Via Paolo Mantovani, 3 - 5
Paid-in Share Capital Euro 80,000,000
R.E.A. n. 421689
Register of Enterprises of Genoa
Tax Code 01371160662
www.ansaldo-sts.com
Strategic Concept, Copywriting, Graphic Design and Execution by:
Contents
1 Company Bodies and Committees
4
Directors’ report at 31 December 2012
2 Financial position and results of operations of the Group
6
2.1 Introduction 6
2.2 Key performance indicators 6
2.3 Net financial position 9
2.4 Non-IFRS alternative performance indicators 10
2.5 Related party transactions 11
2.6 Performance 12
2.6.1 The market and commercial situation 12
2.6.2 Sales information 14
2.6.3 Signalling - performance by Business Unit 15 2.6.4 Performance of the Transportation Solutions Business Unit 17 2.7 Reconciliation between the profit for the year and equity
of the parent and the group at 31 December 2012 19
3 Key events of and after the reporting period
20
4 Risks and uncertainties
22
4.1 Strategic risks 22
4.1.1 Changes in the macroeconomic and market context
and streamlining programmes 22
4.1.2 Innovation: a competitive factor 22
4.2 Operational risks 23
4.2.1 Country risk for new markets 23
4.2.2 Reliance on public customers and construction contracts 23 4.2.3 Budgeting and risk management project planning 23 4.2.4 Third parties (subcontractors, sub-suppliers and partners) 23 4.2.5 Adequacy of and efficiency in developments
and technical references 24
4.2.6 Liability to customers or third parties
for product defects or delivery delays 24
4.2.7 Legal disputes 24
4.2.8 Human resource management 24
4.2.9 Health, safety and environmental compliance 24
4.3 Financial risks 25
4.3.1 Ability to finance a high level of current assets
and obtain guarantees 25
4.4 IT risks 25
4.4.1 IT system management 25
5 The environment
26
6 Research and development
29
7 Human resources and organisation
31
7.1.1 The parent Ansaldo STS 31
7.1.2 Subsidiaries 32
7.1.3 Headcount at 31 December 2012 33
7.2 Data protection document 33
7.3 Incentive plans 33
7.3.1 The stock grant plan 33
7.3.2 Cash plans 34
7.4 Investments held by directors 34
8 Financial disclosure
35
9 Corporate Governance and ownership structure pursuant to
Article 123-bis of Legislative decree no. 58 of 24 February 1998
and subsequent amendments (the Consolidated Finance Act)
37
Consolidated Financial Statements at 31 December 2012 and notes thereto
10 Consolidated financial statements
40
10.1 Income statement 40
10.2 Statement of comprehensive income 40
10.3 Statement of financial position 41
10.4 Statement of cash flows 42
11.2.2 Effects of amendments to the IFRS 54
12 Segment reporting
55
13 Notes to the statement of financial position
57
13.1 Related party assets and liabilities 57
13.2 Intangible assets 61
13.3 Property, plant and equipment 62
13.4 Equity investments 62
13.5 Loans and receivables and other non-current financial assets 64
13.6 Inventories 64
13.7 Work in progress and progress payments and advances from customers 65
13.8 Trade receivables and loan assets 65
13.9 Financial assets measured at fair value through profit or loss 66
13.10 Tax assets and liabilities 66
13.11 Other current financial assets 66
13.12 Cash and cash equivalents 67
13.13 Share capital 67
13.14 Retained earnings or losses carried forward, including profit
for the year and consolidation reserves 68
13.15 Other reserves 68
13.16 Equity attributable to non-controlling interests 69
13.17 Loans and borrowings 69
13.18 Provisions for risks and charges and contingent liabilities 71
13.19 Employee benefits 71
13.20 Other current and non-current liabilities 72
13.21 Trade payables 72
13.22 Derivatives 73
13.23 Guarantees and other commitments 73
14 Notes to the income statement
75
14.1 Impact of related party transactions on profit or loss 75
14.2 Revenue 77
14.3 Other operating income 77
14.4 Purchases and services 77
14.5 Personnel expense 78
14.6 Amortisation, depreciation and impairment losses 78
14.7 Other operating expense 79
14.8 Internal work capitalised 79
14.9 Net financial expense 79
14.10 Share of profits of equity-accounted investees 80
14.11 Income taxes 80
15 Earning per share
82
16 Cash flows from operating activities
83
17 Financial risk management
84
18 Key managers’ remuneration
90
19 Outlook
91
20 Information pursuant to article 149-duodecies
of Consob Issuer regulation
92
Statement on the Consolidated Financial Statements
21 Statement on the Consolidated Financial Statements pursuant to
article 81-ter of Consob regulation no. 11971 of 14 May 1999 and
subsequent amendments and integrations and article 154-bis.2
of Legislative Decree no. 58 of 24 February 1998 and subsequent
aendments and integrations
93
Company Bodies and Committees
BOARD OF DIRECTORS
(for the 2011 - 2013 three-year period)
ALESSANDRO PANSA
Chairman
GIANCARLO GRASSO
Deputy chairman
SERGIO DE LUCA
Chief executive offi cer
GIOVANNI CAVALLINI
2MAURIZIO CEREDA
1 2PAOLA GIRDINIO
1BRUNO PAVESI
2TATIANA RIZZANTE
ATTILIO SALVETTI
1GRAZIA GUAZZI
Board secretary
1. Member of the risk and control committee.
2. Member of the appointments and remuneration committee.
BOARD OF STATUTORY AUDITORS
(for the 2011 - 2013 three-year period)
GIACINTO SARUBBI
Chairman
RENATO RIGHETTI
MASSIMO SCOTTON
SUBSTITUTE STATUTORY AUDITORS
(for the 2011 - 2013 three-year period)
BRUNO BORGIA
PIETRO CERASOLI
INDEPENDENT AUDITORS
(for the 2012 - 2020 period)
KPMG S.p.A.
Directors’ report at
31 December 2012
Financial position and results of operations of the Group |Key performance indicators
2 Financial position and results of operations of the Group
2.1 Introduction
Ansaldo STS group recognised a profit of €75,696 thousand for the year ended 31 December 2012, compared to €73,056 thousand
for the previous year. Revenue came to €1,247,849 thousand, compared to €1,211,944 thousand and the ROS was 9.4%, compared to
9.6% in the previous year.
New orders totalled €1,492,346 thousand, compared to €2,163,745 thousand in 2011 (which included the maxi contract to build the
Honolulu underground). Specifically:
• new orders of €642,712 thousand for the Transportation Solutions business unit, mainly related to contracts under the master
agreement with Rio Tinto in Australia;
• New orders of €893,197 thousand in the Signalling business unit include the order for technological systems for the Brescia-Treviglio
high-speed section in Italy, the contract with Southeastern Pennsylvania Transportation Authority (SEPTA) to supply the Positive Train Control (PTC) integrated signalling system in the USA, the Roy Hill project in Australia for the development of systems for a mining transport railway line featuring innovative satellite technology to pinpoint the train’s location, a contract in the United Arab Emirates for the new Shah-Habshan-Ruswais line and the contract related to the Honam high-speed line in South Korea.
The order backlog at 31 December 2012 totalled €5,683,253 thousand, compared to €5,452,770 thousand at 31 December 2011.
