Risorse Aziendali e Creazione di Valore in Ansaldo STSSergio De LucaCEO

March 14th, 2013

STS

Infr

astr

uct

ure

Veh

icle

sS

ign

alling

TechnologyIntegrator

Oth

er

Su

bsystem

s

Operation & Maintenance

General Contractor

AnsaldoSTS: mastering Transport Solutions and Signalling

Different Subsystems and Services composing a Turnkey Transport System

Transport Solutions BU acts as a General Contractor, both singularly or as a partner of a Consortium

The Transport Solutions BU supplies other subsystems + (Power Supply, TLC...) bought from third parties, often performing the detailed subsystem design & engineering

ASTS main role is as a technological integrator (Transport Systems BU) and as a supplier of signalling equipment (Signalling BU)

The Transport Sollutions BU supplies the track works for High-Speed Railways

The Transport Solutions BU supplies Operation and Maintenance services

Ansaldo STS: Wide portfolio of technologies moving people and goods safely

High Speed LineMain Line Railways Low Density & Freight Railways

Metro

Queensland Rail Broadlea Wotonga Implementation & OthersHamersley Hope, Rio Tinto (Australia)Optimized Traffic Planner, Union Pacific (US)CTC/CAD, CSX (US)

Rome Termini (1st Computer Based Interlocking) Saarbrücken Mannhein, Swedish Ester projectCambrian line, Manchester Node & Metrolink

Italy HSL networkFrance HSL networkMadrid-Lerida (Spain 1st ERTMS Lev2)Channel TunnelParis-Channel Tunnel-London; Paris- BrusselsKorea HSL QinShen(China 1st dedicated passenger line)

LRT / Tramways

Transport SystemsCopenhagen (1st Driverless Steel-Wheel Metro)Brescia, Milan, Thessaloniki, RomeSignallingNY, LA, Shanghai, Binhai, Paris Dublin Light Metro

Kuala Lumpur LRT

4

60% Free Float as of 12.31.20121 60% Free Float as of 12.31.20121

1. Remaining 40% owned by Finmeccanica

A Public Company trusted by International Investors

23% of investors are in North America

CountryMain

HeadcountJan 2013Locations

ITALY Genoa 1.534 NaplesTurinPotenza

FRANCE Les Ulis 518 Riom

SPAIN Madrid 69

UK London 5 Manchester

SWEDEN Stockholm 43

USA - CANADA Pittsburgh Batesburg

AUSTRALIA Brisbane 582

Perth,

INDIA Bangalore 204

MALAYSIA Kuala Lumpur 174

BOTSWANA Gaborone 29

CHINA Hong Kong 66

Other Locations 14

TOTAL 4.017

779

Montreal

Bejing

20%3%

38%

13%

26%

APAC

USA CanadaRest of EuropeFranceItaly

Worldwide Presence

6

WMATA Silver SpringPAAC North Shore

ConnectorNew York MetroChambers Street

- NYCT

WMATA Silver SpringPAAC North Shore

ConnectorNew York MetroChambers Street

- NYCT

Los Angeles Metro (Green Line)

Los Angeles Metro (Green Line)

Manchester Node& Metrolink

Cambrian line

Manchester Node& Metrolink

Cambrian line

ACS Palermo RailwaysRome Station C.B.I. SCMT / ACS Installations

ACS Palermo RailwaysRome Station C.B.I. SCMT / ACS Installations

Conventional & Driverless Metros Rome, Naples, Milan,

Brescia, Genoa

Conventional & Driverless Metros Rome, Naples, Milan,

Brescia, Genoa

Madrid-LeridaHigh-Speed LineMadrid-Lerida

High-Speed Line

Channel TunnelChannel Tunnel

Copenhagen Driverless Sweden Ester ERTMS Lev. 2 O&M contracts Copenhagen City ring

Copenhagen Driverless Sweden Ester ERTMS Lev. 2 O&M contracts Copenhagen City ring

