areva dec0506

Business & Strategy overview

Solutions for power generatorsand distributors

November 2006

> Group Overview – November 20062

Agenda

2

1. Group’s overview

2. Market trends for electrical sector

3. Strategy and objectives

4. Outlook


AREVA provides technological solutions for CO2-free power generation and Transmission & Distribution

Breakdown of AREVA sales in 2005 (€10,125M)

68%

N°1 worldwide in Nuclear€6,9bn

2004 market value:€23bn

Market share: 30%

32%

N°3 worldwide in T&D2005 market value:

€42bn

Market share: 8~9%( vs ABB: 18~19%, Siemens ~13%)

€3,2bn

2005 Sales by business Geographic sales

33%

7%12%

18%

30%

France

Europe (Excl. France)

Americas

Asia

Other


AREVA is ranked first worldwide in nuclear

Sales in the nuclear business

in millions of euros

No.1 worldwide; No.1 in Europe and the USNo.1 in Plants / FuelNo.1 in the Back End

1 386

3 270

1 322

2019

431689

1 6521 1351 317 1 160

798292

1 143

330

0

1000

2000

3000

4000

5000

6000

7000

Areva FAAE West +Tosh

MHI HITCHI USEC GE Nuclear URENCO CAMECO AECL

No. 3 worldwideNo. 2 in Plants / Fuel

1328

W

T

Westinghouse+ Toshiba

HITACHI

Front end (excl. fuel) Reactors & Services + Fuel Back end


MINING

CHEMISTRY

ENRICHMENT

FUELFABRICATION

REACTORS

OTHER SOURCESOF ELECTRIC POWER

TRANSMISSION

DISTRIBUTION

USED FUELMANAGEMENT

RECYCLINGMOX FUELFABRICATION

SERVICES

AREVA is present on each segmentin its businesses

STMicroelectronics*(11% via holdings)

Eramet* (26%)

Investments

SAFRAN (7.4%)

* Consolidated at xx%

Energy

5

34% in AREVA NP


2005 Key data by division

Current operating income by division

€746M

Sales by division€10,125M

Transmission & Distribution Front-End

Reactors & Services

Front-End

Back-End

Transmission & Distribution

19%

32% 26%

23%

Back-End

28%

12%

47%

13%

Reactors & Services


Sales €10,125M(+3.7% like-for-like*)

Strong organic growth

Current operating income €746M / 7.4% of sales(+1.5% vs. 2004**)

Stable overall – Improvement in T&D

Consolidated net income €1,049M****(+133% vs. 2004*)

Up significantly, due in particular to sale of FCI

Free operating cash flow €783M(stable vs. 2004*)

Stable at exceptionally high level

Net debt €268M(vs. €566M at 01.01.05)

Financial structure remains very strong

Dividend proposed to AGM*** of May 2, 2006 €9.87Dividend up 2.9% compared with 2004

Key financial data

Comparable exchange rates and consolidated group. ** Adjusted for FCI disposal *** Annual General Meeting of Shareholders **** Includes net income from the disposal of FCI in 2005 representing €528M


A strong balance sheet

0.92.4

1.4 2.5

4.64.9

0.2

4.46.5

2.2

Assets Liabilities

Goodwill

Fixed assets

End-of-life-cycleassets

Financial assets

Shareholders’equity

Minority interests

Provisionsfor end-of-life-cycleobligations

Other provisions

WCR

Net debt*0.588 incl. 1.08 for Siemens ** put

Shares of associates

= 15.3 =

(*): Net debt = financial debt including interest-bearing advances + minority interest holders’ puts - HFT securities - fin. current account assets** : Siemens 34% share in AREVA NP

In billions of euros

At 6/30/2006


Capital structure

CEA + FRENCH STATE + ERAP

87%

Investment CertificateHolders (free float)

4%

Total

1%

Employees

2%

EDF

2%

CDC

4%

o/w 15%

in a CEA decommissioningfund


Agenda

10




4. Outlook


Worldwide demand for electricityto double by 2030

Worldwide electric power generation (in TWh)

2004 – Worldwide distribution of

electric power mix

$10,000bn Investments expected in the electricity sector

$5,600bn in the T&D sector

$4,400bn in generationcapacities

Sources: IEA-Energy Information (2006), IEA-World Energy Outlook (2004), WNA 2005

Oil7%

Renew.19%

Nuclear16%

Coal39%

Nat. Gas19%

0

5 000

10 000

15 000

20 000

25 000

30 000

35 000

1990 1995 2000 2005 2010 2015 2020 2025 2030

gross TWh

AFRICA / MIDDLE EAST

NORTH / SOUTH AMERICA

EUROPE

ASIA / OCEANIA

1971-2004 : + 3.7% /year 2004 - 2030 : + 2.3% /year


Global warming: a serious long term challenge

CO2 Concentration in Ice Core Samples andProjections for Next 100 Years

150

200

250

300

350

400

450

500

550

600

650

700

Years Before Present

Vostok RecordIPCC IS92a ScenarioLaw Dome RecordMauna Loa Record

Current(2001)

Projected(2100)

0100,000200,000300,000400,000

Years before 1950

2002

19001958

CO2 concentration in ice core sample and projection until 2100

Unit: CO2 (ppm/v)

Projection for 2100


Nuclear power: a necessary part of the solutionfor power generation for 4 main reasons

Nuclear doesn’t release CO2:no greenhouse effect1.

2.

3.

4.

Low price of generationand virtually immune to uranium price fluctuations

Fossil resources are limitedand uranium conventional resources are 200 times 2005 demandEnergy self-sufficiency:uranium is present in stable countries

60%

27%

14%

Operations & Maintenance

Fuelo/w 6% for uraniumInvestment &

Decommisioning / spent fuel management

Nuclear MWh cost split

Average MWh cost for new plants (Europe) CO2 emission / MWh generated (in kg)

Nuclear (uranium @ 40$/lbU3O8) € 30 6

HydropowerCombined cycle gas (@ 6$/Mbtu)WindCoal (@ 50$/ton CIF)OilSolar

€ 30€ 45€ 50€ 40

€ 100> € 450

4427

3 to 22978891

60 to 150

Sources: AREVA based upon EDF, Ampere Commission, Study for Finnish parliament, UK Royal Academy See appendix 1


Priorities in Nuclear for next decades

1. Improve performances of the existing reactors2. Extend life duration: e.g 44 of the 103 US reactors already licensed for 60 y

3. Replace existing reactors: 30% of WW capacity 4. Increase the installed capacity:

200

300

400

500

600

700

800

2004 2010 2015 2020 2025 2030

740

640

524

418390

WW nuclear installed capacity forecasts (GWe)

+ 7 %

WNA 2005 - highWNA 2005 - central

IAEA - highIAEA - low

US DOE-EIA - highUS DOE – EIA - central

+ 90 %

Construction neededbefore 2030

30 - 360 GWe120 GWe

150 - 470 GWe(i.e. ~120 - 400 reactors)


Market size evolution

35 36 35 36

4042

2000 2001 2002 2003 2004 2005

(in billion euros)

Constant T&D market growth

+5%

Average growth ~3-5%

Average growth 00-05: ~3,7%

Mid termForecast


Agenda

16




4. Outlook


AREVA is the only fully integrated playeron the Nuclear value chain

* Publicly traded company ** Compared to 2004, uranium market decreased in 2005 due to the diminution of tails assay which had implied an increase of the enrichment market *** SWU : Separative Work Unit