In the broader context of the global financial crisis, the group’s 2012 performance was positive and in line with forecasts. The delivery of systems in Riyadh and Genoa, the CBTC (Communication Based Train Control) signalling system in Chengdu (China) and of the Milan Line 5 and Brescia underground (in early 2013) represent technological successes and the achievement of targets.
Despite the serious financial and economic crisis, the group’s reference market is generally solid, with international growth rates of 2-3% p.a.. Competition between key international players has however dramatically intensified in recent years, leading to falling unit prices. The group is responding to this issue by introducing plans to contain production and operating costs.
With reference to the group’s corporate and governance structure:
• in March 2012, Ansaldo STS S.p.A.’s board of directors approved the closure of the subsidiary, Ansaldo STS Sistemas de Transporte e Sinalização Limitada, with registered office in Brazil. The decision was based on an in-depth analysis of the Brazilian market and ASTS group’s position within it. The closure took effect from 23 May 2012;
• in September 2012, the dormant indirect subsidiary, Ansaldo STS Finland OY, was put into liquidation. The liquidation process will be completed within the first half of 2013.
Any commercial opportunities arising in these countries will be pursued in partnership with local operators or other legal entities of the group.
2.2 Key performance indicators
(€ ‘000) 31.12.2012 31.12.2011 Change
New orders 1,492,346 2,163,745 (671,399)
Order backlog 5,683,253 5,452,770 230,483
Revenue 1,247,849 1,211,944 35,905
Operating profit (EBIT) 117,073 116,120 953
Adjusted EBIT 123,526 118,459 5,067
Profit for the year 75,696 73,056 2,640
Net working capital (48,147) (89,031) 40,884
Net invested capital 167,184 134,462 32,722
Net financial position (301,982) (289,674) (12,308)
Free operating cash flow 37,569 7,219 30,350
ROS 9.4% 9.6% -0.2 p.p.
ROE 17.0% 18.1% -1.1 p.p.
EVA 62,514 63,243 (729)
Research and development 32,260 33,900 (1,640)
Headcount (no.) 3,991 4,100 (109)
Consolidated profit for 2012 totalled €75,696 thousand, compared to €73,056 thousand in 2011.
Revenue came to €1,247,849 thousand, up €35,905 thousand over the previous year (€1,211,944 thousand). The increase is largely
due to the Transportation Solutions business unit for works carried out under the master agreement with Rio Tinto (RAFA).
The Signalling business unit recognised revenue of €725,588 thousand, including amounts with other business segments, substantially
in line (down €2,787 thousand) with the previous year (€728,375 thousand). The Transportation Solutions business unit recognised
revenue of €564,853, up €52,586 thousand over the previous year (€512,267 thousand). This figure also includes amounts with other
55 45
58 42
Signalling Business Unit
Transportation Solutions Business Unit
1,248 1,212
Revenue for 2012 – 2011 (
€
m) and contribution of the business units
31 December 2012 31 December 2011
% %
Operating profit (EBIT) came to €117,073 thousand, up €953 thousand over 2011 (€116,120 thousand). ROS was 9.4%, compared to
9.6% in the previous year, including additional non-recurring expense, especially in relation to restructuring. Specifically:
• the Signalling business unit recognised operating profit of €62,530 thousand, compared to €75,079 thousand, with a €12,549 thousand
decrease due to the different mix and profitability of the projects in the two years;
• the Transportation Solutions business unit recognised operating profit of €69,130 thousand, up €14,121 thousand on the previous year
(€55,009 thousand), due to greater volumes and the different mix and profitability of the contracts in the two years.
117.1
116.1
EBIT and ROS for 2012 - 2011 (
€
m)
31 December 2012 31 December 2011
9.4% 9.6%
A reclassified income statement, reclassified statement of financial position, the net financial position and a reclassified statement of cash flows follow to provide further disclosure on the group’s financial position, results of operations and cash flows.
Reclassified income statement
(€ ‘000) 31.12.2012 31.12.2011Revenue 1,247,849 1,211,944
Purchases and personnel expense (*) (1,122,374) (1,075,627)
Amortisation, depreciation and impairment losses (20,768) (13,410)
Other net operating income (expense) (**) 17,922 (533)
Change in work-in-progress, semi-finished products and finished goods 897 (3,915)
Adjusted EBIT 123,526 118,459
Restructuring costs (6,453) (2,339)
Operating profit (EBIT) 117,073 116,120
Net financial expense (2,956) (768)
Income taxes (38,421) (42,296)
Profit for the year 75,696 73,056
attributable to the owners of the parent 75,665 72,956
attributable to non-controlling interests 31 100
Earnings per share
Basic and diluted 0.51 0.48¹
1. Recalculated following the bonus issue of 9 July 2012.
Notes to the reconciliation between the reclassified income statement and the income statement included in the consolidated financial statements:
(*) Includes the captions “Purchases”, “Services”, “Personnel expense” and “Accrual to (use of) the provision for expected losses to complete contracts” (net of “Restructuring costs”), and net of “Internal work capitalised”.
(**) Includes the net amount of “Other operating income” and “Other operating expense” (net of restructuring costs and impairment losses and Accrual to (use of) the provision for expected losses to complete contracts).
Financial position and results of operations of the Group |Key performance indicators
Briefly:
Revenue totalled €1,247,849 thousand and increased €35,905 thousand over the previous year.
Overall expense rose due to the increase in activities.
Adjusted EBIT was €123,526 thousand, up €5,067 thousand over 2011.
The operating profit of €117,073 thousand was €953 thousand higher than that of 2011.
Profit for the year increased by €2,640 thousand to €75,696 thousand, mainly due to the combined impact of greater financial expense
and lower taxes.
Reclassified statement of financial position
(€ ‘000) 31.12.2012 31.12.2011Non-current assets 264,996 270,047
Non-current liabilities (49,665) (46,554)
215,331 223,493
Inventories 131,584 129,936
Contract work in progress 313,096 283,302
Trade receivables 748,747 680,069
Trade payables (500,563) (431,851)
Progress payments and advances from customers (710,720) (706,735)
Working capital (17,856) (45,279)
Provisions for risks and charges (15,842) (23,136)
Other liabilities, net (*) (14,449) (20,616)
Net working capital (48,147) (89,031)
Net invested capital 167,184 134,462
Equity attributable to the owners of the parent 468,739 423,014
Equity attributable to non-controlling interests 427 1,122
Equity 469,166 424,136
Net financial position (301,982) (289,674)
Notes to the reconciliation between the reclassified statement of financial position and the statement of financial position included in the consolidated financial statements: (*) Includes “Tax assets” and “Other current assets”, net of “Tax liabilities” and “Other current liabilities”.
Net invested capital totalled €167,184 thousand, compared to €134,462 thousand in 2011. The €32,722 thousand increase is due to
the €8,162 thousand decrease in non-current items and the €40,884 thousand increase in net working capital.
The change in working capital is due to the joint effect of increased work in progress and trade receivables, only partly offset by the increase in trade payables and progress payments and advances from customers.
The group’s net financial position (loan assets and cash and cash equivalents greater than loans and borrowings) was €301,982
thousand, compared to €289,674 thousand at 31 December 2011 (up €12,308 thousand), after the €28,000 thousand
dividend payment (€33,592 thousand in 2011). It includes the €70,643 thousand advance received from the Russian customer,
Zarubezhstroytechnology (“ZST”), for the project for the development of signalling, automation, telecommunication, power supply, security and ticketing systems on the Sirth to Benghazi section in Libya.
