Areva - Reference Document 2016

06

BUSINESS OVERVIEW

6.2 AREVA’s customers and suppliers

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.

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.

6.2.2. SUPPLIERS

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:

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:

p intellectual, technical and engineering services;

p instrumentation and control;

p 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:

travel;

p civil engineering and finishings;

p

p energy and corporate services; p engineering and consulting;

p raw materials and semi-finished products; p forgings, boilers, piping and welding;

p human resources and communication services; p moving, maintenance operational readiness;

p mechanical accessories, components and equipment;

p logistics, handling and storage;

transportation;

production services;

p

p

p chemicals, raw materials (metals); p forgings, boilers, drums and hoisting; p cleanup-dismantling, gas, waste;

p other corporate services. For all categories, orders exceeding 5 million euros are reviewed by an AREVA NP sourcing committee.

p electricity, instrumentation and control, maintenance; p mechanical, machining, equipment, machinery; p information technology and telecommunications.

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2016 AREVA REFERENCE DOCUMENT