Acquisition project of Areva Transmission & Distribution and Even… · 11 Press Conference - Alstom / Schneider Electric – 2 December 2009 A drastic increase of turnkey project

Acquisition project of Areva Transmission & Distribution

Press conference

2 December 2009

All forward-looking statements are Alstom and Schneider Electric

management’s present expectations of future events and are

subject to a number of factors and uncertainties that could

cause actual results to differ materially from those described

in the forward-looking statements.

Disclaimer

3Press Conference - Alstom / Schneider Electric – 2 December 2009 3

Introduction04

33 Conclusion

13 Schneider Electric & Areva D

20 Alstom & Areva T

29 Social commitments


Introduction04

33 Conclusion


20 Alstom & Areva T



The electrical industry is transforming

Production Transmission Distribution Consumption

► Environmental pressure► Decentralized renewable energies► Deregulation► Interconnections► Supply demand response► Energy efficiency► Electric vehicles



Consumers

EnR Storage Backup

The smart grid is changing all stages of the electrical value chain

Centralised Generation

DistributionTransmissionTransport

Residential

Commercial

Industry

Smart & flexible transmission network

1

2

3 Distribution and consumption:energy efficient, communicating, electricity intensive

Communication and software at all levels“Smart Grid”

4Renewable Energies Decentralized and irregular


Two poles of specialization, with two different sets of dynamics

Renew-able

On-siteStorage

BackupPowerCentralized Generation

Transportation

Residential

Commercial

Industrial

• Global and regional players

• Equipment and product sale

• Multi-clients

• Major global players

• Large projects

• Focused on utilities




The offer by the consortium would lead to the creation of two global specialists

2008 proforma sales 2008 proforma sales

€22 Bn

AlstomPower

Areva T

>€11 Bn €3.3 Bn

€20 Bn

Areva DSchneider

ElectricMV / LV

€1.7 Bn >€10 Bn

Upstream Specialist Downstream Specialist


We would maintain and develop the synergies between transmission and distribution

• Commercial agreement between Alstom and Schneider Electric to develop the current flows (<€200M)

• Common smart grid communication and software standards

• Joint R&D program on smart grid

€20 Billion€22 Billion


We would create new synergies for transmission and distribution businesses

• Innovation by connectinggeneration and transmission

• €500m of transmission purchase by Alstom in 2008

• Innovation by connectingdistribution and consumption in real time

• €1bn of medium-low voltage packages in 2008

• Access to diffuse markets

• Critical size in medium voltage

€22 Billion €20 Billion

Strong capability for the smart grid


A drastic increase of turnkey project capabilities

Areva T&Dproject sales

€ 1.6 bn

HV equipments

MV equipments

Utilities Transmission & DistributionUtilities Generation

HV equipments

Alstomproject sales

€ 4.5 bn

MVequipments

Turbines

Utilities Generation & Transmission

HV equipments

Alstomproject sales

€ 5.8 bn

MVequipments

Turbines

Utilities Distribution, Industry, Buildings

Schneider Electricproject sales

€ 2.0 bn

MV equipments

Utilities Distribution, Industry, Buildings

Schneider Electricproject sales

€ 2.3 bn

MV equipments


Value of the transaction

Enterprise value

PensionsNet debtas at

30.06.2009

Equity valuecommitted

to Areva

~ €400m

€1,053m

€2,290m

• 2008 EBITDA of €587m of which minorities of ~€50m (8%)

• Alstom share ~2/3• Schneider Electric share ~1/3• Final share of each partner to

be adjusted on the basis of the respective EBITDA of the T and D businesses

• Multiple of ~8x 2009(e) EBITDA *

~ €200m

Minorities

Cash impact

* Alstom and Schneider Electric estimate

~ €3.3bn ~ €4,000m


Introduction04

33 Conclusion


20 Alstom & Areva T



Areva Distribution: world #4 in medium voltage

~40 plants

Industrial and employee data

Operational figures for Areva Distribution are estimates subject to final adjustments

2006 2007 2008

Sales 2008 sales breakdown

MV distributionproducts

(incl. switchgears, transformers, substations)

