Acquisition project of Areva
Transmission & Distribution
Press conference
2 December 2009
Disclaimer
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.
04
Introduction
13
Schneider Electric & Areva D
20
Alstom & Areva T
29
Social commitments
33
Conclusion
Press Conference - Alstom / Schneider Electric – 2 December 2009
3
04
Introduction
13
Schneider Electric & Areva D
20
Alstom & Areva T
29
Social commitments
33
Conclusion
Press Conference - Alstom / Schneider Electric – 2 December 2009
4
The electrical industry is transforming
Production
►
►
►
►
►
►
►
Transmission
Distribution
Consumption
Environmental pressure
Decentralized renewable energies
Deregulation
Interconnections
Supply demand response
Energy efficiency
Electric vehicles
Production
Transmission
Distribution
Press Conference - Alstom / Schneider Electric – 2 December 2009
Consumption
5
The smart grid is changing all stages of the
electrical value chain
EnR
Centralised Generation
3
2
Storage
Backup
Distribution and consumption:
energy efficient, communicating,
electricity intensive
Smart & flexible
transmission
network
Residential
Commercial
Industry
Transport
Transmission
1
Renewable Energies
Decentralized and irregular
4
Distribution
Consumers
Communication and software at all levels
“Smart Grid”
Press Conference - Alstom / Schneider Electric – 2 December 2009
6
Two poles of specialization, with two different
sets of dynamics
Renew- On-site Backup
able Storage Power
Centralized Generation
Residential
Commercial
Industrial
Transportation
Production
Transmission
Distribution
Consumption
• Major global players
• Global and regional players
• Large projects
• Equipment and product sale
• Focused on utilities
• Multi-clients
Press Conference - Alstom / Schneider Electric – 2 December 2009
7
The offer by the consortium would lead to the
creation of two global specialists
€20 Bn
€22 Bn
Alstom
Power
>€11 Bn
Areva T
€3.3 Bn
Areva D
€1.7 Bn
2008 proforma sales
Production
Schneider
Electric
MV / LV
>€10 Bn
2008 proforma sales
Transmission
Upstream Specialist
Distribution
Consumption
Downstream Specialist
Press Conference - Alstom / Schneider Electric – 2 December 2009
8
We would maintain and develop the synergies
between transmission and distribution
€22 Billion
€20 Billion
• 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
Press Conference - Alstom / Schneider Electric – 2 December 2009
9
We would create new synergies for
transmission and distribution businesses
€20 Billion
€22 Billion
• Innovation by connecting
generation and transmission
• €500m of transmission
purchase by Alstom in 2008
• Innovation by connecting
distribution 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
Press Conference - Alstom / Schneider Electric – 2 December 2009
10
A drastic increase of turnkey project capabilities
Turbines
HV
MV
equipments equipments
HV
equipments
MV
equipments
MV
equipments
Alstom
project sales
€ 4.5 bn
Areva T&D
project sales
€ 1.6 bn
Schneider Electric
project sales
€ 2.0 bn
Utilities Generation
Utilities Transmission
& Distribution
Utilities Distribution,
Industry, Buildings
Turbines
HV
MV
equipments equipments
MV
equipments
Alstom
project sales
€ 5.8 bn
Schneider Electric
project sales
€ 2.3 bn
Utilities Generation &
Transmission
Utilities Distribution,
Industry, Buildings
Press Conference - Alstom / Schneider Electric – 2 December 2009
11
Value of the transaction
Cash impact
~ €3.3bn
~ €4,000m
• 2008 EBITDA of €587m of which
minorities of ~€50m (8%)
~ €400m
~ €200m
• Alstom share ~2/3
€2,290m
• 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
€1,053m
• Multiple of ~8x 2009(e) EBITDA *
* Alstom and Schneider Electric estimate
Equity value Net debt
as at
committed
30.06.2009
to Areva
Pensions
Minorities
Enterprise
value
Press Conference - Alstom / Schneider Electric – 2 December 2009
12
04
Introduction
13
Schneider Electric & Areva D
20
Alstom & Areva T
29
Social commitments
33
Conclusion
Press Conference - Alstom / Schneider Electric – 2 December 2009
13
Areva Distribution: world #4 in medium voltage
Sales
2008 sales breakdown
€1.7bn
€1.4bn
MV distribution
products
Systems &
services
€1.3bn
Grid
