectives 4. Outlook

16

> Group Overview – November 2006

25%

25%

20%

G BNFL, URENCO shareholder

25%

30%

25%

20%

20%

10%

SWUs ***

Natural Uranium fuel (UO2)

30%

6,800 t

20%

30%

OT HE R

41m

Ele ctr ic

Enrichment

5%

Ge ne ral

25%

Ru ss ie)

5% (1)

E(

20%

FA A

66,000 tU

FL /B N

Conversion/ Chemistry

BN

20%

T We osh sti iba ng ho / us e

AR EV A

5% (1)

UR

US EC *

EN CO

*

20%

CA

67,000 t

Mining / Natural Uranium**

FRONT END

ME CO

20 05 Ma rke t

*

AREVA is the only fully integrated player on the Nuclear value chain

10%

10%

BACK END

(Hitachi, MHI)

Reactors & Services

â‚Ź 11 b

30%

Reprocessing

1,550 t

70%

*

Recycling & MOX fuel

17

25% (2)

5%

5%

30% JNFL in 2008 (3) 19% (4)

80%

185 t

Publicly traded company

** Compared to 2004, uranium market decreased in 2005 due to the diminution of tails assay which had implied an increase of the enrichment market ***

10%

25%

SWU : Separative Work Unit

> Group Overview – November 2006

(1) (2) (3) (4)

1%

(Belgonuclear)

JNFL in 2014 (3)

USEC sells natural uranium and conversion services but has no production capacities In April 2005, the BNFL reprocessing plant has been stopped. An assessment of restart and non-restart options is still on-going.

The JNFL reprocessing plant (800 t) and the Mox plant (130 t) should be in service in 2008 and 2014 respectively.

The shutdown of Belgonuclear Mox plant in Dessel (Belgium) is planned for 2006

AREVA installed 26% of the worldwide existing generating capacity

MWe installed (nr of reactors)

120,000

AREVA (91)

100,000

(1) SIE (6)

ABB (9)

(15)

80,000

ABB (14)

60,000 (79)

40,000

Westinghouse

FRA

GE FAAE VVER

(69) (50)

20,000 BW

0

(7)

(53)

Toshiba*

Mitsubishi* (18)

(17) PWR

BWR

AECL Hitachi* Doosan* (12)

(31) (8)

PHWR

* Licensed by: Westinghouse to Mitsubishi and Doosan G.E. to Hitachi/Toshiba ** Following Framatome's purchase of the commercial reactors business from B&W at the end of the 1990s, AREVA may be considered as the preferred service partner for these reactors in the United States, although it is not liable as a constructor Source: AREVA

18

> Group Overview – November 2006

Front End division Key issues and priorities Sales – 2005 split

Strengths & issues X Nr 1 worldwide in the overall front-end X Integrated player: possible one-stop shopping for utilities X Hightly recurrent sales - >3 years backlog X Positive trend on market prices except fuel X Increase in electricity price could penalize margin in Enrichment

Key financials 2003* 2004**

2005**

Sales revenues

2,683 2,524

2,631

Operating income

316

370

374

% Sales

11.8%

14.7%

14.2%

340

106

197

* French Gaap ** IFRS

19%

Fuel* (*

42%

11% Chemistry

34% in AREVA NP)

28%

Enrichment

Strategic priorities

in millions of euros

Op. FCF before tax

Mining

X Double uranium production after 2010 and increase resources X Take advantage of price increase in our new mining contracts X Switch to uranium enrichment by centrifuge: €2.5bn capex over 2006-2018 X Flexibility of our fuel plants X Increase market shares in fuel in the US and Asia

19

> Group Overview – November 2006

Mining: production and exploration set to grow X Finland

Exploration

X Kazakhstan

Permit to be issued

Production

before summer 2006

Production set to increase sharply in 2006

Exploration program continues

X Canada Cigar Lake startup in 2007 Encouraging results in exploration (Shea Creek and Millenium)

Production (metric tons of U) 10,000 / 12,000 X Niger Increase in production capacity

~ 6,000

Production 2005 20

> Group Overview – November 2006

Production 2010

Enrichment: the GB-II program X AREVA anticipated the sharp increase of electricity cost

Decision to move to the centrifuge technology

JV with Urenco into ETC (closing july 3rd 2006)

Cash-out H2 2006: €400 millions X Construction of the GB-II modular plant

Startup in 2009, to reach 7.5 MSWU/year by 2018

GB-II plant: ramp up schedule

100% 80% 60% 40% 20% 0% 2009 2010 2012 2014 2016 2018

X Ultimate capacity based on market conditions X Resources to meet 2006-2012 commitments have been secured

21

> Group Overview – November 2006

CAPEX growing faster in the Front End since 2004 in millions of euros

~ 2.6 billions over the period

239 196 93

2002

22

> Group Overview – November 2006

126

2003

2004

2005

2006-2010E

Reactors & Services division Key issues and priorities Strengths & issues

Sales – 2005 split

X ~100 GW installed capacity WW – 25% total X 85% sales are recurring and 15% concern projects (new reactors and plant modification) X The only company to have Gen.III reactors under construction (Finland, France) X Some growing areas not open to AREVA (Japan, Korea, India, …)

IS Technicatome

Equipment*

2003* 2004**

2005**

Sales revenues

2,124

2,146

2,348

52

95

87

2.4%

4.4%

3.7%

82

228

Op. FCF before tax 145 * French Gaap ** IFRS

23

> Group Overview – November 2006

33%

10%

Reactors*

31% (*

Services*

34% in AREVA NP)

Strategic priorities

in millions of euros

% Sales

6% 7% 13%

Key financials

Operating income

Nuclear measures

X

Be a long term partner for utilities to optimize reactor performance

X

Reinforce our position of N°1 reactor designer Support the life extension of existing reactors (US, Europe, …)

Market our EPR reactor Increase margins in recurring business (first Gen III dilute margin)

X

Growth in recurring business, with a strong increase in market share in the United States Sales revenue from recurring business (Plants / Services / Equipment) (in â‚ŹM)

Sales revenue from recurring business in the United States (in $M)

1,600 600

1, 400 1,200

500

1,000

400

800 300

600 200

400 100

200 0

0

2001

2002

Plants (recurring)

24

2003 Services

> Group Overview – November 2006

2004

2005 Equipment

2001

2002

2003

2004

2005

Plants: current projects and tenders Turnkey plants / Consortiums

Nuclear island

NSSS

Primary coolant loop

Total Capex for the utility - $ (base 100)

~ 55

~ 30

~ 10

2003: Contract 2005: Certification & License 2005: Preliminary design End of public debate Planning 2006-2012 Partnership Partenariat with avecConstellation: Constelation «"UNISTAR" UNISTAR » Licensing Certification process lancée started Startup Démarrage scheduled prévu before avant 2010 2010

Tender submitted in February 2005 for 4 EPR reactors Official decision expected

25

> Group Overview – November 2006

Contracts for duplication of the Ling Ao nuclear plant (2nd Generation)

Update on performance of the OL3 contract X Background First Generation III reactor under construction worldwide Only reactor involving safety authorities during the design phase Contract sets tight cost and schedule terms Specific requirements of the Finnish approval process: technical

documentation approval (customer) and detailed design approval (Safety Authority) as the work progresses