2005

Mar

ket

CAM

ECO*

UREN

CO

USEC

*

AREV

A

BNFL

/BNG

Gene

ral E

lect

ric*

OTHE

R

Conversion/Chemistry

Enrichment

Natural Uraniumfuel (UO2)

Reactors & Services

Reprocessing

Recycling& MOX fuel

20%

20% 25%

20%

25%

25%

30%

30%

70%

80%

BNFL, URENCOshareholder

30%

25%

25% (2)

25%

25%

20%

20%

10%

5%

20%

10%

5%

30%

JNFLin 2008 (3)

67,000 t

66,000 tU

41m SWUs ***

6,800 t

€ 11 b

1,550 t

185 t

FRO

NT

END

BA

CK

EN

D

Mining / Natural Uranium**

FAAE

(Rus

sie)

1%

20%

10%

10%(Hitachi, MHI)

30%

(1) USEC sells natural uranium and conversion services but has no production capacities

(2) In April 2005, the BNFL reprocessing plant has been stopped. An assessment of restart and non-restart options is still on-going.

(3) The JNFL reprocessing plant (800 t) and the Mox plant (130 t) should be in service in 2008 and 2014 respectively.

(4) The shutdown of Belgonuclear Mox plant in Dessel (Belgium) is planned for 2006

Tosh

iba

/ W

estin

ghou

se

5% (1)

5% (1) 5%

19% (4) (Belgonuclear)

JNFLin 2014 (3)


AREVA installed 26% of the worldwideexisting generating capacityMWe installed

(nr of reactors)

120,000

100,000

80,000

60,000

40,000

20,000

0

FRA

BW

SIE

AREVA(91)

(69)

(7)

(15)

(6)(1)

GE

(50)

FAAEVVER

(53)AECL

(31)

Wes

tingh

ouseToshiba*

(79)

(17)

Mitsubishi*

(18)Doosan*

(8)

(14)

(9)

ABB

Hitachi*

(12)

ABB

Source: AREVA

PWR BWR PHWR

* Licensed by: Westinghouse to Mitsubishi and Doosan G.E. to Hitachi/Toshiba ** Following Framatome's purchase of the commercial reactors business from B&W at the end of the 1990s, AREVA

may be considered as the preferred service partner for these reactors in the United States, although it is not liable as a constructor


Front End division -Key issues and priorities

in millions of euros 2003* 2004** 2005**

Sales revenues 2,683 2,524 2,631

Operating income 316 370 374% Sales 11.8% 14.7% 14.2%

Op. FCF before tax 340 106 197

Nr 1 worldwide in the overall front-endIntegrated player: possible one-stop shopping for utilitiesHightly recurrent sales - >3 years backlogPositive trend on market pricesexcept fuel Increase in electricity price could penalize margin in Enrichment

Strengths & issues

Double uranium production after 2010 and increase resources

Take advantage of price increasein our new mining contracts

Switch to uranium enrichment by centrifuge: €2.5bn capex over 2006-2018

Flexibility of our fuel plants

Increase market shares in fuel in the US and Asia

Key financials Strategic priorities

Sales – 2005 split

* French Gaap** IFRS

28%

11%

19%

42%

Mining

Chemistry

Enrichment

Fuel*(* 34%

in AREVA NP)


Mining: production and exploration set to grow

KazakhstanProduction set to increase sharply in 2006

Exploration program continues

CanadaCigar Lake startupin 2007Encouraging results in exploration (Shea Creek and Millenium)

NigerIncrease in production capacity

FinlandPermit to be issued before summer 2006

Production (metric tons of U)

~ 6,000

10,000 / 12,000

Production2005

Production2010

ExplorationProduction


Enrichment: the GB-II program

0%

20%

40%

60%

80%

100%

2009 2010 2012 2014 2016 2018

GB-II plant: ramp up scheduleAREVA anticipated the sharp increase of electricity cost

Decision to move to the centrifuge technologyJV with Urenco into ETC (closing july 3rd 2006)Cash-out H2 2006: €400 millions

Construction of the GB-II modular plant

Startup in 2009, to reach7.5 MSWU/year by 2018

Ultimate capacity based on market conditions

Resources to meet 2006-2012 commitments have been secured


CAPEX growing faster in the Front End since 2004

93126

196239

2002 2003 2004 2005 2006-2010E

~ 2.6 billions over the period



Reactors & Services division -Key issues and priorities

Be a long term partner for utilities to optimize reactor performance

Reinforce our position of N°1 reactor designer

Support the life extension of existing reactors (US, Europe, …)Market our EPR reactor

Increase margins in recurring business (first Gen III dilute margin)

~100 GW installed capacity WW – 25% total85% sales are recurring and 15% concern projects (new reactors and plant modification) The only company to have Gen.III reactors under construction (Finland, France)Some growing areas not open to AREVA (Japan, Korea, India, …)

Strengths & issues

Key financials





Strategic priorities



7%6%13%

10%

31%

33%

Nuclear measures

Reactors*

Services*

Equipment*

Technicatome

IS

(* 34%in AREVA NP)


Growth in recurring business, with a strong increase in market share in the United States

Sales revenue from recurring business in the United States

(in $M)

Sales revenue from recurring business (Plants / Services / Equipment)

(in €M)

0

200

400

600

800

1 000

1 200

1 400

1 600

2001 2002 2003 2004 2005

Plants (recurring) Services Equipment

,

,

,

,

0

100

200

300

400

500

600

2001 2002 2003 2004 2005


Contractsfor duplicationof the Ling Ao nuclear plant (2nd Generation)

Partenariat avec Constelation « UNISTAR »Certification lancée Démarrage prévu avant 2010

Tender submitted in February 2005 for 4 EPR reactorsOfficial decision expected

Partnership with Constellation: "UNISTAR"Licensing process started Startup scheduled before 2010

2005:Preliminary design End of public debatePlanning 2006-2012

2003: Contract2005: Certification

& License

Plants: current projects and tenders

NSSSNuclear islandTurnkey plants / Consortiums Primary coolant loop

25

Total Capex for theutility - $ (base 100) ~ 55 ~ 30 ~ 10


Update on performance of the OL3 contract

BackgroundFirst Generation III reactor under construction worldwide

Only reactor involving safety authorities during the design phase

Contract sets tight cost and schedule terms

Specific requirements of the Finnish approval process: technical documentation approval (customer) and detailed design approval (Safety Authority) as the work progresses

Financial impact: the group recorded a significant provision in H1 2006

Steps taken

New project teams director

Coordination of dedicated group resources under the direct authority of the Chief Operating Officer

Ongoing discussions with the customers to remedy current difficulties

Strengthened support so that the suppliers can more quickly achieve the level of quality required for nuclear projects


Outlook for future EPR sales

OL3 construction gives the group unique experiencein the worldwide market for Generation III reactors

The group will supply the nuclear island and instrumentation& control systems for the Flamanville EPR

Unistar deployment: Constellation Energy has reserved production capacities for heavy equipment for the firstUS-EPR reactor