2.3 Net financial position
(€ ‘000) 31.12.2012 31.12.2011
Current loans and borrowings 18,188 14,535
Non-current loans and borrowings - 269
Cash and cash equivalents (146,837) (160,928)
BANK LOANS AND BORROWINGS (128,649) (146,124)
Related party loan assets (120,533) (2,531)
Other loan assets (52,987) (110,812)
Current financial assets at fair value through profit or loss - (30,756)
LOAN ASSETS (173,520) (144,099)
Related party loans and borrowings -
-Other current loans and borrowings 187 380
Other non-current loans and borrowings - 169
OTHER LOANS AND BORROWINGS 187 549
NET FINANCIAL POSITION (301,982) (289,674)
The group’s net financial position totalled €301,982 thousand at the reporting date, compared to €289,674 thousand at 31 December 2011.
The reclassified statement of cash flows for the year ended 31 December 2012 follows:
(€ ‘000) 31.12.2012 31.12.2011
Opening cash and cash equivalents 160,928 153,320
Gross cash flows generated by operating activities 153,306 127,299 Changes in other operating assets and liabilities (58,279) (67,235)
Funds from operations 95,027 60,064
Change in working capital (51,001) (42,657)
Cash flows from operating activities 44,026 17,407
Cash flows used in ordinary investing activities (6,457) (10,188)
Free operating cash flow 37,569 7,219
Strategic transactions (216) (6,302)
Other changes in investing activities 14 (44)
Cash flows used in investing activities (6,659) (16,534)
Dividends paid (28,000) (33,592)
Cash flows generated by (used in) other financing activities (22,849) 38,955
Cash flows from (used in) financing activities (50,849) 5,363
Exchange rate gains and losses, net (609) 1,372
Closing cash and cash equivalents 146,837 160,928
Cash and cash equivalents totalled €146,837 thousand at the reporting date, down by €14,091 thousand over the prior year figure.
The main changes in the statement of cash flows were as follows:
• cash flows from operating activities totalled €44,026 thousand, an increase of €26,619 thousand over 2011;
• cash flows used in investing activities of €6,659 thousand, down €9,875 thousand over 2011 (€16,534 thousand);
• cash flows used in financing activities of €50,849 thousand, compared to the cash flows from financing activities of €5,363 thousand
in 2011; dividends of €28,000 thousand were paid in 2012 (€33,592 thousand in 2011).
Free operating cash flow (FOCF) before strategic transactions totalled €37,569 thousand, compared to €7,219 thousand for 2011; the €30,350 thousand increase mainly relates to the change in funds from operations (FFO).
Financial position and results of operations of the Group |Non-IFRS alternative performance indicators
2.4 Non-IFRS alternative performance indicators
Ansaldo STS S.p.A.’s management also assesses the performance of the group and the business segments using certain indicators that are not defined by the IFRS.
The components of each indicator are described below as required by CESR/05 - 178b Communication:
• Operating profit (EBIT): earnings before interest and taxes, before any adjustment. EBIT excludes gains or losses on unconsolidated equity investments and securities, as well as any gains or losses on sales of consolidated equity investments, which are classified under “financial income and expense” or “share of profits (losses) of equity-accounted investees” if related to equity-accounted investments.
• Adjusted EBIT (Adj): is the EBIT as described above, net of the following items where applicable: - any impairment of goodwill;
- amortisation of the portion of purchase price allocated to intangible assets acquired as part of business combinations, pursuant to IFRS 3; - restructuring costs in relation to defined and significant plans;
- other income or expense not of an ordinary nature, i.e., related to particularly significant events unrelated to ordinary activities. A reconciliation of EBIT and Adjusted EBIT for the two years is set out below:
(€ ‘000) 2012 2011
Operating profit (EBIT) 117,073 116,120
Restructuring costs 6,453 2,339
Adjusted EBIT 123,526 118,459
• Free operating cash flow (FOCF): this indicator is the sum of cash flows from (used in) operating activities and cash flows from (used in) investing and disinvesting in property, plant and equipment, intangible assets and equity investments, net of cash flows from acquisitions or sales of equity investments which are deemed “strategic” due to their nature or importance. The reclassified statement of cash flows set out in paragraph 2.3 shows how FOCF is arrived at for the current and previous years.
• Funds from operations (FFO): this indicator is the cash flows from (used in) operating activities, net of changes in working capital. The reclassified statement of cash flows set out in paragraph 2.3 shows how FFO is arrived at for the current and previous years.
• Economic value added (EVA): is the difference between EBIT net of income taxes and the cost of the average invested capital of the current and previous years measured on the basis of the weighted average cost of capital (WACC).
• Operating working capital: comprises trade receivables and payables, inventories, work in progress, progress payments and advances from customers and provisions for risks and charges.
• Net working capital: is operating working capital less other current assets and liabilities.
• Net invested capital: is the sum of non-current assets, non-current liabilities and net working capital.
• Net financial position or debt: the calculation method used complies with paragraph 127 of the CESR/05-054b recommendations implementing Regulation (EC) no. 809/2004.
• New orders: the sum of the contracts agreed with customers during the year that meet the contractual requirements to be recorded in the orders book.
• Order backlog: is the difference between new orders and revenue for the year (less the change in contract work in progress). This difference is added to the backlog for the previous year.
• Headcount: is the number of employees recorded in the relevant register on the reporting date.
• Return on Sales (ROS): is the ratio of EBIT to revenue.
• Return on Equity (ROE): is the ratio of the profit or loss for the year to the average amount of equity at the reporting date and the previous year reporting date.
• Research and development expense: total expense incurred for research and development, both expensed and sold. Research expense taken to profit or loss usually relates to “general technology”, i.e., aimed at gaining scientific knowledge and/or techniques applicable to various new products and/or services. Sold research expense represents that commissioned by customers and for which there is a specific sales order and it is treated exactly like an ordinary order (sales contract, profitability, invoicing, advances, etc.) in accounting and management terms.
2.5 Related party transactions
Transactions with related parties relate to ordinary operations. They take place on an arm’s length basis (unless governed by specific contractual terms), as does the settlement of interest-bearing receivables and payables.
They mainly comprise the exchange of goods, the provision of services and the obtaining/granting of financing from and to the parent, associates, joint ventures, consortia and unconsolidated subsidiaries.
During the year, no atypical and/or unusual transactions took place .
With effect from 2011, the only impact of the application of IAS 24 (revised) related to disclosure requirements with reference to related parties, entailing the restatement of comparative figures shown in the schedules to consider as related parties those entities under the control or significant influence of the Ministry of Economy and Finance (“MEF”).
Related party transactions (see notes 13 and 14 to the consolidated financial statements for greater detail) are as follows at 31 December 2012 and 2011.