Ghaziabad KampurIndian Railways

Ghaziabad KampurIndian Railways

Taipei Circular Line Phase 1Kuala Lumpur LRT

North Ipoh ti Pedang Besar

Taipei Circular Line Phase 1Kuala Lumpur LRT

North Ipoh ti Pedang Besar

Clearways 3Hamersley Hope; Dows

Rio Tinto Roy Hill Iron Ore

Clearways 3Hamersley Hope; Dows

Rio Tinto Roy Hill Iron Ore

France TGVFrance TGV

JacksonvilleCTC

JacksonvilleCTC

China & Korea High-SpeedBinhai, Daegu Busan Shitai Line Shenyang

Line 1 Shangai MetroERTMS Zhengxi Line

Hangzhou Metro line 1Chengdu CBTC

China & Korea High-SpeedBinhai, Daegu Busan Shitai Line Shenyang

Line 1 Shangai MetroERTMS Zhengxi Line

Hangzhou Metro line 1Chengdu CBTC

ATC InstallationSaarbrücken

Mannhein ERTM Lev. 2

ATC InstallationSaarbrücken

Mannhein ERTM Lev. 2

Thessaloniki MetroETCS Lev. 1 Terra -

ERGA OSE

Thessaloniki MetroETCS Lev. 1 Terra -

ERGA OSE

Turkey BegazkopruUlukisla Yenice and Mersin Toprakkale Metro Ankara

Electrification and Signalling

Banlieu sud Tunis

Italian High-SpeedMi-Bo & RM-NA,

FI-BO, TO-MI

Italian High-SpeedMi-Bo & RM-NA,

FI-BO, TO-MI

Libya Ras Ajdir SirtiAl-Hisha Sadha &

Sirth-Benghazi lineCPTM CAB

Riyad Metro Women’s University

Riyad Metro Women’s University

6

Honolulu Rail TransitHonolulu Rail Transit

International Player

Omaha OTPOmaha OTP

7

EUR mil 2008 2009 2010 2011 2012Order Backlog 3.136 3.760 4.551 5.453 5.683New Orders 1.297 1.786 1.985 2.164 1.492Revenues 1.106 1.176 1.284 1.212 1.248EBIT 118 125 137 116 117ROS% 10,6% 10,6% 10,7% 9,6% 9,4%Net Profit 78 88 95 73 76

Net Working Capital (166) (187) (154) (89) (48)Total Assets 1.132 1.375 1.620 1.741 1.865

Net Financial Position (Positive Cash) (196) (279) (318) (290) (302)Equity 239 302 382 424 469Total Net Invested Capital 43 23 63 135 167

•Healthy backlog (4.6 times Revenues)

•Strong orders intake – positive book-to-bill ratio

•Revenue growth with sustained profitability

Note: Currency FX for P&L amounts and new orders is the average fx rate for each individual year presented, for order backlog is the fx rate at year-end for each individual year presented

Key Data Trends - Growth with sustained profitability

C.E.OC.E.O

TransportationSolutions Business Unit

(TS BU)

• Sales & BD•Project & Risk Mgt.•RAMS•Engineering•Construction & Commis•Operation & Maint.

TransportationSolutions Business Unit

(TS BU)

• Sales & BD•Project & Risk Mgt.•RAMS•Engineering•Construction & Commis•Operation & Maint.

Innovation & CompetitivenessInnovation & Competitiveness CFO, HR, Strategy, Ext. Communication, Legal, HSE & FacilityCFO, HR, Strategy, Ext. Communication, Legal, HSE & Facility

Standard Platform & Products

(SPP)

•Portfolio Management•Products & Generic application deliveries•Supply Chain

Standard Platform & Products

(SPP)

•Portfolio Management•Products & Generic application deliveries•Supply Chain

SignallingBusiness Unit

(SIG BU)

•Sales & BD•Project & Risk Mgt.•RAMS•Engineering•Construction & Commis•Operation & Maint.

SignallingBusiness Unit

(SIG BU)

•Sales & BD•Project & Risk Mgt.•RAMS•Engineering•Construction & Commis•Operation & Maint.