X Financial impact: the group recorded a significant provision in H1 2006 X Steps taken New project teams director Coordination of dedicated group resources under the direct authority of the Chief Operating Officer

Ongoing discussions with the customers to remedy current difficulties Strengthened support so that the suppliers can more quickly achieve the level of quality required for nuclear projects

26

> Group Overview – November 2006

Outlook for future EPR sales

X OL3 construction gives the group unique experience in the worldwide market for Generation III reactors X The group will supply the nuclear island and instrumentation & control systems for the Flamanville EPR X Unistar deployment: Constellation Energy has reserved production capacities for heavy equipment for the first US-EPR reactor X AREVA is actively negotiating with several other customers

27

> Group Overview – November 2006

Back End division Key issues and priorities Strengths & issues

Sales – 2005 split

X Nr 1 worldwide with >75% market share X Highly recurrent sales due to long term contracts: backlog runs through 2015 X More than 8,000 mt of spent fuel in La Hague waiting for reprocessing (i.e 8 y of production) X Main investments completed X Technology transfer through long term partnership: e.g Japan (Rokkasho Mura)

Key financials

28

2003* 2004**

2005**

Sales revenues

2,023 1,946

1,921

Operating income

155

231

208

% Sales

7.7%

11.8%

10.8%

Op. FCF before tax 509

603

332

> Group Overview – November 2006

Cleanup

4% 6%

Logistics

9%

81% TreatmentRecycling

Strategic priorities

in millions of euros

* French Gaap ** IFRS

Engineering

X Renew reprocessing and recycling contracts X Optimize industrial efficiency of the two main plants (La Hague and Melox) X Market closed-cycle technologies WW Manage the end of technology transfer with Japan Participate in the new US back-end policy Promote our Gen 3 integrated processing-recyclng plant concept

New US policy orientation early 2006, regarding used fuel management X Global Nuclear Energy Partnership announced at the beginning of 2006

Recycling is recognized as a sustainable solution that uses uranium resources more efficiently

International system proposed to increase non-proliferation guarantees through z

Nuclear fuel supply

z

Recycling of used fuel

X AREVA (leader), Washington Group International (WGI) and BWX Technologies Inc. (BWXT) respond to the US-DOE’s request for Expressions of Interest regarding:

Development and deployment of an integrated Treatment/Recycling plant Construction of an Advanced Burner Reactor (ABR)

29

> Group Overview – November 2006

T&D division Key issues and priorities Sales – 2005 split

Strengths & issues X A full fledged player: products & solutions for high and medium voltage technologies X A global sales force in over 100 countries X Focus on electrical utilities: N°2 WW

Services Automation & information

15%

X Strong presence in Europe: N°2 Systems

Strategic priorities

Key financials in millions of euros

2004*

2005*

Sales revenues

3,186

3,211

% Sales

Op. income Op. FCF before tax

39

103

1.2%

3.2%

(103)

(61)

(12)

116

* IFRS

30

> Group Overview – November 2006

38%

32%

X Lost momentum before acquisition by Areva in 2004

Current Op. inc.

Products

15%

X

X

Restore profitability up to the peers in 2007 Change the industrial footprint Optimize and refocus the product portfolio Reduce costs and make productivity efforts Increase our presence in growing areas Boost internal profitable growth Selective external growth

2004-2007 optimization plan is successful X Refocusing on core business completed in 2005 X Industrial restructuring in Europe (France, Germany, UK) completed X ~290 million euros in cumulative restructuring expenses through 6/30/2006

3,708 New orders

3,317

(in millions of euros)

3,162 5.0%

5.9%

2,933

Current operating income

3.2%

(in % of sales revenue)

1.0%

2002

2003

1.2% 2004

January 2004: Acquisition

by AREVA 31

> Group Overview – November 2006

2005

H1 2006

Internal and external growth strategy X Acquisition of RITZ high voltage: AREVA becomes the world leader in instrument transformers

Xiamen

U.S.

EUROPE

X

32

Investment in capacity Germany France Turkey

> Group Overview – November 2006

INDIA

X

Ongoing investment in high-growth countries (China, India)

CHINA

X Construction of a new AREVA Switchgear Company plant in Xiamen (China) X Establishment of AREVA Xiamen Vacuum Interrupter Company, a vacuum circuit breaker manufacturing JV

Agenda

1. Group’s overview 2. Market trends for electrical sector 3. Strategy and objectives 4. Outlook

33

> Group Overview – November 2006

2006 outlook XSales revenue growth XOperating income close to the level reached in 2005 Despite significant impact of OL3 project Thanks to contribution from other activities, expected to increase

XSharply negative free operating cash flow before tax due to: Sharp increase in Capex scheduled for H2 2006 Use of customer advances

34

> Group Overview – November 2006

5 year objectives

X Reach market share representing one third of the world’s nuclear market, with double-digit margin X Acquire a significant position in CO2-free power generation X Be one of the most profitable leaders on the T&D market X Take advantage of opportunities

35

> Group Overview – November 2006

Appendix 1 Nuclear: a necessary part of the solution

How to provide energy to growing population?

es s

as

us ua l”

X Energy situation in 1850-2000-2100 (WEC 98)

“B us in

rio a en c s e g ra e Av n& o i t a servty n o C dari Soli

Source: World Energy Council 1998

37

> Group Overview – November 2006

Primary Energy sources 1990-2050 according to the World Energy Council Gtoe 30

25 25

20 20

14

15

10

9

5

0

1990

a1

Coal

*

a2

Oil

*

a3

Gas

*a: strong growth & increase of wealth and productivity b: medium trend c: priority to ecology

38

> Group Overview – November 2006

*

Bb

2050

*

Nuclear

c1

*

c2

*

H+New Source: Scenarii WEC-IIASA 1998

Favorable position of nuclear is confirmed by the life cycle analysis of energy sources by the World Energy Council, sydney 2004 Important decision-making criteria

Type of fuel burned Nuclear

Hydro

Wind

Sun

Coal

Oil

Gas

Biomass

Comptetitiveness (linket to direct energy costs)

F

M

M

M

F

F

U

U

Energy availability (security and reliability of supply)

F

M

M

M

F

F

U

U

Acceptability of energy (impacts on external environment)

U

U

M

F

F

F

F

F

X Relative rank based on selected decision-making criteria F

Favorable energy source

Medium/neutral M energy source

Unfavorable U energy source

Source: AREVA based on World Energy Council report of July 2004 “Comparison of Energy Systems Using Life Cycle Analysis

39

> Group Overview – November 2006

Nuclear is being considered as the most competitive source of electricity in base load, in competition with coal OECD 2005 Study - Mean levelised cost of electricity in base load (5% discounting) $2003/MWh

70

Inv

O&M

Fuel

60 50 40 30 20 10 0 N

C

G

Canada

40

N

C USA

G

N

C G

Czech Republic

> Group Overview – November 2006

N

C

G

Finland

N

C

G

France

N

C

G

Germany

N

C

G

N

C

G

N

C

G

N

C

G

The Slovak Switzerland Romania Netherlands Republic

N C Japan

G

N

C

G

South Korea

Projected cost of nuclear electricity in Europe is competitive with other baseload technologies Levelized electricity generation costs in four recent European studies (€/MWh) 45

Fuel

Taxes

Invest.

