1) AREVA is a major French public company focused on nuclear energy and electricity production/delivery.
2) While France remains important, AREVA is pursuing international growth strategies in the US and China through its HR policies.
3) AREVA adapts its HR strategies locally while maintaining the company's French roots and values of customer satisfaction, responsibility, and excellence.
Horngren’s Cost Accounting A Managerial Emphasis, Canadian 9th edition soluti...
Areva 2005
1. AREVA
Best in France Case Study
January 2005 – June 2005
Jennifer Chuppe
Miguel Diez-Blanco
Chen Guo
Alessandro Pagella
Roger Pelaud
2. Executive Overview
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
3. AREVA
We bring solutions for electricity
production and delivery
Number 1 in the world for nuclear energy
Number 3 for electricity transmission and distribution
Number 3 in connectors
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.
6. AREVA’s 5 businesses
1 2 3 4 5
FRONT END REACTORS & BACK END TRANSMISSION & CONNECTORS
DIVISION SERVICES DIVISION DISTRIBUTION DIVISION
DIVISION DIVISION
C C F
C Fi
F Comm unic ation s Data
Cons umer , Aut omotiv e,
Elec tric al po wer
inte rcon nect, Micro -
conn ecti ons
C C/F T
T [C] COGEMA
[F] Framatome ANP
T [T] AREVA T&D
[Fi] FCI
7. Key Figures 2004 2003 2002
Sales 11 109 M€ 11 114 M€ 8 265 M€
Consolidated Net Income 428 M€ 357 M€ 240 M€
Workforce 71 590 69 816 50 147
Sales by activity Sales by region
(In millions of € )
Front End Division
1 338 2 683 Europe & CEI
Reactors & 2%
12 % 24 % Services Division 19 %
Americas
2 859* Back End Division
26 %
2 124 Transmission & Asia-Pacific
2 023 21 %
Distibution Division 58 %
19 %
19 % Connectors Africa
Division
8. Workforce
20 principaux pays (sur 70) = 94 % des effectifs
ce
an
Fr
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. We Thank
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
Editor's Notes
AREVA group was created in 2001. The group represents the combination of five main companies: AREVA T&D, COGEMA, FRAMATOME ANP, TECHNICATOME, and FCI. The following are the milestones of the company: 1958: FRAMATOME is established: nuclear reactor engineering(pressurized water reactors, PWR) 1976: COGEMA is founded: mineral exploitation, uranium enrichment and used fuel treatment. 1988-1998: FCI, a leader in connectors is formed through a series of acquisition. 2001: FRAMATOME ANP is formed by merging the nuclear operations of FRAMATOME and Siemens. The new group, held by FRAMATOME(66%) and Siemens(34%), is the sole supplier of new generation EPR reactors and world leader in the nuclear fuel business. 2004: Integration of Alstom’s T&D operation.
AREVA offers customers technological solutions for highly reliable nuclear power generation and electricity transmission and distribution. AREVA also provides interconnect systems to the telecommunications, computer and automotive markets. The group’s business has two catagogries: ENERGY and CONNECTOR. The first four business is included in ENERGY while the fifth one is included in CONNECTOR. The group is a worldwide leader in energy and a frontrunner in connectors . The main functions of the five business are as following: The Front-End Division combines all nuclear operations for electric power generation: uranium mining, concentration, conversion and enrichment, and nuckear fuel fabrication. The Reactors and Services Division designs and builds a wide range of PWRs (Pressurized Water Reactors) and BWRs (Boiling Water Reactors). T he division consists of six business units, which roll out the products and services required for day-to-day operation and maintenance of nuclear power plants. The Back-End Division covers the reprocessing and recycling operations of spent fuel after its use in nuclear power plants. As part of the sustainable development and environmental protection process, AREVA has developed high-tech solutions making it possible to recycle 96% of spent fuel. The AREVA T&D D ivision supplies products, systems and services for electricity transmission and distribution. They are used to regulate, switch, transform and dispatch electric current in electric power networks connecting the power plant to the final user. The division's customers are electric utilities as well as the oil, mining and metals, wind energy, paper and glass, transportation, and power engineering industries. The Connectors Division is represented by FCI, 3rd largest connector manufacturer in the world. Connectors are c omponent s attached to the end of an electrical or optical cable for the purpose of coupling or uncoupling appropriate components . Connectors is a high-precision industry which designs and manufactures electrical, electronic and optical connectors, flexible microcircuits and interconnection systems . AREVA divides this division into four busniess units: The Microconnections business unit develops and manufactures connectors for smart cards, and flexible printed circuit boards for semiconductors used in computers, peripherals and mobile telephony. The Automotive business unit designs, manufactures and supplies interconnection systems for the majority of automotive electrical and electronic applications. The Electrical Power Interconnect business unit designs and manufactures a wide range of products for transportation systems and electric power distribution , as well as for the construction, telecommunications and manufacturing industries. It supplies connectors for high-voltage aluminum and copper transformers and related hardware. The Communication Data Consumer business unit designs, manufactures and markets electronic and optical connectors . In the past years, company acquired business units in France to achieve snergy. Recently the company tries to expand their production-lines to low cost areas such as Asia and South America. They can take advantage of low cost to sale the right products in the host market and in the market where they were forced to leave.
