AREVA in 2006 If you don’t have time to read the AREVA at the heart whole report, of the great energy read this page! challenges Our mission: enable everyone to have access to ever cleaner, safer and more economical energy. Our strategic objectives: • capture one third of the world market in the nuclear business; • clear five billion euros in electricity transmission and distribution sales revenue; • achieve a double-digit operating margin; • attain a significant position in the field of renewable energies. No. 1 worldwide No. 3 worldwide OUR PERFORMANCE IN 2006 in the entire nuclear cycle in electricity transmission Steady sales growth and distribution €10.86 B With manufacturing facilities in 41 countries and a sales network or + 7.3% * in more than 100, AREVA offers customers reliable technological * +6.7% like-for-like. solutions for CO2-free power generation and electricity transmission and distribution. We are the world leader in nuclear power and Strengthening the only company to cover all industrial activities in this field. of operating income Our 61,000 employees are committed to continuous improvement €407 M on a daily basis, making sustainable development the focal point of or 3.7% of sales the group’s industrial strategy. AREVA’s businesses help meet the greatest challenges of the Strong growth in net income 21st century: making energy available to all, protecting the planet, € and acting responsibly towards future generations. 649 M or + 43.9% * * Compared to 2005 consolidated net income excluding income from discontinued operations (Connectors division). Fuel fabrication Enrichment Reactors Chemistry Renewable energies Recycling MOX fuel fabrication Mining Used fuel treatment Services Transmission OTHer SOUrceS OF ELecTRIC Power Distribution Adding value throughout the energy cycle A solution for each customer Our customers’ needs: generating, transmitting and distributing electricity • Secure supply to their reactors. • Ensure facility operations and • Optimize the management of used • Ensure the continuity and quality maintenance while optimizing nuclear fuel. of electricity transmission and their performance. • Shut down nuclear facilities distribution to the user. AN INTEGRATED • Extend reactor service life. at the end of their service life. • Manage grids, boost their capacity, • Build new generating capacity. ensure their reliability and provide energy market management. OFFER SERVING Our answers: supplying solutions for CO2-free power generation and reliable electricity transmission and distribution • Uranium exploration and mining. • Inspection, servicing and retrofitting • Solutions for used fuel treatment • Design, manufacturing and • Uranium conversion and enrichment. of all reactor types. and recycling of reusable materials. installation of high and medium ENERGY • Nuclear fuel design and fabrication. • Heavy component design, • Solutions for used fuel storage. voltage equipment and systems. manufacturing and replacement. • Facility decommissioning at the end • Development and installation of • Design and construction of nuclear of service life. grid control systems. power plants, including the EPR, PROFESSIONALS and of biomass plants. Reactors and Services Transmission & Distribution Front End division Back End division division division Contents 02 Message from the Chairman of the Supervisory Board 03 Message from the Chief Executive Officer A LOOK AT WORLD ENERGY 06 The world in 2006 AREVA IN 2006, A GROUP ON THE MOVE 10 2006 Highlights 14 Business review 16 Key data 20 AREVA around the world 22 A policy of continuous innovation A COMMITMENT TO SUSTAINABLE DEVELOPMENT 26 Five years of sustainable development 28 Governance 30 Continuous improvement 32 Financial performance 34 Innovation 35 Customer satisfaction 36 Corporations and human rights 40 Commitment to employees 43 Environmental protection 46 Risk management and prevention 48 Dialogue and consensus-building 50 Community involvement GOVERNANCE, SHARE INFORMATION AND shaReholder RELATIONS 54 Corporate governance 58 Organization of the group 60 Share information and shareholder relations 64 Glossary 69 Learn more TO GO FURTHER The reference document is available on our website www.areva.com. It is also obtainable from the Financial Communications Department. AREVA – 33, rue La Fayette – 75442 Paris Cedex 09 – France Tel.: 33 (0)1 34 96 71 00 – Fax: 33 (0)1 34 96 00 01 AREVA 2006 • 1 Frédéric Lemoine Anne Lauvergeon Chairman of the Supervisory Board Chief Executive Officer MESSAGE FROM THE CHAIRMAN OF THE SUPERVISORY BOARD Message from THE CHief EXECUTIVE officer A French success story, a European company, a world leader. The producing the nuclear island and instrumentation and control sys- In five years we have turned AREVA into the world European Union celebrates its 50th birthday this year. AREVA may tems for the EPR, is still jointly owned by AREVA (66%) and Siemens have been born in the 21st century, but it draws on decades of (4%). This does not preclude cooperation with other partners for the leader in recyclable energy – nuclear energy – and have research and industrial