Annual Report & Accounts 2010

AnRep cover_no gloss:Layout 1 11/4/11 09:52 Page 1 Delivering on our commitments A n n u a l r e p o r t & a c c o URENCO Limited u 18 Oxford Road n t Marlow s Annual report 2 Buckinghamshire 0 SL7 2NL 1 0 & accounts 2010 UK www.urenco.com Copyright© 2011 URENCO Limited URENCO’s Vision, Mission and Values URENCO believes that nuclear power will play a fundamental role in meeting the increasing future demand for sustainable global energy. URENCO is a leading supplier in the global enrichment market, with demand for the Group’s services continuing to increase. “Enriching the future” is therefore our commitment, through the global deployment of our nuclear products, services and technology to support sustainable nuclear energy. Living Our Values The Values of Safety, Integrity, Flexibility, Development and Profitability guide everything we do at URENCO and remain a strong focus across the Group. Our Values inform both strategic and operational decision- making, alongside more everyday activities across the Group at employee level. Formally introduced in 2005, our set of relevant and robust Values are now deeply embedded in the culture of the Group, forming a solid benchmark against which our behaviours are consistently checked. Understood and accepted by all employees, the Values assist employees in the achievement of the Group’s commitment of ‘enriching the future’. Safety We will operate to the highest standards of safety, environmental and security requirements. Integrity We will conduct all our relationships with honesty, fairness and respect. Flexibility We will be responsive to the market to best meet our customers’ needs through flexible deployment of our skills. Development We are committed to the sustainable growth of our business through the continuous development of our employees, services and products. Profitability We are committed to generating profits to secure our future and reward our shareholders and employees. Contents Annual report & accounts 2010 Highlights 2010 2 Chairman’s Statement 3 Treaty of Almelo 4 URENCO – At the heart of the world’s nuclear fuel supply chain 5 Chief Executive Officer’s Review 6 Business review: URENCO Group 10 Enrichment Operations 12 URENCO ChemPlants 13 Stable Isotopes 14 Research and Development 14 Enrichment Technology Company 15 Group Finance Report 16 Corporate Responsibility 24 Board Biographies 26 Consolidation Group Financial Statements 2010 29 Company Financial Statements 2010 87 Glossary of Terms 100 Contact Listing 102 Highlights 2010 Chairman’s statement Financial Highlights The earthquake and subsequent tsunami in Japan was a truly shocking IFRS event. Our thoughts are with all those who have been affected by the devastation caused by such a catastrophic natural disaster. 2006 2007 2008 2009 2010 €m €m €m €m €m Revenue 893.7 1,023.8 1,129.7 1,121.0 1,267.2 In relation to the events at the Fukushima nuclear power plant, the Sustainability EBITDA 527.3 542.4 654.3 669.7 813.6 global nuclear industry is working together in order that appropriate URENCO’s business is rooted in supplying a vital service to the nuclear Income from operating activities 352.8 352.8 459.0 500.4 590.9 actions can be taken and lessons learned. industry in its mission to deliver safe, affordable, low carbon energy. Net Income 211.3 250.6 260.1 342.8 387.1 The industry has always been committed to safety and will continue to URENCO believes that nuclear continues to be an essential part of the Capital expenditure 351.5 517.3 820.8 843.0 703.4 focus improving that wherever possible whether through design or energy mix. The industry is confident that it can overcome the current 1 through operation. Cash generated from operations (before interest & tax) 563.4 577.8 616.0 656.4 831.6 challenges and proactively implement measures to improve safety and performance for the future. In this time of increasing uncertainty around energy security, we strongly believe that nuclear energy will continue to be a significant Key ratios I can report another year of solid growth for URENCO, reflecting our component of the energy mix. Nuclear energy is important for ensuring position as a leading supplier in the global enrichment market. The energy security at a stable price, while at the same time enabling Net asset turnover 2 1.30 1.28 1.44 1.26 1.02 Group extended its global reach in June 2010 with the commencement countries to achieve their long term carbon reduction targets in an Return on sales 23.6% 24.5% 23.0% 30.6% 30.5% of operations at our fourth enrichment facility, located in the US. This affordable manner. Return on equity 2 30.7% 31.4% 33.3% 38.5% 31.1% responds to demand for enriched uranium from our North American customers and demonstrates our ability to safely install and operate Basic Earnings per Share (€) 1.26 1.49 1.55 2.04 2.30 URENCO’s commitment to sustainability