AREVA is actively negotiating with several other customers


Back End division -Key issues and priorities

Nr 1 worldwide with >75% market shareHighly recurrent sales due to long term contracts: backlog runs through 2015More than 8,000 mt of spent fuelin La Hague waiting for reprocessing(i.e 8 y of production)Main investments completed Technology transfer through long term partnership: e.g Japan (Rokkasho Mura)

Renew reprocessing and recycling contracts

Optimize industrial efficiency of the two main plants (La Hague and Melox)

Market closed-cycle technologies WWManage the end of technology transfer with JapanParticipate in the new US back-end policyPromote our Gen 3 integratedprocessing-recyclng plant concept

Strengths & issues



Key financials






Logistics

CleanupEngineering

Treatment-Recycling

6%4%

9%

81%


New US policy orientation early 2006, regarding used fuel management

Global Nuclear Energy Partnership announced at the beginning of 2006

Recycling is recognized as a sustainable solution that uses uranium resources more efficiently

International system proposed to increase non-proliferation guarantees through

Nuclear fuel supplyRecycling of used fuel

AREVA (leader), Washington Group International (WGI) and BWX Technologies Inc. (BWXT) respond to the US-DOE’s request for Expressions of Interest regarding:

Development and deployment of an integrated Treatment/Recycling plantConstruction of an Advanced Burner Reactor (ABR)


T&D division -Key issues and priorities

A full fledged player: products & solutionsfor high and medium voltage technologies

A global sales force in over 100 countries

Focus on electrical utilities: N°2 WW

Strong presence in Europe: N°2

Lost momentum before acquisition by Arevain 2004

Restore profitability up to the peersin 2007

Change the industrial footprintOptimize and refocus the productportfolio Reduce costs and makeproductivity efforts

Increase our presence in growing areasBoost internal profitable growthSelective external growth

Strengths & issues

Key financials

in millions of euros 2004* 2005*

Sales revenues 3,186 3,211

Current Op. inc. 39 103% Sales 1.2% 3.2%Op. income (103) (61)

Op. FCF before tax (12) 116* IFRS



Products

Systems

Automation& information

Services

15%15% 38%

32%


2004-2007 optimization plan is successful

Refocusing on core business completed in 2005

Industrial restructuring in Europe (France, Germany, UK) completed

~290 million euros in cumulative restructuring expenses through 6/30/2006

2002 2003 2004 2005H1 2006

Current operating income(in % of sales revenue)

New orders(in millions of euros)

January 2004: Acquisition by AREVA

1.0% 1.2%

5.0% 2,9333,162

3,3175.9%

3,708

3.2%


Internal and external growth strategy

Construction of a new AREVA Switchgear Company plant in Xiamen(China)

Establishment of AREVAXiamen Vacuum Interrupter Company, a vacuum circuit breaker manufacturing JV

Acquisition of RITZ high voltage: AREVA becomes the world leaderin instrument transformers

Ongoing investmentin high-growth countries (China, India)

Investmentin capacity

GermanyFranceTurkey

U.S. CHINAXiamen

INDIAEUROPE


Agenda

33




4. Outlook


2006 outlook

Sales revenue growth

Operating income close to the level reached in 2005Despite significant impact of OL3 project

Thanks to contribution from other activities, expected to increase

Sharply negative free operating cash flow before tax due to:

Sharp increase in Capex scheduled for H2 2006 Use of customer advances


5 year objectives

Reach market share representing one third of the world’s nuclear market, with double-digit margin

Acquire a significant position in CO2-free power generationBe one of the most profitable leaders on the T&D marketTake advantage of opportunities

Appendix 1Nuclear: a necessary part of the solution


How to provide energy to growing population?

Energy situation in 1850-2000-2100 (WEC 98)

“Bus

ines

s as u

sual”

Conservation &

Solidarity

Average scenario

Source: World Energy Council 1998


0

5

10

15

20

25

30

1990 a1 a2 a3 B c1 c2

Coal Oil Gas Nuclear H+New

b2050

Gtoe

9

25

20

14

Primary Energy sources 1990-2050 according to the World Energy Council

* * * * * *

*a: strong growth & increase of wealth and productivityb: medium trendc: priority to ecology Source: Scenarii WEC-IIASA 1998


Favorable position of nuclear is confirmed by the life cycle analysis of energy sourcesby the World Energy Council, sydney 2004

FFFFFMUUAcceptability of energy(impacts on externalenvironment)

UUFFMMMFEnergy availability(security and reliabilityof supply)

UUFFMMMFComptetitiveness(linket to direct energy costs)

BiomassGasOilCoal

SunWindHydroNuclearType of fuel burnedImportant decision-making

criteria

Relative rank based on selected decision-making criteriaFavorableenergy sourceF M Medium/neutral

energy source U Unfavorableenergy source

Source: AREVA based on World Energy Council report of July 2004 “Comparison of Energy Systems Using Life Cycle Analysis


Nuclear is being consideredas the most competitive source of electricity

in base load, in competition with coal

0

10

20

30

40

50

60

70

N C G N C G N C G N C G N C G N C G N C G N C G N C G N C G N C G N C G

Canada USA CzechRepublic

Finland France Germany TheNetherlands

SlovakRepublic

Switzerland Romania Japan SouthKorea

Inv O&M Fuel$2003/MWh

OECD 2005 Study - Mean levelised cost of electricityin base load (5% discounting)


Projected cost of nuclear electricity in Europe is competitive with other baseload technologies

Levelized electricity generation costsin four recent European studies (€/MWh)

Belgium 2000*** Finland 2000** France 2003 UK 2004* AREVA adjustments asserting realistic / present fossile resources prices** Most recent values as of April 2001 prices by Tarjanne & Rissanen*** For Belgium, O&M costs are not separate from capital investment

See next slides for assumptions

0

5

10

15

20

25

30

35

40N

ucle

ar

CC

GT

Coa

l

Nuc

lear

CC

GT

Coa

l

Nuc

lear

CC

GT

Coa

l

Nuc

lear

CC

GT

Coa

l

Invest. O&M

Fuel Taxes R&D45 35.8 €/MWh*

if uranium @

40$/lbU3O8

45.1 €/MWh* if gas @6$/MBtu

39.2 €/MWh* if coal @

45$/ton CIF

36.9 €/MWh* if gas @6$/MBtu

29.8 €/MWh* if uranium @40$/lbU3O8


Recent European studiesA. Nuclear power generation data

FranceFinlandBelgium UK

5 years5 years5 years-Lead time

n.a36.1%35%33%Efficiency

€5/MWhe€4.40/MWhe

based on $20/lb U3O8

€3/MWhe€9.40 (2010) to

€11.50 (2030)/kWheFuel cost

7.5%8%7%5%Discount rate

€61.50/kW/year€5.09/kW/year + €0.61/MWh

€26.20/kW/yr + €3.40/MWh-O&M

€1,730/kWe without IDC

€1,413/kWe without IDC

€1,749/kWe incl. IDC

€1,686/kWe incl. IDC

Invest. Overnight

60 years

90.3%

EPR (LWR) 1,600MWe

series of 10

DGEMP study (2003)

40 years

91%

PWR1,250 MW

Lappeenranta University

(2000)

40 years

85%

PWR1,300 MW

Ampere Commission

(2000)

40 yearsService life

n.aLoad factor

1,000 MWReactor

Royal Academy of Engineering

(2004)Study data


Recent European studiesB. CCGT power generation data

Gas price

-- 2 years

60%55%55-65%

€3.10 to 3.30 (long term)/GJ€3/GJ€3.50 (2010) to

€6/GJ (2030)

7.5%7%5%

€450/kWe€572/kWe incl. IDC€496/kWe

€8.58/kW/year + €0.30/MWh

25 years

91%

400 MW


(2002)

-

20 years

85.5%

460 MW

Ampere Commission

(2000)

37.5 €/kW/year

25 years

n.d.

