Strategy update and bondholder solicitation - Arevawebcast.areva.com/20160830/market_update/materials/... · Strategy update and bondholder solicitation | August 30, 2016 | p.2 Disclaimer

Strategy update and bondholder solicitation

August 30, 2016

Strategy update and bondholder solicitation | August 30, 2016 | p.2

DisclaimerAREVA's operations, financial situation and results, as well as the risk factors related to it, are described in the AREVA Reference Document, which was

filed with the Autorité des Marchés Financiers (AMF) on April 12, 2016 under number D. 16-0322 (the Reference Document), which is available on the

AMF website (www.amf-france.org) and on the AREVA website (www.areva.com). Chapter 4 of the Reference Document describes the risk factors to

which AREVA is exposed.

This document does not constitute a prospectus under the meaning of the directive 2003/71/EC of November 4, 2003. This document does not contain,

does not constitute, is not part of and should not be considered as an offer, an invitation or a solicitation for an investment in financial securities in

France, the United States or any other jurisdiction. Any offer of AREVA's financial securities may only be made by virtue of offering documents

specifically prepared for that purpose. Any investment decision should be made only on the basis of offering documents specifically prepared for that

purpose. This document has not been authorized or approved by any regulatory authority.

AREVA's financial securities have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the Securities Act) and may

be offered, sold or subscribed in the United States only within the framework of an exemption or a transaction not subject to the registration requirements

of the Securities Act. AREVA has no intention of registering all or part of an offer in the United States or of carrying out an offer of financial securities in

the United States.

The distribution of this document and of the information it contains may be the subject of legal restrictions in some countries. Persons who might come

into possession of it must inquire as to the existence of such restrictions and comply with them. Any breach of these restrictions is liable to constitute a

violation of applicable rules in the countries concerned.

Some of the information included in this document and other information reported or to be reported by AREVA constitute forward-looking information, not

historical facts. This forward-looking information refers to the future prospects, development and strategies of AREVA and are based on an analysis of

forecasts of future income and estimates of amounts that cannot yet be determined. By nature, the forward-looking information includes risks and

uncertainties insofar as they refer to events and depend on circumstances that may or may not occur in the future. AREVA draws your attention to the

fact that the forward-looking information does not constitute warranties as to AREVA's future performance and financial situation, AREVA's results and

cash flows, and that the development of the industrial segment in which AREVA operates may differ significantly from forward-looking information

mentioned in this document.

AREVA draws your attention to the fact that certain contemplated events, elements or features of the restructuring are conditional or depend on

approvals or decisions by other parties and therefore AREVA may not guarantee that all such events, elements or features will occur or be implemented

as contemplated.

Moreover, even if AREVA's financial situation, results and cash flows and the development of the industrial segment in which AREVA operates are

consistent with the forward-looking information mentioned in this document, these items might not be representative of results or developments of later

periods. AREVA makes no commitment to revise or confirm the forecasts and estimates of analysts or to make public any revision of forward-looking

information in order to reflect the events or circumstances that might occur subsequent to the date of this document. These risks and uncertainties

include the risk factors described in the Reference Document.

http://www.amf-france.org/

http://www.areva.com/


Today’s agenda

► Update on strategic roadmap implementation

► Update on NewCo’s performance

► Bondholders’ consent solicitation


STRATEGIC REFOCUSINGUpdate on strategic roadmap implementation


AREVA SA

OTHER

SHAREHOLDERS

NewCo

Reminder of proposed structurepost-reorganization

FRENCH STATE,

CEA & BPI

0-13.5% 86.5-100% 0-33%

STRATEGIC

INVESTORS

Other

subsidiaries

(o/w AREVA

Business Support)

AREVA NC

(Front End &

Back End)

AREVA

MINES

100% 100% 100%

AREVA NP :

OL3 project(1) and

certain contracts

(1) AREVA NP will ensure the completion of the OL3 project,

with personnel continuing to be fully mobilized, in compliance

with contractual obligations

a + b ≥ 67%a b

a

b

NEW NP(2)

