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BUSINESS OVERVIEW
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6.3 Overview and strategy of the group
Since the Fukushima accident in 2011, the group is facing a deteriorated market
situation due to:
p
the shutdown of reactors in Germany and the slow restart of reactors in Japan;
p
excess capacity in the uranium, conversion and enrichment markets;
p
the reduction in the maintenance budgets of power generating companies.
Energy demand fundamentals confirm the growth prospects for the nuclear market.
According to available estimates, if the objectives of COP 21 are to be met, world
nuclear generating capacity will have to double by 2040, led by the Asian market
in particular.
The fundamentals of the nuclear market have changed in recent years:
p
in mature nuclear markets (Europe and the United States), AREVA’s traditional
customers are under heightened economic pressure, which is passed on to
suppliers. Profitability requirements and power plant aging are creating new
demand in the utilities market;
p
markets in the front end of the cycle (mining, chemistry, enrichment) have faced
significant price reductions since 2011. Prices are expected to rise as supply
and demand readjust and in response to the need to attract investment in new
capacity;
p
the management of environmental and financial issues in the back end of
the cycle may open new growth opportunities for industrial companies over
the medium term. For all countries with a significant nuclear power program,
sustainable management of the back end of the cycle is becoming a priority
and requires decisions on capital expenditure (whether in recycling, logistics
or cleanup);
p
in the new builds market, competition is becomingmore pronounced, with some
competitors benefitting from the growth of their essentially captive domestic
markets (in particular South Korea and Russia) and from financial support for
their projects. In addition, the redefinition of the French nuclear industry was
undertaken because AREVA no longer has a sufficient capital base to carry the
risk of a new reactor construction project alone, and because the operations of
AREVA NP and EDF have overlapping skills in the nuclear island.
Given this situation, it has been decided to:
p
combine the nuclear fuel cycle operations within NewCo;
p
sell AREVA NP’s operations to EDF (except for the OL3 contract) and to third-
party investors. These activities, combined with New NP, should optimize the
performance of the French nuclear industry and its global reach;
p
launch a plan to create a joint entity between New NP and EDF devoted to
the design and construction of nuclear islands for new reactors. This business
combination will underpin an ambitious export policy and the future replacement
of the French nuclear fleet.
NEWCO
In the next ten years, NewCo wants to be a leading player in the production and
recycling of nuclear materials, in waste management, and in dismantling. NewCo
will offer its customers innovative solutions and technologies in response to their
challenges. It will become a competitive, profitable group across all of its businesses.
NewCo will remain an internationally positioned group servicing the French nuclear
industry and its international customers, and will develop in the most dynamic
regions of the nuclear markets, such as Asia.
These goals are expressed through three major priorities:
p
create value for our customers by offering them competitive products,
technologies and services that meet their current and future needs;
p
put operational excellence at the heart of our daily management, relying on:
○
a simple organization and a short decision-making process,
○
management methods anchored in respect for standards, accountability,
teamwork and presence in the field;
p
foster innovation in every field (industrial, technological, commercial and
organizational), in existing markets as well as new markets calling for nuclear
materials and isotopes.
To meet these challenges, NewCo has real assets:
p
an uncompromising culture of safety;
p
a unique customer portfolio in the nuclear field;
p
recognized industrial expertise and renewed facilities;
p
benchmark technologies and expertise that is unique in the world;
p
men and women recognized for their skills, their commitment and their ability
to meet challenges.
NEW NP
In the next ten years, New NP’s goal is to be a leading supplier of the nuclear
steam supply system, equipment, services and fuel, with high levels of safety and
performance.
New NP’s future development will have three major thrusts:
p
offering innovative solutions and value-adding technologies contributing to safety
enhancement and the achievement of its customers’ economic and societal
objectives;
p
being a leader in commercial and operational excellence, both for manufacturing
and for project execution, ensuring a high level of safety;
p
ensuring the professional skills of its employees andmaintaining their commitment
in a demanding and rewarding work environment.
This development will occur within the context of the sale of a majority interest in
New NP’s operations to EDF and the plan to create a joint entity devoted to the
completion of nuclear islands for new reactor projects. This plan should enable
the development of industrial synergies with EDF while complying with applicable
regulations on competition, and would preserve the integrity of New NP’s skills in
nuclear steam supply systems.
6.3.2.
STRATEGY
2016 AREVA
REFERENCE DOCUMENT
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