Performance of the Signalling Business Unit

(EUR 000) 31.12.2011 31.12.2010 Change
Orders 1,045,870 890,205 155,665
Order backlog 2,341,367 2,090,584 250,783
Revenue 728,375 841,831 (113,456)
EBIT 75,079 104,232 (29,153)
R.O.S. 10.3% 12.4% -2.1 p.p.
Operating Working Capital 111,449 300 111,149
Research and Development 32,475 33,053 (578)
Headcount (no.) 3,081 3,315 (234)
The figures in this table are inclusive of transactions with other segments

Revenue at 31 December 2011 was EUR 728,375 thousand from EUR 841,831 thousand in 2010.

Below is an overview of the most relevant production events:

As regards the High Speed programme, the activities for the existing lines were essentially completed, except for continuous but small maintenance and upgrading of control equipment. Through the Consorzio Saturno, for the future Milan-Genoa and Brescia-Treviglio lines, designing commenced ahead of the signing of the relevant contracts, which envisage very short times for the designing stage.

In the onboard SCMT segment, the supply of equipment for the Trenitalia rolling stock continued under the applicable Master Agreement. Good was the volume of activities generated by orders of other railway companies and builders of rolling stock intended for circulation in Italy.
In particular, for AnsaldoBreda production continued for the SCMT systems of high-frequency trains (TAFs), for regional trains (TSR), both intended to Ferrovie Nord Milano and for Vivalto double-decker carriages for Trenitalia; development activities continued for the 50 new V300 Zefiro High-Speed trains and equipment for the first two trains were tested.

In the Station equipment segment, almost all of the activities were completed for the systems of the Naples, Venezia-Mestre, Pisa, and Milano-Rogoredo junctions as well as for the Trento-Malè line. Equipment at Palermo station is being installed. As regards the newly-acquired large facility for the Genoa multistation equipment, activities were slower than scheduled due to delays in civil contracts and track-laying, which are preparatory to the works of the Company.

The Turin-Padua Line is worth a specific mention. Production mainly regarded detailed engineering, which was completed in due time, and the relevant documentation was delivered to the customer. Development activities continued mainly for the release of the key prototypes for the later stages of procurement and designing.

In the Mass Transit segment, in cooperation with the Transportation Solution Business Unit, the major activities regarded the supply of systems for Line B1 of the Rome Metro, De Ferrari - Brignole line of the Genoa Metro, Line 1 Dante-Garibaldi of the Naples Metro, Line 6 of the Naples Metro. As regards the latter, development activities continued for the Metropolitan Border of the Mostra-Mergellina section.

The year saw growing volumes of assistance and maintenance activities, mostly for RFI and Trenitalia, the result of large quantities of systems and equipment supplied to these customers in the last years.


(This section also includes Turkey and the FSU)

In France activitiesmostly regarded onboard systems (TG Rhin-Rhône) and equipment (Thalys) for the French high speed network, as well as the usual orders for maintenance, assistance and manufacturing of spare parts.

In Sweden the Ester project is being fully developed for the construction of an ERTMS level 2 system on the Ester line in the Northern part of the country. The project for the upgrade of the Red Line of the Stockholm Metro is also being developed using CBTC technology.

In the UK, during the year the operation stage was completed for the project for the Cambrian line (the first line on British soil to be equipped with the ERTMS level 2 European standard). This allowed the settlement of some contractual claims of the customer.

In Germany testing and operation activities commenced on the equipment installed on the Saarbrücken - Mannheim line, which is part of the interoperable European corridor (Paris-Ostfrankreich-Südwestdeutchland). Preliminary designing activities started on a similar contract acquired during the year for the track laying of the Rostock-Berlin line.
As regards the onboard project for the supply of 30 multistandard equipment for 15 HS Velaro trains, manufacturing activities continued during the year and some additional functional implementations were defined with the customer.

In Russia preparationswere completed for the start of the testing of the Itarus system, a system designed by Ansaldo STS with NIJAS (the research body of the Russian railways) for the introduction of the ERTMS standards in the physical and operating environment of the Russian territory.