Europe

North America

Asia-Pacific

Rest of world

Systems & services

€1.3bn€1.4bn

€1.7bn

Gridautomation

~11,000 employees

http://www.areva-td.com/solutions/US_514_VISAX+Air-Insulated+Switchgear+with+rotary+breaker+up+to+24+kV.html

http://www.areva-td.fr/solutions/FR_507_GMA+-+Tableau+isol%E9+au+gaz+%28GIS%29+jusqu%27%E0+24+kv.html


We would consolidate two complementary players in medium voltage…

MV switchgears & systems

Distribution Transformers

GridAutomation

Fill the gap with

no.1

Balance global

footprint

Complementarysmart

grid offerings

Combined sales~€ 4.6 bn

80 plants~ 22,000 employees

~45% in new economies

Extensive marketcoverage



…with geographical fit in key markets and exceptional presence in new economies

Strong complementarities in new economies

Areva DSchneider Electric MV

ChinaIndiaBrazilRussiaMiddle East

Further reinforceour footprint in New Economies

Promising market trends in new economies

Industrial sites in new economiesAreva D (~20) + SE (~20) = ~40

Electrification and equipment needs

> 80% of global market growth in next ten years New economies ~43% ~47%

% of MV sales



… as well as important complementarities of customer bases and technologies

Strong complementarities in technologiesStrong fit of customer bases

Areva DSchneider Electric MV

Electrical utilitiesElectro-intensive*IndustriesBuildings

Wider range of technologies Wider range of end-users

MV switchgear Areva D stronger in primary MVSchneider Electric stronger in secondary MV

Transformers Complementary footprint

Grid automation

Areva D substation automationcomplements Schneider Electricoffers in smart grid

* Notably Oil & Gas, MMM …


Creation of Energy: a new business with proforma sales of ~€4.6bn and 22,000 employees

Key market segments

Key product lines

• Utilities• Oil and gas

Areva D€ 1.7 bn

IT

Power

(MV +LV )

Buildings

IT

Power

Industry

Buildings

Energy

5 Businesses

critical power & cooling

LV Power

Industrial automation

Buildingautomation& security

MVdistribution

IS&C

Grid Automation

• Retail• Hotels• Hospitals• Offices

• Data centers• Bank / Insurance

• Residential• Marine

4 Businesses

€ 4.6 bn

Industry• OEMs • Water• Mining CST


Conclusion

Strong presence in fast growing new economies

Strong industrial rationale

A fruitful combination for the future between Areva D and

Schneider Electric

A perfect fit to our medium voltage business

A move supporting our solution approach to utilities and electro-intensive customers


Introduction04

33 Conclusion


20 Alstom & Areva T



Areva Transmission: a major step forward for Alstom’s growth

Alstom today : two Sectors Alstom tomorrow : a group based on three strong pillars

Sales: ~ €22 billionEmployees: ~ 100 000

Power Transport

Sales: ~ €19 billionEmployees: ~ 80 000

Stronger presence in Asia

•China: from 7000 to 10 000 employees

• India: from 4 000 to 6 500 employees

Strong technological base

•R&D spending grows to

~ €750 million

More balanced spread of activities

•Transmission: an activity combining projects and products; smaller projects; less cyclical

POWER TRANSPORT POWER TRANSPORTTRANSMISSION


2,42,9

3,4

-

1.0

2.0

3.0

4.0

2006 2007 2008

Sales and operating margin(in € billions)

Industrial and employee data21 000 employees65 sites

2008 sales breakdown (estimated)

Areva Transmission: World n°3 in high voltage

HV Products

Systems & Services

Grid automation

Europe

Asia-Pacific

Rest of the world

North America


Areva Transmission: a promising asset…

A sound long-term market

•Global population and economic growth

•Ageing installed base

•New equipment in emerging markets

•Energy efficiency and environmental regulations

A global player

•Present in 160 countries

•Leader in Europe

•Very well positioned in the Middle East

•Number 1 in India

Market leader

Gas insulated

switchgears (GIS)

