Signalling - performance by business unit

(€’000)   First half of 2013   First half of 2012
Change 2012
New orders   281,816  453,867  (172,051)  893,197
Order backlog    2,519,391  2,581,823  (62,432)  2,616,684
Revenue   343,149  334,174  8,975  725,588
Operating profit    29,866  34,798  (4,932)  62,530
ROS   8.7%  10.4%  -1.7 p.p.  8.6%
Operating working  capital    119,189  139,827  (20,638)  103,705
Research and development    13,923  15,321  (1,398)  30,566
Headcount (no.)    3,045  3,033  12  2,971
(The amounts shown in the table include inter-segment transactions).
 

Revenue for the reporting period came to €343,149 thousand, compared to €334,174 thousand in the corresponding period of the previous year.

The key production activities are summarised below:

ITALY

RAILWAYS - HIGH SPEED

Production mainly related to the design activities for the new Treviglio-Brescia high-speed section and the continuation of works on the Bologna connector and in the Naples area.

RAILWAYS - ON-BOARD ATCS/ERTMS

In the On-board systems line, production mainly related to the development of ERTMS systems for the new ETR1000 high-speed trains for the Trenitalia fleet and the supply of new rolling stock to AnsaldoBreda S.p.A. and Stadler. Activities for the resumption of works on the Greek railways contract were also commenced, as well as those related to the upgrade of Trenitalia’s ETR 500 Frecciarossa fleet. 

RAILWAYS - CENTRAL AUTOMATED SYSTEM

In the Station equipment line, activities continued on certain projects, including: Mestre, Rogoredo, Trento–Malé, Rebaudengo (variations to Turin Porta Susa tracks I and II), Palermo Centrale, the Genoa junction (provision of materials) and Brescia (design).
The reconfiguration of the ATCS SST (wayside systems) continued for the Genoa, Florence, Turin, Naples and Verona sections, as well as automation activities comprising both modifications and revamping of existing CTC (Centralised Traffic Control)/SCCs (command and control system) (including the Naples SCC and Bari-Lecce and Bari-Taranto, Taranto-Brindisi, Cremona and Siena CTCs) and activities related to new SCC systems (Palermo).
The project for the technological upgrade of the Turin-Padua section deserves special mention, where production mainly comprised product development, materials procurement and detailed executive design activities. 

MASS TRANSIT

Key activities related to the roll-out of line B1 of the Rome metro, as well as station/yard assembly activities and the roll-out of the SCADA signalling and automation systems for line 1 of the Naples metro. Production of the on-board and undercarriage equipment for the traction units continued for line 6 of the Naples metro, as did the roll-out of the Milan metro supervision system for the Comasina-Maciachini extension. 

REST OF EUROPE

(This section includes Turkey and the former Soviet republics)

In France, activities mainly related to systems (LGV SEA, Bretagne Pays de la Loire BPL and Honam) and on-board 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, where checking and validation activities continue along with the first installations.
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 this 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 officially halted for the POS (Paris-Ostfrankreich-Südwestdeutchland) project, pending the customer’s review of the project inputs. The first deliveries and testing activities were successful in relation to the set-up of the Rostock-Berlin line, however, the customer is expected to suspend the works due to a new redefinition of the technical/contractual requirements.
An extension to the scope of work has been agreed for the on-board project to supply 30 multistandard facilities for 15 Velaro high-speed trains. The first ISA V114 Bi-standard report and maintenance manual have been issued and, during the period, new integration tests were carried out on the ATP (automatic train protection) system for both Velaro and Eurostar.
n Khosta, Russia, after providing assistance in assembling Itarus RBC and power supply systems, the communication protocol testing stage was completed (between the RBC and the customer’s system) necessary for the roll-out of the ERTMS standard in Russia (trial site).
In Turkey, in-depth Interlocking design activities were completed for the Mersin-Toprakkale line and the first Mersin-Tirmil-Taskent multistation was formally delivered, while on-site installations continued in the Southern and Northern sections.
In relation to the Ankara metro, design and on-site installation base contract activities continued as well as the design and materials supply activities for the variation for the implementation of the DTP (discontinuous train protection) system (related to the CBTC subsystem).
The system architecture for the Gebze-Kosekoy project was completed and initial documentation related to basic design has been issued. 