Company Organization

Strategy enablers: implementation monitoring for all strategic change initiatives + HR programs to improve capabilities & performance of Global workforce

ASTS still committed and able to deliver superior value creation

Commit-ment

Superior value creation with conservative outlook• Sustain revenue growth leveraging healthy backlog while protecting profitability

Funda-mentals

Market: Large & still growing but more competitive, volatile and changing in geo mix- Consolidation is happening for real: Siemens-Invensys deal

Technology: Core technologies becoming global solutions integrated in a diversified and proven portfolio to serve global and local needs

People/capabilities: Globally integrated organization delivering on time and on budget but needs to be even more efficient & effective especially in distant & “just enough” markets

Business model: Unique client centric business model shaped to win in the competitive arena- Risks due to limited scale/support network and uncertainties on AB future

Strategicdirections

Focus on attractive markets where

Ansaldo STS can enjoy good competitive

positioning

Build competitive advantages and

ensure long-term growth

Stay competitive and agile optimizing organizational

model and product competitiveness

Market selectivity Innovation Effectiveness and efficiency 2 3 4

Support network and access to Rolling Stock1

5

Key values and company resources

SignallingMarket

TransportationSolutions

2012 2015

~14.1B€~14.1B€

~15.1-16.3B€~15.1-16.3B€

~ 10.0

~ 5.1

~6.0–6.6

~1

~1,2-1,3~1-3% CAGR

~5-9% CAGR

~10.4-11.0

~2.8-5.1% CAGR

Market: healthy and still expected to grow at 3%+Geo mix evolving: more growth outside of Western Europe

1996 2011

New mining freight networks in AustraliaSIG Mass transit in USSIG / TS

Iron OreIron Ore

Turkey, Middle East, North AfricaSIG East AsiaSIG / TS

New sweet spots in Signalling and Transportation Solution

Hedging core European markets

Honam HSL (S Korea) Honam HSL (S Korea)

TramWave licensing TramWave licensing to CNR (China)to CNR (China)

Hangzhou line 2 (China) Hangzhou line 2 (China)

Shah-Habsan-Shah-Habsan-Ruwais line (UAE)Ruwais line (UAE)

ETCS L1 onboard for 80 ETCS L1 onboard for 80 locos (Turkey)locos (Turkey)

Roy HillRoy Hill

Rio TintoRio Tinto

€m€m €m

1990s Now 1990

s Now 1990s

ERTMS

Current portfolio includes a wide range of solutions and technologies at different life cycle stages: a key asset

Mature Emerging Leading edge

Life-cycle stage

Solutions(samples)

Technologies(samples)

Comp. Based interlocking

(CBI)

Driverless CBTC Satellite-based

TramwaveWayside PTCATS Infrastructure monitoring

Distributed interlocking

Now

Evolving competitive scenario: Siemens-Invensys deal

• Signaling (or Rail Automation) is a key part of Infrastructure & Cities division and core to Siemens new go to market strategy– Same relationship exists between Signaling and

Transportation Solutions within ASTS– This is a key trend common in the whole industry

• M&A activity and consolidation are an "evergreen idea" in rail transportation industry– Other two technology full liners - Alstom & Bombardier - could beat

Siemens to the finish line …– … and/or newer players could enter Signaling and therefore

Transportation Solutions

• Siemens decided to pay a very high premium for Invensys Rail just to make the first move in the industry– Invensys has been on sale for a long time: sooner or later someone

would have taken it over

Siemens-Invensys deal:

an expensive defensive

move by the market leader

to protect“the core of

Infrastructure & Cities”

Industry dynamics have not changed: no new integrated player has been created

Consolidation

Price pressure has continued into 2012

2008 - 20092008 - 20092000 - 20072000 - 2007 2010 - 20112010 - 2011 2012 - 20162012 - 2016

-15%

Increasing competition

Product standardization

Aggressive efficiency programs

Poor financial performance

-20%

Some price pressure is starting to show up also in Transportation Solutions

Price level

External drivers of price pressure

Revised estimate of price trend

Last year’s estimate

People development is placed at the top of the corporate agenda...