786 MWCapacity


(2004)

2 yearsLead time

59.1%Efficiency

€3.30(reference) to

$3.60/MBtu

8%Discount rate

€18.20/kW/year + €3.05/MWhO&M

€505/kWeInvest. Overnight

25 years

94.9%

900 MWe

DGEMP study (2003)

FranceFinlandBelgium

Service life

Load factor

Study data

UK


Recent European studiesC. Pulverized coal power generation data

4 years--

40%41%43%

€2.10/GJ€1.17/GJ€1.80/GJ

7.5%7%5%

€36/kW/year€16.30/kW/yr + €5/MWh-

€1,290/kWe€814/kWe incl. IDC€1,165/kWe

25 years

91%

500 MW

30 years

84%

300 MW

30 years

n.d.

1,600 MW

Coal price


(2002)

Ampere Commission

(2000)

Capacity


(2004)

3 yearsLead time

46-47%Efficiency

$30 to 35/MT CIF ARA

8%Discount rate

€26/kW/year + €2.30/MWhO&M

€1,100/kWeInvest. Overnight

35 years

90.2%

2x900 MW

DGEMP study (2003)

FranceFinlandBelgium

Service life

Load factor

Study data

UK


Nuclear power is a recent source of energyProduction increases faster than installed capacity

0

500

1 000

1 500

2 000

2 500

3 000

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005

Gross TWhSOUTH AFRICA

N / S AMERICA

EUROPE

ASIA / OCEANIA

∆ 89/05 1989–2005 CAGRProduction +42% +2.2%Capacity +21% +1.2%

15% of the world’s

electricity generationin 2005 (~18,340 TWh)

Worldwide nuclear power generation (in TWh)

% of WW 2005 generation

0.5%

19.9%

34.1%

45.6%

Sources: IEA/OCDE (1990), Nucleonics Week (1995-2005)


Improve existing reactor performance

55

65

75

85

95

1988

1990

1992

1994

1996

1998

2000

2001

2002

2003

2004

2005

USA

WORLD

%

FRANCE

JAPAN

Capacity factor of main nuclear contries (in %)


Improved security of supply with Uranium

Developed countries and China depend largely on oil & gas supplied from unstable areas

Uranium OilGas

Sources: Areva, IEA

North America

30%

13%

27%

Russia

8%11%22%

Vénézuela 4%

Mexico 5%

Algéria 3%

Niger 6%

8%

Ousbékistan 5%

Australia

20%

Indonesia

3%

China

4%

15%

42%

40%

Other

Kazakhstan:13% in 2025

70% of oil reservesand 40% of gas

reserves

Namibia

8%

Middle East

21%

5%

Key areas of production (in % of global production)


Conventional fissile resources representmore than 200 years of 2006 world demand

General total of conventional resources: 14,750 000 tWorld demand in 2006: less than 70,000 t

Resources: > 200 times 2006 demand

10.04.75General total

Subtotal

> 130

80 to 130

40 to 80

< 40

15 to 25

7.5

2.9

4.6

SpeculativeResources

2.52

?

0.82

1.7

PrognosticatedResources

2

1.45

-

0.29

0.36

0.80

InferredResources

1

3.30

-

0.65

0.70

1.95

ReasonablyAssured

Resources

Cost of recovery$/kgU

Unconventional

Conventional

CATEGORY of Uranium resources (million tons = Mt)

Source: Nuclear Energy Agency "Uranium 2005: Resources, Production and Demand"

+ With Gen IV Fast Breeder Reactor, resources are virtually unlimited

1 Based on direct geologicalevidence

2 Based on indirect geologicalevidence

3 Extrapolated values

3

Identified (deposits) Undiscovered


1,062

766774

398

5 3 70

200

400

600

800

1000

1200

lignit

e

coal fue

l

CCGT

hydro

Nuclea

r

Wind

tonn

es C

O2e

q/G

Whe

l

Nuclear saves about 20% CO2 emission in Power generation, and 10% of WW overall emissions

CO2 emission by energy source (Source: WEC, July 2004)

Hydro16%

Oil7%

Nat. Gas20%

Coal40%

Nuc16%

Other2%

Source: IAE Key World Energy Statistics 2006

2,460Avoided

10,363

PowerGeneration

CO2 emission

2,460 Avoided

26,583*

Total CO2 emissions

Worldwide CO2 emissions in 2004 (M t CO2)

Electricity Mix

Source:IAE 2004 outlook & Key World Energy Statistics 2006

* including aviation & marine bunkers

24% CO2saving

Source: World Energy Council / entire life cycle analysis, Special report July 2004 (lowest values)


Nuclear has internalized most of its costs and generated few external costs

for the environment

3250

31 33 24

1419

551

4

0102030405060708090

100

Coal Wind Gas Biomass Nuclear

Total costin €/MWh*

External costs *

Production costs (source: Finnish study)

87

5150 47

28

Indirect external costs: Impact on climate (CO2)Impact on healthImpact on the environment

* Source “EXTERNE” study, EC 2001, calculating the indirect costs (impact on climate, health or physical impact) of different power generation sources


Nuclear generating cost per MWhfor the EPR

13%54%

6%27%

Operations andmaintenance

Front end

Back end

Amortization &depreciation

11%

32%

3%

49%

Design-Fabrication

Natural uranium*

Generating cost perMWh of the EPR

Enrichment

Conversion

* For a uranium concentrate price around $40 / lbU3O8

Appendix 2Situation regarding nuclear in the various regions


The nuclear power fleet: 444 plants in operation in 2005 and several tens in construction

or planned, mainly in Asia

1 1 0

134

Western Europe

30 256

91

Asia10 22917

India & Pakistan

5 5 16

70

CEI & Eastern Europe

0 129

2

Africa

North & SouthAmerica

1 1 13

130

ConsideredUnder construction PlannedIn operation


Installed capacity in main countries

2005 2004 2005 2004

France* 65.9 65.6 450.6 447.6Germany 21.4 21.4 162.1 167.1Russia 23.2 23.2 146.8 142.9United Kingdom** 12.8 12.8 82.0 82.7Ukraine 13.9 13.9 88.8 85.4Sweden 9.2 9.8 70.5 77.3Spain 7.9 7.9 57.5 63.7Belgium 6.1 6.1 47.6 47.3Finland 2.8 2.9 23.3 22.7Other 18.1 18.0 127.3 130.0

TOTAL 181.2 181.6 1,256.5 1,266.5

* Excluding Phoenix, considered a research reactor.** 2005 data unavailable for British Energy. Data based on 2004 production.Source: Nucleonics Week, February 2006, restated by AREVA.