NORTH AFRICA AND THE MIDDLE EAST 

Works related to the Electrification Banlieue Sud de Tunis project in Tunisia are substantially 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 have not recommenced since the upheaval started. 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 asset currently recognised in the financial statements is more than offset by the amount of progress payments.
In the United Arab Emirates, initial activities linked to preliminary design, delivery of material and installation of the first suburban sites were completed for the Abu Dhabi project (Shah-Habshan-Ruwais Line). Commissioning activities are set to begin this year. 

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. In this respect, FAT tests on the Core Release 1 (CR1) and those related to the first part of the Core Release 2 (CR2) were successfully completed, in addition to ordinary maintenance activities. They also included activities for the customer, Southeastern Pennsylvania Transportation Authority (SEPTA), for the procurement, design, production, construction and installation of a Positive Train Control (PTC) system on 13 lines. Wayside and communication design and configuration, as well as activities with subsuppliers, continued in the period. Works continued in relation to the Central Florida Rail Corridor (CFRC) project for the supply of wayside signalling systems (comprising 12 control points, 269 signals, 70 level crossings and 50 switches), as well as communication systems and the centralised control system. 

ASIA PACIFIC

Production in Australia focused on the alliances with local mining companies.
With respect to Newcastle, the last installations and commissioning of the period have been completed, while alliance mobilisation is nearing completion. A Caretaker agreement transition plan was approved, clarifying all pending commercial aspects.
Start-up activities continued for the new Roy Hill project. The preliminary engineering activities have been approved by the customer and subsequent processing commenced, which will only be approved definitively once work is underway.
Production in India mainly focused on the following projects: 

KFW

During the period, an extension was approved for the delivery of the project as well as a variation to the third line. Two stations and one block section were commissioned.

NORTH TPWS

The installation reworking on the “Kosi Yard and BAD - FAR” sections was completed and the safety case has been sent to the customer for approval. A training session for the customer’s personnel was organised and completed and an extension was also approved.

SOUTH TPWS

Installation and building site works were completed for both the on-board and wayside portions. The as-built and safety case documentation and the ISA report have been sent to the customer for approval for the FAT certification required for the completion of the project.

CALCUTTA METRO

The Calcutta metro project is still in its initial stages. The customer has officially notified a one-year delay for certain civil works which does not currently appear to impact the planning of the works the group must carry out; investigations are underway to better establish timing and cost implications. Engineering activities have commenced and purchase orders were finalised with telecommunications providers. The General requirements and preliminary design milestones were reached and submitted to the customer for examination.

There are various projects underway in Korea for equipment supply for various types of locomotives. 31 locomotives have been delivered for the Rotem TCDD projects. In respect of the other projects, the equipment for the first eight KTXII-H and EMU 138 locomotives were delivered in addition to the first DL25 locomotive.

In China, the ZhengXi Line project is almost complete. 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. The first train featuring cabling hardware modifications began operating.

Operating profit (EBIT) of the Signalling business unit for the period ended 30 June 2013 came to €29,866 thousand (8.7% as a percentage of revenue), compared to €34,798 thousand (10.4% as a percentage of revenue) in the corresponding period of the previous year, due to the different mix of contracts in the two periods.
Operating working capital at 30 June 2013 amounted to €119,189 thousand, compared to €103,705 thousand at 31 December 2012. The change is mainly due to the increase in net work in progress and inventories.
Research and development expense for the reporting period equalled €13,923 thousand, compared to €15,321 thousand in the corresponding period of the previous year.
The headcount at 30 June 2013 numbered 3,045 (3,033 employees at 30 June 2012). The increase, which is mainly related to fixed-term contracts, refers in particular to the Spanish area and reflects the acquisition of the contract for the maintenance of the railway traffic control and signalling and associated systems for the Madrid-Puigverd de Lleida high-speed line.

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