news release 26 August 2011 URENCO Group – Half-Year 2011 Unaudited Financial Results

Highlights •

Shift in delivery profile compared to 2010 leads to significant revenue increase

•

Increase in production capacity of 4% across geographies since December 2010

•

Order book remains strong at more than €20 billion extending out beyond 2025

•

Improved funding position following re-financing of revolving credit facilities at €750 million and extended European Investment Bank loan

•

Tails management facility (TMF) site preparation work completed and lead contract signed for construction services

•

Japan earthquake and impact on nuclear generation in Japan and other countries will slow near term growth in deliveries

Financial highlights Six months to 30 June 2011 (unaudited) €m

Six months to 30 June 2010 Restated €m i

% change

Revenue

527

390

35%

EBITDA

306

264

16%

EBITDA margin - %

58%

68%

(10%)

Income from operating activities

190

167

14%

Net income

125

98

28%

Net income margin - %

24%

25%

(1%)

Capital expenditure

334

368

(9)%

Cash generated from operating activities

390

357

8%

i Restated for change in accounting policy - under IAS 31 interests in joint ventures

•

Shift in delivery profile compared to 2010 leads to significant revenue increase Revenue for the first half of 2011 was €527 million, a 35% increase on 2010 half year. This was driven by 29% higher separative work deliveries to our customers. EBITDA increased by 16% to €306 million (2010: €264 million) mainly as the result of higher revenue and production cost savings, driven by further economies of scale. EBITDA margin at 58% was 10%

lower than half year 2010. The main driver for this was a foreign exchange retranslation gain included in 2010 results (2010: €33 million). Net income grew by 28% during the period (2011: €125 million; 2010: €98 million). This is higher than the growth in EBITDA (2011: €306 million; 2010 €264 million, an increase of 16%), in part as a result of gains on ineffective hedges (€7 million) during the first half of 2011. The net income margin at the half year was 24% (2010: 25%), impacted by higher depreciation costs. The Group’s tax charge for the half year was €39.3 million (2010: €18.2 million), with an effective rate of 24% (2010: 16%). The Group invested €334 million in new production capacity (2010: €368 million). The Group expects further new capacity to be added across Europe and in the United States. Cash generation from operating activities was €390 million (2010: €357 million), an 8% increase, mainly as a result of the shift in customer deliveries. Tax paid in the period was €74 million (2010: €60 million), reducing net cash flow from operating activities to €316 million, a 6% increase on 2010. •

Increase in production capacity of 4% across geographies since December 2010 URENCO continued capacity expansion at its European sites during the first half of 2011. This has added circa 500 t/SW of capacity, bringing the Group’s total amount to more than 13,500 tSW/a. This equates to a 4% increase from the start of 2011 (2010: 13,000 tSW/a). The Group expects that new capacity will be added during the second half of 2011. Commissioning issues at URENCO’s US facility are still causing delays in bringing additional capacity online. URENCO continues to work with the US Nuclear Regulatory Commission (NRC) towards a resolution. Overall, the impact from URENCO’s US facility on the Group’s capacity has been mitigated by additional capacity in Europe, as well as URENCO’s flexible business model.

•

Order book remains strong at more than €20 billion extending out beyond 2025 URENCO’s order book remains strong, with only minimal impact seen as a result of the events in Japan and the nuclear phase-out in Germany. Currently, forward orders stand at more than €20 billion and extend beyond 2025. This strong visibility of future revenues successfully underpins URENCO’s strategy of growth through investment. URENCO continues to be a leading provider of enrichment services to the global nuclear power industry, maintaining a market share of around 27%*. * internal calculation

•

Improved funding position following re-financing of revolving credit facilities at €750 million and extended European Investment Bank loan URENCO’s liquidity position continues to be good, with significant forward cover from its committed funding facilities through into 2013. In the first half of 2011, the syndicated bank facility of €500 million maturing in 2012 was replaced with a new syndicated and a bilateral facility totalling €750 million, with a term out to 2016. In addition, €75 million was drawn down as part of the funding arrangements with the European Investment Bank (EIB).

•

Tails Management Facility (TMF) site preparation work completed and lead contract signed for construction services Site preparation works have been completed in the first half of 2011 for the TMF, which will be built at URENCO’s UK site. Detailed design work continues. A contract has been signed for project management, design engineering, procurement and construction management services. A further contract has also been signed for the supply of core technology. It is anticipated that construction will begin in 2012, with operations due to commence in 2015. The TMF is an important project for URENCO, as it will provide control over the cost of tails and the ability to manage tails in a responsible manner. The TMF will comprise a UF6 tails deconversion unit and a number of associated storage, maintenance and residue processing facilities. This supports URENCO’s long-term strategy for the management of tails pending future re-use.