Gross capacity(GWe)

Gross generation(TWh)

2005 2004 2005 2004

Canada 15.0 16.1 92.5 91United States 105.7 102.6 817.9 822.6Mexico 1.4 1.5 10.8 9.2Brazil 2.0 2.0 9.8 11.5Argentina 1.0 1.0 6.9 8.2

TOTAL 125 123.2 937.8 942.6

Source: Nucleonics Week, February 2006, restated by AREVA.

Gross capacity(GWe)


2005 2004 2005 2004

Japan 48.9 47.4 287.9 282.0China 7.0 7.0 53.1 49.6India 3.3 2.7 17.6 16.9South Korea 17.7 17.7 145.6 129.6Taiwan 5.1 5.1 40.0 39.5Pakistan 0.5 0.5 2.6 2.1

TOTAL 83.5 80.4 546.8 519.6

Source: Nucleonics Week, February 2006, restated by AREVA.

Gross capacity(GWe)



Electricity prices increased by more than 100% over3 years in Europe and US

Evolution of electricity prices

Source : Platts


The generation capacities in developed countries will need to be replaced

More than 500 GWe to be constructed before 2030In

stal

led

capc

ity(G

We)

Shutdown profile of thermal capacities presently under operation in EU 15Sources: EDF, EURELECTRIC

20400

50

100

150

200

250

300

350

400

450

2010 2020 2030

Nuclear

CoalGas

OtherOil

Lignite

An ageing coal based fleet in the USA

28 y28 y

38 y20 y

14 y 13 y27 y 19 y

0200400600800

1000

100-499 500-999 >1000

Fleet's average age (per class of capacity)

Num

ber

of u

nits

Nuclear

CoalGas

Source PowerDAT – June 2004

MW MW MW


The nuclear market: 444 reactors under operation in 2005, i.e 392 GWe of installed capacity across 31 countries

Asia-Pacific

FSU & Eastern Europe

Africa

Americas

125 GWe – 130 reactors

938 TWh by nuke in 2005

% in the mix: 18%


1,256 TWh by nuke in 2005

% in the mix: 25%



% in the mix: 9%

2 reactors in South Africa

% in the RSA mix: 6%

5,000 to 10,000 MWe needed by 2010

Canada: Ontario energy plan, June 2006 –Revamping of Pickering and Darlington – New reactor construction – Nuclear power must be the main component of the energy mix by 2025

United States: 16 COL applications contemplated (or being prepared) to build at least 24 reactors. Back end of the cycle: GNEP program lauched

Argentina: The government provides details of its nuclear investment program: complete Atucha II, extend the operating life of Embaiseand feasibility study for a 4th reactor

Mexico: the Deputy Secretary for Electricity announces that a call for tender for a new reactor could be issued in 2008

Brazil: The Minister of Science and Technology announces that Angra III would be completed and that the country will build up to 7 more reactors

Western Europe


Americans Are Becoming More Favorable to Nuclear Energy

Source: NEI



UK: Energy Review is complete – Strategic role of nuclearpower confirmed. Government proposals expected in November 2006

France: EDF begins construction of Flamanville 3 EPR

Portugal: Prime Minister Jose Socrates requests a national debate on nuclear power

Russia: Rosatom Chairman S. Kirienko sets a goal of building 42 to 58 reactors by 2030. Rosenergoatom plans to startconstruction of 7 reactors in 2007

Baltic States: Multilateral agreement in February to build a reactor in Lituania

Turkey: Declaration of intent for 3 reactors by 2011



% in the mix: 25%


Western Europe



South Africa: Decision to build 5,000 to 10,000 MW of nuclear power capacity

China: project to duplicate two Ling Ao type Gen II reactors is launched

India: Signature of treaty with the United States / progress in bilateral discussions with France

Vietnam: Feasibility study expected in 2008 for later selection of a nuclear reactor supplier

Australia: Australian Nuclear Review is launched – Report expected by the end of 2006

Asia-Pacific


Americas



% in the mix: 18%



% in the mix: 25%



% in the mix: 9%

Western Europe


Nuclear acceptability 2005 poll

Support to nuclear generation

Nuclear is a safetechnology: build

new reactors

None of followinganswers

28%

12%2%

34%

Use existingcapacities but don’t

build new ones

No answer

25%

Nuclear is dangerous, close all the plants

Source: AIEA, oct 2005, Global Public Opinion on nuclear issues

Appendix 3Front End business details


Uranium: secondary resources will dwindlein the middle term

Consumption of Market Economy World

World supply and demand

Supply:

Demand:

Fresh productionHEU

RecyclingInventory drawdown


Uranium: secondary resources will dwindlein the middle term

Consumption of Market Economy World

World supply and demandRecent trend in uranium spot price indices (USD)

Source: TradeTech.Spot USD LT USD

10

20

30

40

50

60

janv-03 juil-03 janv-04 juil-04 janv-05 juil-05 janv-06 juil-06


Uranium spot prices increasing, still low impact on our long term contracts revenues

Visible price pressures: + 78% in 2005 after + 42% in 2004Highest: ~$40/lb U3O8 (1978)Lowest: ~$ 5/lb U3O8 (1971)End of September 2006: $ 53 lb U3O8

Partial effects starting 2005 sales due to long term contracts

The Group’s total mineral resources in the ground thus come to nearly 330,000 MT of uranium. Reserves remained almost stable at approximately 140,500 MT.

$0

$20

$40

$60

$80

$100

$120

69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05

US$

/lb U

3O8

Source: 1969-1986 Nuexco Exchange Value, 1987-Present Ux U3O8 Price.

Source: The Ux Consulting Company, LLC.


Front end: in mining, the topthree players represent 50% of world productionWorldwide natural uranium production in 2005 [in metric tons of uranium]

North America

Kazakhstan

Australia

Niger

AREVA

CAMECO

RIO TINTOBHP BILITON

KAZATOMPROM

NAVOI

TVEL

Uzbékistan

Russia

Namibia

1 950

3 5104 290

3,300

OTHERS

Others: 5,930 t

3,6978,239

2,6004,100

38

3,148

3,5505,006

108

6,019

2,281

Total: 42,000 MTU 8,3472,600

5,930

3,300

5,0063,148 3,550

4,100

RTZ-CRA


Mining: sensivity to market pricewill be more significant after 2008

2006 2007 2008 > 2009

BacklogTotal: 53 000 metric tonsBacklog at 12/31/05:

5 years of sales

Sensitivity to market price(assuming no change in volumevs. 2005)

12 000 MT

Deliveries 2006-2008

Deliveries after 2008

Exposureto market price after 2005

< 40% > 60%

Increase in the cost of resources is expected

Uranium provides significant marketing leverage Growing cross-fertilization between the various components of the fuel cycle More than one third of all new orders in 2004-2005 involve at leasttwo components


Front End: in uranium Enrichment,AREVA meets 25% of the worldwide growing demand

* Central and Eastern European Countries

Other

Asia

North America

CEEC* - not eligible for EU

CEEC* eligible for EU memb.

Other Western Europe and South Africa

France

05,000

10,00015,00020,00025,00030,00035,00040,00045,000

2000 2005 2010 2015 2020

kSWU

+ ~5 million SWU

Demand: ~40 million SWUWorldwide capacity:

~40 million SWU

Start of production at GB II plant

Possible shut downof GB I plant

Average growth exceeds 0.5% / year


Enrichment Construction of Georges Besse II has begun

Cash-out: ~€400M in H2 2006

(operating cash flow)

ETC closing on July 3, 2006

ETC (JV)

R&D and Technology

Centrifuge designand

manufacturing

50% 50%

33% 33% 33%

BNFL NL Gov’t.

