Financial structure

Free operating cash flow before tax of -€1.090bn

Free operating cash flow before tax went from -919 million euros in 2009 to -1.090 billion euros in 2010. Part of the increase in net capex is financed by the improved EBITDA and working capital requirement.

Review of free operating cash flow before tax by Business Group:

• The Mining-Front End Business Group reported -252 million euros in free operating cash flow before tax, compared with -315 million euros in 2009. This improvement is due in particular to increased operational performance and a positive contribution from the change in working capital requirement of 330 million euros (inventory optimization plans and receipt of customer advances), largely offsetting the increase in gross capex and the decrease in cash generated by the disposal of minority interests in certain assets of the BG;
• The Reactors & Services Business Group reported free operating cash flow before tax of -639 million euros, essentially unchanged from 2009 (-662 million euros). The improvement in EBITDA and the slight decrease in capex were offset by deterioration of the working capital requirement due to the receipt of customer advances in 2009 which were not repeated in 2010;
• The Back End Business Group reported free operating cash flow before taxes of 414 million euros, an increase compared with 2009 (288 million euros), thanks to EBITDA growth and the contribution from the change in working capital requirement;
• Free operating cash flow before tax of the Renewable Energies Business Group went from -91 million euros in 2009 to -309 million euros in 2010 due to acquisitions made in 2010 (Ausra and minority interests in Multibrid).

Markedly stronger balance sheet

The group’s net financial debt comes to 3.672 billion euros at December 31, 2010 (based on the 2007 valuation of the debt to Siemens i.e. 2.049 billion euros, plus accrued interest) compared with 6.193 billion euros at December 31, 2009. The 2.521 billion euro reduction is due to the cash generated by the disposal of the Transmission & Distribution business (3.124 billion euros), by the transactions on Safran securities in the amount of 636 million euros, and by the 900-million euro capital increase, which helped largely offset the free operating cash flow described above, as well as the payment of dividends for 2009 to AREVA SA shareholders in the amount of 250 million euros.

These amounts should be compared with equity of 9.578 billion euros at December 31, 2010, compared with 7.574 billion at year-end 2009.

The group’s gearing thus went from 45% in 2009 to 28% in 2010, illustrating the notable strengthening of the group’s balance sheet. As part of this process, AREVA’s Supervisory Board will not propose to the Annual General Meeting of Shareholders the payment of a dividend for 2010.

In addition, the group's liquidity was reinforced in 2010 by a fourth bond issue of 750 million euros. Excluding the debt to Siemens, the group has no major reimbursement due before 2016.

Capital employed and ROACE

* Average capital employed = Net intangible and tangible fixed assets + operating capital requirements - Provisions for Risks and Charges.