•

Japan earthquake and impact on nuclear generation in Japan and other countries will slow near term growth in deliveries The effects of the earthquake and subsequent tsunami that took place in Japan earlier in 2011 are still being assessed in terms of impact on the global nuclear industry. URENCO has so far experienced minimal impact from the events that took place mainly as a result of URENCO’s flexibility of investment and geographical spread, however near term growth in customer deliveries will slow. The Group will continue to assess this impact and will monitor future capacity development.

Outlook The Group expects to deliver stable operational and financial results for 2011, with revenues expected to be slightly higher and EBITDA broadly in line with the 2010 full year results. Net income at the full year is expected to be lower than 2010. Operational cash flow will remain strong and continue to be a significant source of funds for the Group’s expansion programme. We expect to continue capacity expansion in the second half of 2011 in order to meet our customer commitments, which extend beyond 2025.

Helmut Engelbrecht, Chief Executive of the URENCO Group, commenting on the half-year results, said: “URENCO’s operations continued to perform well in the first half of 2011, and capacity increased by 4%. Our financial results were also robust, with higher customer deliveries providing better performance compared to the same period last year. “The consequences of the events in Japan are still unfolding and the final implications for the global nuclear industry are not yet fully understood. Although the impact on URENCO is minimal to date, we are aware that this will have implications for how we do business in the future. However, as URENCO has a flexible and robust business model, we are confident that the Group will continue to grow and remain strong both operationally and financially. “We expect to continue capacity expansion in the second half of 2011 in order to meet our customer commitments, which extend beyond 2025.”

Editors note: Condensed Consolidated Financial Statements for the half-year 2011 are available in full on www.urenco.com Name: Title: Direct Tel: Email:

Jayne Hallett Head of Group Communications +44 (0) 1628 402297 [email protected]

Name: Title: Direct Tel: Email:

Sam Waller Investor Relations +44 (0) 1628 486254 [email protected]

Name: Title: Direct Tel: Email:

Howard Lee Headland Consultancy +44 (0) 207 367 5225 [email protected]

Summary Half-Year Results – period ended 30 June 2011

Income Statement for the period ending 30 June 2011 Separative Work Unit (SWU) deliveries were 29% higher in the period to June 2011, compared with the same period last year. In addition, deliveries of feed to our customers grew by 17% and average selling prices saw a small increase compared to half year 2010. These combined factors led to an increase in revenue which reached €527 million (2010: €390 million). EBITDA was 16% higher during the first half of 2011, reaching €306 million (2010: €264 million). The increase in EBITDA was as a result of increased revenue and reduced average production costs driven by economies of scale and cost control. The first half of 2010 EBITDA of €264 million included foreign exchange retranslation gains on balance sheet items of €33 million. The impact of retranslation for half year 2011 is a loss of €7 million. Net finance costs for the half year 2011 were €26 million, compared to €51 million at half year 2010. The portion of the hedge portfolio not eligible for hedge accounting under IAS39 (including ineffective hedges) led to a €19 million charge to the income statement for the first six months of 2010. This charge was primarily driven by the weakening of the Euro against both the Dollar and Sterling. This compares to a gain of €7 million for the half year 2011. The tax charge for the first half of the year at €39 million (2010: €18 million) is higher than the same period last year with an effective tax rate of 24% (2010: 16%). The increase in the effective tax rate compared with the previous half year period is mainly the result of unusually large non-taxable foreign exchange gains included in the Group's income statement in the six months to 30 June 2010. Net income grew by 28% during the period (2011: €125 million; 2010 €98 million). This is higher than the growth in EBITDA in part as a result of certain gains on ineffective hedges during the first half of 2011. The net income margin at the half year was 24% (2010: 25%), impacted by higher depreciation costs.