15% - 25%

(2) NEW NP : AREVA NP operations, excluding the OL3

projects and certain component contracts


Bonds to be transferred to NewCo simultaneously with assets

AREVA SA NewCo

BOND DEBT(2)

BANK DEBT

(bilateral, RCF & bridge

loan(1))

OTHER SUBSIDIARIES(o/w AREVA Business Support)

AREVA MINES

OTHER ASSETS AND

LIABILITIES

SHARE OF CASH

AREVA NC

(Front End & Back End)

(2) Excluding 2016 bond, which will mature before the

assets and debt transfer is completed(1) Bridge loan currently undrawn

SHARE OF CASH

OTHER FINANCIAL DEBT

AREVA NP:

OL3 project(3) and certain

contracts


NewCo net median value: € 6.5 Bn before cash and financial debt

► AREVA SA to transfer all nuclear fuel cycle assets and liabilities to NewCo

Simultaneous expected transfer of the shares of AREVA Business Support, AREVA

Mines, AREVA NC (and their subsidiaries) and the bonds debt as of 2017

AREVA SA Extraordinary shareholders meeting to be called on November 3, 2016, to

approve partial asset contribution

Approval of the partial transfer of assets by the AREVA SA Board of Directors on August

29, 2016

The assets transfer is subject to certain condition precedents (as detailed in the

contribution documentation) and to bondholders approval

Two independent contribution auditors (“commissaires aux apports”) to review the

valuation process and provide written reports to shareholders

Fair market valuation performed by an independent institution and approved by the

AREVA SA Board of Directors on August 29, 2016


AREVA SANewCo

Values at June 30, 2016

before capital increase

OTHER SUBSIDIARIES(o/w AREVA Business Support)

Subsidiaries held for

sale

Share of cash

AREVA NP:

OL3 project(3) and certain

contracts

(2) Bridge loan currently undrawn

Transfer of assets: snapshot before capital increases

€5.9 Bn

€1.4 Bn

Median equity value

€2 Bn(4)

Fuel business cycle

median net value(4)

€6.5 Bn

FUEL BUSINESS CYCLE

Other assets and

liabilities

(4) Median real proforma value established from

multi-criteria method net of non financial liabilities

(e.g. pensions, end of cycle obligations and other

provisions). Transfer of assets to New AREVA

holding will be effected at book values.

FINANCIAL DEBT

o/w bonds(1) and other debt

BANK DEBT

(bilateral, RCF & bridge

loan(2))




SHARE OF CASH

NewCo SHARES

(1) Excluding 2016 bond, which will mature before the

assets and debt transfer is completed


Proposed capital increases tailored to the needs and purposes of each entity

AREVA SA NewCo

Capital increases in the total

amount of €5 Bn(1) subscribed by

the French State and third party

investors, targeted in Q1 2017

€3 Bn

(1) Subject to approval by the European Commission and success of current discussions with several

potential third-parties

€2 Bn €3 Bn


► Signing of a memorandum of understanding with EDF, confirming the sale of AREVA NP’s

operations

Sale to EDF and other investors of AREVA NP’s operations (excluding specific contracts, one

of them being OL3) in accordance with the chosen legal structuring scheme (option B(1))

o Transfer of AREVA NP operations to a new company, “NEW NP”, subsidiary fully

owned by AREVA NP, to be transferred to EDF at the closing of the deal

o Specific contracts, including the OL3 contract, are kept within AREVA NP (which

remains a subsidiary of AREVA SA), with dedicated resources and in compliance

with contractual obligations.