Fu

ture

imp

ort

ance

1. The Conference Board "CEO Challenges 2006" results of global CEO survey with 540 responses 2. CEOs who nominated factor as of greatest concern/among my chief concerns (%).Note: Future importance, relevance today, and capability were items asked in Web surveySource: Proprietary Web survey with responses from 83 countries and markets; BCG/WFPMA analysis, 2008

88

87

84

78

78

76

74

73

71

69

0 20 40 60 80 100

Speed, flexibility, adaptability to change

Sustained and steady top-line growth

Customer loyalty/retention

Stimulating innovation/creativity/enabling entrepreneurship

Tight cost control

Availability of talentedmanagers/executives

Cost/ability to innovate

Employee loyalty/commitment/job satisfaction

Transferring knowledge/ideaspractices within the company

Succession planning%2

Uncritical Somewhatcritical

Very critical

Low relevance today

High relevance today

BCG study (2008): key HR topics for 2017BCG study (2008): key HR topics for 2017 CEO top challenge priorities1 CEO top challenge priorities1

Low

High

LowHigh

Managing

diversityManaging

corporate socialresponsibility

Managing

work-lifebalance

Managingdemographics

Becoming a learningorganization

Delivering on

recruiting andstaffing

Managingchange and

culturaltransformation

Enhancing

employeecommitment

Improving leadershipdevelopment

Improving

performancemanagementand rewards

Restructuring

the organization

Transforming HR

into a strategic partner

Measuring HR and

employee performanceProviding shared

services andoutsourcing HR

Mastering HR

processes

Managing

globalization

Managing

talent

Current capability

Three key pillars for people development to best address target group needs

Leadershipdevelopment

Talent management

Core competencymanagement

(L&D)

What leadership model is best suited to drive the organization's strategy and match the desired culture?

What talent segments and key positions should be focused on, and how can they be attracted and internally identified?

How can staff capabilities be mapped and effectively managed for business impact?

Key segmentsKey segments Guiding questionsGuiding questions

Source: BCG

Segment approaches by value contribution and distinct target group needs

958580 100907570656055

+38%

45403530252015105 500

+196%

+72%

+56%

-2%

+9%

-29%

+132%

+51%

Develop tailored career tracks

Improve the visibility of talented employees for the corporate center

Hire talented employees from competitors

Source talented employees globally

Source talented employees locally

Develop specific compensation schemes for talented people

Move businesses to new locations to access talented people

Establish alumni networks

Launch initiatives that target specific groups of potential employees, such as various ethnicities, immigrants, and

women

Companies forecast a critical importance of development activities (talent management)

Which of the following aspects of talent management are, and will be, the key actions of HR in your company?

Which of the following aspects of talent management are, and will be, the key actions of HR in your company?

Note: Participants could make multiple selections. Regression analysis on topic capability with 5% significance level. * = 10% significance level. Source: BCG/WFPMA analysis

Today (2007) In future (2010–2015) Increase rate

Respondents (%)

Companies forecast a critical importance of development activities (learning and staff development)

Which are, and will be, your key actions in order to encourage a learning organization in your company?

Which are, and will be, your key actions in order to encourage a learning organization in your company?

60 95905

+113%

35 7550 6530

+24%

2015 100100

+72%

45 5540 8525 8070

+25%

+129%

+56%

-32%

-13%

+61%

+48%

+7%

+26%

Today (2007) In future (2010–2015) Increase rate

Leverage senior managers as central personnel developers

Leverage trainee programs, job enlargement, job enrichment, and job rotation (on-the-job development )

Invest in IT-based learning-management systems to closely monitor individual activities

Leverage external consultants as central personnel developers

Leverage e-learning

Leverage business schools as central personnel developers

Leverage case studies and speeches (off-the-job development)

Leverage in-house training capabilities

Leverage quality circles and project teams (near-job development)

Leverage outplacement and retirement preparation (out-of-the-job development)

Leverage coaching, counseling, and mentoring (parallel-to-the-job development)

Leverage introductory sessions and training (prejob development)

Note: Participants could make multiple selections. Regression analysis on topic capability with 5% significance level. Source: BCG/WFPMA analysis

Respondents (%)

959085807570656055505 454035302520

+122%

+35%

+23%

+31%

15 100100

+114%

+257%

+95%

+88%

+56%

+36%

+17%

-6%

+38%

Companies forecast a critical importance of development activities (leadership development)

What are, and will be, the key actions for HR to prepare the leaders?What are, and will be, the key actions for HR to prepare the leaders?