31.12.2012 (€ ‘000)
Ultimate
parent Unconsolidated subsidiaries Associates
Joint ventures
(*) Consortia (**)
Other group
companies MEF Total
Non-current assets - financial - - - - - other - - 5,373 1,224 182 - - 6,779 Current assets - financial 120,533 - - - 120,533 - trading 426 290 41,473 2,114 22,201 11,626 90,836 168,966 - other 145 - - - 1,365 45 - 1,555 Non-current liabilities - financial - - - -- other - - - -Current liabilities - financial - - - -- trading 281 261 10,573 - 1,214 44,709 1,703 58,741 - other - 3 - - 24 370 - 397 31.12.2012 (€ ‘000) Ultimate
parent Unconsolidated subsidiaries Associates
Joint ventures
(*) Consortia (**)
Other group
companies MEF Total
Revenue - 270 38,780 11,148 9,769 14,001 156,337 230,305
Other operating income 67 3 89 - 1,457 17 - 1,633
Expense 4,349 829 45,915 - 2,359 25,389 1,695 80,536
Financial income 152 - - - 152
Financial expense 111 - - (49) - - - 62
Other operating expense 20 - - - 35 61 - 116
(*) Portion not eliminated on proportionate consolidation (**) Consortia subject to significant influence or common control.
31.12.2011 (€ ‘000)
Ultimate
parent Unconsolidated subsidiaries Associates
Joint ventures
(*) Consortia (**)
Other group
companies MEF Total
Non-current assets - financial - - - - - - other - - 1,540 1,225 - - - 2,765 Current assets - financial 2,531 - - - - 2,531 - trading 365 1,237 13,606 13,513 32,596 15,040 56,773 133,130 - other 145 - - - 1,364 - - 1,509 Non-current liabilities - financial - - - - - - other - - - - - Current liabilities - financial - - - - - - trading 470 729 5,969 1,176 974 36,262 404 45,984
Financial position and results of operations of the Group |Performance
31.12.2011 (€ ‘000)
Ultimate
parent Unconsolidated subsidiaries Associates
Joint ventures
(*) Consortia (**)
Other group
companies MEF Total Revenue - 763 16,095 12,042 13,760 18,913 149,361 210,934
Other operating income - - 103 - 49 - - 152
Expense 3,218 1,945 41,332 70 2,754 35,842 1,864 87,025
Financial income 7 - - - - 641 - 648
Financial expense 105 - - (105) - - - -
Other operating expense - - - 100 - 100
(*): Portion not eliminated on proportionate consolidation. (**): Consortia subject to significant influence or common control.
Finally, the group’s corporate governance framework includes specific guidance on conduct to ensure related party transactions comply with criteria of procedural and substantial correctness.
Related party transactions between the parent and related parties take place on an arm’s length basis.
2.6 Performance
2.6.1 The market and commercial situation
Despite the increasingly challenging competitive scenario, the group’s sales activities were intense in 2012, generating new orders of
€1,492,346 thousand (€2,163,745 thousand in 2011).
Signalling Business Unit
New orders for 2012 totalled €893 million (€1,046 million for 2011).
Key events of the year are described below.
ITALY
New orders totalled approximately €206 million. Key new orders included the contract for the Brescia-Treviglio high-speed section (57
kms) for roughly €70 million, which includes the design, construction, installation, roll-out of the signalling (level 2 and multistation ERTMS
(European Rail Traffic Management System/ETCS (European Train Control System)) and automation systems, and the €34 million order to
overhaul the Brescia central automated system (ACC) which, due to the complexity of movements within the station areas, also requires the installation of a movement supervision system (SSA-CR).
Other important new orders include those for the sale of components and maintenance of rail and on-board equipment for approximately
€37 million, as well as several works on the existing high-speed line, such as those related to the completion and technological
improvements on the Milan-Bologna and Rome-Naples sections for a total of €17 million.
REST OF EUROPE
In France, new orders approximated €56 million, including in relation to the sale of components and spare parts (€26 million), as well as
contracts for upgrade activities on high-speed passenger lines.
In the United Kingdom, new orders approximated €8 million, related to maintenance activities and minor variations, especially for the
Cambrian line; in Germany, new orders of around €8 million related mainly to the sale of on-board equipment for Velaro trains, in Sweden
approximately €7 million for components for the maintenance of rail and on-board equipment, in Turkey approximately €3 million related
to order variations on the Mersin-Toprakkale line and, finally, in Spain approximately €2 million for maintenance activities on existing
high-speed lines.
AMERICA
In the USA, new orders totalled approximately €157 million, including €73 million related to the contract agreed with the Southeastern
Pennsylvania Transportation Authority (SEPTA) for the supply of the Positive Train Control (PTC) integrated signalling system to increase railway transport safety in the regional railway system. Other significant orders related to the sale of components (approximately €43
million) and maintenance for the CSX control room (over €12 million).
New orders in Canada exceeded €48 million, the largest two of which relate to the Toronto underground.
NORTH AFRICA AND THE MIDDLE EAST
In the United Arab Emirates, via the Italo-Indian joint venture comprising Saipem-Tecnimont-Dodsal, the group won a contract
(approximating €59 million) for the first line of the new Shah-Habshan-Ruwais line under construction, owned by Etihad Rail (the United
Arab Emirates railways). Under the agreement, signalling, automation and telecommunication systems and other minor systems for passenger and freight traffic management and control will be supplied for the line of some 260 kms, which will connect the Shah industrial complex with the Ruwais port.
ASIA PACIFIC
In Australia, new orders totalled approximately €187 million, including the €118 million Roy Hill order for the development of systems for
a mining transport railway line featuring innovative satellite technology to pinpoint the train’s location, considerably simplifying line set-up and the consequent maintenance expense. There were also orders related to the extension of the NSR (Northern Suburbs Rail) Clarkson-Jindalee line (€15 million), Xstrata Plc’s Ravensworth North line for mining in the Upper Hunter Valley in New South Wales worth around €8 million and numerous activities related to contract variations.
In India, new orders approximated €17 million related almost fully to contracts to upgrade the interlocking systems of certain stations of
the complex passenger railway network. New orders totalled around €16 million in China, including the important order related to Line 2
of the Hangzhou underground for over €10 million, as well as a further approximate €4 million in the railway sector related to the sale of
components and maintenance services.
Finally, new orders of over €86 million were acquired in South Korea during the year. Key orders relate to the high-speed Honam line (€47
million), the order related to the supply of on-board equipment for 22 KTX - II trains (€13 million) and the sale of on-board equipment to
the Korean multinational Hyundai-Rotem for 80 locomotives of the Turkish Railways (TCDD) to upgrade the fleet to European ERTMS/ETCS standards (approximately €10 million).
Transportation Solutions Business Unit
New orders acquired during the year totalled €643 million, compared to €1,256 million in the previous year, which included the Honolulu
contract.
Generally, the global macroeconomic scenario is still affected by the financial crisis, leading to delays in several projects, and the relevant development programmes do not fully cover the cost of the main projects to expand the transport systems.
Demand for technological solutions continues to grow in the driverless underground railway business segment. Key events of the year are described below.
ITALY
New orders totalled €98 million and comprise: orders and variations related to Line 1 of the Naples underground as part of activities on
the Dante- Garibaldi section for the development of the temporary operating control room (shuttle); the upgrade of the definitive operating control room and for the safety project for the entire line for a total of €23 million; the settlement agreement for Line C of the Rome
underground (€36 million) and the extension of Line B1 Conca d’oro-Ionio (€3 million). A new contract was won in relation to the Italian
high-speed railway for the Brescia-Treviglio section (€12 million) and orders for the Rome-Naples line (€11 million).