Instrument transformers

Disconnectors(DSC)

Energy management

systems for the transmission grid


…that Alstom will develop in the future

Worldwide presence Customers

•Optimise utilities commercial base

•Develop the industrial customer base (aluminium…)

•Develop the commercial position in China

•Strengthen the presence in North America

Product and services offering

•Turnkey substations

•Power electronics HVDC/FACTS*

•Develop services and refurbishment (installed base and service network)

• High Voltage Direct Current - Flexible Alternative Current Transmission Systems


Technology leader strategy Priority development axes

• R&D projects and pilot installations

• Partnerships − Universities, laboratories− Start-up

• Acquisitions

Variable speed pump turbine

Energinet – management of renewables

Smart gridControl systems

Power electronics

Power management HVDC Point to point

Automation

Renewables

Shared ambitions


United KingdomSheringham Shoal

RussiaBogushany

IndonesiaPLN 10GW 150kV .

South KoreaKepco II HDVC

Qatar - Phase 8 Dubai - BarshaBahrain- Alba

LibyaSebha &Tobruk10 GIS stations

CanadaRiel substation

Areva TAlstom

Main projects

Shared competenciesExpertise in managing and controlling large integrated projects


Areva TAlstom

Tianjin, Wuhan – ChinaEnvironmental protection

systems,Hydropower turbines

Baroda, Chennai - IndiaTransformers, GIS

Circuit breakers

Elblag - Poland Foundry

Chattanooga – USASteam turbines,

Boilers

Gebze - TurkeyTransformers

Shanghai, Wuhan - ChinaTransformers, GIS

Main production centres

Areva TAlstom

Main investments

Shared competenciesA global and flexible industrial base close to key markets


Alstom Areva TInternational PowerConstellationHydro QuebecGeneral ElectricChevronCFEAlcan/Rio Tinto

Americas

Alstom Areva TEDFEndesaIberdrolaGDF SuezArevaE.ONVattenfallRWEBOTNational Grid

Europe

Alstom Areva TNTPCRelianceEVNMarubeniPower GridBabcock & BrownSGCCPLNCTGPCCGNPC

Asia / Pacific

Alstom Areva TEskomSECSonelgazGecolDEWAADWEA

Africa/Middle East

Main Alstom and Areva Transmission customers

√ √ √ √

√ √ √ √ √ √ √

√ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √

√

√ √

√ √

√ √

√

√

√

√ √ √ √ √ √ √ √

√ √

√ √

√ √

Shared customersA strengthened commercial base


Introduction04

33 Conclusion


20 Alstom & Areva T



Alstom & Schneider Electric, committed to corporate social responsibility

● A history of strong and shared company culture

● A continuous social dialogue supporting each company’s transformation

● Respect, diversity & development of people at the heart of human resources policies

Signatory of


A transparent integration project for all Areva T&D employees

Willingness for dialogue and sharing with all employees

A transparent communication at each step

A rapid transition associatingT&D teams


Solid social commitments for Areva T&D employees

● Integration of all T&D people● All Areva T&D people, either in Alstom or Schneider Electric● In Europe, if necessary, propose to the employees an equivalent

position in the same geographical area while maintaining their grade, seniority and remuneration

● In Europe, people and sites maintenance● No site closures, up until the beginning of 2013● No mass redundancy plan other than voluntary one, unless in

case of a significant downturn in the general economic conditions

●Continuity● Maintenance and development of social policies and practices

from Areva T&D


Introduction04

33 Conclusion


20 Alstom & Areva T



The transaction timeline

Exclusivity period

Consultation of works’ councils Regulatory approvals

Acquisition of Areva T&Dthrough a common vehicle

Allocation of T to Alstomand D to Schneider

Announcement Signing Closing

Approval by Commission des Participations et des Transferts (CPT)

Areva T&D,Alstom & Schneider Electric

Creating two global leaders to tackle the new smart grid challenges

Documents

Acquisition project of Areva Transmission & Distribution and Even… · 11 Press Conference - Alstom / Schneider Electric – 2 December 2009 A drastic increase of turnkey project