Develop company-specific leadership seminars in cooperation with business schools

Use assessment centers to assess employees' leadership skills

Develop company-specific leadership seminars with the help

of external consultants

Use internal coaching from top management

Provide financial rewards for good leadership

Use external consultants to assess employees' leadership skills

Measure leadership skills through 360° feedback

Develop an internal brick-and-mortar leadership institute

Have senior executives assess employees' leadership skills through action-learning seminars

Use external leadership seminars

Develop company-specific leadership seminars on your own

Employ external coaches

Develop an internal virtual leadership institute

Note: Participants could make multiple selections. Regression analysis on topic capability with 5% significance level. * = 10% significance level. Source: BCG/WFPMA analysis

Today (2007) In future (2010–2015) Increase rate

Respondents (%)

1. Based on end-of-year closing prices 2. Average growth rate of companies' share prices in percent (weighted by 2001 share prices), dependent on sample composition for each particular year

+10

"People" companies outperform the market average

1. Based on end-of-year closing prices Source: 2012 BCG/WFPMA proprietary web survey and analysis

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

+109

S&P 500

Companies that made Fortune's "100 Best Companies to Work For"2

+99 percentage

points

People companies outperform the

market average in eight out of ten

years

150

100

50

0

–50

Cumulative growth rate of share price (%)1

HR development programs are critical for an effective ASTS global organization

Key elements of the program• Open: anyone can apply• Selective: 20 Future Leaders selected every 2 years for a 2-year Program• Challenging: assigned to one or more priority Group projects (operational/strategic) & expected to work

hard• International: part of 2 years spent Internationally; 20 Future Leaders coming from all ASTS countries• Developing: frequent feedback sessions with Supervisors & Mentors; 6 weeks of external executive

MBA training• Rewarding: monetary incentives for those selected and especially for those graduating

Systematic and fact-based selection process started in April and concluded in early October 2012• Objective and fact-based: quantitative standard tests (GMAT, TOEFL) and clearly defined decision

criteria• Transparent: clear and direct feedback to non-selected candidates and also to their supervisorsProgram being kicked-off in Genoa during the week of 17-21 December 2012

Future Leaders

Global Talent Mana-

gement

Identified ~400 Global Talents from all ASTS companies• Identified with bottom-up process within each global/local function: based on performance and

potential• Complemented with candidates from Future Leaders selection process: those who made it to the

final rounds and interviewed with senior leaders but were not selected among the 20• Classified between Managerial and Professional profiles• List/database will be updated every year

Established practical yearly process driven by ASTS Strategic Committee• Every year: define Priority List of ~80 people from overall pool of Global Talents• Hold quarterly Talent Management meetings: go through Priority List and identify specific

opportunities, can be new jobs/assignments but also leadership roles in internal projects

• Commitment to identify opportunities for entire Priority List within any given year

Future Leaders: fondamenti del programma

Le caratteristiche dei Future LeadersLe caratteristiche dei Future Leaders Le caratteristiche principali del programmaLe caratteristiche principali del programma

• Aperto: tutti possono fare application

• Selettivo: 20 Future Leaders selezionati ogni 2 anni per un programma di 2 anni; possibilita’ di escludere dal programma chi non performa adegautamente

• Sfidante: assegnati a uno o piu’ progetti prioritari per il gruppo (operativi e /o strategici); attesi massimo impegno e dedizione all’esperienza professionale

• Internazionale: parte dei 2 anni fuori dal paese di origine; 20 selezionati provenienti da tutto il mondo

• Formativo: frequenti sessioni di valutazione/feedback con managers e mentors; 6-8 settimane di executive training organizzato da importante scuola MBA per Ansaldo STS

• Incentivante: incentivi/bonus per i 20 selezionati ma soprattutto per quelli che completano con successo i 2 anni di programma

• Vogliono mettersi in discussione• Desiderano contribuire a cambiare l’azienda• Possono prendere le posizioni di massima

responsabilita’ del gruppo entro 5 anni

Future Leaders: perché e quali risorse si stanno cercando

Le ragioni per lanciare il programmaLe ragioni per lanciare il programma

Abbiamo bisogno di più leaders capaci di operare con efficacia in un contesto globale•Crediamo di avere un buon senior leadership team ma siamo anche consapevoli che esistono ampi spazi di miglioramento dovuti soprattutto alla necessita’ di gestire un’organizzazione globale integrata invece di organizzazioni locali indipendenti