O&M

39.2 €/MWh* 45.1 €/MWh* if if coal @ gas @6$/MBtu 45$/ton CIF 35.8 €/MWh* 36.9 €/MWh* if uranium @ if gas @ 6$/MBtu 40$/lbU3O8 29.8 €/MWh* if uranium @ 40$/lbU3O8

R&D

40 35 30 25 20 15 10 5

Belgium 2000***

Finland 2000**

France 2003

Coal

CCGT

Nuclear

Coal

CCGT

Nuclear

Coal

CCGT

Nuclear

Coal

CCGT

Nuclear

0

UK 2004

* AREVA adjustments asserting realistic / present fossile resources prices ** Most recent values as of April 2001 prices by Tarjanne & Rissanen *** For Belgium, O&M costs are not separate from capital investment See next slides for assumptions

41

> Group Overview – November 2006

Recent European studies A. Nuclear power generation data

Study data

Belgium

Finland

France

UK

Ampere Commission (2000)

Lappeenranta University (2000)

DGEMP study (2003)

Royal Academy of Engineering (2004)

PWR 1,300 MW

PWR 1,250 MW

EPR (LWR) 1,600MWe series of 10

1,000 MW

Reactor Efficiency Invest.

Overnight

33%

35%

36.1%

n.a

€1,686/kWe incl.

IDC

€1,749/kWe incl. IDC

€1,413/kWe without IDC

€1,730/kWe without IDC

Lead time

-

5 years

5 years

5 years

Load factor

85%

91%

90.3%

n.a

Service life

40 years

40 years

60 years

40 years

5%

7%

8%

7.5%

€9.40 (2010) to €11.50 (2030)/kWhe

€3/MWhe

€4.40/MWhe based on $20/lb U3O8

€5/MWhe

-

€26.20/kW/yr + €3.40/MWh

€5.09/kW/year + €0.61/MWh

€61.50/kW/year

Discount rate Fuel cost O&M 42

> Group Overview – November 2006

Recent European studies B. CCGT power generation data Belgium

Finland

France

UK

Ampere Commission (2000)

Lappeenranta University (2002)

DGEMP study (2003)

Royal Academy of Engineering (2004)

Capacity

460 MW

400 MW

900 MWe

786 MW

Efficiency Invest.

Overnight

55-65%

55%

59.1%

60%

€496/kWe

€572/kWe incl.

IDC

€505/kWe

€450/kWe

Study data

Lead time Load factor

-

-

2 years

2 years

85.5%

91%

94.9%

n.d.

Service life

20 years

25 years

25 years

25 years

5%

7%

8%

7.5%

€3.50 (2010) to €6/GJ (2030)

€3/GJ

€3.10 to 3.30 (long term)/GJ

-

€8.58/kW/year + €0.30/MWh

€3.30 (reference) to $3.60/MBtu €18.20/kW/year + €3.05/MWh

Discount rate Gas price O&M 43

> Group Overview – November 2006

37.5 €/kW/year

Recent European studies C. Pulverized coal power generation data Belgium

Finland

France

UK

Ampere Commission (2000)

Lappeenranta University (2002)

DGEMP study (2003)

Royal Academy of Engineering (2004)

300 MW

500 MW

2x900 MW

1,600 MW

43%

41%

46-47%

40%

€1,165/kWe

€814/kWe incl.

IDC

€1,100/kWe

€1,290/kWe

-

-

3 years

4 years

Load factor

84%

91%

90.2%

n.d.

Service life

30 years

25 years

35 years

30 years

5%

7%

8%

7.5%

€1.80/GJ

€1.17/GJ

$30 to 35/MT CIF ARA

€2.10/GJ

-

€16.30/kW/yr + €5/MWh

€26/kW/year + €2.30/MWh

€36/kW/year

Study data

Capacity Efficiency Invest.

Overnight Lead time

Discount rate Coal price O&M 44

> Group Overview – November 2006

Nuclear power is a recent source of energy Production increases faster than installed capacity Worldwide nuclear power generation (in TWh) Gross TWh SOUTH AFRICA

3 000

% of WW 2005 generation 0.5%

2 500

ASIA / OCEANIA

19.9%

2 000 1 500

N / S AMERICA

34.1%

1 000 500 0 1960

1965

1970

1975

∆ 89/05

1980

1985

Production

+42%

+2.2%

Capacity

+21%

+1.2%

> Group Overview – November 2006

1990

1989–2005 CAGR

Sources: IEA/OCDE (1990), Nucleonics Week (1995-2005)

45

45.6%

EUROPE

1995

2000

2005

15% of the world’s electricity generation in 2005 (~18,340 TWh)

Improve existing reactor performance X Capacity factor of main nuclear contries (in %) % 95

USA

85

WORLD

75

FRANCE

65

JAPAN

46

> Group Overview – November 2006

20 00 20 01 20 02 20 03 20 04 20 05

19 98

19 96

19 94

19 92

19 90

19 88

55

Improved security of supply with Uranium X Developed countries and China depend largely on oil & gas supplied from unstable areas Kazakhstan: 13% in 2025 Russia 11% 8%

North America 22% 8%

13% 30%

Ousbékistan

27%

Mexico

Algéria 5%

Vénézuela

3%

5%

Middle East

China 4%

5%

Niger 6% 21%

4%

Indonesia 3%

Other Namibia 15%

Australia

8%

40%

42% Sources: Areva, IEA

47

> Group Overview – November 2006

70% of oil reserves and 40% of gas reserves

20%

Key areas of production (in % of global production) Uranium Oil Gas

Conventional fissile resources represent more than 200 years of 2006 world demand CATEGORY of Uranium resources (million tons = Mt) Conventional Identified (deposits) Undiscovered Cost of recovery $/kgU

Reasonably Assured Resources

Inferred Resources 1

Prognosticated Resources 2

Speculative Resources 3

< 40

1.95

0.80

40 to 80

0.70

0.36

80 to 130

0.65

0.29

0.82

> 130

-

-

?

