Areva - Reference Document 2016

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RISK FACTORS

4.5 Operational risks

4.4.3. OTHER ENVIRONMENTAL RISK

NATURAL DISASTERS PREVALENT IN CERTAIN REGIONS IN WHICH THE GROUP DOES BUSINESS COULD AFFECT ITS OPERATIONS AND FINANCIAL POSITION The location of some of the group’s production sites in areas exposed to natural disasters, such as earthquakes or flooding, could weaken the group’s production capacity. Following the Fukushima accident inMarch 2011, stress tests were carried out or are being completed on nuclear facilities in most of the countries that have them; the conditions required for their continued operation were set upon the completion of these tests.

OCCUPATIONAL DISEASES RELATED IN PARTICULAR TO EXPOSURE TO ASBESTOS OR RADIATION CANNOT BE RULED OUT The group believes that it fundamentally complies with legal and regulatory provisions pertaining to health and safety in every country in which it operates and considers that it has taken the measures needed to ensure the health and safety of its own personnel and of subcontractor personnel (see Section 17. Human Resources) . However, the risk of occupational disease cannot be excluded in principle. Yet the occurrence of disease could result in legal action against the group or in claims for compensation, either from employees or former employees, or from buyers of the group’s businesses, in the event that occupational disease as the result of a previous exposure should arise in employees prior to their transfer with the business. These actions could result in the payment of damages. The group had a limited number of reports of occupational disease in France in 2016.

4.5.

OPERATIONAL RISKS

4.5.1. RISK OF INTERRUPTION IN THE SUPPLY CHAIN FOR PRODUCTS OR SERVICES

An industrial breakdown, a work stoppage or an interruption of the supply chain in the group’s manufacturing plants or at a supplier’s location could delay or stop the flow of the group’s products or services. This risk is heightened by the fact that the group’s different plants, in any given business, are highly integrated and interdependent, and that some of the group’s suppliers could have financial difficulties or might not be able to cope with demand while complying with the group’s deadlines and quality standards. A potential breakdown or stoppage of production in a plant or at a supplier’s location, or an interruption of some shipments could affect all of the group’s operations and cause an interruption of supplies or services.

Contracts between the group and its customers include a certain number of warranties that can trigger penalties for delays. These warranties could enter into play as a result of an industrial breakdown, work stoppage or an interruption of the supply chain, whether at one of the group’s industrial units or at one of its supplier’s locations. Although the group has implemented measures to limit the impact of a potential breakdown and has covered its exposure through business interruption insurance for its industrial units, and although it selects its suppliers based on stringent criteria for quality and financial soundness, it is nonetheless still possible that an industrial breakdown, a work stoppage or an interruption of the supply chain at the group’s industrial units or at a supplier’s location could have a significant negative impact on the group’s financial position and on its ability to respond in optimum manner to customer demand.

4.5.2. RISK OF DEFAULT BY SUPPLIERS, SUBCONTRACTORS, PARTNERS AND CUSTOMERS

AREVA’s suppliers, subcontractors and partners could encounter financial difficulties related to economic conditions and no longer be in a position to perform contracts entered into with the group.

Depending on the region, the economic situation could have a negative impact on the group’s suppliers, subcontractors, partners and customers, whether as concerns their access to sources of funds or their ability to meet their obligations in the group’s regard.

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2016 AREVA REFERENCE DOCUMENT