Indicative price at €2.5 billion (for 100% of its equity) for NEW NP operations (excluding

specific contracts, one of them being OL3)

Implementation of liability warranties for Component contracts

► Sale of operations subject to acceptability of the FA3 reactor vessel

► Deal expected to close in the 2nd half of 2017

Update on proposed sale of AREVA NP’s operations

(1) cf. Market Update presentation of June 15th, 2016


On track to deliver the strategic refocusing program

Solar energy

End of AREVA's operational involvement in solar operations in March 2016

Bioenergy

Decision made to cease operations as soon as projects in progress in France

and Asia have been completed

Canberra

Sale to Mirion completed on July 1st 2016

Adwen

AREVA has until mid-September to either: Sell its share in Adwen to Gamesa, or

Sell 100% of Adwen’s shares to a third-party investor which may submit a more

attractive binding offer during this period; the sale of the entire capital is made possible

by AREVA's drag-along right on Gamesa’s stake.

AREVA TA

Closing targeted for late 2016


Transactions

on share

capital

Q2 2016 20172017H2 2016

Shareholders’

Meeting: Capital

increases(1) for

AREVA SA and

NewCo

Structuring and

carving out of NEW NPSale of NEW NP(2)

Closing of

AREVA TA

sale

Targeted sequence of events

European

Commission

NEW NP

sale

Asset

sales

(2) Subject to the conditions mentioned on slide 10

Choice of a buyer for

Adwen

Bond transferTransfer of

bond debt

Shareholders’

Meeting:

Creation of

NewCo

Bondholders

consultation

Temporary guarantee

of AREVA to the

bondholders

Sale of

Canberra

Signature of

the proposed

partial transfer

of assets

Signing of the

binding offer

European

CommissionDiscussions of the French authorities

with the European Commission

Approval of the

State aid by the

European

Commission

(1) Subject to approval by the European Commission and success

of current discussions with several potential third-parties


End 2016

estimated

+ 1.3

Interim

financing

- 1.0+ 1.2

September

debt

repayment

Other current

borrowings

- 0.2

Gross cash

as of January

5th, 2016

Other current

borrowings

- 0.1

Net CF from

company

operations

- 1.0

Net CF from

company

operations

- 0.5

+ 2.8

Credit lines

+ 2.0

End 2015

+ 0.8

+ 0.1

+ 0.7

Gross cash other entities

Gross cash AREVA SA

Expected improvement of the Net Cash-Flow from company operations guidance at - €1.5bn

for 2016, at the top of the previous range

Going concern assured by the capital increase(1) that should take place in early 2017, replaced

by a shareholder loan(1) in case of delay

Enhanced liquidity outlookgiven improved cash flow

First half of 2016

2016 Net cash-flow

from company

operations of - €1.5 Bn

Second half of 2016

(1) Subject to approval by the European Commission and success of current discussions with several potential third-parties


AREVA SA configured to meet its 2016-2019 commitments(1)

► Plan for capital increase(2)

0.2

Resources

1.4

3.2

2.0

Requirements

0.6

2.5

0.2

3.4Repayment of debt

►

►

Interest on debt

Net cash flow from company

operations (including the

completion of the OL3 project)

►

Sensitivity of proceeds from sales

►

►Opening cash balance

► Proceeds from sales:

AREVA NP

Canberra, AREVA TA and others

(1) 2016 – 2019 resources and requirements as from January 1st, 2016, including credit lines drawn in January 2016



NewCo set to meet its 2016-2019 financial requirements(1)

► Plan for capital increase(2):

Commitment from the State

to ensure its full success

Discussions underway with

strategic partners

0.7

1.8

0.5

Resources

0.5

1.5

3.0

Requirements

0.8

1.1

0.7

Repayment of debt

►

►Interest on debt

Net cash flow from NewCo

operations

►

Sensitivity factors of NewCo

►

► Opening cash balance

► Other resources

Minimum cash reserve

►

(1) 2016 – 2019 resources and requirements as from January 1st, 2016, including credit lines drawn in January 2016