Statement of Financial Position – as at 30 June 2011 The book value of tangible assets increased by €77 million in the first half of the year, reflecting the growth through investment strategy. Capital expenditure during the first six months of 2011 amounted to €334 million which compares to €368 million at half year 2010. The timing of customer receipts and supplier payments led to higher net cash flow from operating activities of €316 million (2010: €297 million). Net debt was €2,485 million as at 30 June 2011, up €76 million from 31 December 2010 and mainly reflecting capital expenditure made in the first half of the year. The Group held cash and cash equivalents of €97 million at the end of June 2011 (2010: €38 million). Total equity has increased by €3 million with retained earnings increasing by €34 million in the period. This has been offset in part by equity movements in hedging reserve (IAS39) and foreign currency retranslation reserve which, when combined, reduce equity by €31 million. Further Information •

Income statement, statement of financial position and cash flow statement

The income statement, statement of financial position and cash flow statement included as appendices to this investor release have been extracted from the Unaudited half-year Condensed Consolidated Financial Statements of the URENCO Group for the six months ended 30 June 2011, which can be found in full on the URENCO Group’s website [www.urenco.com].

•

Definitions

Revenue – Revenue from sale of goods and services Net Income – Income for the period/year attributable to equity holders of the parent. EBITDA – Earnings before interest (including other finance costs), taxation, depreciation and amortisation (or income from operating activities plus depreciation and amortisation, plus joint venture results). Order book – Contracted and agreed business Separative Work Unit (‘SWU’) – The standard measure of the effort required to increase the concentration of the fissionable U235 isotope. Feed – Natural or reprocessed uranium, that has been converted by a third party to uranium hexafluoride.

Net Debt – Loans and borrowings (current and non-current), plus obligations under finance leases less cash and cash equivalents. Net Finance Costs – Finance costs less finance income net of capitalised borrowing costs and including costs/income of non designated hedges.

The URENCO Group URENCO is an independent international energy and technology group with its head office based in Marlow, UK. It operates facilities in Germany, the Netherlands, the UK and New Mexico, US. It operates in a pivotal area of the nuclear fuel supply chain, which enables the sustainable generation of electricity for consumers around the world. Utilising centrifuge technology, URENCO provides safe, cost-effective and reliable uranium enrichment services for civil power generation within a framework of high environmental, social and corporate responsibility standards. Currently URENCO fulfils around 27% of the global enrichment market, and aims to establish itself as the leading global supplier of enrichment and enrichment technology. www.urenco.com Disclaimer This news release is not intended to be read as the Group’s half year accounts. Information contained in this release is based on the 2011 Unaudited Half-Year Consolidated Financial Statements of the URENCO Group, which have been reviewed by the Group’s auditors, Deloitte LLP. The independent review report is based on the 2011 Unaudited Half-Year Consolidated Financial Statements of the Group. The Group’s 2010 statutory accounts have been delivered to the registrar of companies. This release and the information contained within it does not constitute an offering of securities or otherwise constitute an invitation or inducement to underwrite, subscribe for or otherwise acquire securities in or issued by any company within the URENCO Group. Any forward-looking statements contained within this release are inherently subject to risks and uncertainties. Actual results may differ materially from those expressed or implied by such forward-looking statements and, accordingly, any person reviewing this release should not rely on such forward-looking statements. URENCO Limited disclaims and intention or obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

HALF-YEAR CONSOLIDATED INCOME STATEMENT Six months ended 30 June 2010 2011 (restated) Unaudited €m €m

Year ended 31 December 2010 (restated) Audited €m

527.0

389.5

1,259.4

6.2

7.9

14.5

36.8 (27.6) (55.1) (64.3) (113.9) (116.8) (2.1)

54.3 (0.4) (49.8) (0.5) (63.7) (92.2) (73.5) (4.5)

(16.9) (32.8) (102.3) (129.2) (203.3) (183.5) (15.4)

Income from operating activities

190.2

167.1

590.5

Finance income Finance costs Income before tax

40.9 (66.8) 164.3

45.5 (96.2) 116.4

63.6 (132.4) 521.7

Income tax expense

(39.3)

(18.2)

(134.6)

Net income relating to the period/year attributable to equity holders of the parent

125.0

98.2

387.1

€ 0.74

€ 0.58

€ 2.30

Revenue from sale of goods and services Work performed by the entity and capitalised Changes to inventories of finished goods and work in progress Raw materials and consumables used Tails provision created Revision of decommissioning provision Employee benefits expense Depreciation and amortisation Other expenses Share of results of joint venture

