Areva - Reference Document 2016

BUSINESS OVERVIEW

6.2 AREVA’s customers and suppliers

AREVA’s customers are chiefly electric utilities, energy services companies, public

entities (agencies in charge of the back end of the nuclear fuel cycle, research

centers, etc.) and local public sector or economic players.

Geographically, most of the group’s customers are located in Europe, the United

States, Latin America and Asia.

The EDF group is AREVA’s leading customer, representing about 30%of its revenue

in 2016. The group’s 10 biggest customers, including the EDF group, represented

about 64% of its revenue at the end of December 2016. A discussion of backlog

may be found in Section 9.

NUCLEAR

The nuclear businesses have a limited number of customers. The contracts are

generally large, amounting to as much as several billion euros. In addition to the

EDF group, the principal customers are utilities such as Duke and Exelon in the

United States, ETN in Brazil, Engie, RWE and

E.ON

in Europe, and CGN, CNNC,

KHNP and Tepco in Asia. Customers are diversified geographically, with a strong

historical presence in Europe and customer growth in Asia.

AREVA has long-term contractual commitments from its customers in the different

segments of the nuclear fuel cycle. This is the case in several businesses, such as

Chemistry, Enrichment and Recycling, and in the Mining operations, which have

service agreements with most of the world’s nuclear utilities. The Reactors and

Services operations sign contracts for services and equipment replacement for

the installed reactor base.

In addition to contracts with the nuclear utilities, with more than 90% of their

reactors served by AREVA in 2016, the group’s entities have significant contracts

with governmental and para-governmental entities such as the Commissariat à

l’énergie atomique et aux energies alternatives in France (CEA, the French atomic

energy commission), the United States Department of Energy (DOE), the Nuclear

Decommissioning Authority of Great Britain (NDA), the French naval shipyards

DCNS and the Direction générale de l’armement (French defense procurement

agency, DGA), among others.

In line with market practices, a certain number of warranties are given to customers

for performance, late penalties, liability for failure to deliver, etc. The warranties and

the risks associated with these warranties are described in Sections 20.2.

Notes

to the consolidated financial statements for the year ended December 31, 2016

and 4.

Risk

factors

RENEWABLES

Customers are public or private utilities, independent energy infrastructure project

developers, local and regional economic development groups, and industry. These

customers are located in a wide range of geographic areas on five continents.

The group’s involvement in the renewable energies sector particularly includes

the fields of bioenergy and energy storage. Nevertheless, in line with its objective

of refocusing on the nuclear fuel cycle operations, most of these operations are

scheduled to be sold or shut down.

6.2.2.

SUPPLIERS

External purchases are made chiefly by the NewCo and AREVA NP operations.

NEWCO CONSOLIDATION SCOPE

External purchases represented a volume of approximately 1.6 billion euros in 2016

(NewCo consolidation scope, excluding Nuclear Measurements), divided between

contracted construction (civil engineering, finishings, ventilation, piping, scaffolding,

insulation) and cross-business purchases.

Cross-business purchases are divided among the following categories:

travel;

energy and corporate services;

engineering and consulting;

human resources and communication services;

moving, maintenance operational readiness;

transportation;

chemicals, raw materials (metals);

forgings, boilers, drums and hoisting;

cleanup-dismantling, gas, waste;

electricity, instrumentation and control, maintenance;

mechanical, machining, equipment, machinery;

information technology and telecommunications.

AREVA NP CONSOLIDATION SCOPE

External purchases represented a volume of approximately 1.4 billion euros in 2016,

divided at the corporate level among several categories:

intellectual, technical and engineering services;

instrumentation and control;

non-production purchases: energy, facilities management, travel, consulting

services and human resources.

They also included purchases led by the business units in the following categories:

civil engineering and finishings;

raw materials and semi-finished products;

forgings, boilers, piping and welding;

mechanical accessories, components and equipment;

logistics, handling and storage;

production services;

other corporate services.

For all categories, orders exceeding 5 million euros are reviewed by an AREVA NP

sourcing committee.

2016 AREVA

REFERENCE DOCUMENT