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Full Year 2018 Audited Financial Results

15 March 2019

Revenue broadly in line with prior year; slight fall in EBITDA and net income.

Urenco Group (“Urenco” or “the Group”), an international supplier of uranium enrichment services and nuclear fuel cycle products, today announces its results for the full year ended 31 December 2018.


  • Robust financial and operational performance, improved safety and good progress on strategic implementation.
  • Revenue broadly in line with 2017 (up 1.6% year-on-year) supported by established contract order book and increased SWU and uranium related sales.
  • EBITDA reflects strong underlying business performance and cost discipline, down 3.9% year-on-year due to higher costs of nuclear provisions.
  • Net income down 0.7% year-on-year, reflecting lower EBITDA; offset by slightly lower financing and taxation costs.
  • Strong operating cash generation (up 6.6% year-on-year) and reduction in net debt (down 34.9% year-on-year).
  • UK Tails Management Facility (TMF) operations planned to start in 2019.

Financial Highlights (€m)

  2018 2017
Revenue 1,957.7 1,926.9
EBITDA (i), (ii) 1,200.4 1,249.5
EBITDA margin % 61.3% 64.8%
Income from operating activities 826.5 871.8
Net income 511.3 514.9
Earnings per share 3.0 3.1
Capital expenditure 183.1 299.5
Cash generated from operating activities 1,401.0 1,314.1

(i) EBITDA is earnings before exceptional items, interest (including other finance costs), taxation, depreciation and amortisation and joint venture results. Depreciation and amortisation are adjusted to remove elements of such charges included in changes to inventories and net costs of nuclear provisions. Further details on the calculation of EBITDA are set out in note 4 to the Group’s Consolidated Financial Statements contained in the 2018 Annual Report and Accounts.

(ii) There were no exceptional items in 2018 or 2017.

Thomas Haeberle, Chief Executive of Urenco Group, commenting on the full year results, said:

“During 2018 Urenco achieved robust financial and operational results, improved safety, and good progress in all areas of our strategy.

A strong order book and increased SWU and uranium related sales have supported a 1.6% increase in revenue. EBITDA and net income are slightly reduced (3.9% and 0.7% respectively) reflecting increased costs for nuclear provisions, partially offset by good cost discipline. We have continued to reduce debt; down by over 50% in three years.  

We are in the third year of our strategy and remain on track to realise our target cost savings by the end of 2019. We are signing new customer contracts and are making good progress on several new business opportunities. In 2019 we also plan to see our new Tails Management Facility (TMF) commence operations.

The global enrichment market remains challenging and current price levels would not support reinvestment in our enrichment facilities.

We are proud of the key role we play in the nuclear fuel cycle and the sustainable benefits we deliver to a low carbon economy. Customers remain our priority, and once again we met every delivery thanks to the work of our committed and engaged employees.

At the end of March, I will step down as CEO and retire from Urenco. My successor, Boris Schucht, joins us from 50Hertz, the North-East German Transmission System Operator. I am confident that Urenco will continue to prosper under his leadership. Urenco is well positioned to meet the market and geopolitical challenges, innovate to explore opportunities for growth, and empower employees to use their expertise to drive efficiency and continued positive change across our business.”

Financial Results

Revenue for the year ended 31 December 2018 was €1,957.7 million, an increase of 1.6% on the €1,926.9 million in 2017. SWU revenues were up by €17.8 million and uranium related sales were up by €62.3 million. For both SWU revenues and uranium related sales the favourable movements were primarily driven by higher volumes with average unit revenues broadly in line with 2017. Other net movements in revenue decreased by €49.3 million compared to 2017, primarily as a result of lower net fair value gains associated with uranium related commodity contracts and marginally lower sales at Urenco Nuclear Stewardship.

EBITDA for 2018 was €1,200.4 million, a decrease of €49.1 million (3.9%) from €1,249.5 million in 2017. This resulted principally from higher net costs of nuclear provisions (€53.6 million) together with higher reported other operating and administrative expenses (€26.3 million), which more than offset the margin impact from increased revenue.

The net costs of nuclear provisions were €174.1 million in 2018 compared to €120.5 million in 2017, an increase of €53.6 million as a result of an increase in the net costs for each of tails, decommissioning and other nuclear provisions.