► Improved business risk profile: refocus on lower risk and growing

businesses with more predictable revenues and cash flows

An improved business profile for NewCo

Shareholders

Operations

Balance

sheet

► Committed shareholders: French State is committed to supporting the

capital increase(1) and maintaining at least 2/3 majority ownership, directly

or indirectly, via AREVA SA

► New investors: re-focused business model aimed at attracting third-

parties into NewCo’s share capital(1) in 2017

► Improved access to capital markets: improved financial position post

capital increase(1) will provide the company with potential to finance itself

in the mid term

► Stronger credit position: direct creditors of NewCo and therefore direct

benefit of the assets and cash flows of the core performing businesses,

transferred simultaneously to NewCo with the bond debt

► Enhanced rating prospect: S&P announced initial preliminary rating

expected in line with AREVA SA, with upside potential as soon as the

capital increase would be completed



UPDATE ON NEWCO’S PERFORMANCE


► Strong position on the fuel cycle, anchored in proven technologies and backed by

innovation capabilities

► International presence with solid partnerships, to be a leading player in the nuclear

industry’s development, particularly in Asia

► Operating resilience, with a backlog representing the equivalent of 8 years of revenue

► Improved profitability through an ambitious performance plan and by refocusing on

comprehensive, well-managed operations

ratio of EBITDA to revenue of 22% to 25%(1)

ratio of EBIT to revenue of more than 8%(1)

► Strengthened cash generation thanks to a renewed industrial base and plants

capable of operating on a very large scale

NewCo: focused on the fuel cycle,ready to capture market opportunities

targeted in 2020

(1) Guidance presented on June 15th 2016 in the Market Update, adjusted considering the depressed front-end markets


2015 revenue by business(1)

NewCo : a business profile well balanced

Mining

Front End

35% (37% at June 30, 2016)

26%(20% at June 30, 2016)

Back End

38%(43% at June 30, 2016)

Backlog by business at the end of June 2016 (€Bn)

Mining

Front End

Back End

9.4

11.5

11.6

32.8(1)

Total

backlog:

(1) Including the Corporate activities


Set to continue delivering on performance plan

272

Achieved

2015(1)

456

332

70

54421

268

62

91

405

251

58

96

+€51m

03.16

103

12.15(1)

210

79NewCo

Objective

2018

1,000

50%

50%

In place

Secured

Identified

2016 2017

€500 m

New savings identified to meet the cost reduction objective

of €500m for NewCo

661

315

124

222547

251

103

193

509

236

89

184

+152m

(1) Data as of December 31, 2015 adjusted from the cycle engineering, transferred from AREVA NP to NewCo

06.1603.1612.15(1) 06.16

Subsidiaries

held for sale

(AREVA NP, …)+ 13%

+ 30%


+7pts.

H1 2016

29.2%

2015

28.8%

H1 2015

22.2%

1 9301 833

4 175

+5,3%

H1 20162015H1 2015

Revenue (in €m)

NewCo: Key figures as of H1 2016Improvement of performance, except for the OCF

(unfavorable WCR variation)

EBITDA(in % of revenue)

Operating income(in €m)

191

- 411

+137m

H1 20162015H1 2015

54

388

704

-318m

H1 2016

70

2015H1 2015

Operating cash flow(in €m)


25%

36%

Mining (in % of revenue)

Perspectives of NewCo EBITDA margin highlighting solid and balanced profitability across all businesses(1)

Front-End(in % of revenue)

Back-End(in % of revenue)

NewCo(in % of revenue)

20%

29%22% to 25%

Average c. 20%

15%

20%

> 15%

2020

Average c. 40%

2015

42%

2014

35%

2017 2018 2019

202020152014 2017 2018 2019

202020152014 2017 2018 2019

202020152014

(1) Guidance presented on June 15th 2016 in the Market Update, adjusted considering the depressed front-end markets


