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RESEARCH AND DEVELOPMENT PROGRAMS, PATENTS AND LICENSES

11

11.1 Research and Development

In the group’s twomain companies, NewAREVAHolding (“NewCo”) andAREVANP,

the principal research and development programs concerned:

p

New AREVA Holding (“NewCo”):

development and upgrading of production capabilities in the front end of

the cycle,

preliminary design of new treatment and recycling plant processes, and

maintenance and performance improvement at existing plants,

development of new shipping casks for nuclear materials and waste,

development of methods and tools to support dismantling activities;

p

AREVA NP:

development of next-generation and advanced fuels,

continuation of a basic design study in partnership with EDF for an optimized

EPR reactor to meet requirements for the replacement of EDF’s fleet (“EPR

NM” project),

completion of detailed generic design studies for the Atmea1 reactor in

partnership with MHI,

development of advanced instrumentation and control products and systems

for new power plants or the renovation of existing power plants,

development of advanced tools and methods to support design and services

provided to operators,

evaluation of advanced concepts such as fast neutron reactors (support for

the CEA’s Astrid demonstrator project) and small modular reactors (SMR)

with AREVA TA,

performance improvement in equipment manufacturing, particularly forgings.

Research and development costs recognized as expenses under the gross margin

of the group’s combined subsidiaries (continuing operations and operations held

for sale) represented a cumulative total of 167million euros in 2016, compared with

202 million euros in 2015. Mineral exploration costs amounted to 32 million euros

in 2016, compared with 35million euros in 2015. The Research Tax Credit came to

58 million euros and was stable compared with 2015. In addition, 33 million euros

in R&D costs were capitalized in 2016, compared with 39 million euros in 2015.

11.1.2.

OVERALL ORGANIZATION OF RESEARCH AND DEVELOPMENT

Research, development and innovation are one of the pillars of the group’s strategy,

enabling it to ensure its competitiveness and to create new growth opportunities.

AREVA has a single Research, Development and Innovation function shared by

all subsidiaries. By functioning in integrated mode, the group is able to share best

practices across all entities. This boosts the effectiveness of programs conducted

in fields as varied as knowledge and expertise management, the protection of

intellectual assets, and innovation. It also helps initiate and ultimately manage and

fund projects at the corporate level when they serve several group subsidiaries or

are longer term.

R&D projects cover a broad spectrum of technological fields, from uranium ore

extraction to the treatment and recycling of nuclear fuel. All R&D projects help to

improve existing products, services and processes, or to create new ones.

AREVA’S INNOVATION INITIATIVE

AREVA’s innovation initiative draws on a wide network of contacts in the operating

and functional entities. Starting from a shared goal – “To convert employees’

innovative ideas into drivers for performance and differentiation so that new

AREVA activities can emerge” – it is reinforced by programs that open a door to

our ecosystem: “associating innovative solutions developed in other fields of activity

with our development projects.”

AREVA’s innovation initiative is expressed in five major objectives:

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to create and reinforce our culture of innovation;

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to create value in the near and medium terms by identifying and developing new

ideas and by accelerating innovation projects throughout the group’s footprint;

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to boost development and ensure business continuation by speeding up the

time-to-market for innovative technical and non-technical solutions;

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to stimulate digital innovation and support the group’s digital transformation;

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to develop innovative solutions by strengthening AREVA’s ties with external

partners – laboratories, small andmediumbusinesses, start-ups, venture capital

funds, etc.

Focus on the Open Innovation initiative, the AREVA portal for

small and medium business innovation

The AREVA Innovation PME initiative seeks to foster collaborative innovation

between AREVA and start-ups and small and medium businesses in France (

PME:

petites et moyennes entreprises

). Working with the group’s employees, AREVA

Innovation PME identifies and evaluates the best innovation solutions developed

by start-ups and small and medium businesses that may be able to meet some of

the challenges facing AREVA and its customers. AREVA Innovation PME is built on

a win-win approach for start-ups and small and medium businesses, for the French

industrial ecosystem, and for AREVA.

A website devoted to innovation

(www.innovationpme.areva.com

) was created to

give small and medium businesses a broader view of AREVA’s innovation needs.

AREVA puts challenges on the website for which small andmediumbusinessesmay

be able to propose innovative solutions. They can also offer solutions unprompted

by any bidding process. Proposed solutions are reviewed by a panel of the group’s

experts.

As of the end of 2016, close to 25 AREVA challenges had been posted and more

than 1,000 small and medium businesses were registered on the dedicated portal,

submitting more than 300 innovative solutions, a hundred of which made the short

list for evaluation. Some 20 contracts had been signed as of the end of 2016 in

thematic areas such as:

p

“Inspection and measurement assistance in difficult-to-access areas”: indoor

drones, virtual-on-actual projection, an inflatable robotic arm and a miniaturized

wireless sensor;

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“Contact maintenance planning and worker assistance”: contactless tool for

three-dimensional inspection of complex shapes, hybrid laser welding head,

and virtual reality training of operators on a pole crane;

p

“Augmented operator”: harvesting and transmission of virtual reality knowledge,

voice transcription of project follow-up documentation, bone conduction

communication system and exoskeletons.

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2016 AREVA

REFERENCE DOCUMENT