Performance of the Transportation Solutions Business Unit

(EUR 000) 31.12.2011 31.12.2010 Change
Orders 1,256,058 1,142,756 113,302
Order backlog 3,442,345 2,721,540 720,805
Revenue 512,267 504,448 7,819
EBIT 55,009 46,294 8,715
R.O.S. 10.7% 9.2% +1.5 p.p.
Operating Working Capital (172,411) (105,299) (67,112)
Research and Development 1,425 1,774 (349)
Headcount (no.) 600 449 151
The figures in this table are inclusive of transactions with other segments

Revenue of the Transportation Solutions Business Unit at 31 December 2011 amounted to EUR 512,267 thousand from EUR 504,448 thousand at 31 December 2010.
The volumes were developed in Italy (55%) and abroad (45%), with 78% regarding the metro rail sector. Production developed on the projects for high-speed trains, the Rome Metro Line C, Copenhagen Metro, Milan Metro, Genoa Metro, Thessaloniki, Alifana, Naples Metro Line 6, Naples Metro Line 1, Brescia Metro, Riyadh Metro, Malaysia and Australia Metros.

Below is an overview of the most significant production events.

ITALY


HIGH-SPEED RAILWAYS
In the High Speed segment, marginal activities continued on existing lines for the operation of some new interconnections and for assistance works covered by warranty; activities for the designing of the new sections Treviglio - Brescia and Milan-Genoa 3° Valico del Giovi - for which contracts are to be formalised yet - started with interruptions.

METROGENOVA
Regarding the functional line De Ferrari–Brignole, during the year activities were carried out for the supply of technological equipment, for equipment assembled along the line and at Brignole station. Operation activities also started.
The flood that hit Genoa and our building site in November caused the operational programme to be postponed: opening to the public is now estimated in September 2012.
Regarding the Dinegro Depot, the customer decided to assign to the Company the construction of a part of the structures above the depot, with a variation that is currently being approved.

ALIFANA REGIONAL LINE
During the second quarter an Agreement was signed for the price increases in construction materials, accounted in previous years. The Licensor Metrocampania Nordest prepared and transmitted to the Campania Region a new text for the Addendum to replace the one signed in March 2010.
In November the Submission Deed for the Scampia Underpass was signed and the works covered by the civil and technological variations were regularised.
Still in November the deed for the suspension of the works of Melito station, lot A, with a specific reserve for the refund of all the greatest resulting charges and damages.
With reference to the credit position of the Temporary Business Grouping, and of the Associates accordingly, during the year legal actions were initiated to protect former entitlements.
At the same time, contacts continued with the Campania Region for the definition of a settlement that is satisfactory for all the parties.
With regard to the Piscinola–Capodichino line, Metrocampania Nordest as Contractor has not delivered the areas and works in Lot A yet, as envisaged in the Integrated Contract. The Temporary Business Grouping, of which the company is the agent, formalised a specific reserve for the refund of all the greatest resulting charges and damages.

NAPLES METRO LINE 6
The year was marked by significant events in terms of techniques and construction.
In particular, as regards the Line Tunnel, excavation was completed in October as the TBM/EPB arrived at the site of the Municipio station, where facilities have already been built for dismantling. The traditional 3-km long tunnel built has 1,700 lining segmental rings, has a single tube, and stretches from the Mergellina station to the Piazza Municipio areas.
With regard to the stations A.Mirelli, S.Pasquale, Chiaia and Municipio works continued at different paces because of the peculiar events of the year. Works were dramatically delayed in the last few years because the level of archaeological excavation was reached. Finally, as regards the Municipio site, during the year archaeological surveys continued on the station shaft areas, and as a result planned activities were delayed.
With regard to the significant credit position of the contract, the Company initiated proceedings to have an injunction issued against the Municipality of Naples for the collection of the amounts due.

ROME METRO LINE C
Works in the outdoor section linking Pantano–Torrenova and the Pantano Depot were essentially completed; tests, especially subsystem, interface functional tests and preventive functional tests, are under way.
As regards the works for underground stations in the tunnel section linking Giardinetti and Centocelle, rough works, floors and covers of the various levels are being completed, and platforms were enlarged. As regards the line, the construction of the large concrete slab is being completed and the assembly of emergency platforms is nearing completion; the laying of tracks and of the primary cable paths commenced.

MILAN LINE 5
On the functional line linking Bignami and Zara assembling activities and the operation of most of the telecommunications systems were completed.
Following the request of the municipality of Milan for temporarily opening to the public the functional line Bignami-Zara for the “Family Week” at the end of May 2012, it was determined that a shuttle service will operate on a single track, with two trains at Bignami and Zara stations not stopping at the other stations.
The service will be driverless with officers on board and at stations at the end of May. To that end commissioning activities were adjusted.
The final activation of the Bignami-Zara line is scheduled at the end of October 2012.
With regard to the extension of the line to San Siro station, the detailed engineering is under way and will be completed within December 2012. Orders were issued for all the supplies, while the contract for the assembling of the signalling equipment will be completed next year. The civil partner is carrying out activities for moving subservices, the construction of the station bulk heads and the preparation of the first two TBMs.