2.9

Subtotal

3.30

1.45

2.52

7.5

General total

1.7 4.6

4.75

10.0

14,750 000 t World demand in 2006: less than 70,000 t Resources: > 200 times 2006 demand

General total of conventional resources:

+ With Gen IV Fast Breeder Reactor, resources are virtually unlimited Source: Nuclear Energy Agency "Uranium 2005: Resources, Production and Demand"

48

> Group Overview â&#x20AC;&#x201C; November 2006

1 Based on direct geological evidence 2 Based on indirect geological evidence 3 Extrapolated values

Unconventional 15 to 25

Nuclear saves about 20% CO2 emission in Power generation, and 10% of WW overall emissions CO2 emission by energy source (Source: WEC, July 2004)

tonnes CO2eq/GWhel

1200

1,062 766

1000

774 800 600

398

400 200

5

3

7 W in d

N uc le ar

hy dr o

G T C C

fu el

lig ni te

co al

0

Source: World Energy Council / entire life cycle analysis, Special report July 2004 (lowest values)

Electricity Mix

Nuc 16%

Worldwide CO2 emissions in 2004 (M t CO2) Other 2%

Hydro 16% Oil 7%

Coal 40%

Nat. Gas 20%

Source: IAE Key World Energy Statistics 2006

49

> Group Overview â&#x20AC;&#x201C; November 2006

24% CO2 saving Source: IAE 2004 outlook & Key World Energy Statistics 2006

2,460 Avoided 10,363

Power Generation * including aviation CO2 emission & marine bunkers

2,460 Avoided

26,583* Total CO2 emissions

Nuclear has internalized most of its costs and generated few external costs for the environment Total cost in €/MWh*

100 90 80 70 60 50 40 30 20 10 0

Indirect external costs: ` Impact on climate (CO2)

87

` Impact on health ` Impact on the environment 55

51 1

50

47

19

14

4

50 32

Coal

Wind

31

33

Gas

Biomass

External costs * Production costs (source: Finnish study) * Source “EXTERNE” study, EC 2001, calculating the indirect costs (impact on climate, health or physical impact) of different power generation sources

50

> Group Overview – November 2006

28 24 Nuclear

Nuclear generating cost per MWh for the EPR

Generating cost per MWh of the EPR Operations and maintenance Front end 54%

* For a uranium concentrate price around $40 / lbU3O8

> Group Overview â&#x20AC;&#x201C; November 2006

32%

Enrichment

13%

Amortization & depreciation

51

DesignFabrication

27% 6%

Back end

11%

Conversion

3%

49%

Natural uranium*

Appendix 2 Situation regarding nuclear in the various regions

The nuclear power fleet: 444 plants in operation in 2005 and several tens in construction or planned, mainly in Asia 134

70 1

1

0

5

16

5

Western Europe CEI & Eastern Europe 91 130

30 6 1

1

13

North & South America

17

10

29 2

Asia

29 2

0

1

India & Pakistan

Africa

In operation

53

> Group Overview â&#x20AC;&#x201C; November 2006

Under construction

Planned

Considered

25

Installed capacity in main countries Gross capacity (GWe)

Gross generation (TWh)

2005

2004

2005

2004

France* Germany Russia United Kingdom** Ukraine Sweden Spain Belgium Finland Other

65.9 21.4 23.2 12.8 13.9 9.2 7.9 6.1 2.8 18.1

65.6 21.4 23.2 12.8 13.9 9.8 7.9 6.1 2.9 18.0

450.6 162.1 146.8 82.0 88.8 70.5 57.5 47.6 23.3 127.3

447.6 167.1 142.9 82.7 85.4 77.3 63.7 47.3 22.7 130.0

TOTAL

181.2

181.6

1,256.5

1,266.5

* Excluding Phoenix, considered a research reactor. ** 2005 data unavailable for British Energy. Data based on 2004 production.

Source: Nucleonics Week, February 2006, restated by AREVA.

Gross capacity (GWe)

Canada United States Mexico Brazil Argentina TOTAL

Gross generation (TWh)

2005

2004

2005

2004

15.0 105.7 1.4 2.0 1.0

16.1 102.6 1.5 2.0 1.0

92.5 817.9 10.8 9.8 6.9

91 822.6 9.2 11.5 8.2

125

123.2

937.8

942.6

Source: Nucleonics Week, February 2006, restated by AREVA.

Gross capacity (GWe)

Gross generation (TWh)

2005

2004

2005

2004

Japan China India South Korea Taiwan Pakistan

48.9 7.0 3.3 17.7 5.1 0.5

47.4 7.0 2.7 17.7 5.1 0.5

287.9 53.1 17.6 145.6 40.0 2.6

282.0 49.6 16.9 129.6 39.5 2.1

TOTAL

83.5

80.4

546.8

519.6

Source: Nucleonics Week, February 2006, restated by AREVA.

54

> Group Overview â&#x20AC;&#x201C; November 2006

Electricity prices increased by more than 100% over 3 years in Europe and US Evolution of electricity prices

Source : Platts

55

> Group Overview â&#x20AC;&#x201C; November 2006

The generation capacities in developed countries will need to be replaced

Installed capcity (GWe)

X More than 500 GWe to be constructed before 2030 450

Shutdown profile of thermal capacities presently under operation in EU 15

400

Sources: EDF, EURELECTRIC

350

Other Oil Gas Coal Lignite Nuclear

300 250 200 150 100 50 0

2010

2020

2030

2040

Num ber of units

X An ageing coal based fleet in the USA 1000 800 600

Coal Gas Nuclear

20 y 38 y 28 y

400 200

13 y 28 y

19 y

0 100-499 MW

Source PowerDAT – June 2004

56

14 y 27 y

> Group Overview – November 2006

500-999 MW

Fleet's average age (per class of capacity)

>1000 MW

The nuclear market: 444 reactors under operation in 2005, i.e 392 GWe of installed capacity across 31 countries X 125 GWe – 130 reactors

X 181 GWe – 204 reactors

X 938 TWh by nuke in 2005

X 1,256 TWh by nuke in 2005

X % in the mix: 18%

X % in the mix: 25%

FSU & Eastern Europe Americas X

X

57

Western Europe

X 84 GWe – 108 reactors X 547 TWh by nuke in 2005

Canada: Ontario energy plan, June 2006 – Revamping of Pickering and Darlington – New reactor construction – Nuclear power must be the main component of the energy mix by 2025

X % in the mix: 9%

United States: 16 COL applications contemplated (or being prepared) to build at least 24 reactors. Back end of the cycle: GNEP program lauched

X

Argentina: The government provides details of its nuclear investment program: complete Atucha II, extend the operating life of Embaise and feasibility study for a 4th reactor

X

Mexico: the Deputy Secretary for Electricity announces that a call for tender for a new reactor could be issued in 2008

X

Brazil: The Minister of Science and Technology announces that Angra III would be completed and that the country will build up to 7 more reactors > Group Overview – November 2006

Asia-Pacific

Africa X 2 reactors in South Africa X % in the RSA mix: 6% X 5,000 to 10,000 MWe needed by 2010

Americans Are Becoming More Favorable to Nuclear Energy

Source: NEI

58

> Group Overview â&#x20AC;&#x201C; November 2006

The nuclear market: 444 reactors under operation in 2005, i.e 392 GWe of installed capacity across 31 countries X 181 GWe – 204 reactors X 1,256 TWh by nuke in 2005 X % in the mix: 25%

FSU & Eastern Europe

Western Europe X UK: Energy Review is complete – Strategic role of nuclear power confirmed. Government proposals expected in November 2006 X France: EDF begins construction of Flamanville 3 EPR X Portugal: Prime Minister Jose Socrates requests a national debate on nuclear power X Russia: Rosatom Chairman S. Kirienko sets a goal of building 42 to 58 reactors by 2030. Rosenergoatom plans to start construction of 7 reactors in 2007 X Baltic States: Multilateral agreement in February to build a reactor in Lituania X Turkey: Declaration of intent for 3 reactors by 2011

59

> Group Overview – November 2006

The nuclear market: 444 reactors under operation in 2005, i.e 392 GWe of installed capacity across 31 countries X 125 GWe – 130 reactors