investment. conventional island, as demonstrated by the Flamanville EPR being built with Alstom. In the global economy we live in today, France’s establishment and built up modern manufacturing capabilities designed development of the world’s preeminent nuclear power company is AREVA’s European roots and global reach were strengthened even to meet future market prospects. no small achievement. But it should be remembered that, in its more in 2004 when the group acquired AREVA T&D, one of the conquest of markets throughout the world, AREVA is first and three world leaders in electricity transmission and distribution, all of foremost a European company. which, incidentally, are European. AREVA T&D made spectacular AREVA celebrated its fifth birthday in 2006. Five years during which Though operating income is still very healthy, after four years of progress yet again in 2006, with 16% growth, a return to profitability, This was demonstrated again in 2006 with the start of construction we have strengthened our organization, defined our scope of busi- growth it eroded in comparison with 2005, as provisions were and acquisitions in Italy and Germany. of the new Georges Besse II uranium enrichment plant in the Rhône ness, launched major capital spending projects, and consolidated needed to cover unforeseeable events at the EPR construction Valley. Based on ultracentrifugation technology developed by Three-quarters of AREVA’s 61,000 employees worked in Europe at our identity in pursuing our initial objective: pooling the know-how site in Finland. As real as they may be, such problems are not UreNco, this new plant will eventually replace the Eurodif plant the end of 2006, including more than 0,000 in France and more of the group’s entities to provide the world market with comprehen- uncommon for a project of this magnitude, especially since that has long associated Belgian, Spanish and Italian interests with than 6,000 in Germany. Even more telling, 2.5% of the group’s sive solutions in the fields of CO2-free power generation and grid we’re dealing with first-of-a-kind equipment being built under those of France. AREVA acquired a 50% stake in a centrifuge 2006 sales were generated in France and 61.6% in Europe. This, infrastructure. extremely severe conditions. To date, AREVA is the first to build a manufacturing plant in the Netherlands alongside UreNco, of course, is another sign of the importance of non-European Generation III reactor in Europe and will gain a wealth of experience Energy is key to a number of economic, environmental and human held equally by British, Dutch and German interests. The AREVA/ markets and the strategic priority of the United States, where new invaluable to the global market from this demanding project. challenges influencing the future of our planet. Our management UreNco partnership was made possible when France, Germany, reactor construction, renewed interest in the back end of the cycle, Incidentally, the impact of these provisions was partially offset model recognizes this fact. In keeping with the principle of sus- the Netherlands and the United Kingdom ratified the Cardiff treaty. and environmental concerns characterized the year, and of China, by the excellent performance of the Front End, Back End and tainable development, our model is designed to ensure both Could anything be more quintessentially European? where the intensive marketing efforts of 2006 will bear fruit in the T&D divisions. The T&D division is already a year ahead of its responsible and profitable growth on a market where investments longer term. profitability objectives. This was also the year of the EPR. To meet the ambitious challenge are expected to reach 5 trillion dollars in production equipment of building the first reactor of its kind in Finland on schedule, the full AREVA was built around a mission: to offer customers reliable and 6 trillion dollars in electricity transmission and distribution commitment of our people and close and constant supervision by solutions for CO2-free power generation and electricity transmission infrastructure by 200. IN SYNC WITH THE MARKET the Executive Board and the Supervisory Board are needed. This and distribution. That mission is at the heart of the challenges of It was to be prepared for such prospects that AREVA was established It’s an ever-changing market: between 2000 and 2006 half of is also true of the construction of the French EPR at Flamanville. sustainable development and the fight against global warming that when it was. The appropriateness of this integrated industrial Europe’s electric utilities were swallowed up by their competitors Interest in the EPR has been expressed on practically every con- are of particular concern today to the European continent. In pursu- organization – providing each client with its own solution – has been and the number of listed utilities dropped in the United States from tinent, including Asia (China), North America (the United States, ing this mission, and in building on its French origins (evidenced confirmed by positive growth in the group’s earnings year after 71 to 65.