Sensitivity of NewCo’s cash generation to key assumptions

► EUR / USD exchange rate: sensitivity cushioned by currency hedges

2017-2019 period: +/- 10 cents impacts the financial trajectory by +/- €40 m

2020-2025 period: +/- 10 cents impacts the financial trajectory by +/- €220 m

► Natural uranium price: sensitivity cushioned by the backlog

2017-2019 period: +/- 5 USD / lb. impacts the financial trajectory by +/- €20 m

2020-2025 period: +/- 5 USD / lb. impacts the financial trajectory by +/- €220 m

► SWU price: sensitivity cushioned by the backlog

2017-2019 period: +/- 5 USD / SWU impacts the financial trajectory by +/- €20 m

2020-2025 period: +/- 5 USD / SWU impacts the financial trajectory by +/- €90 m

Economic

assumptions

that could

impact net cash

flow from

company

operations

Specific

strategic

assumptions

that could

impact net cash

flow from

company

operations

► Export business in the Back End: projects in Asia, signature of new contracts

► End-of-lifecycle obligations: sensitivity to interest rates, regulations, advances in

technology

► Installed base safety: strengthening of safety measures by all industry players,

reputation risks

► Successful legal and financial restructuring

► Asset sale prices

► Country risk


► Entity benefiting from an Investment Grade business model thanks to

A refocus on healthy and resilient businesses

Strong market positions and backlog

Good profitability even after restructuring costs and contingencies

► A sound financial profile reflecting

Predictable earnings and cash flow from long term contracts

Positive free cash flow position

A deleveraged balance sheet

► Continued long term support of the French state remains accretive to

NewCo’s credit profile and rating

NewCo intends to return to capital markets for financing in the mid term


BONDHOLDERS’ CONSENT SOLICITATION


750

200

750

500

750

68

800

975

202320222021 2024

1,000

20202019201820172016

Post 2016 bonds to be transferred to NewCo

(*) Private Placement, (**) JPY 8bn Private Placement, consent will be solicited on a bilateral basis (JPY/EUR: 0.0084)

Outstanding amount

(in €m)

FR0011125442 FR0011566280** FR0010817452 FR0011560986 FR0010941690 FR0011227339* FR0011791391 FR0010804500ISIN code


Bondholders consent solicitation

► Approve the Partial Asset Contribution and the transfer of post-2016

bonds to NewCo

► Add a temporary guarantee from AREVA SA to the holders of the

bonds being transferred to NewCo: the guarantee will remain in place until

after a capital increase of €3bn is completed at the level of NewCo

► Add a reporting requirement to the T&Cs of the bonds, ensuring that

NewCo will continue to publish consolidated financial reports semi-

annually (as long as transferred bonds are outstanding)


Bondholders to benefit from irrevocable joint and several guarantee until completion of NewCo capital increase(4)

AREVA SA NewCo

Subsidiaries held for sale

AREVA NP :OL3 project(1) and certain contracts

Share of cash

Fuel business cycle

Bond Debt(3)

Temporary

Parent

Guarantee

FOCUS ON

TEMPORARY

GUARANTEE




Other financial debtBank debt(bilateral, RCF & bridge loan(2))

(2) Bridge loan currently undrawn

(4) Subject to approval by the European

Commission and success of current discussions

with several potential third-parties

(3) Excluding 2016 bond, which will mature before the assets

and debt transfer is completed

NewCo shares

Other assets and liabilities

Share of cash


► To ensure that existing bonds continue to be backed by all of

AREVA Group’s assets, including those that remain at AREVA SA,

until completion of NewCo’s capital increase(1)

Temporary parent guarantee

Purpose

Form of the

guarantee

Conditionality

Expiration

► Irrevocable joint and several guarantee (“cautionnement solidaire”)

to the benefits of the holders of each series of bonds (i.e. a guarantee

for each series), as if AREVA SA remained the issuer of the bonds

► The temporary guarantee will become effective as of the

implementation of the Partial Asset Contribution, subject to

receiving the relevant consents by bondholders and the Extraordinary

general meeting (EGM) approval and the completion of the condition

precedents set out in the contribution documentation

► The temporary guarantee will expire following the completion of

the planned capital increase at NewCo for an amount of €3bn

FOCUS ON

TEMPORARY

GUARANTEE



Payment of Consent Fee

► If the proposal is accepted by all series of bonds, AREVA will pay a

consent fee of 0.25 per cent on the notional amount of each bond(1)