With respect to the contract won for Line 4 (S. Cristoforo-Linate) of the Milan underground, the financing agreements for the joint venture comprising Impregilo (lead contractor), Astaldi, AnsaldoSTS, AnsaldoBreda, Sirti and ATM Milano have not yet become effective but are expected to in the first half of 2013. However, based on the obligations taken on as part of the ancillary agreement and its appendices, the joint venture commenced the relevant activities.
REST OF EUROPE
In Denmark, new orders totalled €120 million in relation to variations and price revisions on existing contracts.
Ansaldo STS group was short-listed for the construction of the city of Aarhus’ first urban tram system; the tender is expected to be announced before the end of 2013.
NORTH AFRICA AND THE MIDDLE EAST
A €16 million order was acquired for the operation and maintenance of the APM Princess Noura University driverless underground in
Riyadh, constructed and rolled out this year.
Ansaldo STS was successfully short-listed for the Riyadh driverless underground. The winner is expected to be announced in the first half of 2013.
The offer for the Lusail tramway has been submitted, featuring the “Tramwave”® overhead line-free solution. The winner is expected to be announced in early 2013.
ASIA PACIFIC
New orders acquired in Australia came to €408 million relating to specific contracts under the master agreement with the Rio Tinto
mining company. The largest amount relates to the “Autohaul” project totalling AUD317 million (approximately €253 million).
In India, certain underground projects are scheduled for the short- and medium-term and potential partnerships are being evaluated with local contractors.
Interest in the company’s innovative overhead line-free “Tramwave” solution is strong in China. A strategic agreement was reached in July with the China-based CNR Dalian and the Taiwan-based General Resources Company, licensing the TramWave® technology to the joint venture that will be formed by CNR Dalian and General Resources Company.
The innovative TramWave® solution offers overhead line-free electric power supply and was developed and patented by Ansaldo STS for use in urban transport systems, eliminating the visual impact of traditional overhead lines.
Financial position and results of operations of the Group |Performance
It is hoped that this agreement will lead to a profitable and long-term collaboration so that the many opportunities offered by the Chinese tram market can be exploited.
This agreement is also an ideal starting point for more far-reaching collaboration in the mass transit sector with the same partner companies.
2.6.2 Sales information
New orders for the reporting period totalled approximately €1,492,346 thousand, compared to €2,163,745 thousand in the previous
year, with a €671,399 thousand decrease.
New orders acquired by the Signalling business unit amounted to €893,197 thousand and those of the Transportation Solutions business
unit to €642,712 thousand.
Key orders acquired by the Signalling business unit in 2012 were as follows:
Country Project Customer Amount (€m)
Australia Roy Hill 1 Hancock Prospecting 118.0
USA PTC SEPTA 73.4
Italy HSL MI – VR (Brescia – Treviglio) Consorzio Saturno 70.2
UAE – Abu Dhabi GCC - Abu Dhabi section 1 SAIPEM 58.8
South Korea HSL Korea - Honam Line LSIS 47.3
Italy Brescia ACC RFI 34.4
Canada Extension Phases 2, 3 & 4 TTC 22.8
Canada TTC North Spadina Extension TTC 18.3
Italy HSL Italy – variations MI-BO - RM-NA RFI 16.7
Australia Butler Extension - Northern Suburbs Railway (NSR) Public Transport Authority WA 14.7
South Korea On-board equipment ROTEM 13.0
Italy SSB - ATCS variation on 4th application contract Trenitalia 10.9
China Hangzhou line 2 INSIGMA 10.3
USA Components, Service & Maintenance Various 54.5
Italy Components, Service & Maintenance Various 36.8
France Components, Service & Maintenance Various 26.1
Key orders acquired by the Transportation Solutions business unit in 2012 were as follows:
Country Project Customer Amount (€m)
Australia AutoHaul Rio Tinto 252.8
Australia RCE 353 & ECP Rio Tinto 101.0
Australia Various contracts Rio Tinto 54.4
Denmark Copenhagen Ring – variation order Metroselskabet 78.9
Denmark Copenhagen Ring - O&M variation orders Metroselskabet 41.4
Italy Rome underground Line C RomaMetropolitane 35.7
Saudi Arabia Riyadh - O&M variation order PMU 16.0
Italy Line 1 of Naples underground - Colli Aminei PCO Metropolitana di Napoli 13.2
Italy HSL MI – VR (Brescia–Treviglio) Consorzio Saturno 11.8
Italy HSL RO – NA – variation order Iricav Uno 11.3
Italy Line 1 of the Naples underground - variation order Dante-Garibaldi Metropolitana di Napoli 10.1
57
43 42
58
Signalling Business Unit
Transportation Solutions Business Unit
1,492
2,164
New orders for 2012 (
€
m) and contribution of the business units
31 December 2012 31 December 2011
% %
The order backlog at 31 December 2012 totalled €5,683,253 thousand, up €230,483 thousand over 31 December 2011. €646,712
thousand relates to projects in Libya which are currently halted.
The order backlog of the Signalling business unit amounted to €2,616,684 thousand (€2,383,511 thousand net of transactions with the
The order backlog of the Transportation Solutions business unit amounted to €3,388,258 thousand (€3,299,742 thousand net of
transactions with the Signalling business unit).
42
58 61 39
Signalling Business Unit
Transportation Solutions Business Unit
5,683
5,453
Order backlog at 31 December 2012 and 2011 and contribution of the business units
31 December 2012 31 December 2011
% %
2.6.3 Signalling - performance by Business Unit
(€ ‘000) 31.12.2012 31.12.2011 Change
New orders 893,197 1,045,870 (152,673)
Order backlog 2,616,684 2,341,367 275,317
Revenue 725,588 728,375 (2,787)
Operating profit (EBIT) 62,530 75,079 (12,549)
ROS 8,6% 10,3% -1,7 p,p,
Operating working capital 103,705 111,449 (7,744)
Research and development 30,566 32,475 (1,909)
Headcount (no.) 2,971 3,081 (110)
(The amounts shown in the table include inter-segment transactions).
Revenue for 2012 came to €725,588 thousand, compared to €728,375 thousand in the previous year.
The key production activities are summarised below.
ITALY
RAILWAYS - HIGH SPEED
The high-speed programme for the original sections (Turin-Milan-Bologna-Florence-Rome-Naples) is largely complete.
Works continue on systems to resolve minor issues that do not compromise the safety of train operations. Simultaneously, the activities necessary for the complex technical/administrative testing procedure continue for each section.
RAILWAYS - ON-BOARD ATCS/ERTMS
In the On-board systems line, production mainly related to the supply of new rolling stock to AnsaldoBreda S.p.A., Stadler (Flirt train ATCS set-up for Strutture Trasporto Alto Adige and set-up options for other Flirt trains for Ferrovie Nord Milano and Ticino-Lombardia consortium), Vossloh and Siemens. Specifically, supply continued of Vivalto double-decker carriages to Trenitalia for high-frequency trains (TAF) and Electric Multiple Unit (EMU) bidirectional trains.
Activities also continued for the development of ERTMS systems for the new Zefiro V300 high-speed trains for the Trenitalia fleet. Finally, negotiations were finalised with Trenitalia for the contract to upgrade the ETR 500 fleet and establishing the fees for additional services requested under the ATCS master agreement.
