Areva Sees Strong revenue growth in 2009: +5.4% to €8.5B
• Disposal of the Transmission & Distribution division
• Strong installed base business in Nuclear and Renewable Energies
• Despite a weak economic environment, the backlog at year-end 2009 is up 2% to 43.3 billion euros (€B), incl. more than €1B in Renewables
• Strong revenue growth in 2009: +5.4% to €8.5B
• 2010 outlook: significant growth in backlog and in revenue
– By Stephen Heiser –
As part of its development plan, announced on June 30, 2009, AREVA put its Transmission & Distribution business (T&D) up for sale. On January 20, 2010, AREVA signed a share purchase agreement with the Alstom/Schneider consortium which values the business at more than four times its acquisition price in 2004 and includes major social commitments.
In accordance with IFRS 5 accounting standard, revenue generated by the Transmission & Distribution business is not included in group revenue for 2009 and 2008, and the result of this business will be presented on a separate line, “Net income from discontinued operations” in the 2009 financial statements. Revenue from continuing operations thus include only the contributions of the Front End, Reactors & Services (including Renewable Energies) and Back End divisions.
Revenue for the Nuclear and Renewables businesses came to 8,529 million euros in 2009, up 5.4% compared with 2008 and up by 4.6% like-for-like1. The group’s total revenue including T&D came to 14,003 million euros in 2009, for 6.4% reported growth and 5.7% like-for-like1 growth compared with 2008.
In 2009, revenue from the Nuclear and Renewables businesses were stable in France compared with 2008. International sales were up 9.3% in relation to 2008, to 5,264 million euros, i.e. 62% of revenue. The Reactors & Services division was the main engine for the group’s revenue growth in 2009, with growth of 12.8%. Revenue for the Front End and Back End divisions was essentially stable compared with 2008.
Foreign exchange2 had a positive impact of 67 million euros. Changes in consolidation scope had a negligible impact. In the fourth quarter of 2009, revenue for the Nuclear and Renewables businesses came to 2,748 million euros, a 12.4% increase from the fourth quarter of 2008 and a 15.1% increase like-for-like1.
Changes in consolidation scope had a negligible impact for the period. Foreign exchange2 had a negative impact of 60 million euros. Growth was mainly driven by Reactors & Services, which was up by 39.3%.
The backlog for the Nuclear and Renewables businesses came to 43.3 billion euros at December 31, 2009, a 1.8% increase in relation to year-end 2008.
New orders came to about 9.5 billion euros in the Nuclear business, confirming the strength of the installed base business:
- In the Front End business, AREVA signed major multi-year contracts with Asian, American and European utilities, including natural uranium for KHPN (South Korea), enrichment services for CEZ (Czech Republic) and Duke (United States), and fuel supply for E.On (Germany) and Central Nuclear de Trillo (Spain);
- Reactors & Services received new orders for 12 steam generator replacements for TVA (United States), KHNP (South Korea) and EDF (France), in addition to an order for 60 reactor coolant pumps for CNPEC (China) and a multi-year framework agreement with EDF for engineering services;
- In the Back End, the group was awarded several contracts to supply MOX fuel to Japanese utilities.
- In Renewable Energies, the group signed a contract valued at more than 800 million euros in the offshore wind market, bringing the value of the backlog to more than 1 billion euros as of December 31, 2009.
Letters of intent, subject to conditions, valued at 4.3 billion euros were also signed, mainly in Enrichment and corresponding to advance sales of the production of new facilities currently under construction.
In addition, despite the backdrop of economic crisis, the Transmission & Distribution division succeeded in consolidating its global number three position. This is underpinned by three main pillars:
• Deployment in emerging markets. For example, AREVA T&D strengthened its position as number 1 in India;
• Increased research and innovation spending, resulting in new contracts for high voltage direct current links in Brazil and China;
• Broadening of the division’s offering to industrial segments, as shown by the signature of a turnkey contract to build substations in the Australian oil and gas segment.
As a result of these initiatives, the backlog came to 6.1 billion euros at year-end 2009, up 7.4% from yearend 2008, giving a book-to-bill ratio of 1.08.
For 2010, AREVA anticipates significant growth in backlog and revenue for the Nuclear and Renewables businesses.
1 Like for like, i.e. at constant exchange rates and consolidation scope
2 Currency translation impact on financial statements
Revenue by division for the Nuclear and Renewables businesses
Front End division
Revenue for the Front End division came to 3,471 million euros in 2009, for a 3.2% increase on a reported basis and an increase of 3.6% like-for-like1. Foreign exchange2 had a positive impact of 32 million euros.
Consolidation scope had a negative impact of 45 million euros due to a change in consolidation method for a Fuel subsidiary in the United States.
• In Mining, AREVA’s average sales price for uranium was up almost 5% compared with 2008 (from $36.9/lb in 2008 to $38.6/lb in 2009);
• In Enrichment, revenue growth was fueled once again by rising volumes, after particularly strong deliveries in 2008;
• In Fuel, volumes delivered in Europe were down from 2008, which had been a particularly strong year.
This impact was partially offset by increased sales in the United States.
Reactors & Services division
Revenue for the Reactors & Services division was up 12.8% in 2009 (+10.3% LFL1) to 3,418 million euros. Foreign exchange2 had a positive impact of 29 million euros. The change in consolidation scope had a positive impact of 40 million euros, reflecting acquisitions made by AREVA TA in 2008 and 2009.
• In Plants, revenue growth was fueled by the rising contribution from major reactor projects and by an increase in the installed base business, notably in Instrumentation and Control systems.
• The drop in Nuclear Services business in France was offset by growth in the United States. This was accelerated in the fourth quarter of the year, due to particularly heavy business from outage campaigns in the fall.
• Renewable Energies benefitted from the ramp-up in offshore wind projects and the development of the Biomass business, particularly in Europe.
Back End division
Revenue for the Back End division in 2009 was quasi-stable compared with that of 2008, at 1,637 million euros (-3.3% in reported data and -3.7% LFL1).
Upcoming events and publications
March 4, 2010 – 17:45 CET: Press release and conference – 2009 results
April 29, 2010 – 17:45 CET: Press release – First quarter 2010 sales
1 Like for like, i.e. at constant exchange rates and consolidation scope
2 Currency translation impact on financial statements