RWE+E.on

SET - GBII Enrichment

UEC - URENCOEnrichment

URENCO(Holding)


Enrichment: resources to meet 2006-2012 commitments have been secured

Enrichment in 2005 (in millions of SWU) Processing contracts

For 50% of the sales (EDF, Suez) electricity is provided by the customer on a pass-through basis

Other enrichment servicesNegotiations under way regardingthe price of energy after 2005The Group has secured resourcesto meet delivery commitmentsin 2006-2012

~ 5

~12~ 5

To inventory

ResourcesSales

Other export customers

Production with pass-through power supply

(EDF, Suez)

The GB-II plant is scheduled to begin production in 2009

40% of the world’s enrichment capacity uses the gaseous diffusion process, where electricity represent 60% of the production cost.Therefore, the SWU price could become more sensitive to electricityprice


Georges Besse I Georges Besse IIA transparent transition for customers

Années2007 2008 2009 2010 2011 2012 2013

GB IGB I GB IIGB II

2014 2015 2016

Transition ManagementInventories constitution

EURODIF (GB I) stopping Start and GBII production increase


Fuel: in 2005, almost 45% of all PWR and BWRreactors in operation worldwide were fueled by AREVA

Number of reactors fueled by AREVA

2 2 2

2001 2005 2010E

North & South AmericaStrong growth in the US over a five-year periodBacklog for 2010 already covers 32 reactors

EuropeDecrease due to the openingof the French market

AsiaGradual penetration

in Asia, where the market is protected

96 93 83

2001 2005 2010E

Africa

Potential market: 108 reactors



11 14 15

2001 2005 2010E

2228

43

2001 2005 2010E


Sources: IAEA and WNA, as of December 2005

Appendix 4Reactors & Services business details


Reactors and Services is mostly a recurring business

Servicing and operation of existing reactors

Large equipment replacement(vessel inspections, steam generators, etc.)

On-site maintenance services

Open-ended engineering services

Dismantling services

Reactor life extensionDesign, safety analysis and construction of new reactors and first reload

Completion of reactor construction to western safety standards (e.g. Russian-designed VVER)

Uprating, upgrading and life extension

Recurring

business

> 85%

of sales

% of 2005 sales Prospects

Service life extension for installed baseload in the US

Business development in U.S. and Asia

Strong European market share

Development of innovative contracting mechanisms such as “allliancing”

Non-recurring

business

< 15%

of sales

Near term: EPR construction in Finland (signed), first EPR in France, construction of Angra 3 in Brazil, involvement in Chinese nuclear power program

Long term (start of next decade): new construction likely in US (Bush plan), possible in Europe (replacement reactors starting in 2015), others


NPPs O&M costs in the US and Europeamount at 1 – 1,3 c$ / kWh today

1,25

1,5

1,75

2

2,25

2,5

2,75

3

3,25

3,5

1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

Année

Ope

ratin

g co

st (i

nclu

ding

fuel

) US EDF

Operating Costs (O&M + Fuel) in France and the USAUSc/kWh

Year

Operating costs in 2002: 1.7 c$/kWh in the US and 1.4 c$/kWh in France, of which:

0.4 c$/kWh for fuel

1.3 c$/kWh in the US and 1.0 c$-c€/kWh in France for pure O&MSource: Nuclear Engineering International – december 2004 / AREVA – US dollar de 2001, 1 $ = 0,94 €


O&M recurring expensesshould remain stable and high

6

7

8

9

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007Year

Bill

ion

US$

Forecast

Trend in O&M expenses By the US nuclear utlities

Annual expenses1998-2007

US: around $8.5-9.0bn for a production in the range of 750 bn kWh / y

~0,4€ cents/kWh

Europe: maintenance, repare,spare parts replacement, recurringengineering and upgrade

Maintenance

OperatingTraining

Logisitcs...

40%

60%

~0,6€ cents/kWh

Est. €40-45 M/y for a typical1 000 MW PWR


A significant share of O&M expenses are outsourced by the utilities

0

100

200

300

400

500

600

700

800

900

EDF US (Navigant Consult.) US (Duke estimate)

FTE Internal FTE External

Full Time Equivalent workforce internal + external

for 1,000 MWe installed

The trend should amplifyin the coming years

Source: Nuclear Engineering International – december 2004 / AREVA


Main componentsof PWR coolant system

5

4

1

2

3

1 Reactor vessel

2 Control rod drive mechanisms

3 Steam generator

4 Reactor coolant pump

5 Pressurizer

78


PWR steam generator

Heat transfer surface: 4,700 to 7,000 square meters

mechanical effects of the circulating P and S flowschemical effects of the P and S fluidsnominal and transient temperatures and pressures on P and S sides

DUTY

nickel-based alloy (tubes),low internal alloy carbon steel (structures) with a stainless steel layer the water chamber (P side)

MATERIALS

height: 20 to 22 metersdiameter: 3.5 to 5 metersweight (empty): 300 to 420 metric tons

DIMENSIONS & WEIGHT:

FUNCTIONS

to transfer heat and ensure leak-tightness between the primary (P) and secondary (S) circuits

CommissioningDesign

79


Chalon plant (Equipment): successful globalization

Chalon plant - Total loadbaseline 100 in 2005

0

20

40

60

80

100

120

2001 2002 2003 2004 2005 2006E

100

EDF Exports

New capacity placed in service

2005


The EPR: increased power and safety - extended life expectancy over the most recently built reactors

Thermal Power

Electrical Power

Thermal Efficiency

Limitation of severe accidents consequences

Number of fuel assemblies

Average burnup of reloads

Redundancy factor

Service lifetime

MW

MW

%

GWd/t

years

4500

1650

36.8

++

241

>60

4

60

EPR

4250

1450

34

+

205

45*

2

40

N4

* Maximum burnup rate currently allowed by the French safety authority


Plants: Call for Tenders – Who does what?

Incl. NSSS [30% of the price]

NUCLEAR ISLAND

[~55% of the price]AREVA

CONVENTIONALISLAND

[~20% of the price]Alstom, GE,

MHI, Siemens, Toshiba

Control systems [~ 3%]Safety nuclear : AREVA

Operating systems: Alstom/Atos, MHI, Siemens, Westinghouse

ADDITIONAL CONSTRUCTION

[ ~25% of the price]

82


More than 50,000 MWe installed is over 30 yearsMore than 110,000 MWe is over 25 years

Pyramid of ages – WW nuclear fleet (October 2006 update)

0

5 000

10 000

15 000

20 000

25 000

30 000

35 000

1 6 11 16 21 26 31 36 41

Age (in years)

Inst

alle

d ca

paci

ty (M

We)

0

50 000

100 000

150 000

200 000

250 000

300 000

350 000

400 000

Cum

ulat

ed in

stal

led

capa

city

(MW

e)

A need for re-investmentsin the existing fleet

Source: AIEA / PRIS – October 2006


Heavy re-investments in existing US reactorsUp to $300M for a typical 850 MWe PWR

Oconee 1, 2 & 3PWR 850 MWe

Commissioned: july 1973 december 1974

Re-investment: $1bn over 2001-2006 Replacement of Vessel Heads and Steam Generators