RAILWAYS - CENTRAL AUTOMATED SYSTEM (ACC)
In the Station equipment line, activities continued on several projects, including: the final stage of the Mestre ACC, Trento–Malé ACC, Tel station (Merano-Malles) ACC, Rebaudengo ACC (system delivered to the customer and rolled out in December 2012), Palermo Centrale ACC (finalisation of cabin installation and related power supply), the Genoa junction ACC (materials supply) and the upgrade of the Voghera ACC. The ACC in Chieri was rolled out.
Activities also continued for the reconfiguration of the ATCS SST (wayside systems) for the Turin, Naples, Genoa and Verona sections, as well as automation activities comprising both modifications and revamping of existing CTCs (Centralised Traffic Control) (including Siena and Cremona, which have been rolled out) and SCC (command and control system) activities (Venice and Palermo).
Negotiations are still underway with the customer for the finalisation of a variation to the Turin-Padua section.
MASS TRANSIT
Key activities related to the roll-out of the De Ferrari-Brognole section of the Genoa underground and Line B1 of the Rome underground and the extension of Line 1 of the Naples underground.
Financial position and results of operations of the Group |Performance
REST OF EUROPE
(This section includes Turkey and the former Soviet Republics)
In France, activities mainly related to on-board systems (TGV Rhin- Rhône, LGV SEA, Bretagne Pays de la Loire BPL) and equipment (Thalys) for the country’s high-speed network, as well as the usual maintenance, assistance and production contracts for individual parts. In Sweden, production mainly related to the Ester and Red Line projects.
In the United Kingdom, the completion of the Cambrian line project (the first line in Britain to be equipped with the European level 2 ERTMS standard) has been put back to next year due to additional requests of the customer with respect to a new RBC (radio block centre) version for which commissioning has been completed.
Activities in Germany were cut to a minimum for both the POS (Paris-Ostfrankreich-Südwestdeutchland) project and the set-up of the Rostock-Berlin line, pending the customer’s review of the project inputs.
The customer has requested an extension to the scope of work for the on-board project to supply 30 multistandard facilities for 15 Velaro high-speed trains.
In Sochi, Russia, assistance was provided in assembling Itarus RBC and power supply systems for the roll-out of the ERTMS standard in the region and the communication protocol testing stage is progressing.
In Turkey, in-depth design activities continued for the Mersin-Toprakkale line, as did the on-site installation activities. Production for the Ankara underground comprised design activities and the continuation of on-site installation for the first lot.
NORTH AFRICA AND THE MIDDLE EAST
Works in Tunisia are almost complete and negotiations are underway with the customer for the partial extension of the work schedule so as to avoid the application of penalties.
In Libya, activities for the project to develop the signalling, telecommunications, security and power supply systems for the Ras Ajdir–Sirth and Al Hisha–Sabha sections were suspended straight after the well-known riots started, and they have not yet recommenced.
In a letter dated 21 February 2011, the customer, a construction company of the Russian railways, Zarubezhstroytechnology (ZST), also halted a project to develop a similar system for the Sirth–Benghazi section. Negotiations are underway with this company to agree an extension to the period of the contract’s suspension.
It is presently difficult to say when production for these contracts will resume, given the situation in the country. As previously reported, the currently recognised asset is more than offset by the amount of progress payments.
In the United Arab Emirates initial activities linked to preliminary design were completed and interim design and procurement activities are underway for the Abu Dhabi project (Shah-Habshan-Ruwais Line). Initial FAT certifications were successful for the RBC (Radio Block Centre) buoys and cabinets.
AMERICA
Production activities focused both on long-term projects and the sale of components. With respect to the former, there was intense activity for the customer, Union Pacific, for the OTP/CADX project. Ansaldo STS USA INC. won the contract in 2005 to develop and roll out Next Generation Computer Aided Dispatch (CAD) and an Optimizing Traffic Planner (OTP) system, as well as subsequent maintenance activities until 2030. They also included activities for the customer, Southeastern Pennsylvania Transportation Authority (SEPTA), for the procurement, design, construction and installation of a Positive Train Control (PTC) system on 13 lines. The scope of the work includes testing the system control centres and wayside, communication and vehicle components. Contracts were finalised during the year with all subsuppliers (Burns, PHW, Farfield and ARINC) and wayside and communication design and configuration activities have commenced.
ASIA PACIFIC
Production in Australia focused on the alliances with local mining companies. With respect to Newcastle, installations and commissioning have been completed.
Renegotiations of the Program Alliance Agreement with QR National are underway, pending the finalisation of a sales agreement. Start-up activities are underway for the new Roy Hill project.
Production in India mainly focused on the KFW and TPWS projects.
With respect to the first, during the year commissioning commenced for five stations, six block sections, two medium yards and the H-H-H (three hot systems, one for each side of the station plus one for the station itself) conversion for three of these stations. Engineering and construction & commissioning activities were completed for stage 4, while the CTC is in the final stage. Construction of the centralised traffic control building was also completed. The project’s extension until December 2013 has been approved, as well as a variation on the third line. Last year, activities were forecast to be completed between the end of 2012 and the first half of 2013.
Considerable expense was incurred in 2012 for internal and outsourced engineering activities. This negatively impacted profitability, mainly as a result of the re-working (the retrofit for stations already completed and changes for new ones) requested by the customer. The cost of completion has therefore been re-estimated to include the activities that will have to be rolled out in order to deliver the stations in line with the new project delivery date agreed with the customer.
With reference to the NORTH TPWS project, system maintenance training was provided during the year to Indian railway personnel and the performance parameters were monitored. The additional works and on-board installations on all this line’s locomotives were completed. The customer also approved an extension, with works to be completed next year.
along the line during the year, particularly in relation to the installation of materials, necessitating additional engineering and construction & commissioning activities.
the projects had to be redesigned, particularly as regards defect liability period activities, which impacted profitability.
the Calcutta underground project is still in its early stages with the start-up of engineering, procurement and contract management activities. Planning and identification of key suppliers for the system’s construction is underway.
In Korea, the supply of equipment for the E-loco EMU locomotives was completed, performance testing was successful and system specifications were endorsed for certain types of locomotives for which all equipment was also supplied. System specifications were finalised and technical mechanical plans drawn up for the other types of locomotives and the hardware plans were completed. Performance testing is underway.
In China, the ZhengXi Line project is almost complete, with activities relating to the transfer of technology (tot) to the local partner, Hollysys, which is subject to final approval by MOR (the Ministry of Railways of China).
On-board systems issues have been resolved and laboratory and on-site testing carried out together with Hollysys. this entailed the release of a new version of the on-board software featuring a safety case, which has already been installed on the trains. Certain cabling hardware modifications necessary to resolve the issues are currently being defined in conjunction with MOR.
Operating profit (EBIT) of the Signalling business unit for the year ended 31 December 2012 came to €62,530 thousand (8.6% as a
percentage of revenue), compared to €75,079 thousand (10.3% as a percentage of revenue) in the previous year, due to the different mix
of contracts and profitability in the two years.
Operating working capital at 31 December 2012 was €103,705 thousand, a decrease on the €111,449 thousand at 31 December
2011, due to the decreased inventories and net work in progress.
Research and development expense for the year equalled €30,566 thousand, compared to €32,475 thousand in the previous year.
the headcount at 31 December 2012 numbered 2,971 (3,081 employees at 31 December 2011).