is reflected in many ways, URENCO technology in a new territory. We also continued to invest in an example of which is the Tails Management Facility (TMF) planned enrichment infrastructure at all our European sites and thereby 1 Cash generated from operations in 2006 has been restated to include fixed asset prepayments within investing activities and provisions have been at URENCO’s UK site, which continued its design and other adjusted to reflect decommissioning asset additions. increased capacity across the Group. pre-construction activities in 2010. This facility, once operational, will process URENCO’s European inventory of depleted uranium tails, 2 Net asset turnover and return on equity have been calculated using an average of net assets and equity (excluding minorities) respectively. The financial performance of the Group resulted in a year on year rise a by-product of the enrichment process. This is in-line with our of 13% in revenue based on an increased sales volume. Group EBITDA commitment to reducing our impact on the environment. grew 21%; net income increased by 13%, marking another successful year for URENCO. Board The Group has continued its steady growth with an order book I would like to pay tribute to Bart Le Blanc for his significant extending up to and beyond 2025 and currently amounting to in contribution to URENCO over the last seven years. Bart retired from excess of €21 billion of future sales. This business growth continues his position as Chief Financial Officer and the Board on 1 April 2011. to be reflected in our credit rating which remains at a single ‘A’ level. I am pleased that he will continue to act as Chairman of ETC. I welcome Friso van Oranje as our new Chief Financial Officer. Investment I would like to thank all of URENCO’s employees for their hard work We continue to focus on steady growth in capacity in order to meet and commitment, which contributes to the continuing success of the the demands of our customers. We are committed to providing Group. We are justifiably proud of our first class reputation for safety, 4 enrichment services close to our customer base and we continue . reliability and quality, and I would like to extend my thanks to all 3 0 to focus our attention on delivering excellent customer service. This 7 who work for URENCO as we look forward to the continuing remains a top priority. success of the Group. During the year, we have also maintained our investment in research and development, directly and indirectly via our joint venture Enrichment Technology Company (ETC), to ensure that URENCO keeps hold of its competitive edge in a changing market. Chris Clark Chairman 2 Annual report & accounts 2010 Annual report & accounts 2010 3 Treaty of Almelo URENCO At the heart of the world’s nuclear fuel supply chain The 40th anniversary of the signing of the Treaty of Almelo was celebrated URENCO is an independent, international energy and technology group across the URENCO Group on 4 March 2010. This fundamental Treaty, operating in a pivotal area of the nuclear fuel supply chain, which ends signed by the governments of Germany, the Netherlands and the UK on with the sustainable generation of electricity for consumers worldwide. 4 March 1970, established essential principles for the effective supervision of URENCO’s technology, centrifuge manufacturing and operations. It marked the start of a new age in uranium enrichment for civil purposes. Since the signing of the Treaty, URENCO has fully justified the With production from facilities in Germany, the Netherlands, the UK negotiations and decisions of 1970. Four decades on, the and the US, URENCO’s focus is on providing safe, cost-effective and agreement remains the cornerstone of international collaboration reliable uranium enrichment services for civil power generation, within on non-proliferation, while URENCO has grown considerably and a framework of high environmental, social and corporate responsibility extended its international relationships to include the US and France. standards. URENCO has realised the original vision of the Treaty of Almelo, becoming a model of international co-operation ensuring a safe, secure and commercially attractive supply of nuclear fuel for the The diagram below demonstrates the supply chain from the peaceful use of nuclear power. mining of uranium ore to the generation of electricity. Since the signing of the Treaty, URENCO has fully justified the negotiations and decisions of 1970. Four decades on, the agreement remains the cornerstone of international collaboration on non-proliferation. 4 Annual report & accounts 2010 Annual report & accounts 2010 5 Chief Executive Officer’s Review A major achievement in the history of the Group came in June 2010 with the inauguration and start of commercial operations at URENCO’s new facility in the US.

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