automation
2006
2007
(incl. switchgears,
transformers,
substations)
2008
Industrial and employee data
Asia-Pacific
Europe
~11,000 employees
Rest of world
~40 plants
Operational figures for Areva Distribution are estimates
subject to final adjustments
North
America
Press Conference - Alstom / Schneider Electric – 2 December 2009
14
We would consolidate two complementary
players in medium voltage…
MV
switchgears
& systems
Fill the
gap with
no.1
Distribution
Transformers
Balance
global
footprint
Grid
Automation
Complementary
smart
grid offerings
Combined sales
~€ 4.6 bn
80 plants
~ 22,000 employees
~45% in new economies
Extensive market
coverage
Operational figures for
Areva Distribution are estimates
subject to final adjustments
Press Conference - Alstom / Schneider Electric – 2 December 2009
15
…with geographical fit in key markets and exceptional
presence in new economies
Promising market trends
in new economies
Electrification
and equipment needs
> 80% of global market
growth in next ten years
Industrial sites in new economies
Areva D (~20) + SE (~20) = ~40
Strong complementarities
in new economies
Schneider
Electric MV
Areva D
China
India
Brazil
Russia
Middle East
New economies
% of MV sales
~43%
~47%
Further reinforce
our footprint in New Economies
Operational figures for Areva Distribution are
estimates subject to final adjustments
Press Conference - Alstom / Schneider Electric – 2 December 2009
16
… as well as important complementarities of customer
bases and technologies
Strong fit of customer bases
Schneider
Electric MV
Electrical utilities
Electro-intensive*
Industries
Buildings
Strong complementarities
in technologies
Areva D
MV switchgear
Transformers
Grid
automation
Areva D stronger in primary MV
Schneider Electric stronger
in secondary MV
Complementary footprint
Areva D substation automation
complements Schneider Electric
offers in smart grid
Wider range of technologies
Wider range of end-users
* Notably Oil & Gas, MMM …
Press Conference - Alstom / Schneider Electric – 2 December 2009
17
Creation of Energy: a new business with
proforma sales of ~€4.6bn and 22,000 employees
4 Businesses
5 Businesses
Power
(MV
+LV )
Areva D
€ 1.7 bn
Power
Energy
Key market
segments
• Residential
• Marine
• Utilities
• Oil and gas
€ 4.6 bn
IT
Industry
Buildings
IT
Industry
Buildings
• Data centers
• Bank / Insurance
• OEMs
• Water
• Mining
• Retail
• Hotels
• Hospitals
• Offices
Press Conference - Alstom / Schneider Electric – 2 December 2009
Key product
lines
LV Power
IS&C
MV
distribution
Grid
Automation
critical
power &
cooling
Industrial
automation
CST
Building
automation
& security
18
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
Press Conference - Alstom / Schneider Electric – 2 December 2009
19
04
Introduction
13
Schneider Electric & Areva D
20
Alstom & Areva T
29
Social commitments
33
Conclusion
Press Conference - Alstom / Schneider Electric – 2 December 2009
20
Areva Transmission: a major step forward for
Alstom’s growth
Alstom tomorrow : a group based on
three strong pillars
Alstom today : two Sectors
Power
POWER
Transport
TRANSPORT
POWER
Sales: ~ €19 billion
Employees: ~ 80 000
• China: from 7000 to 10 000
employees
TRANSPORT
Sales: ~ €22 billion
Employees: ~ 100 000
More balanced spread of
activities
Strong technological base
Stronger presence in Asia
• India: from 4 000 to 6 500
employees
TRANSMISSION
• R&D spending grows to
~ €750 million
• Transmission: an activity
combining projects and
products; smaller projects;
less cyclical
Press Conference - Alstom / Schneider Electric – 2 December 2009
21
Areva Transmission: World n°3 in high voltage
Sales and operating margin
2008 sales breakdown (estimated)
(in € billions)
4.0
3.0
2,4
2,9
3,4
Systems & Services
2.0
HV Products
1.0
2006
2007
2008
Grid automation
Industrial and employee data
21 000 employees
65 sites
Rest of the world
Europe
North America
Asia-Pacific
Press Conference - Alstom / Schneider Electric – 2 December 2009
22
Areva Transmission: a promising asset…
A sound long-term market
• Global population and
economic growth
A global player
Market leader
• Present in 160 countries
• Leader in Europe