Streamlining of the Riom and Batesburg production facilities was completed in 2012 with the outsourcing of certain activities and related resources.
2.6.4 Performance of the Transportation Solutions Business Unit
(€’000) 31.12.2012 31.12.2011 Change
New orders 642,712 1,256,058 (613,346)
Order backlog 3,388,258 3,442,345 (54,087)
Revenue 564,853 512,267 52,586
Operating profit (EBIt) 69,130 55,009 14,121
ROS 12,2% 10,7% +1,5 p.p.
Operating working capital (129,106) (172,411) 43,305
Research and development 1,695 1,425 270
Headcount (no.) 631 600 31
(the amounts shown in the table include inter-segment transactions).
Revenue generated by the transportation Solutions business unit in 2012 amounted to €564,853 thousand, compared to €512,267
thousand in the previous year.
Volumes generated in Italy accounted for 43% and those generated abroad for 57%, with 57% of volumes in the underground sector. Production mainly related to the following projects: Line C of the Rome underground, high-speed railways, Copenhagen, the Milan underground, the Genoa underground, Alifana, Line 6 and Line 1 of the Naples underground, the Brescia underground, the Riyadh underground, the Honolulu underground and the Australian Rio tinto project.
the key production activities are summarised below.
ITALY
HIGH-SPEED RAILWAYS:
Interconnections continued to be rolled out and works performed under warranty on those lines already in operation in the high-speed line. With respect to the Rome-Naples section, arbitration between tAV and IRICAV UNO consortium was concluded in June, with the award in favour of IRICAV UNO. the customer has stated its intention to appeal against the award.
Negotiations are underway for a settlement to finalise the outstanding litigation.
the arbitration between RFI/tAV and the IRICAV DUE consortium was also concluded in May for the Verona-Padua section; under the award, RFI/tAV shall partially compensate IRICAV DUE and the 1992 Agreement is still valid and in effect.
RFI has already paid IRICAV DUE the amount set in the award but has not yet forwarded IRICAV DUE the definitive project for the section in order to commence the execution plan.
Financial position and results of operations of the Group |Performance
GENOA UNDERGROUND:
The De Ferrari/Brignole functional section was opened to the public in December.
A variation enabling the conclusion of works in May 2014 is under approval by the Genoa municipality.
ALIFANA REGIONAL LINE:
Following the halt of all activities related to the Piscinola-Aversa section, the group deemed it necessary to redetermine and agree a suspension of the physical activities so as not to incur extra costs. With reference to the Piscinola-Capodichino section, as the customer failed to fulfil its commitments, a review of the claims was commenced and there is a court order imposing the customer to pay
outstanding receivables.
NAPLES UNDERGROUND LINE 6:
The progress of works for the year was in line with the schedule; it mainly comprised the continuation of civil works on the sites related to the sixth Rider (Mergellina-Municipio functional section) and progress on the testing of the signalling system’s trackside equipment.
Specifically, the civil works on the stations A. Mirelli and S. Pasquale are at an advanced stage (the excavation has reached the bottom and construction has commenced of the internal structures), while the Chiaia and Municipio stations are still subject to various issues compromising the normal progress of the executive stage.
The contract manager delivered the works for the technological systems in November, thus enabling the commencement of the procurement process which will take place in the first few months of 2013 with a view to having the main systems ready for testing by year end.
ROME UNDERGROUND LINE C:
In 2012, CIPE (Interministerial economic planning committee) approved funding for the settlement agreement between the parties and the T3 section for which the contractual formalisation is yet to take place.
With reference to the progress of on-site activities, testing (including integrated system testing) is substantially complete on the Pantano-Torre Gaia section. Integrated system testing is underway for the Pantano-Torre Gaia-Centocelle tunnel section, which is the first to be rolled out. Certain variations have become necessary for Metro C, reducing work shifts dedicated to testing and pre-operational activities. Consequently, Roma Metropolitane and Metro C are working on a new roll-out plan which foresees the above activities and which provides for the launch of the pre-operational stage by the general contractor in the first part of 2013 directly on the Pantano-Centocelle section, to avoid efficiency losses.
MILAN UNDERGROUND LINE 5:
Assembly activities have been completed for the functional section from Bignami to Zara and the systems rolled out. The ATC proof tests and final integrated system testing have been completed. The functional section will be rolled out in February 2013. No particular issues have arisen in relation to the activities to complete the Zara to Garibaldi section and its roll-out is slated for the end of 2013.
With reference to the line’s extension from Garibaldi (excluded) to the San Siro station, the executive design is substantially complete and orders for all main supplies have been issued. Testing of the signalling and telecommunications materials is nearing completion. Due to delays in delivery from the customer, there is presently a difference between the final date for the work compared to the contractually-agreed programme. An agreement has been reached with the Milan municipality for a situation that, although on a smaller scale (skipping some stations), will allow the partial opening of the Garibaldi to San Siro line by the contractually-agreed date of April 2015 (in time for EXPO 2015) and the completion of all works and the opening of the complete line by October 2015.
NAPLES UNDERGROUND LINE 1:
During the year, the technological works were completed in relation to the Toledo station opened in September.
Activities are also underway on the other sites that will lead to the completion of the Dante-Garibaldi section in its final configuration, except for the Municipio and Duomo stations, by the end of 2013.
BRESCIA UNDERGROUND:
The procurement and assembly activities have been completed and the integrated system testing for the start-up (first year of commercial operation) configuration is substantially complete. Performance testing, which involves a greater number of vehicles, is yet to be completed. The system is at a pre-operational stage and ministerial approval for the start-up of commercial operations will be received in March 2013.
REST OF EUROPE
THESSALONIKI UNDERGROUND:
Technical meetings continued with the customer, Attiko Metro, to formalise the technical acceptance of the compliance matrix of the CBTC signalling system, and concluded positively in December. With respect to the general final design, the customer has officially approved the Greek version of the Telecom system and partially approved that of the Security Management System (SMS); the English version for the third rail system has been partially approved and the approval procedure for depot equipment is almost complete. A remedy of petition was formally brought before the Greek court at the end of November, representing the parent’s claim for damage incurred during the design stage. Moreover, an official claim was lodged in October with the joint venture for the ATC signalling system proposed during the bidding stage and never accepted by the customer. Internal consultations and analyses also continued with a view to agreeing new timelines between the members of the joint venture.
COPENHAGEN:
All detailed design documentation (“DD”) was issued in the fourth quarter of 2012. DD milestones for the CMC (civil works for the depot) and passenger vehicles subsystems have been reached.
The supplier of civil works for the depot has completed the activities related to the foundations of buildings E (internal washing) and F (external washing). Activities are underway for the construction of buildings A, B, C and D (electricity substation, offices and depot workshop), cable laying and piping.
The first factory-based testing of power supply and depot workshop equipment has been successfully completed.
NORTH AFRICA AND THE MIDDLE EAST
RIYADH AUTOMATED PEOPLE MOVER SYSTEM (APM):
The building design activities have been completed, as have the interfacing activities with the civil works. All monitoring activities have also been completed, as well as the key activities for roll-out.
The system has been running automatically since September 2012; at such time, following the signing of the contract, Ansaldo STS group commenced operation and maintenance activities.