► The payment date is expected to be on the 3rd business day after

approval by the EGM scheduled for November 3rd, 2016

► The fee will be paid to holders as of the applicable Account Holder

Certification deadlines (14th or 19th September), in line with the

Consent Solicitation Memorandum (the “CSM”)

(1) AREVA retains the right to withdraw the proposal at any time


Practical details (1/2)

Bondholders meetings(1):

► Date: September 19, 2016 on 1st consultation

► Time: from 9:00 a.m. (Paris Time) until 12:00 p.m. (noon - Paris Time)

► Location: Allen & Overy LLP – 52, Avenue Hoche 75008, Paris, France

Quorum and Majority:

► For each bond series, quorum is 20% of outstanding amount at the first

meeting (any amount at adjourned meeting)

► A majority of 2/3 of the votes cast at the meeting is required to approve

the resolutions

(1) Not applicable to the 2018 Private Placement


Physical Vote

By Proxy

By

Correspondence

Practical details (2/2) How to vote:

Provide an account holder certificate dated no later than:

► March 2022 notes only: 19 September 2016

► All other bond series: 12:00 a.m. (midnight - Paris time) on 14 September 2016

Provide valid voting documents to the centralising agent no later than:

► By post or by email: 16 September 2016 (being the final reception date)

Provide valid voting documents to the centralising agent no later than:

► By post or by email: 16 September 2016 (being the final reception date)

Voting Documents may be obtained from the Centralising Agent:

BNP PARIBAS Securities Services

Les Grands Moulins de Pantin

9, rue du Débarcadère 93500 Pantin, France

Email: [email protected]

Fax: +33 140 14 58 90

mailto:[email protected]


Key dates

(1) Subject to all conditions being satisfied or waived

30th 2nd

Webcast &

investor

presentation

NOVEMBER

Consent fee

payment date(1)

16th

Voting Deadlines

(post and email)

19th

1st Bondholders

meetings

SEPTEMBER

22nd

Results announced,

or, if no quorum, launch

of the 2nd meetings (i.e.

notice sent to

bondholders)

3rd

EGM to

approve Partial

Asset

Contribution

8th

AUGUST

Launch

of consent

(i.e. notice

published)

OCTOBER

7th

2nd Bondholders

meetings


For more information

► Holders of the bonds should refer to the Consent Solicitation Memorandum

dated 30 August 2016 (the “CSM”), available from the centralizing agent, for

the full terms and conditions and applicable restrictions of the Consent

Solicitation

► Any questions on the Consent Solicitation can be directed to:

AREVA IR contact :

Manuel Lachaux ([email protected] / +33 134 96 11 53)

The Solicitation Agents :

BANCO SANTANDER, S.A. ([email protected] /

+44 207 756 6909 )

CA-CIB ([email protected] / +44 207 214 5733)

HSBC [email protected] / +44 207 992 6237)

► Questions on procedures to submit votes should be directed to the Centralizing

Agent

Email : [email protected]

Fax : +33 140 14 58 90







Conclusion

► Split of the AREVA Group in 2 entities configured to meet their

commitments

► NewCo, focused on the nuclear business cycle, would take

advantage of any anticipated market recovery and would generate

substantial cash-flows

► We rely on the support of our bondholding partners to accompany

the group reorganisation and ensure its recovery


APPENDIX


List of all legal & marketing documents available to investors(1)

Documents available to investors

(1) Not applicable to the 2018 Private Placement

► Marketing:

Press release

Market Update presentation

► Legal:

Consent solicitation Memorandum containing

inter alia the letter of the Directeur Général of

AREVA, the asset transfer agreement, the

temporary guarantees and the resolutions

Notice for the 1st bondholders meetings

Voting documents obtained from the

centralizing agent

Result notice if quorum

DATE OF RELEASE

September 2, 2016

August 30, 2016

From September 2, 2016

As soon as reasonably practicable

after the meetings

August 30, 2016

August 30, 2016