Come azienda, dobbiamo sviluppare internamente la maggior parte dei nostri futuri leaders•Il nostro settore ha specificità e barriere tecniche•Assumere dall’esterno ai massimi livelli funziona in alcune funzioni ma non in tutte

Vogliamo far emergere talenti con una modalità “attiva”, attraverso una presa di responsabilità diretta sul proprio autosviluppo

Vogliamo comunicare concretamente a tutta l’azienda quanto crediamo nella leadership, nella responsabilita’, e nell’imprenditorialita’ come valori chiave•E vogliamo cogliere l’opportunita’ di identificare nuovi potenziali talenti, anche tra quelli non selezionati per Future Leaders

I principi guida per la selezioneI principi guida per la selezione

Comunicazione chiara e trasparente agli executives di tutto il mondo•Ragioni per lanciare il programma•Un programma voluto fortemente dal CEO per supportare il processo di cambiamento

Aperto a qualsiasi dipendente•Tutti hanno potuto fare application, indipendentemente dalla posizione organizzativa e dalla valutazione dei manager

Oggettivo/fattuale•Tests con risultati quantitativi – inclusi GMAT e TOEFL•Sforzo di quantificare tutti i criteri: es. lettere di motivazione valutate su 4 dimensioni con voti da 1 a 3 per ciascuna dimensione

Trasparente•Feed-back diretti e chiari ai candidati non selezionati (e anche ai loro capi)

Autoesclusi che non hanno completato tutti i tests/ interviste richiesti

Future Leaders: i numeri del processo di selezione

Criteri di selezione

• Capacita’ analitiche e logico/critiche misurate dal GMAT (voti 250-720)

• Anni di esperienza professionale rilevante

• Conoscenza inglese misurata dal TOEFL

• Lettere di motivazione (voti da 4 a 12)

• Test online SHL di potenziale (voti 1-5)

• Intervista strutturata da parte di HR (voti 1-5)

• Geografia

I Venti

•Potenziale di leadership

•Motivazione

•Condivisione di valori chiave

Aprile 2012

Aprile 2012

Apr-Mag2012

Apr-Mag2012

Giu-Ago 2012

Giu-Ago 2012

Settembre2012

Settembre2012

Elementi chiave del programma per i 20 Future Leaders

• Formazione tipo Executive MBA organizzata per i 20 Future Leaders di Ansaldo STS da rinomata scuola di management internazionale (italiana o americana)

• 6-10 settimane di formazione suddivise in 4 sessioni nell’arco dei 2 anni- Organizzate o presso la sede della scuola o nelle nostre sedi

Executive MBA

• Ogni Future Leader lavorera’ su uno o piu’ progetti prioritari per il gruppo che gli permettano di comprendere meglio l’azienda sviluppando al tempo stesso nuove competenze

- Progetti operativi: come Project Managers o Project Engineers di importanti progetti di Signaling o di Transportation Solutions

- Iniziative strategiche: come Initiative Leaders di progetti una tantum che possono spaziare dall’efficienza, al ridisegno organizzativo/di processi, all’innovazione, o all’entrata su nuovi mercati/segmenti

Attivita’ lavorative

• Ogni Future Leader avra’ almeno 3 persone senior di riferimento- Il capo organizzativo (definito in base all’attivita’ lavorativa prevalente),

un Executive Mentor, e il CEO- Tutte queste persone di riferimento giocheranno un ruolo chiave nel fornire feedback e

nell’effettuare frequenti valutazioni della performance (almeno ogni 6 mesi)• In aggiunta ci saranno opportunita’ di interagire con tutti i Global Leaders del gruppo

Supervisione e coaching

• Incentivi durante i due anni del programma e aumenti di retribuzione a fine programma- Incentivi e aumenti soggetti al completamento con successo del programma da cui i

partecipanti possono anche essere esclusi prima del completamento

Retribuzione/ incentivi

STS