X 181 GWe – 204 reactors

X 938 TWh by nuke in 2005

X 1,256 TWh by nuke in 2005

X % in the mix: 18%

X % in the mix: 25%

FSU & Eastern Europe

Western Europe

X 84 GWe – 108 reactors X 547 TWh by nuke in 2005 X % in the mix: 9%

Americas Asia-Pacific X South Africa: Decision to build 5,000 to 10,000 MW of nuclear power capacity X China: project to duplicate two Ling Ao type Gen II reactors is launched X India: Signature of treaty with the United States / progress in bilateral discussions with France X Vietnam: Feasibility study expected in 2008 for later selection of a nuclear reactor supplier X Australia: Australian Nuclear Review is launched – Report expected by the end of 2006 60

> Group Overview – November 2006

Nuclear acceptability 2005 poll X Support to nuclear generation

No answer

None of following answers Use existing capacities but don’t build new ones

2% 12% 34% Nuclear is a safe technology: build new reactors

28% 25% Nuclear is dangerous, close all the plants

Source: AIEA, oct 2005, Global Public Opinion on nuclear issues

61

> Group Overview – November 2006

Appendix 3 Front End business details

Uranium: secondary resources will dwindle in the middle term X Consumption of Market Economy World World supply and demand

Supply: Demand:

63

> Group Overview â&#x20AC;&#x201C; November 2006

Fresh production HEU

Recycling Inventory drawdown

Uranium: secondary resources will dwindle in the middle term X Consumption of Market Economy World World supply and demand Recent trend in uranium spot price indices (USD) 60

50

40

30

20

10 janv-03

juil-03

janv-04

juil-04

Spot USD Source: TradeTech.

64

> Group Overview â&#x20AC;&#x201C; November 2006

janv-05

juil-05

LT USD

janv-06

juil-06

Uranium spot prices increasing, still low impact on our long term contracts revenues X Visible price pressures: + 78% in 2005 after + 42% in 2004

Highest: ~$40/lb U3O8 (1978) Lowest: ~$ 5/lb U3O8 (1971) End of September 2006: $ 53 lb U3O8 X Partial effects starting 2005 sales due to long term contracts X The Group’s total mineral resources in the ground thus come to nearly 330,000 MT of uranium. Reserves remained almost stable at approximately 140,500 MT. $120

US$/lb U3O8

$100 $80 $60 $40 $20 $0 69

71

73

75

77

79

81

83

85

87

89

91

93

95

So urce: 1969-1986 Nuexco Exchange Value, 1987-P resent Ux U3O8 P rice.

Source: The Ux Consulting Company, LLC.

65

> Group Overview – November 2006

97

99

01

03

05

Front end: in mining, the top three players represent 50% of world production X Worldwide natural uranium production in 2005 [in metric tons of uranium] 8,239

3,300

3,697

12,600 950

38

North America Uzbékistan

108

Kazakhstan

2,281

AREVA CAMECO

3,148

Niger

RIO TINTO BHP BILITON

Namibia

RTZ-CRA

KAZATOMPROM

33,550 510

5,006 4 290

Others: 5,930 t

Australia

NAVOI 5,930

TVEL OTHERS

6,019

3,300

Total: 42,000 MTU

2,600

8,347

4,100 3,148

66

4,100

Russia

> Group Overview – November 2006

3,550

5,006

Mining: sensivity to market price will be more significant after 2008 Backlog Total: 53 000 metric tons

X Backlog at 12/31/05: 5 years of sales X Sensitivity to market price (assuming no change in volume vs. 2005) Deliveries 2006-2008 Exposure to market price after 2005

< 40%

Deliveries after 2008

12 000 MT

2006

2007

2008

> 2009

> 60%

X Increase in the cost of resources is expected X Uranium provides significant marketing leverage

Growing cross-fertilization between the various components of the fuel cycle More than one third of all new orders in 2004-2005 involve at least two components 67

> Group Overview – November 2006

Front End: in uranium Enrichment, AREVA meets 25% of the worldwide growing demand Demand: ~40 million SWU Worldwide capacity: ~40 million SWU kSWU 45,000

+ ~5 million SWU

Other

40,000

Asia

35,000 30,000

North America

25,000

CEEC* - not eligible for EU

20,000

CEEC* eligible for EU memb.

15,000

Other Western Europe and South Africa

10,000 5,000

France

0 2000

2005 Start of production at GB II plant

2010

2015 Possible shut down of GB I plant

Average growth exceeds 0.5% / year 68

> Group Overview â&#x20AC;&#x201C; November 2006

2020

* Central and Eastern European Countries

Enrichment Construction of Georges Besse II has begun ETC closing on July 3, 2006

BNFL 33%

NL Gov’t.

33%

URENCO

RWE +E.on 33%

50%

ETC (JV) R&D and Technology

50%

(Holding)

Centrifuge design and manufacturing UEC - URENCO Enrichment

SET - GBII Enrichment

Cash-out: ~€400M in H2 2006 (operating cash flow) 69

> Group Overview – November 2006

Enrichment: resources to meet 2006-2012 commitments have been secured Enrichment in 2005 (in millions of SWU)

For 50% of the sales (EDF, Suez)

To inventory Other export customers Production with pass-through power supply (EDF, Suez)

~5

X Processing contracts

~12

electricity is provided by the customer on a pass-through basis

X Other enrichment services

Negotiations under way regarding

~5

the price of energy after 2005

The Group has secured resources Sales

Resources

to meet delivery commitments in 2006-2012

X The GB-II plant is scheduled to begin production in 2009 X 40% of the world’s enrichment capacity uses the gaseous diffusion process, where electricity represent 60% of the production cost.

Therefore, the SWU price could become more sensitive to electricity price 70

> Group Overview – November 2006

Georges Besse I Æ Georges Besse II A transparent transition for customers Transition Management Inventories constitution EURODIF (GB I) stopping Start and GBII production increase

GB I

2007 71

2008

GB II

2009

> Group Overview – November 2006

2010

2011

2012

2013

2014

2015

2016

Années

Fuel: in 2005, almost 45% of all PWR and BWR reactors in operation worldwide were fueled by AREVA

Number of reactors fueled by AREVA X Europe Decrease due to the opening of the French market 96

93

83

X North & South America Strong growth in the US

X Asia Gradual penetration

over a five-year period

Backlog for 2010 already covers 32 reactors 22

2001

2005

2010E

43

28

2005

2010E

2

2

2

2001

2005

2010E

Potential market: 108 reactors Potential market: 2 reactors

Sources: IAEA and WNA, as of December 2005

72

11

14

15

2001

2005

2010E

Potential market: 111 reactors

X Africa 2001

in Asia, where the market is protected

> Group Overview – November 2006

Potential market: 86 reactors

Appendix 4 Reactors & Services business details

Reactors and Services is mostly a recurring business % of 2005 sales X Servicing and operation of existing reactors Large equipment replacement (vessel inspections, steam generators, etc.)