The net costs for tails provisions in 2018 were €2.8 million higher than those for 2017. This increase was due to the lower costs of new tails provisions created (€54.5 million) being more than offset by lower releases from the tails provisions (€57.3 million). The costs of new tails provisions created in 2018 of €144.7 million were lower than the costs of €199.2 million in 2017, largely driven by the volume of new tails generated during the year and the 2017 uplift in deconversion cost estimates not being repeated in 2018. There was a €29.2 million release from the tails provision (2017: €86.5 million), as a result of optimisation of operations and the impact of the reduction in higher assay tails associated with enrichment services contracts.

The net costs for decommissioning provisions in 2018 increased by €42.3 million primarily due to a charge for

additional provisions of €65.9 million (2017: €18.4 million) following the triennial review of nuclear liabilities undertaken in 2018, offset by releases of provisions in the year of €8.8 million (2017: €3.6 million) associated with cylinder inventories.

The net costs for other nuclear provisions in 2018 increased by €8.5 million as a result of optimisation of the operations and changes to the forecasts for future re-enrichment of low assay feed.

Other operating and administrative expenses were €583.2 million in 2018 compared to €556.9 million in 2017, an increase of €26.3 million. 2017 benefited from a one-time gain of €15.6 million associated with the closure of the UK defined benefit pension scheme to further accrual and in 2018 a provision for a potential bad debt associated with a specific customer has been made of €17.3 million (2017: nil). Adjusting for these two factors, our other operating and administrative expenses are broadly in line with our Strategy 2020 ambition and our cost discipline has continued to mitigate the impact of inflationary pressures as well as additional costs associated with the development of our business.

The EBITDA margin for 2018 was 61.3% compared to 64.8% in 2017. The EBITDA margin in 2018 was adversely impacted by the triennial review of nuclear liabilities referred to above.

Depreciation and amortisation for 2018 was €329.2 million, compared to €343.3 million for 2017.

In 2018 there were no exceptional items (2017: nil) and, therefore, there is no associated income tax impact for 2018 (2017: nil).

Income from operating activities for 2018 decreased by €45.3 million to €826.5 million compared to last year (2017: €871.8 million).

Net finance costs for 2018 were €106.0 million, compared to €140.1 million for 2017 with the reduction largely due to lower net cost on borrowings (€52.4 million) which were partially offset by higher losses due to foreign exchange movements (€19.8 million). The net finance costs on borrowings (including the impact of interest rate/cross currency interest rate swaps) were lower at €75.3 million (2017: €127.7 million) reflecting lower levels of net debt in 2018.

In 2018 the tax expense was €209.2 million (an effective tax rate (ETR) of 29.0%), a decrease of €7.6 million over the tax expense of €216.8 million for 2017 (ETR: 29.6%). The tax expense for 2017 included a credit of €74.0 million related to previously unrecognised US deferred tax assets resulting from the impact that the increased centrifuge and associated equipment lifetimes will have on future depreciation. There was also a deferred tax charge of €85.1 million from the write down of previously recognised US deferred tax assets which has been revalued to reflect a reduction in average US Federal and New Mexico state corporate tax rates from 38.84% to 25.66%, effective from 1 January 2018. Excluding the impact of these two deferred tax items the 2017 tax expense would have been €205.7 million (ETR: 28.1%) compared to the tax expense of €209.2 million for 2018 (ETR: 29.0%).

In 2018 net income was €511.3 million, a decrease of €3.6 million (0.7%) compared to the 2017 net income of €514.9 million. The net income margin for 2018 was 26.1% compared to 26.7% for 2017. The decrease in net income reflects the impact of lower EBITDA, offset by lower depreciation and net finance costs and a lower income tax expense.

Cash flow

Operating cash flow before movements in working capital was €1,293.8 million (2017: €1,188.3 million) and cash generated from operating activities was €1,401.0 million (2017: €1,314.1 million). Higher cash flows from operating activities result from higher revenues and lower spend on the storage and disposal of tails, partially offset by a less favourable movement in working capital compared to 2017.

Tax paid in the period was €119.3 million (2017: €122.9 million).