Instrumentation & Control upgrade

Calvert Cliffs 1&2PWR 850 MWe

Commissioned: may 1975 - april 1977

Re-investiment: $600M over 2001-2006Replacement of Vessel Heads and Steam Generators

Instrumentation & Control upgrade


Generation 3+

Generation 4

Current NuclearFleet with 40-year service life

Life extension past 40 years

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060

EDF nuclear plant scenario starting in 2020

Generation 3+: EPRSource: EDF

85

MWe installed

Renewal over 30 years (2020-2050)Construction of about 2,000 MW/year

Years

Average plant life: 48 years


AREVA and Constellation have joined forces for a new US economic model in nuclear capacities construction

www.unistarnuclear.com

May 2005: EPR licensing process launched in the US w/ customers support

August 2005: President Bush signs the Energy Bill: incentives for the first 6 nuclear GWe installed

September 2005: AREVA and Constellation form UniStar Nuclear to market at least 4 EPRs in the United States

Marketing, technical and financial resources are pooled for the creation of JVs, which are open to other commercial and financial partnersJVs, operated by Constellation, will be in charge of licensing, constructing and operating the reactorsAREVA will supply the nuclear island, the control systems and the first reactor core to the JVsBechtel will support the project with its architect-engineer expertise

August 2006: AREVA signs an agreement with Constellation Energy to reserve capacity for the supply of heavy components for the first US-EPR reactor


Gen IV - Towards a fully used nuclear system?

Present GenerationOf Nuclear Reactors

Next GenerationOf Nuclear Systems - Gen IV

87

Loss

HydrogenProduction

Enhancement of Nuclear Heat Utilization

Steam Temperature:~300°C-Steam Cycle-

Light Water ReactorGaz Temperature:~1000°C

-Cogeneration-

High Temperature Gas-cooled Reactor

Appendix 5Back End business details


Back End market combines reprocessing, final disposal and “wait-and-see” solutions

RUSSIA

FORMEREASTERN

BLOCK COUNTRIES

0

500

1,000

1,500

2,000

2,500

FRANCESWITZ.

UK

USA(to date)

GERMANY

BELGIUM

SPAIN

ASIA

JAPAN

SWEDEN FINLAND

Final Disposal

(Open cycle)

ReprocessingRecycling

(closed cycle)

mt of heavy metal/year

CHINA

AREVAcustomers

OTHERS

Mixed solutions

Difference in costs between closed and open cycles is impactless on the kWh cost

Back-end cost represent less than 6% of the overall nuclear kWh cost

When choosing the closed cycle:

96% of the materials can be recycled

wastes volumes are divided by a factor 4 to 5

Radio-toxicity of long term wastes is reduced by a factor 10


The closed and open cycles are similar in price, in a back-end that represents less than 6%

of the overall nuclear kWh cost

* Source: OECD - April 1994 converted to € - discount rate 0%

The rising cost of Uranium is in favour of the closed cycle

Closed cycle

Spent Fuel Transp.

Open cycle

Spent Fuel Storage

Reprocessing / Vitrif.

Spent Fuel condit..

Disposal of wastes

End-of –cycle Subtotal

Cost* (€ct/kWh)

Uranium credit

Plutonium credit

Materials Credit Subtotal

Total cost

0.015 0.015

0.047

0.183

0.106

0.017

0.215 0.168

(0.027)

(0.011)

(0.038)

0.177 0.168

0

% of a 3 €ct/kWh generation cost (typical nuclear) 5.9% 5.6%


120,000 mt of spent nuclear fuel are stored worldwide 7,200 mt are unloaded in addition yearly

US EUROPE Far East

Stored quantity120,000 t

as of 31/12/2003

Annual discharge7,200 mt/y

35,000 mt35,000 mt50,000 mt

2,500 mt/y 2,500 mt/y 2,200 mt/y

Back end division

2005 sales€118M

€1,615Minc. €1,104M

in France€187M

Estimated global spent fuel

management cost

€0,5 to 1 M/mt


In Back End, AREVA is the specialist of spent fuel management

Considerable barriers to entry for reprocessing-recycling:Technical and technological know-how:Areva is number one in terms of operating experienceRegulationsCapital requirements

AREVA is Nr 1 worldwide in terms of effective production

Effective reprocessing capacity for lightwater reactors spent fuel

AREVACOGEMA - La Hague

BNFL /Sellafield

Minatom /Chelyabinsk

Japon /Rokkasho Mura(starting 2006)

1,700 mt / y

900 mt / y

Max. 400 mt / y

800 mt / y

Technology transfer

Source: AREVA, World Nuclear Association

AREVA BNFL Minatom Other

~20,000 mt

5,800 mt3,700 mt

1,600 mt

Up today, AREVA reprocessed 67% of the spent fuel worldwide,i.e 19,400 mt out of 28,900 mt

Cumulative effective production,as of dec. 2004


Key events in the Back End business (2005 & H1 2006)

Success of EUROFAB –

MOX fuel loaded

at Catawba

Success of EUROFAB –

MOX fuel loaded

at Catawba

1° The Boston Cinsulting Group confirms the sound economics

of the closed cycle2°Industrials respond to the US

DOE’s request for E.O.I.

1° Phase II of hot testing begins at the Rokkasho Mura fuel treatment plant

2° Two new contracts / L.O.I to supply MOX fuel for delivery until 2020

Request for Tender in Italy to recycle 235 metric tons

of used fuel

Germany discontinues shipment of used fuel

to Treatment-Recycling plants

New law on radioactive waste management was

adopted

Appendix 6T&D business details


WW market share 2005

Note: Regional Market share estimates based on orders repartitionSources: ABB, Siemens, Areva announcements; Strategic Marketing

AREVA T&D in the race

Other:58%

ABB: 19%

Areva: 9% Siemens: 14%

Americas

Asia Pacific

Africa M.East

Europe 12

9 7

15

Market size in 2005, €bn 42

10% Siemens5% Areva T&D

16% ABB


23% ABB


13% ABB


23% ABB


Products and Systems keep the main T&D segments

Products:CAGR +1.7%

Market pulled by HV and MV Switchgears

Products€23bn

Automation€4 bn

Services€7bn

Pull throughProducts to system

€42bn

o/w €5bnproduct

Systems€13bn

SystemsCAGR +0.5%

Market growth led Power Electronics.