On-site maintenance services Open-ended engineering services

Prospects f Service life extension

Recurring business > 85% of sales

Dismantling services

for installed baseload in the US f Business development in U.S.

and Asia f Strong European market share f Development of innovative

contracting mechanisms such as “allliancing”

f Near term: EPR construction

X Reactor life extension Design, safety analysis and construction of new reactors and first reload

Completion of reactor construction to western safety standards (e.g. Russian-designed VVER)

Uprating, upgrading and life extension

74

> Group Overview – November 2006

Non-recurring business < 15% of sales

in Finland (signed), first EPR in France, construction of Angra 3 in Brazil, involvement in Chinese nuclear power program f Long term (start of next

decade): new construction likely in US (Bush plan), possible in Europe (replacement reactors starting in 2015), others

NPPs O&M costs in the US and Europe amount at 1 – 1,3 c$ / kWh today

Operating cost (including fuel)

Operating Costs (O&M + Fuel) in France and the USA USc/kWh US

EDF

3,5 3,25 3 2,75 2,5 2,25 2 1,75 1,5 1,25 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

Année Year

X Operating costs in 2002: 1.7 c$/kWh in the US and 1.4 c$/kWh in France, of which:

0.4 c$/kWh for fuel 1.3 c$/kWh in the US and 1.0 c$-c€/kWh in France for pure O&M Source: Nuclear Engineering International – december 2004 / AREVA – US dollar de 2001, 1 $ = 0,94 €

75

> Group Overview – November 2006

O&M recurring expenses should remain stable and high Annual expenses 1998-2007

9

Forecast Billion US$

US: around $8.5-9.0bn for a production in the range of 750 bn kWh / y

8

7

~0,4€ cents/kWh Operating Training Logisitcs ...

6 1998

Trend in O&M expenses By the US nuclear utlities

1999

2000

2001

2002

2003

2004

2005

2006

Year

40%

~0,6€ cents/kWh

Maintenance

76

60%

> Group Overview – November 2006

Europe: maintenance, repare, spare parts replacement, recurring engineering and upgrade Est. €40-45 M/y for a typical 1 000 MW PWR

2007

A significant share of O&M expenses are outsourced by the utilities Full Time Equivalent workforce internal + external for 1,000 MWe installed

900 800 700 600 500 400 300 200 100 0 EDF

US (Navigant Consult.)

FTE Internal

US (Duke estimate)

FTE External

The trend should amplify in the coming years Source: Nuclear Engineering International â&#x20AC;&#x201C; december 2004 / AREVA

77

> Group Overview â&#x20AC;&#x201C; November 2006

Main components of PWR coolant system

5 1 Reactor vessel

2 Control rod drive mechanisms 3 3 Steam generator 2 4 Reactor coolant pump

5 Pressurizer

4

1

78

> Group Overview â&#x20AC;&#x201C; November 2006

PWR steam generator

Design

Commissioning

FUNCTIONS X to transfer heat and ensure leak-tightness

between the primary (P) and secondary (S) circuits DUTY X mechanical effects of the circulating P

and S flows X chemical effects of the P and S fluids X nominal and transient temperatures and pressures on P and S sides MATERIALS X nickel-based alloy (tubes),

low internal alloy carbon steel (structures) with a stainless steel layer the water chamber (P side) DIMENSIONS & WEIGHT: X height: 20 to 22 meters

Heat transfer surface: 4,700 to 7,000 square meters 79

> Group Overview â&#x20AC;&#x201C; November 2006

X diameter: 3.5 to 5 meters X weight (empty): 300 to 420 metric tons

Chalon plant (Equipment): successful globalization Chalon plant - Total load baseline 100 in 2005

New capacity placed in service 120 100 100

80

60

40

20

0 2001

2002

2003

EDF 80

> Group Overview â&#x20AC;&#x201C; November 2006

2004

Exports

2005 2005

2006E

The EPR: increased power and safety - extended life expectancy over the most recently built reactors

N4

Thermal Power

MW

4500

4250

Electrical Power

MW

1650

1450

%

36.8

34

Number of fuel assemblies

241

205

Limitation of severe accidents consequences

++

+

Redundancy factor

4

2

Thermal Efficiency

Average burnup of reloads

GWd/t

>60

45*

Service lifetime

years

60

40

* Maximum burnup rate currently allowed by the French safety authority 81

EPR

> Group Overview â&#x20AC;&#x201C; November 2006

Plants: Call for Tenders – Who does what?

NUCLEAR ISLAND [~55% of the price] AREVA

CONVENTIONAL ISLAND

Incl. NSSS

[~20% of the price]

[30% of the price]

Alstom, GE, MHI, Siemens, Toshiba

Control systems [~ 3%] Æ Safety nuclear : AREVA Æ Operating systems: Alstom/Atos, MHI, Siemens, Westinghouse 82

> Group Overview – November 2006

ADDITIONAL CONSTRUCTION [ ~25% of the price]

More than 50,000 MWe installed is over 30 years More than 110,000 MWe is over 25 years

35 000

400 000

30 000

350 000 300 000

25 000

250 000 20 000 200 000 15 000 150 000 10 000

100 000

5 000

50 000

0

0 1

6

11

16

21

26

31

Age (in years)

A need for re-investments in the existing fleet Source: AIEA / PRIS – October 2006

83

> Group Overview – November 2006

36

41

Cumulated installed capacity (MWe)

Installed capacity (MWe)

Pyramid of ages – WW nuclear fleet (October 2006 update)

Heavy re-investments in existing US reactors Up to $300M for a typical 850 MWe PWR X Oconee 1, 2 & 3

PWR 850 MWe Commissioned: july 1973 Æ december 1974 Re-investment: $1bn over 2001-2006 z

Replacement of Vessel Heads and Steam Generators

z

Instrumentation & Control upgrade

X Calvert Cliffs 1&2

PWR 850 MWe Commissioned: may 1975 - april 1977 Re-investiment: $600M over 2001-2006

84

z

Replacement of Vessel Heads and Steam Generators

z

Instrumentation & Control upgrade

> Group Overview – November 2006

EDF nuclear plant scenario starting in 2020 Renewal over 30 years (2020-2050) Construction of about 2,000 MW/year MWe installed 70,000

60,000

Life extension past 40 years

50,000

40,000

Generation 4

30,000

Current Nuclear Fleet with 40-year service life

20,000

Generation 3 +

10,000

0 1975

Years 1980

1985

1990

1995

2000

2005

2010

2015

2020

2025

Average plant life: 48 years Source: EDF

85

> Group Overview â&#x20AC;&#x201C; November 2006

2030

2035

2040

2045

2050

2055

2060

Generation 3+: EPR

AREVA and Constellation have joined forces for a new US economic model in nuclear capacities construction

www.unistarnuclear.com

X May 2005: EPR licensing process launched in the US w/ customers support X August 2005: President Bush signs the Energy Bill: incentives for the first 6 nuclear GWe installed X September 2005: AREVA and Constellation form UniStar Nuclear to market at least 4 EPRs in the United States Marketing, technical and financial resources are pooled for the creation of JVs, which are open to other commercial and financial partners

JVs, operated by Constellation, will be in charge of licensing, constructing and operating the reactors

AREVA will supply the nuclear island, the control systems and the first reactor core to the JVs

Bechtel will support the project with its architect-engineer expertise X August 2006: AREVA signs an agreement with Constellation Energy to reserve capacity for the supply of heavy components for the first USEPR reactor 86

> Group Overview – November 2006

Gen IV - Towards a fully used nuclear system?