NAPLES METRO LINE 1
The contract relates to the construction of the works for the contact line, power supply, telecommunications, signalling and automation and the protection systems on the 5-km line entirely in the tunnel. During the year a section linking Dante and Università (March 2011) was activated in a shuttle configuration (down line track).
It is expected that in 2012 Toledo station be included in the shuttle route that is now operating and that the entire section linking Dante and Garibaldi be completed with a carousel configuration which will be final (December), except for Municipio and Duomo, for which completion is expected in 2013 and 2014 respectively.

METRO BRESCIA
During the year the construction designing was fully developed and installations along all of the line are nearing completion, with the exceptions of details for civil finishings and minor works at the depot workshop. On-site activities are mainly related to the operation of the ATC subsystem, of vehicles, and to the system integration on the functional line and on the rest of the line, which will continue throughout September. System operation is expected at the end of December 2012.
The year was marked by the settlement of the dispute between ATI and Brescia Mobilità through a settlement agreement that redefined the reference programme, allowed ATI a part of the expenses incurred for time extension and variations made after works had commenced, and determined how the company in charge of the Operation and Maintenance of the system will work.

 

REST OF EUROPE

 

THESSALONIKI METRO
The designing phase on which the Company is working at the moment, named the General Final Design 2 (GFD2), was marked in 2011 by two key events: the substantial approval by the Customer of the Company’s technical proposal on the new CBTC architecture for the signalling system and the formalisation of the reservation submitted by the JV to the Customer regarding the damages incurred by the Partners of the B Group (ASTS and AB) at designing (GFD1 and GFD2).
In terms of programmes, according to the best estimate possible at the moment, works will be completed at the end of December 2007. On the other hand, in November the Customer made an official request to the JV for a new programme where works are estimated to be completed by the end of 2015, even though this request is not accompanied by a genuine Customer commitment to promptly settle any payments still due. At present the estimated contract amount includes an estimate of delays due in part to the unfavourable economic conditions of the country.

 

 

COPENHAGEN
As regards the Cityringen contract, a new programme for the construction of the work was agreed upon with the customer and the civil works contractor. The new programme brings the start of operations of the system forward to December 2017.
All the designing and interface definition milestones were reached during the year with the Civil contractor.
The construction of the site was completed and pre-excavation activities started in the Depot area.

 

In 2011 the Operation&Maintenance contract performed greatly with Service Availability of 98.8% following improvements in operating procedures and system changes, in addition to the renewal of obsolete components.
The number of passengers reached its all-time high with some 54 million journeys/passengers.

NORTH AFRICA AND THE MIDDLE EAST

 

RIYADH AUTOMATED PEOPLE MOVER SYSTEM (APM)
During the year the construction designing activities and interfacing with civil works were completed. Commissioning activities are nearing completion.
During the first three months of the year, an agreement was signed with the Customer for the formalisation of a new timeline and new interim milestones. In particular, the first one, the Ceremonial Opening, was a full manual service on line 2 in May at the presence of the King.

 

ASIA - PACIFIC

CIRCULAR LINE TAIPEI METRO
The Customer contracted only two of the three major contracts with civil enterprises, with a delay over the initial plan. Negotiations are under way for the formalisation of a time extension that covers these delays.
It is to be reported that at the end of the year the CBS (Contract Baseline Schedule) was processed and submitted. Its approval caused the receipt of a huge amount as advance payment in December.

AUSTRALIA
Production mainly developed on the projects related to the Framework Agreement of Rio Tinto (RAFA). In particular, activities on the Rail Capacity Enhancement and Hope Down 4 account for most of the revenue for the year and of the employment of Engineering and Construction entities’ in-house resources. Activities continued for the preparation of operations for the ECP and the ATO projects and for the study phase for the remaining part of the programme.

MALAYSIA
Production mainly regarded the Malaysia North Double Tracking project. The most relevant event of the period was the settlement of the dispute with the Customer, at all levels, for the definition of the signalling technological solution to be adopted for the project. Negotiations are still being held for the work programme and for the request for a time extension to make up for the months spent identifying the reference technological solution.

 

EBIT for the Transportation Solutions Business Unit at 30 December 2011 came to EUR 55,009 thousand (10.7% of the value of revenue) compared with EUR 46,294 thousand at 31 December 2010 (9.2% of the value of revenue); this increase is a result of the different mix of orders worked in the two comparison periods.

Operating Working Capital came to a negative EUR 172,411 thousand, as compared with a negative EUR 105,299 thousand at 31 December 2010; this change is mainly attributable to the increase in advances from customers during the year.

Research & Development costs charged to the income statement amounted to EUR 1,425 thousand, mainly in line with the figure at 31 December 2010 (EUR 1,774 thousand).

The headcountat 31 December 2011 was equal to 600 units, up 151 units compared with 31 December 2010 (449 units). This change is attributable to the reallocation of resources, especially in Australia, made in the scope of the group reorganisation.

“ Ansaldo STS puts customer satisfaction at the centre of its strategy: the ability to understand the client’s needs and expectations and to meet them is the central value on which the corporate culture is based.”
> Please see pages 55 and 135 of the 2011 Sustainability Report for further information

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