In 2018 the Group invested a total of €183.1 million (2017: €299.5 million), reflecting a lower level of expenditure on core enrichment assets in line with our strategy and the decline in the level of investment in TMF (2018: €76.0 million, 2017: €184.4 million). Construction of the TMF was completed in late 2018 and operations planned to commence in 2019. Capital expenditure is expected to fall further in future years following the completion of the TMF and lower levels of investment required in new enrichment capacity.

Capital structure and funding

Net debt decreased to €1,370.9 million (2017: €2,104.7 million). Net debt to total asset ratio remained strong at 20.8% (2017: 32.9%), well within the Group’s target ratio of less than 60%.

Urenco repaid its remaining loan (€100.0 million) from the European Investment Bank (EIB) on maturity in March

2018, having prepaid other EIB loans (€319.6 million) in December 2017. During 2018, Urenco utilised its one year bilateral loans, each of €90 million, with four of Urenco’s relationship banks. These loans were fully repaid and the facilities expired by the year end. In January 2019 the Group also completed the repurchase and cancellation of €215.6 million of its 2021 Eurobonds.

The Group targets an FFO/TAD ratio that results in a strong investment grade credit rating. The FFO/TAD ratio was 34.3% (2017: 30.5%) as EBITDA, the main component of FFO, has decreased by €49.1 million while net debt has decreased by €733.8 million. The Group’s debt is rated by Moody’s (Baa1/Stable) and Standard & Poor’s (BBB+/Stable); these external ratings were unchanged during 2018.

In 2018, €300.0 million in dividends for the year ended 31 December 2017 were paid to shareholders (2017: €300.0 million). The Board has approved that dividends of €300.0 million be paid on 20 March 2019.

Order Book

Our order book contains orders extending into the 2030s with an approximate value at 31 December 2018 of €11.9 billion based on €/$ of 1 : 1.15 (2017: approximately €12.7 billion based on €/$ of 1 : 1.20).


Urenco’s strategy ensures our organisation has a broad and sustainable offering for the nuclear industry. Enrichment remains our core activity and we continue to explore new markets. The expansion of our Stable Isotopes capacity will enable us to serve a growing global market and provide a solid return on our investment. Our expertise in nuclear stewardship will broaden the services we offer to the nuclear industry.

Our contract order book remains strong, with further business secured during 2018. Excess inventories of enriched uranium, which have been contributing to pricing pressures, are decreasing. Market conditions remain challenging and current price levels would not support reinvestment in our enrichment facilities. There is an increasing global demand for sustainable, low carbon energy. As a leader in the nuclear industry, we are well positioned to meet this need.

The principal risks and uncertainties to which Urenco is exposed remain broadly in line with those disclosed in 2017.

We have made robust preparations for the various geopolitical challenges facing Urenco. The actions we have taken in relation to the UK’s withdrawal from the European Union and Euratom mean we will meet our customer commitments. We acknowledge the ongoing political debate in Germany about nuclear energy and are confident that we can continue to demonstrate that we are a long term, sustainable operator in the country and are an integral part of Germany’s highly impressive technological capabilities. We are actively tracking developments in US trade policy and will continue to provide a secure supply to the country’s utilities from our facility in New Mexico.


Thomas Haeberle, Chief Executive of Urenco, will step down and retire from his post in March 2019. He will be succeeded by Boris Schucht. Mr Schucht joins Urenco from 50Hertz, the North-East German Transmission System Operator, where he has held the position of Chief Executive Officer since 2010. Mr Schucht previously held a number of senior executive positions within the energy sector across Europe, including WEMAG AG and the Vattenfall Group. 


Click here to view the full press release as a PDF.


About Urenco

Urenco is an international supplier of enrichment services and fuel cycle products with sustainability at the core of its business. Operating in a pivotal area of the nuclear fuel supply chain for 50 years, Urenco facilitates zero carbon electricity generation for consumers around the world.

With its head office near London, UK, Urenco’s global presence ensures diversity and security of supply for customers through enrichment facilities in Germany, the Netherlands, the UK and the USA. Using centrifuge technology designed and developed by Urenco, and through the expertise of our people, the Urenco Group provides safe, cost effective and reliable services; operating within a framework of high environmental, social and governance standards, complementing international safeguards.

Urenco is committed to continued investment in the responsible management of nuclear materials; innovation activities with clear sustainability benefits, such as nuclear medicine, industrial efficiency and research; and nurturing the next generation of scientists and engineers.


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