Present Generation Of Nuclear Reactors

Next Generation Of Nuclear Systems - Gen IV

Enhancement of Nuclear Heat Utilization

Loss

Hydrogen Production

87

Light Water Reactor

High Temperature Gas-cooled Reactor

Steam Temperature:~300°C -Steam Cycle-

Gaz Temperature:~1000°C -Cogeneration-

> Group Overview – November 2006

Appendix 5 Back End business details

Back End market combines reprocessing, final disposal and “wait-and-see” solutions mt of heavy metal/year

X Difference in costs between closed and open cycles is impactless on the kWh cost

2,500

RUSSIA CHINA UK

OTHERS

X Back-end cost represent less than 6% of the overall nuclear kWh cost

2,000

JAPAN

1,500

USA (to date)

X When choosing the closed cycle:

96% of the materials

FORMER EASTERN BLOCK COUNTRIES

ASIA

1,000 SPAIN SWITZ.

can be recycled

wastes volumes are divided

FRANCE

BELGIUM

500

by a factor 4 to 5

Radio-toxicity of long term wastes is reduced by a factor 10

89

> Group Overview – November 2006

AREVA customers

GERMANY

0

SWEDEN FINLAND

Final Reprocessing Mixed solutions Disposal Recycling (closed cycle) (Open cycle)

The closed and open cycles are similar in price, in a back-end that represents less than 6% of the overall nuclear kWh cost Cost* (€ct/kWh)

Closed cycle

Spent Fuel Transp.

0.015

0.015 0.047

Spent Fuel Storage Reprocessing / Vitrif.

Open cycle

0.183

Spent Fuel condit..

0.106

Disposal of wastes

0.017

End-of –cycle Subtotal

0.215

0.168

Uranium credit

(0.027)

Plutonium credit

(0.011)

Materials Credit Subtotal

(0.038)

0

Total cost

0.177

0.168

% of a 3 €ct/kWh generation cost (typical nuclear)

5.9%

5.6%

X The rising cost of Uranium is in favour of the closed cycle * Source: OECD - April 1994 converted to € - discount rate 0%

90

> Group Overview – November 2006

120,000 mt of spent nuclear fuel are stored worldwide 7,200 mt are unloaded in addition yearly

US

EUROPE

Far East Annual discharge

2,500 mt/y

2,500 mt/y

2,200 mt/y

7,200 mt/y Stored quantity

50,000 mt

35,000 mt

35,000 mt

120,000 t as of 31/12/2003

Estimated global spent fuel management cost €0,5 to 1 M/mt

€1,615M €118M

91

> Group Overview – November 2006

inc. €1,104M in France

€187M

Back end division 2005 sales

In Back End, AREVA is the specialist of spent fuel management X Considerable barriers to entry for reprocessing-recycling:

Technical and technological know-how:

Areva is number one in terms of operating experience Regulations Capital requirements

X AREVA is Nr 1 worldwide in terms of effective production Effective reprocessing capacity for light water reactors spent fuel 1,700 mt / y

Cumulative effective production, as of dec. 2004 ~20,000 mt

900 mt / y 800 mt / y Max. 400 mt / y

5,800 mt 3,700 mt 1,600 mt

AREVA COGEMA - La Hague

BNFL / Sellafield

Minatom / Chelyabinsk

Japon / Rokkasho Mura (starting 2006)

Technology transfer Source: AREVA, World Nuclear Association

92

> Group Overview – November 2006

AREVA

BNFL

Minatom

Other

Up today, AREVA reprocessed 67% of the spent fuel worldwide, i.e 19,400 mt out of 28,900 mt

Key events in the Back End business (2005 & H1 2006) 1° The Boston Cinsulting Group confirms the sound economics of the closed cycle 2°Industrials respond to the US DOE’s request for E.O.I.

Success Success of of EUROFAB EUROFAB –– MOX MOX fuel fuel loaded loaded at at Catawba Catawba

Germany discontinues shipment of used fuel to Treatment-Recycling plants

Request for Tender in Italy to recycle 235 metric tons of used fuel

New law on radioactive waste management was adopted 1° Phase II of hot testing begins at the Rokkasho Mura fuel treatment plant 2° Two new contracts / L.O.I to supply MOX fuel for delivery until 2020 93

> Group Overview – November 2006

Appendix 6 T&D business details

AREVA T&D in the race Europe

12

23% ABB 19% Siemens 13% Areva T&D

Asia Pacific Americas

9

16% ABB 10% Siemens 5% Areva T&D

Africa M.East

7

15

13% ABB 9% Siemens 6% Areva T&D

23% ABB 16% Siemens 14% Areva T&D

X WW market share 2005 Areva: 9%

42

Siemens: 14%

Market size in 2005, €bn ABB: 19% Other: 58% Note: Regional Market share estimates based on orders repartition Sources: ABB, Siemens, Areva announcements; Strategic Marketing

95

> Group Overview – November 2006

Products and Systems keep the main T&D segments €42bn Gross market sizes (i.e. including pull-through)

X Automation

Automation

CAGR +4.2%* (2005-2008)

€4 bn

Boosted by Deregulation and Grid numeration

Services €7bn

X Services CAGR +0.8%

Systems €13bn

X Systems o/w €5bn product

CAGR +0.5% Market growth led Power Electronics.

Products

Pull through Products to system

€23bn

X Products: CAGR +1.7% Market pulled by HV and MV Switchgears

T&D global market 2005 E Source: AREVA estimates

96

> Group Overview – November 2006

Global dynamic market trends mainly in Asia and Middle East Afr.&M.East 16%

Asia Pacific 35%

X Near & Middle is one of the most attractive market in the world X India is expected to be the fastest growing market for the coming years X China still shows good perspective

Americas 21%

X US: Energy Bill 2005 should drive major investments in the grid X Brazil: development and upgrade of the power grids X Russia and Central Europe: Strong market potential due to replacement and dynamic economic growth

Europe 28%

X Europe: interconnection development and Renewable Energies T&D global market 2005 E Source: AREVA estimates

97

> Group Overview â&#x20AC;&#x201C; November 2006

AREVA T&D: a Utility focused company X Market breakdown by Customers AREVA T&D’s Customer base

Global T&D market 40% Industry Companies T D

60% Utilities

T

D

X Industry Companies Oil & Gas, Chemicals Mining & Metals Passenger Transportation Others X Utilities Integrated utilities Transcos Discos Generators

25% Industry Companies

75% Utilities

AREVA T&D is #2 in the utility market Source: AREVA estimates

98

> Group Overview – November 2006

Sourcing

X Sourcing represents 53% of our sales X Levers to improve sourcing costs

Globalisation

20%

Labor Low Cost Country sourcing 5%

45%

8%

Redesign to cost 22%

99

Make or buy

> Group Overview â&#x20AC;&#x201C; November 2006

Other

Industrial footprint: too European but a new balance AREVA T&D Sales by Origin 2005

2003 Asia Pacific

2005 Market Volume

Americas

Asia Pacific

Americas

Asia Pacific

Americas

12% 12%

16%

20%

15%

35%

21%

19% 72%

46% Africa & Middle East

Europe

16% Africa & Middle East

Europe

46% of our 2005 sales manufactured in Europe vs 72% in 2003 Note: AREVA estimates

100

> Group Overview â&#x20AC;&#x201C; November 2006

28% Europe

Reposition AREVA T&D in growing areasâ&#x20AC;Ś in sync with the market Market growth estimate per year 2005 - mid-term + 12%

+ 9%

+ 9%

China

Russia

+ 2.4% + 0.9% - 1.1%

France

Germany

Note: AREVA estimates

101

> Group Overview â&#x20AC;&#x201C; November 2006

U.K.