In Turkey detailed engineering continued on the Mersin-Toprakkal line. As the Customer gave the necessary approvals, onsite assembly commenced. Activities resumed with new strength for the Ankara metro, after the title of the contract changed from the municipality to the Ministry of Transportation.

In Kazakhstan all the productive activities that had commenced on the Khorgos-Zhetysen line project, as part of the Joint Venture formed with the local railways, were formally interrupted by the customers and negotiations are under way for the redefinition of the scope of work of the JV. Therefore, it was considered prudent not to include the finishing amount of the project (some EUR 45 million) in the Group backlog, given the persistent uncertainty.

The performance of the activities planned for the year 2011 in Tunisia and mostly Libya was adversely affected by the political riots in the region.

In Tunisia activitiesresumed at the end of the year, and activation of the signalling and automation systems in the Tunis suburban line is nearing completion.

In Libya, immediately after riots started, activities were suspended for the project for the construction of the signalling, telecommunications, security and power supply system for the Ras Ajdir –Sirth and the Al Hisha – Sabha lines. These activities have not resumed for the time being. The project for the construction of a similar system for the Sirth – Benghazi section was also suspended by the customer, the construction company of the Russian Railways Zarubezhstroytechnology (ZST), with letter dated 21 February 2011. Contacts are under way with this organisation in order to agree upon extending the period of suspension of the contract.
At present it is difficult to assume that these contracts may be resumed, given the situation of the country.

Production came from both system works on projects lasting several years and from the sale of components.
For the first segment, activity was extensive for the customer Union Pacific on the OTP/CADX project. In 2005 Ansaldo STS USA won the contract for the development and implementation of the Next Generation Computer Aided Dispatch (CAD) and of an Optimizing Traffic Planner (OTP) system, as well as maintenance until 2030. During the year the OTP was activated in all the Western regions and in most of the Southern areas. The completion in all the regions (34 overall) is expected in 2012. As regards the development of the CADX Office, 90% of the subsystem requirements were approved by Union Pacific.
In the Mass Transit market, manufacturing regarded several contracts with various public transport authorities: NYC - 5th and Lexington, WMATA – Red Line, PATH PTCC – Office, Port Authority of AlleghenyCo, LIRR-Harold Interlocking.

In Australia activities were carried outwith several customers, mostly using alliance contracting. In particular, works worth noting are those for the Newcastle Alliance, the Synergy Alliance, the Richmond Line Alliance, the K2RO Project, and the NCIG-Coal Export Terminal.

In India, manufacturing mainly focussed on these projects, all with the Indian federal railways.
Since its inception, the KFW project has been upgraded and changed with variations and this caused a delay in the performance timeline together with a number of technical problems which were finally resolved during 2011. Thanks to this, the first systems were delivered for operation.
After a long series of technical and operational difficulties, solutions to be implemented with the customer were sufficiently defined for the two projects (North and South) for equipping wayside and onboard systems with devices for the Train Protection and Warning System (TPWS).

In Korea the cooperation with Rotem involved the supply of equipment for some types of engines. During the year line testing was carried out with positive results.

In China, the ZhengXi Line project is now ending; the major activities regarded the Transfer of Technology (ToT) to the local partner Insigma.

EBIT of the Signalling Business Unit at 31 December 2011 came to EUR 75,079 thousand (10% of the value of revenue), lower than the amount of December 2010 (EUR 104,232 thousand) due to smaller volumes and the freezing of the new contracts in Libya.
Operating Working Capital at 31 December 2011 totalled EUR 111,449 thousand, up from EUR 300 thousand at 31 December 2010 as a result of an increase in trade receivables, inventories and work in progress.

Research & Development costsat 31 December 2011 amounted to EUR 32,475 thousand, essentially in line with the figures for the prior year (EUR 33,053 thousand).

Headcountat 31 December 2011 totalled 3,081 people (3,315 at 31 December 2010); it includes the containment of resources as part of the reorganisation process.

Registered Office: 16151 Genoa Via Paolo Mantovani, 3 - 5
Paid-in Share Capital EUR 70,000,000 R.E.A. n. 421689 Register of Enterprises of Genoa Tax Code 01371160662
A Finmeccanica Company