AREVA

1. AREVA Best in France Case Study January 2005 – June 2005 Jennifer Chuppe Miguel Diez-Blanco Chen Guo Alessandro Pagella Roger Pelaud

2. The objective of this study is to understand how a major French public company adapts its domestic HR strategy to attract and retain talents abroad The focus is on the US and China The HR strategy is very much in line with the company’s strategy Internationalization of the group operations is very much facilitated by HR strategy The purpose of this presentation is to detail the triggers that enable a major company to be more efficient abroad thanks to their HR approach and perspective In a nutshell, let’s discover the best of HR practices acting as an engine for the company mid to long term policy and need for internationalization Executive Overview

3. AREVA Number 1 in the world for nuclear energy Number 3 for electricity transmission and distribution Number 3 in connectors We bring solutions for electricity production and delivery

4. AREVA’s Mission • Innovate to contribute to an ever cleaner, safer and economical way to produce and deliver electricity. • Basic principles : • Profitable growth : Client satisfaction, economic and financial performance, innovation and R&D. • Socially responsible : Involvement, dialogue and consensus-building, community involvement. • Respect for the environment : Risk management and prevention.

5. The AREVA Company • Simplified legal organizational chart

6. [C] COGEMA [F] Framatome ANP [T] AREVA T&D [Fi] FCI 1 2 3 4 5 AREVA’s 5 businesses BACK END DIVISION FRONT END DIVISION REACTORS & SERVICES DIVISION TRANSMISSION & DISTRIBUTION DIVISION CONNECTORS DIVISION C C F Fi C F Communications Data Consumer, Automotive, Electrical power interconnect, Micro-connections C C/F T T T

7. Key Figures 200420032002 • Sales • Consolidated Net Income • Workforce 11 109 M€ 428 M€ 71 590 11 114 M€ 357 M€ 69 816 8 265 M€ 240 M€ 50 147 Sales by activity(In millions of € ) Sales by region

8. Workforce 20 principaux pays (sur 70) = 94 % des effectifs France

9. Who are the company’s clients? ENERGY DIVISION Nuclear T&D Integrated electric utilities Transmission companies Major consumers of electricity

10. Who are the company’s clients? CONNECTORS DIVISION Telecom Market IT Market OEMs EMS

11. What are clients’ expectations? • Receive products, services and expertise enabling them to grow while meeting their responsibilities with regard to their own stakeholders • Receive what is promised • Respect for their culture and protect their image and their interests • Protect their data and know-how with the same degree of care as if they were Areva’s own, to the fullest extent of the law and regulatory requirements.

12. The importance of France • France still represents 29% of their sales revenues. • The largest customer, EDF, represents less than 20% of the Group’s consolidated sales revenue. • France still is, and will be, a key factor for AREVA’s core business.

13. Company values • AREVA’s values are the group’s commitment to its customers, its employees, its shareowners and all of the communities in which AREVA plays a role, directly or indirectly. These values are: • CUSTOMER SATISFACTION • PROFITABILITY • RESPONSIBILITY • INTEGRITY • EXCELLENCE • SINCERITY • PARTNERSHIP

14. Company values • These values are rooted in the conviction that rigorous business ethics are integral to strong financial performance • As a French company, Areva has no problems to encourage these values in France • Globally, Areva ensures that these values are instilled by means of the AREVA values charter counting on every person belonging to the company, regardless of his/her duties, affiliate or country, to put the company values into practice, to defend them, and to promote them.

15. Areva’s Global HR Policy • France still most employees • French company • Government owned • Unique culture • Hiring: 70% engineers • No extraordinary high compensation, but • Opportunity to develop • Talent cultivation • Areva-University (focus on top-level management) • Formal, both locally and internationally focused courses for each hierarchy level of management • Training centers in France, U.S., France • First time: expression of the HR policy in the annual report

16. Areva’s Regional HR Policy • Most important countries • Europe: France & Germany • USA • China ! • France & Germany: steady/declining number of employees • Germany: political climate unfavorable concerning nuclear plants • USA: Trying to hire high-potentials, but difficult to compete with other companies (i.e. GE, Westinghouse) due to • Salary offered by competitors • Fact, that it is a French government-owned company: no stock options. • Agreements with MIT: knowledge center

17. Areva’s Regional HR Policy: challenges • Europe: shaping talent, talent building • Asia: talent development and retaining • USA: knowledge management, compensation and benefit

18. Areva’s Regional HR Policy - China • Clear Focus on China • Chinese Market seen as key-market, because of proximity to customers (note: not primarily because of lower labor costs!) • Trying to attract mainly Chinese high-potentials, who have been studying abroad, preferably in France • Key characteristics: well-known schools, international exposure, native Chinese speakers, mobility • French language is an asset • Problematic: high employee turnover rate! • Compensation system very different in China • Employees demand benefits apart from salary, such as pension plans for parents, housing assistance, etc.

19. Key Constraint Costs • Costs important for site and operational business – movement towards low cost • HR will not be outsourced since it is important from a strategic standpoint for Areva to have a global HR policy as well as regional management to address specific cultural differences • Tradeoff between cost and quality – prefer to produce in ‘low cost’ country, but must maintain a high level of quality – complex tasks completed in France • Compensation varies by region to account for various cultural differences • Example: in China there is a movement to offer a benefit whereby the employee’s parent is offered retirement benefits (Areva has not implemented this as of yet)

20. Key Benefits • Areva wants to be close to their clients (i.e. Asia, Americas) while maintaining their roots as a French company • Currently building expertise in Asia • Operations in France and Germany are higher cost in comparison to other regions • Company is owned by the French government but does not have assistance from ‘local governments’ in the regional (international) locations • Recruiting in France is easier in comparison to other region thanks to Areva’s strong brand • Striving to improve and educate other regions about the Areva brand

21. Key learnings and recommendations • “Think global, act local” applicable to HR • Transition to become a global player driven by HR • Learn about local nuances and competitive advantage, hence focus • HR can tackle competition from the recruitment point of view

22. For their contribution, support and trust Mr. Frédéric Thoral, Vice President Human Resources and Managerial Communication Mr. Henry Dufourmantelle, corporate Campus Management Director Their input was exhaustive and acted as a trigger for further and deeper understanding of the HR strategic role We Thank