India

Increased CAPEX in targeted regions CHINA

Capex 2006-2007: ~ €200M WESTERN EUROPE

Shanghai MEXICO

Villeurbanne

Suzhou Xiamen

BRAZIL Gebze

Tizayuca

TURKEY Naini Canoas

Kolkata Bangalore INDIA

102

> Group Overview – November 2006

Chennai

Appendix 7 Financials

Income statement 2005

2004 adjusted for sale of the Connectors Division (excl. IAS 32 et 39)

10,125

9,821

7

7

(7,852)

(7,478)

2,280

2,350

In millions of euros Sales revenue Other income from operations Cost of sales Gross margin Research and development expenses

-328

-327

Marketing and sales expenses

-478

-500

General and administrative expenses

-724

-684

Other operating income and expenses

-4

-103

Current operating income

746

735

Restructuring and early retirement costs

-138

-205

Other non-current operating income and expenses

-56

29

Operating income

551

558

Income from cash and cash equivalents

59

54

Gross borrowing cost

-42

-27

Net borrowing cost

17

27

Other financial income and expenses

-30

-30

Net financial income

-13

-3

Income tax

-146

-124

Net income from consolidated businesses

393

431

Share in net income of equity affiliates

153

128

Minority interests

-95

-139

Net income from continued operations

451

420

Net income from discontinued operations

598

31

1,049

451

35,442,701

35,442,701

Earnings per share from continued operations

12.72

11.83

Earning per share

29.6

12.71

Earnings per diluted share (1)

29.6

12.71

Consolidated net income Average number of shares outstanding

(1) Areva has no diluting instrument in its share capital

104

> Group Overview â&#x20AC;&#x201C; November 2006

Key figures by Division (1/3) X 2005 IFRS excluding amounts linked to end-of-life-cycle obligations

T&D

Holding and other operations and eliminations

Group Total

1,921

3,211

14

10,125

87

208

(61)

(58)

551

14.2%

3.7%

10.8%

-1.9%

n/a

5.4%

EBITDA (ex, end-cycle costs)

508

173

483

106

(53)

1,217

% of contribution to sales

19.3%

7.4%

25.1%

3.3%

n/a

12.0%

Net CAPEX

(236)

(170)

(53)

68

(4)

(395)

Change in operating WCR

(77)

226

(95)

(69)

(30)

(45)

Operating cash flow

197

228

332

116

(90)

783

Fixed assets

1 554

606

2 079

950

1 210

6 399

Capital employed

1 642

130

(737)

671

52

1 955

Employees

11 047

14 323

10 864

22 094

432

58 760

In millions of euros (exc. employees)

Contribution to sales revenue Results

Operating income % of sales

Cash

Other

105

> Group Overview â&#x20AC;&#x201C; November 2006

Front End

Reactors & Services

Back End

2,631

2,348

374

Key figures by Division (2/3) X 2004 IFRS excluding amounts linked to end-of-life-cycle obligations and adjusted for disposal of FCI T&D

Holding and other operations and eliminations

Group Total

1,946

3,186

18

9,821

95

221

(103)

(35)

558

14.7%

4.4%

11.8%

-3.2%

n.s

5.7%

EBITDA (ex, end-cycle costs)

459

121

402

23

(14)

991

% of contribution to sales

18.2%

5.7%

20.7%

0.7%

n.s

10.1%

Net CAPEX

(196)

(71)

(97)

57

(66)

(354)

Change in operating WCR

(157)

11

299

22

(4)

(170)

Operating cash flow

106

82

603

(12)

2

782

Fixed assets

1,308

456

2,203

1,028

nc

nc

Capital employed

1,410

276

(456)

722

57

2,164

Employees

10,952

14,066

10,697

21,816

378

57,909

In millions of euros (exc. employees)

Contribution to sales revenue Results

Operating income % of sales

Cash

Other

106

> Group Overview â&#x20AC;&#x201C; November 2006

Front End

Reactors & Services

Back End

2,524

2,146

370

Key figures by Division (3/3) X 2004 reported excluding amounts linked to end-of-life-cycle obligations

Connectors

Holding and other operations and eliminations

Group Total

3,186

1,289

18

11,109

177

31

80

(79)

613

4.2%

9.1%

1.0%

6.2%

n/a

5.5%

466

133

394

19

113

(77)

1,049

% of contribution to sales

18.5%

6.2%

20.0%

0.6%

10.3%

n/a

9.4%

Net CAPEX

(196)

(59)

(98)

(57)

(71)

(4)

(486)

Income on sales of of tangible and intangible assets

1

4

8

0

0

Change in operating WCR

(159)

11

298

27

12

(1)

187

Operating cash flow

112

88

603

(12)

54

(88)

763

Fixed assets

2,135

515

9 061

1,096

656

2,320

15,783

Capital employed

2,184

670

(132)

1,330

1,318

527

5,897

Employees

10,952

14,066

10,697

21,816

12,160

378

70,069

Front End

Reactors & Services

Back End

T&D

2,524

2,146

1,946

314

90

12.4%

EBITDA (ex. end-cycle costs)

In million of euros (ex. employees)

Contribution to sales revenue Results

Operating income % of sales revenue

Cash

Other

107

> Group Overview â&#x20AC;&#x201C; November 2006

12

Free Operating Cash Flow in millions of euros

2004 R* IFRS

2005 IFRS - 45

+ 170 - 435

+ 92

+ 955

- 554 + 782

EBIDTA excl. Chg in end-of-lifeOp. cycle WCR obligations and gain on disposals

CAPEX

Disposals

FOCF

+ 159

+ 1,223

+ 783 EBIDTA excl. end-of-lifecycle obligations and gain on disposals

Change in op.

WCR

CAPEX

Disposals

FOCF

X EBITDA up significantly in all businesses X Slight increase in WCR, with use of customer advances and prepayments X Increased CAPEX in Mining and Plants (licensing)

* Adjusted for disposal of FCI

108

> Group Overview â&#x20AC;&#x201C; November 2006

End-of-life-cycle obligations: dedicated portfolio up +19.1% in 2005, consistent with the benchmark End-of-life-cycle obligations at June 30, 2006

Dedicated portfolio performance 450

404

400

350

322 300

2,786

250

2,457

200

150

Out-performance: +25 %

100

2,083

2,083

Assets

Provisions

50

0 93

94

95

96

97

98

99

00

01

02

03

04

AREVA Portfolio Composite index (FTSE, MSCI France and EUROPE)

109

> Group Overview â&#x20AC;&#x201C; November 2006

05

AREVA Third party share