• Ageing installed base
• New equipment in emerging
markets
• Energy efficiency and
environmental regulations
• Very well positioned in the
Middle East
• Number 1 in India
Gas
insulated
switchgears
(GIS)
Disconnectors
(DSC)
Instrument
transformers
Energy
management
systems for the
transmission grid
Press Conference - Alstom / Schneider Electric – 2 December 2009
23
…that Alstom will develop in the future
Worldwide presence
Customers
• Develop the commercial
position in China
• Optimise utilities commercial
base
• Strengthen the presence in
North America
• Develop the industrial
customer base
(aluminium…)
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
Press Conference - Alstom / Schneider Electric – 2 December 2009
24
Shared ambitions
Technology leader strategy
•
R&D projects and pilot
installations
•
Partnerships
− Universities, laboratories
− Start-up
•
Priority development axes
Renewables
Variable speed
pump turbine
Energinet – management of
renewables
Automation
Acquisitions
Control systems
Smart grid
Power electronics
Power management
Press Conference - Alstom / Schneider Electric – 2 December 2009
HVDC Point to point
25
Shared competencies
Expertise in managing and controlling large integrated projects
Canada
Riel substation
Russia
Bogushany
United Kingdom
Sheringham Shoal
South Korea
Kepco II HDVC
Indonesia
PLN 10GW 150kV .
Main projects
Alstom
Areva T
Libya
Sebha &Tobruk
10 GIS stations
Qatar - Phase 8
Dubai - Barsha
Bahrain- Alba
Press Conference - Alstom / Schneider Electric – 2 December 2009
26
Shared competencies
A global and flexible industrial base close to key markets
Chattanooga – USA
Steam turbines,
Boilers
Elblag - Poland
Foundry
Tianjin, Wuhan – China
Environmental protection
systems,
Hydropower turbines
Shanghai, Wuhan - China
Transformers, GIS
Main investments
Areva T
Alstom
Main production centres
Areva T
Alstom
Gebze - Turkey
Transformers
Baroda, Chennai - India
Transformers, GIS
Circuit breakers
Press Conference - Alstom / Schneider Electric – 2 December 2009
27
Shared customers
A strengthened commercial base
Main Alstom and Areva Transmission customers
Europe
EDF
Endesa
Iberdrola
GDF Suez
Areva
E.ON
Americas
Alstom
International Power
Constellation
Hydro Quebec
√
√
√
General Electric
Chevron
CFE
Alcan/Rio Tinto
√
√
√
Areva T
Vattenfall
RWE
BOT
√
√
√
√
√
Alstom
Areva T
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
National Grid
Asia / Pacific
NTPC
Reliance
EVN
Marubeni
Areva T
Babcock & Brown
Eskom
√
√
SGCC
SEC
√
√
PLN
Sonelgaz
√
√
CTGPC
Gecol
√
CGNPC
DEWA
√
ADWEA
Areva T
√
√
√
√
√
√
√
√
√
Power Grid
Africa/Middle East
Alstom
Alstom
√
√
√
√
√
√
Press Conference - Alstom / Schneider Electric – 2 December 2009
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04
Introduction
13
Schneider Electric & Areva D
20
Alstom & Areva T
29
Social commitments
33
Conclusion
Press Conference - Alstom / Schneider Electric – 2 December 2009
29
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
Press Conference - Alstom / Schneider Electric – 2 December 2009
30
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 associating
T&D teams
Press Conference - Alstom / Schneider Electric – 2 December 2009
31
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 to 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 in
case of a significant downturn in the general economic conditions
● Continuity
● Maintenance and development of social policies and practices
from Areva T&D
Press Conference - Alstom / Schneider Electric – 2 December 2009
32
04
Introduction
13
Schneider Electric & Areva D
20
Alstom & Areva T
29
Social commitments
33
Conclusion
Press Conference - Alstom / Schneider Electric – 2 December 2009
33
The transaction timeline
Exclusivity
period
Announcement
Signing
Consultation of works’ councils
Closing
Regulatory approvals
Allocation of T to Alstom
and D to Schneider
Approval by Commission des
Participations et des Transferts (CPT)
Acquisition of Areva T&D
through a common vehicle
Press Conference - Alstom / Schneider Electric – 2 December 2009
34
Areva T&D,
Alstom & Schneider Electric
Creating two global leaders to
tackle the new smart grid
challenges