ServicesCAGR +0.8%

AutomationCAGR +4.2%* (2005-2008)

Boosted by Deregulation and Grid numeration

Gross market sizes (i.e. including pull-through)

T&D global market 2005 E

Source: AREVA estimates


Global dynamic market trends mainly in Asia and Middle East

Near & Middle is one of the most attractive market in the world

Europe28%

Asia Pacific35%

Americas21%

Afr.&M.East16%

T&D global market 2005 E

India is expected to be the fastest growing market for the coming years

China still shows good perspective

Russia and Central Europe: Strong market potential due to replacement and dynamic economic growth

Europe: interconnection development and Renewable Energies

US: Energy Bill 2005 should drive major investments in the grid

Brazil: development and upgrade of the power grids



AREVA T&D: a Utility focused company

Market breakdown by Customers

Industry CompaniesOil & Gas, ChemicalsMining & MetalsPassenger TransportationOthers

UtilitiesIntegrated utilitiesTranscosDiscosGenerators

Global T&D market

40%Industry Companies

60%Utilities

DT

D

T

25%Industry Companies

75%Utilities

AREVA T&D’sCustomer base

AREVA T&D is #2 in the utility market



Sourcing

Sourcing represents 53% of our sales

Levers to improve sourcing costs

20%

5%

8%

22%

45%

Globalisation

Labor Low Cost Country sourcing

Make or buy

Redesign to cost

Other


Industrial footprint: too European but a new balance

46% of our 2005 sales manufactured in Europe vs 72% in 2003

20%

Asia Pacific

15%

Americas

46%

Europe

28%

Europe

21%

Americas

35%

Asia Pacific

16%Africa

& Middle East

2005Market Volume

Note: AREVA estimates

19%

Africa & Middle East

AREVA T&D Sales by Origin

2003 2005

12%Asia Pacific

16%

Americas

72%

Europe

12%


Reposition AREVA T&D in growing areas…in sync with the market

Market growth estimate per year2005 - mid-term

France Germany ChinaIndiaU.K. Russia

- 1.1%+ 0.9%

+ 9%

+ 12%

+ 2.4%

+ 9%

Note: AREVA estimates


Increased CAPEX in targeted regions

MEXICO

WESTERN EUROPE

BRAZIL

TURKEY

INDIA

CHINA

Tizayuca

Canoas

Naini

Bangalore Chennai

Kolkata

Xiamen

Shanghai

Suzhou

Gebze

Villeurbanne

Capex 2006-2007: ~ €200M

Appendix 7Financials


Income statement

In millions of euros

2005 2004 adjusted for saleof the Connectors Division

(excl. IAS 32 et 39)Sales revenue 10,125 9,821

Other income from operations 7 7

Cost of sales (7,852) (7,478)

Gross margin 2,280 2,350

Research and development expenses -328 -327

Marketing and sales expenses -478 -500

General and administrative expenses -724 -684

Other operating income and expenses -4 -103

Current operating income 746 735

Restructuring and early retirement costs -138 -205

Other non-current operating income and expenses -56 29

Operating income 551 558

Income from cash and cash equivalents 59 54

Gross borrowing cost -42 -27

Net borrowing cost 17 27

Other financial income and expenses -30 -30

Net financial income -13 -3

Income tax -146 -124

Net income from consolidated businesses 393 431

Share in net income of equity affiliates 153 128

Minority interests -95 -139

Net income from continued operations 451 420

Net income from discontinued operations 598 31

Consolidated net income 1,049 451

Average number of shares outstanding 35,442,701 35,442,701

Earnings per share from continued operations 12.72 11.83

Earning per share 29.6 12.71

Earnings per diluted share (1) 29.6 12.71

(1) Areva has no diluting instrument in its share capital


Key figures by Division (1/3)

2005 IFRS excluding amounts linked to end-of-life-cycle obligations

GroupTotal

5.4%

551

10,125

783

(45)

(395)

12.0%

1,217

% of sales

Operating income

Contribution to sales revenue

Results

In millions of euros(exc. employees)

Operating cash flow

Change in operating WCR

Net CAPEX

% of contribution to sales

EBITDA (ex, end-cycle costs)

Cash

Employees

Capital employed

Fixed assets

Other

Holding and other

operations andeliminations

n/a

(58)

14

(90)

(30)

(4)

n/a

(53)

432

52

1 210

T&D

-1.9%

(61)

3,211

116

(69)

68

3.3%

106

22 094

671

950

Back End

10.8%

208

1,921

332

(95)

(53)

25.1%

483

10 864

(737)

2 079

Reactors & Services

3.7%

87

2,348

228

226

(170)

7.4%

173

14 323

130

606

Front End

14.2%

374

2,631

197

(77)

(236)

19.3%

508

11 047

1 642

1 554

58 760

1 955

6 399



2004 IFRS excluding amounts linked to end-of-life-cycle obligations and adjustedfor disposal of FCI

GroupTotal

5.7%

558

9,821

782

(170)

(354)

10.1%

991

57,909

2,164

nc

% of sales

Operating income


Results

In millions of euros(exc. employees)

Operating cash flow


Net CAPEX


EBITDA (ex, end-cycle costs)

Cash

Employees

Capital employed Other

Fixed assets

Holding and other

operations andeliminations

n.s

(35)

18

2

(4)

(66)

n.s

(14)

378

57

nc

T&D

-3.2%

(103)

3,186

(12)

22

57

0.7%

23

21,816

722

1,028

Back End

11.8%

221

1,946

603

299

(97)

20.7%

402

10,697

(456)

2,203

Reactors & Services

4.4%

95

2,146

82

11

(71)

5.7%

121

14,066

276

456

Front End

14.7%

370

2,524

106

(157)

(196)

18.2%

459

10,952

1,410

1,308



2004 reported excluding amounts linked to end-of-life-cycle obligations

5.5%

613

11,109

GroupTotal

763

187

12

(486)

9.4%

1,049

70,069

5,897

15,783

% of sales revenue

Operating income


In million of euros(ex. employees)

Operating cash flow


Income on sales ofof tangible and intangible assets

Net CAPEX


EBITDA (ex. end-cycle costs)

Employees

Capital employed

n/a

(79)

18

Holding and other

operations and eliminations

(88)

(1)

(4)

n/a

(77)

378

527

2,320

6.2%

80

1,289

Connectors

54

12

0

(71)

10.3%

113

12,160

1,318

656

1.0%

31

3,186

T&D

(12)

27

0

(57)

0.6%

19

21,816

1,330

1,096

9.1%

177

1,946

Back End

603

298

8

(98)

20.0%

394

10,697

(132)

9 061

4.2%

90

2,146

Reactors & Services

88

11

4

(59)

6.2%

133

14,066

670

515Fixed assets

12.4%

314

2,524

Front End

112

(159)

(196)

18.5%

466

10,952

2,184

2,135

1

Results

Cash

Other


Free Operating Cash Flow


+ 955 + 782

+ 170

- 435

EBIDTA excl. end-of-life-

cycle obligations and gain on disposals

Chg in Op.

WCR

CAPEX FOCF

+ 783+ 1,223

- 554

- 45

Change in op. WCR

CAPEX FOCFEBIDTA excl. end-of-life-

cycle obligations and

gain on disposals

+ 159

Disposals

2005 IFRS

+ 92

Disposals

2004 R* IFRS

EBITDA up significantly in all businesses

Slight increase in WCR, with use of customer advances and prepayments

Increased CAPEX in Mining and Plants (licensing)

* Adjusted for disposal of FCI


End-of-life-cycle obligations: dedicated portfolio up +19.1% in 2005, consistent with the benchmark

0

50

100

150

200

250

300

350

400

450

93 94 95 96 97 98 99 00 01 02 03 04 05

AREVA Portfolio

Composite index (FTSE, MSCI France and EUROPE)

404

322

Out-performance: +25 %

2,0832,083

2,4572,786

Assets ProvisionsAREVAThird party share

Dedicated portfolio performance End-of-life-cycle obligations at June 30, 2006

areva dec0506

Documents

end group overview

outlook group overview

consolidated group

areva np x group overview

financial debt

tdconsolidated net income

bnmarket share

2bn2005 sales