Earnings per share: Basic and diluted earnings per share

HALF-YEAR CONSOLIDATED STATEMENT OF FINANCIAL POSITION

€m

30 June 2010 Unaudited (restated) €m

31 December 2010 Audited (restated) €m

3,632.8 68.5 39.5 111.3 136.2 3,988.3

3,495.8 30.9 40.8 56.6 156.6 3,780.7

3,555.9 75.1 34.8 79.1 122.4 3,867.3

201.2 594.3 18.1 23.0 96.6 933.2 4,921.5

216.6 487.4 23.6 15.1 27.2 769.9 4,550.6

139.3 733.4 16.4 4.5 38.2 931.8 4,799.1

237.3 16.3 1,346.9 (99.5) (99.7) 1,401.3

237.3 16.3 1,007.1 (309.2) 113.6 1,065.1

237.3 16.3 1,313.0 (170.3) 1.9 1,398.2

35.4 0.2 2,167.0 602.9 39.3 9.4 37.0 74.8 2,966.0

9.9 0.3 2,148.8 530.1 60.2 9.6 178.5 21.3 2,958.7

10.7 0.1 2,157.8 568.9 41.5 9.5 55.7 39.7 2,883.9

171.8 0.2 317.8 0.3 12.0 29.9 22.2 554.2 3,520.2 4,921.5

132.6 0.5 271.7 1.9 98.3 21.8 526.8 3,485.5 4,550.6

176.5 0.3 250.8 1.1 42.7 40.6 5.0 517.0 3,400.9 4,799.1

30 June 2011 Unaudited

ASSETS Non-current assets Property, plant and equipment Intangible assets Investments Derivative financial instruments Deferred tax assets Current assets Inventories Trade and other receivables Derivative financial instruments Income tax recoverable Cash and cash equivalents TOTAL ASSETS EQUITY AND LIABILITIES Equity attributable to equity holders of the parent Share capital Additional paid in capital Retained earnings Hedging reserve Foreign currency translation reserve Total equity Non-current liabilities Trade and other payables Obligations under finance lease Interest bearing loans and borrowings Provisions Retirement benefit obligations Deferred income Derivative financial instruments Deferred tax liabilities Current liabilities Trade and other payables Obligations under finance lease Interest bearing loans and borrowings Provisions Derivative financial instruments Income tax payable Deferred income Total liabilities TOTAL EQUITY AND LIABILITIES

HALF-YEAR CONSOLIDATED CASH FLOW STATEMENT

Income before tax Adjustments to reconcile Group income before tax to net cash inflows from operating activities:

Six months ended 30 June 2011

Six months ended 30 June 2010 (restated)

Year ended 31 December 2010 (restated)

Unaudited

Unaudited

Audited

€m

€m

€m

164.3

116.4

521.7

2.1

4.5

15.4

Depreciation and amortisation

113.9

92.2

203.3

Finance income

(40.9)

(45.5)

(63.6)

66.8

96.2

132.4

Share of joint venture results

Finance cost

-

0.1

0.6

32.8

70.0

92.3

Operating cash flows before movements in working capital

339.0

333.9

902.1

(Increase) / decrease in inventories

(40.9)

(56.8)

18.0

157.8

99.7

(86.5)

(65.8)

(20.0)

26.7

Loss on write off of property, plant and equipment Increase/(decrease) in provisions

Decrease / (increase) in receivables

(i)

(Decrease) / increase in payables Cash generated from operating activities

390.1

356.8

860.3

Income taxes paid

(74.4)

(60.1)

(142.2)

Net cash flow from operating activities

315.7

296.7

718.1

16.3

15.1

34.7

Investing activities Interest received Proceeds from non designated derivatives Purchases of property, plant and equipment Increase in prepayments in respect of fixed asset purchases (1) Purchase of intangible assets Net cash flow from investing activities

-

-

0.7

(333.8)

(367.7)

(676.6)

(29.9)

(35.3)

(121.9)

(0.2)

-

(25.0)

(347.6)

(387.9)

(788.1)

(61.9)

(79.8)

(119.6)

(1.0)

(12.0)

(14.7)

Financing activities Interest paid Payments in respect of non designated derivatives Dividends paid to equity holders Proceeds from new borrowings

(75.0)

(75.0)

500.0

817.4

(173.6)

(256.7)

(539.2)

Repayment of finance lease liabilities

(0.2)

(0.4)

(0.7)

Net cash flow from financing activities

92.6

76.1

68.2

Net (decrease)/increase in cash and cash equivalents

60.7

(15.1)

(1.8)

Repayment of borrowings

1

329.3

Cash and cash equivalents at beginning of period/year

38.2

38.4

38.4

Effect of foreign exchange rate changes

(2.3)

3.9

1.6

Cash and cash equivalents at end of period/year

96.6

27.2

38.2

This includes prepayments in respect of fixed asset purchases representing 50% of payments made to the ETC joint venture in advance of deliveries of centrifuge cascades.