Signalling Business Unit

New orders for 2012 totalled €893 million (€1,046 million for 2011).

Key events of the year are described below.

Perfomance of the Signalling 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)
R.O.S. 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).


New orders totalled approximately €206 million. Key new orders included the contract for the Brescia-Treviglio highspeed 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.


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.


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.


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.


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 highspeed 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).

Revenue for 2012 came to €725,588 thousand, compared to €728,375 thousand in the previous year.


The key production activities are summarised below.


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.

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.

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.

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.


(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 highspeed 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.


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.


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.


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 reworking (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.

The SOUTH TPWS project was expected to be completed in the first half of 2012, however, there were significant unforeseeable issues 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 e111,449 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 cer tain activities and related resources.