Financial analysis - PPT

Financial analysisThomas LEFEBVRE, Yves-Marie SALAUN, Pablo LAIZ, LonanCAROLL, Mehdi VATRI, Bastien DANIEL

Group B

Index

Company overview (I)

Context for analysis (II)

Financial structure (III)

Trend analysis (IV)

Comparative analysis (V)

Financial cash flows (VI)

Assessment of the risks (VII)

Conclusion and recommendations (VIII)

Company overview

World leading company in nuclear

energy

Activities : mining-front end, reactors and

services, back end, renewable energies

Competitors : Siemens AG, Rosatom and

Schneider Electric

Consolidated sales revenue of 9,342

billion euros in 2012

Source : Areva

Context for analysis

Over 50 % decline in share price

Japan disaster in 2011 – Negative income

3 opportunities of action plan “Active 2016” :

1. World energy demand doubled by 2050

2. Fossil fuels depletion

3. Eco-friendly energy provision

Context for analysis

In 2012, early indicators of success, + 5,3 % in sales

revenues, operating income of 119 million

Remain unattractive investment prospect

Restructuring of investments

Financial structure

• Balance sheet

Non current assets

Current assets

22107

9148

Stockholder equity

Non current liabilities

Current liabilities

5556

14107

11593

Total assets 31255 Total liabilities + SE 31255

Financial structure

Current assets

- Current liabilities

9148

11593

= Cash injected in the production cycle (2245)

- Net treasury 1615

= Working capital (4060)

+ Non current assets 22107

= Capital employed 18047

Net debt

+ Shareholders equity

12492

5556

= Invested capital 18047

• Working capital

Trend analysis

RATIOS 2010 2011 2012

Acid test 84.28% 68.30% 27.16%

Leverage 0,7558 1,0219 1,0531

Current Ratio 0,850 0,789

# years needed to repay debts 5,7 6,5 5,44

Debt ratio 20,96% 19,5% 18,71%

Total debts 7240 6093 5850

Total assets 34538 31232 31255

• Liquidity, autonomy and solvency

Trend analysis

2010 2011 2012

Revenue 9104 8872 9342

Growth of revenue - -2,55% +5,30%

ROA 2,55% -8.01% -0.32%

Net income 883 -2503 -99

• Growth and efficiency

Trend analysis

• Profitability

2010 2011 2012

Gross margin 14,06% 9,17% 9,41%

EBITDA margin 13,93% 8,77% 11,50%

EBIT 188 -1866 119

Sales 9104 8872 9342

Gross profit 1280 852 879

Comparative analysis

• Net sales revenue

Comparative analysis

• Gross margin

Comparative analysis

• Return on capital employed (ROCE)

Comparative analysis

• Return on assets (ROA)

Financial cash flows

Operating cash flow (A)

- Investing cash flow (B)

713

(1139)

= Free cash flow (426)

Financing cash flow (C) (167)

Net cash flow (A+B+C) (593)

Assessment of the risks

Risk : extent and likelihood that what is estimated to

occur will not actually occur.

• Market risk

• Liquidity risk

• Default risk

• Operating risk

• Political risk

Conclusion and

recommendations

Conclusion

• Highly

financed by

debt

• Substantial

exposure to

risk

• Promising

future figures

for 2013

Source : Areva

Conclusion and

recommendations

Recommendations

• Think about the financial model

• Reducing the cost of production

• Focus on nuclear businesses

• Find a way to generate more cash

Thank you for your attention