Acquisition project of Areva Transmission & Distribution · • Critical size in medium voltage ... Areva D substation automation complements Schneider Electric ... DEWA ADWEA Afric

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

13 Schneider Electric & Areva D

20 Alstom & Areva T

29 Social commitments

33 Conclusion


Introduction04


20 Alstom & Areva T


33 Conclusion


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

1 Renewable Energies Decentralized and irregular

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


• Major global players

• Large projects

• Focused on utilities

• Global and regional players

• Equipment and product sale

• Multi-clients

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



2008 proforma sales 2008 proforma sales

€20 Bn

Areva DSchneider

ElectricMV / LV

€1.7 Bn >€10 Bn

€22 Bn

Alstom Power

Areva T

>€11 Bn €3.3 Bn

Downstream SpecialistUpstream 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

€20 Billion€22 Billion

• 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

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

Alstom project sales

€ 4.5 bn

MVequipments

Turbines

Utilities Generation & Transmission

HV equipments

Alstom project 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


20 Alstom & Areva T


33 Conclusion


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…

Fill the gap with

no.1

MV switchgears & systems

Combined sales~€ 4.6 bn

80 plants~ 22,000 employees

~45% in new economies

Extensive marketcoverage

Balance global

footprintDistribution

Transformers

Complementarysmart

grid offerings

GridAutomation Operational figures for

Areva Distribution are estimates subject to final adjustments


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

Promising market trends in new economies

Strong complementarities in new economies

Areva DSchneider Electric MV

ChinaIndiaBrazilRussiaMiddle East

Further reinforceour footprint 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

Operational figures for Areva Distribution are estimates subject to final adjustments


… as well as important complementarities of customer bases and technologies

Strong fit of customer bases Strong complementarities in technologies

Schneider Electric MV Areva D

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

Electrical utilitiesElectro-intensive*IndustriesBuildings

Transformers Complementary footprint

Grid automation

Areva D substation automationcomplements Schneider Electricoffers in smart grid

Wider range of technologies Wider range of end-users

* Notably Oil & Gas, MMM …


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

4 Businesses 5 Businesses Key market segments

Key product lines

LV Power• Residential• MarinePower

Areva D€ 1.7 bn

Power

(MV +LV ) MV

distribution

IS&C

Grid Automation

• Utilities• Oil and gasEnergy

€ 4.6 bn

• Data centers• Bank / InsuranceIT IT

critical power & cooling

Buildings

Industry

Buildings

Industrial automation

Buildingautomation& security

• Retail• Hotels• Hospitals• Offices

• OEMs • Water• Mining

IndustryCST


Conclusion

Strong industrial rationale

A perfect fit to our medium voltage business

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

Strong presence in fast growing new economies

A fruitful combination for the future between Areva D and

Schneider Electric


Introduction04


20 Alstom & Areva T


33 Conclusion


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

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

Sales: ~ €22 billionEmployees: ~ 100 000

Power Transport

POWER TRANSPORT POWER TRANSPORTTRANSMISSION

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


Areva Transmission: World n°3 in high voltage

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 data● ~ 21 000 employees● ~ 65 sites

2008 sales breakdown (estimated)

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 a 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


Shared ambitions

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 competenciesExpertise in managing and controlling large integrated projects

United KingdomSheringham Shoal

RussiaBogushany

IndonesiaPLN 10GW 150kV .

South KoreaKepco II HDVC

Qatar - Phase 8 Dubai - BarshaBahrain- Alba

LibyaSebha &Tobruk10 GIS stations

CanadaRiel substation

Main projects

AlstomAreva T


Shared competenciesA global and flexible industrial base close to key markets

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 investments

Areva TAlstom

Main production centres


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

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√

√

√

√ √ √ √ √ √ √ √

√ √

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Shared customersA strengthened commercial base


Introduction04


20 Alstom & Areva T


33 Conclusion


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 all 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 there

is a significant downturn in the general economic conditions

●Continuity● Maintenance and development of social policies and practices

from Areva T&D


Introduction04


20 Alstom & Areva T


33 Conclusion


The transaction timeline

Exclusivity period

Announcement Signing Closing

Regulatory approvalsConsultation of works’ council Allocation of T to Alstomand D to Schneider

Approval by Commission des Participations et des Transferts (CPT)

Acquisition of Areva T&Dthrough a common vehicle

Areva T&D,Alstom & Schneider Electric

Creating two global leaders to tackle the new smart grid challenges

Documents

Acquisition project of Areva Transmission & Distribution · • Critical size in medium voltage ... Areva D substation automation complements Schneider Electric ... DEWA ADWEA Afric