As well as activities necessary to consolidate system performances, the roll-out of the automated depot equipment (AMR: automatic meter reading, MMIS: man-machine interface systems and the washing plant), the roll-out of the automatic operation of some vehicles (five vehicles were not available for the implementation) and integrated system testing are yet to be completed.
Once these pending issues have been resolved and system performance established, system demonstration activities necessary for the system’s handover can commence by mid-2013.
AMERICA
HONOLULU RAIL TRANSIT PROJECT:
Approval of the first of three planning stages (definitive design) is underway and activities related to the second stage (interim design) are commencing.
The customer officially approved the works schedule in November 2012.
Subcontract agreements between Ansaldo Honolulu JV and key electrical traction, telecommunications and security and fire prevention partners have been signed in recent months.
ASIA PACIFIC
TAIPEI UNDERGROUND CIRCULAR LINE:
The customer divided the last civil works package, which had not yet been awarded, into two contracts; only the first of these has been awarded.
An extension of time was agreed with the customer at the end of 2012 and a new CBS (contract baseline schedule) will be drawn up in the first few months of 2013.
AUSTRALIA:
Production of the reporting period related to projects under the master agreement with Rio Tinto (RAFA). The key production activities of the year related to RCE283, Hope Down 4, Driver Assist, OSS (Overspeed Sensor System) and ECP (Electronically Controlled Pneumatic brakes).
Start-up activities are proceeding as scheduled for the AutoHaul and ECP Installation Phase projects.
Operating profit (EBIT) of the Transportation Solutions business unit for 2012 came to €69,130 thousand (12.2% as a percentage of
revenue), compared to €55,009 thousand (10.7% as a percentage of revenue) in the previous year. This increase is due to the increased
volume and the different mix of contracts in the two years.
Operating working capital at 31 December 2012 was negative by €129,106 thousand, compared to a negative €172,411 thousand at
31 December 2011. The increase is mainly due to the change in net work in progress.
Research and development expense taken to profit or loss totalled €1,695 thousand, compared to €1,425 thousand in the previous year.
The headcount at 31 December 2012 numbered 631, up 31 employees on the 600 employees at 31 December 2011. This rise is linked to the increase in volumes, particularly in Australia.
2.7 Reconciliation between the profit for the year and equity of the parent and the group at 31 December 2012
(€’000) Equity
of which: profit for the year
Parent’s equity at 31 December 2012 and profit for the year then ended 344,396 50,738
Difference between the equities shown in the annual financial statements (including profits for the year)
compared with carrying amounts of investments in consolidated companies 78,017 21,125
Goodwill 34,569 -
Consolidation adjustments for: - -
- Dividends from consolidated companies - -
- Translation differences 4,280 -
- Impairment losses recognised on consolidated companies and loan assets of subsidiaries 7,477 3,837
- Other adjustments - (35)
Total attributable to the owners of the parent 468,739 75,665
- Non-controlling interests 427 31
Key events of and after the reporting period
3 Key events of and after the reporting period
Through its subsidiary, Ansaldo STS Australia PTY LTD, the group was awarded a €118 million (AUD151 million) contract in May 2012, for
the supply of the first two stages of a signalling and communication system for the 342 km railway line for heavy mining-related traffic for the Roy Hill Iron Ore project, in the Pilbara region of Western Australia.
The signalling solution proposed by Ansaldo STS is a cutting-edge technological innovation. It features centralised shunting and Automatic Train Protection (ATP), using satellite positioning. This solution is backed by Ansaldo STS’s expertise and products and represents a new frontier in the railway sector, paving the way to the signalling systems of the future and offering significant advantages in terms of efficiency, availability, quality and safety.
Again in Australia, two contracts totalling €289 million (AUD362 million) were agreed in June 2012 as part of the master agreement with
Rio Tinto.
The first of these, AutoHaulTM, worth around €253 million (AUD317.5 million), covers the development and supply of an automated
train management system for the 1,500 km railway network for the heavy transport of steel for Rio Tinto Iron Ore, in the Pilbara region of Western Australia.
Completion of the automated railway for heavy transport is slated for 2015 and it will represent the first of its kind globally, significantly increasing the flexibility and capacity of Rio Tinto Iron Ore’s mining railway network.
The highly-specialised modular signalling system includes the implementation of a centralised vital safety server, for the safe and flexible management of train manoeuvring and a driving module installed on board enabling fully automated control of the trains.
The second contract, worth approximately €36 million (AUD44.7 million), is also part of the master agreement with Rio Tinto Iron Ore
(RAFA), for improvements to locomotive control systems.
Moreover, again in Australia, a contract worth a total €65 million (AUD80 million) was agreed in July for the supply of signalling,
communication and transmission systems as part of the important RCE 353 (Rail Capacity Enhancement Project 353) project for Rio Tinto’s heavy transport railway line in the Pilbara region.
These important contracts are the last in a series of projects for heavy, mining-related transport for Rio Tinto Iron Ore awarded to Ansaldo STS Australia under the master agreement signed in November 2010 between Ansaldo STS and Rio Tinto Iron Ore (RAFA).
A strategic agreement was reached in July with the China-based CNR Dalian and the Taiwan-based General Resources Company, licensing the TramWave® technology to the joint venture that will be formed by CNR Dalian and General Resources Company.
The innovative TramWave® solution offers overhead line-free electric power supply and was developed and patented by Ansaldo STS for use in urban transport systems, eliminating the visual impact of traditional overhead lines.
It is hoped that this agreement will lead to a profitable and long-term collaboration so that the many opportunities offered by the Chinese tram market can be exploited.
This agreement is also an ideal starting point for more far-reaching collaboration in the mass transit sector with the same partner companies.
On 9 July 2012, as approved by the board of directors on 23 May 2012, the parent, Ansaldo STS S.p.A., carried out the third instalment of the bonus issue approved by the shareholders in their extraordinary meeting of 23 April 2010.
Following the issue of this third instalment, the parent’s share capital now equals €80,000,000, comprising 160,000,000 ordinary shares
of a nominal amount of €0.50 each.
In February 2013, the Ansaldo STS group company, Metro 5 S.p.A., completed the first section of Milan’s automatic light rail (“Line M5”) from Bignami to Zara.
The project received project financing and was carried out by the operator Metro 5 S.p.A., which is owned by Ansaldo STS S.p.A., AnsaldoBreda, Astaldi and Alstrom. The operator is in charge of its operation and maintenance for the next 30 years through the operations and experience of ATM, which also manages Milan’s other underground lines.
The current route covers seven stations, from Bignami in the Fulvio Testi area to Zara. It is slated to reach Garibaldi station by the end of 2013 and as far as San Siro in 2015, offering passengers a line almost 13 kms long and taking 26 minutes, with 19 stations integrated with Milan’s other public transport systems.
Ansaldo STS group is a key player in Milan’s new automatic light rail system, having designed, supplied and implemented the signalling system featuring driverless technology and requiring neither a driver on board the trains or personnel at the stations.
Ansaldo STS group won a €26.9 million contract through its Spanish subsidiary in the first few months of 2013 for the maintenance of
the railway traffic control and signalling and associated systems for the Madrid-Puigverd de Lleida high-speed line.
The fully automated driverless Brescia underground was handed over at the beginning of March 2013, a result of the partnership between Ansaldo STS, Ansaldobreda and Astaldi.