Sales and Net income increases on a yearly basis, which results from new acquisition and the expansion of market to foreign countries. The productions of the five businesses almost evenly weighted in the total sales with connectors division lags behind. The company strategy is to seek expansion in all the activities in the prerequisite of remaining stable based on figures in prior years. 58% sales comes from Europe which mainly include germany and France. This is due to both geographic and techonogical advantage. However, the company is expanding to growth market such as Asia-Pacific and the market where they were forced to leave out of such as Americas in the recent years. This is in compliance with the company’s strategy of expansion. The market in Europe comes to saturation while there is a big market in both Asia-Pacifi and America. 2. Workforce increased with the increase of sales.(Please refer to our sldes ‘ Workforce ’)
The group has plants sites in over 40 countries with 70,000 employees . The group has manufacturing facilities in over 40 countries and a sales network in over 100 . In particular, it is reinforcing its presence in North America, the major Asian countries and Russia.
Energy divisions Nuclear The majority of AREVA’s customers are large electric utilities; public entities, such as publicly-owned electric power supply systems or agencies in charge of the back end of the nuclear fuel cycle; and major industrial companies. Geographically, the majority of its customers are located in Europe, the United States and Japan. The Group is also present in new emerging markets (China, Brazil, etc.), mainly through its T&D Division and, to a lesser extent, through its nuclear businesses. EDF, the CEA, Duke, E-On, EnBW, Entergy, JNFL, RWE, Suez and Vattenfall are among the Group’s largest customers. Together, they account for approximately 37% of AREVA’s consolidated sales. The Group’s five largest customers account for approximately 30% of AREVA’s consolidated sales. The largest customer, EDF, represents less than 20% of the Group’s consolidated sales revenue. T&D In contrast to the businesses of the Nuclear Division, the customer base for the businesses of the T&D Division is very broad – T&D services about 30,000 customers – while the size of the contracts is usually a few million euros. The Division’s ten largest customers represent approximately 5% of its sales revenue. The commercial organization of the T&D Division is centralized through an international sales network (ISSCO) present in 100 countries, ensuring the continuity and coordination of commercial relations across the Division’s entire offering. The sales force is organized into twelve regions and has a headcount of about 1,200. A program was adopted in 2004 to coordinate the management of accounts, enabling the Division to develop preferred, long-term relationships with world-class customers that are leaders in their markets, including EDF in France, National Grid Transco in the U.K., Hydro Quebec in Canada and E-On in Germany. The new approach is consistent with the Group’s overall business strategy and calls for the Division to work with the customers to anticipate future developments in electric power supply systems. The Division’s main customers, by category, are: • Integrated electric utilities: Steg in Tunisia, Dewa in Dubai, Wapda in Pakistan, Egat in Thailand, Vattenfall in Sweden, CFE in Mexico, Eletrobras in Brazil and Gecol in Libya; • Transmission companies set up in the wake of deregulation: NGT in the U.K., Transelec in the US, RTE in France and State Grid Corporation in China; • Large companies that are major consumers of electricity: Arcelor, Chevron, Aluar, Alba, Volkswagen and Wal-Mart. Connectors Division The Connectors Division has a diversified customer base, with its ten largest customers contributing approximately 30% of the Division’s sales revenue. The Communication Data Consumer Business Unit is present in the Telecom, IT, Consumer electronics and Industrial electronics markets. In the Telecom market, its main customers include original equipment manufacturers (OEMs), such as Ericsson, Lucent, Nokia, Alcatel, NEC and Cisco; and electronics manufacturing services companies (EMS), such as Solectron, Flextronics, Celestica, Sanmina and Jabil. In the IT market, the Division’s largest customers are Dell, IBM, HP-Compaq, Intel, Samsung, Seagate,
Energy divisions The majority of AREVA’s customers are large electric utilities; public entities, such as publicly-owned electric power supply systems or agencies in charge of the back end of the nuclear fuel cycle; and major industrial companies. Geographically, the majority of its customers are located in Europe, the United States and Japan. The Group is also present in new emerging markets (China, Brazil, etc.), mainly through its T&D Division and, to a lesser extent, through its nuclear businesses. EDF, the CEA, Duke, E-On, EnBW, Entergy, JNFL, RWE, Suez and Vattenfall are among the Group’s largest customers. Together, they account for approximately 37% of AREVA’s consolidated sales. The Group’s five largest customers account for approximately 30% of AREVA’s consolidated sales. The largest customer, EDF, represents less than 20% of the Group’s consolidated sales revenue. Connectors Division The Connectors Division has a diversified customer base, with its ten largest customers contributing approximately 30% of the Division’s sales revenue. The Communication Data Consumer Business Unit is present in the Telecom, IT, Consumer electronics and Industrial electronics markets. In the Telecom market, its main customers include original equipment manufacturers (OEMs), such as Ericsson, Lucent, Nokia, Alcatel, NEC and Cisco; and electronics manufacturing services companies (EMS), such as Solectron, Flextronics, Celestica, Sanmina and Jabil. In the IT market, the Division’s largest customers are Dell, IBM, HP-Compaq, Intel, Samsung, Seagate,
AREVA’s goal is to offer products, services and expertise enabling our electric utility and manufacturing customers to grow while meeting their responsibilities with regard to their own stakeholders. AREVA’s ears are always open to our customers. We try to anticipate as well as meet their needs. We deliver what we promise and we don’t promise more than we can deliver. At AREVA, we respect our customers’ culture and work to protect their image and their interests . Our technologies and services are designed and deployed in accordance with the highest health, safety, environmental protection and quality standards. We protect the data and know–how that our customers and partners entrust to us with the same degree of care as if they were our own, to the fullest extent of the law and regulatory requirements.