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FINMECCANICA

“INSIDE THE BOX”

London - July 10th 2007

Managing long term programmesacross the Finmeccanica Group

Alessandro PansaCo-General Manager / CFO

3

Landscape evolution

Domestic company

Favourable contractual & commercial terms

Little competition

Increased critical mass to achieve leadership in specific core sectors

Seeking opportunities overseas in growing markets

PastPast

Present & FuturePresent & Future

INTERNATIONALISATION

4

North America

2005A: Eur 15.4 bnAvg Gross Margin 19.3%

Italy UK Rest of Europe* Rest of World

2006A: Eur 15.7 bnAvg Gross Margin 19.8%

2008E: > Eur 17 bnAvg Gross Margin 20.3%

* Including international programmes (i.e. Eurofighter), previously accounted under “Italy”

Orders

Strong and high quality international orders coming from key export markets…

20% 28%

20%22%

10%

5%8%

20%

21%

46%

25%

11%

20% 16%

28%28%

5

… underpin our platform to deliver increasing revenues and margins over a long term horizon

Maintaining annual book to bill (Orders/Revenues) above 1x to guaranteea growing order backlog with an average visibility of 3 years of production

A,D&S Orders Civil Orders A,D&S Revenues Civil Revenues

Avg Gross Margin on Orders

Eur Bn

-

2

4

6

8

10

12

14

16

18

20

2003A 2004A 2005A 2006A 2007E 2008E 2009E

19.8%19.8%

16.9%16.9%16.8%16.8%

19.3%19.3%19.9%19.9%

20.3%20.3%21.0%21.0%

2010E

Target Revenues ca. € 16.5 bn

Target Revenues ca. € 16.5 bn

6

Finmeccanica management has delivered on its guidance over the last four years

Proven ability to achieve economic and financial commitments in terms of:Value of Production and Revenues growth YoY

Ebit Margin increase (from 5.1% in 2004 up to 7% in 2006)

Maintaining Net Debt/Equity below 0.2x

Operating and Free Operating Cash Flow generation

Proven ability to win large export and international partnership orders, i.e.: US Presidential fleet

US Joint Cargo Aircraft

Turkey Atak helicopters (selected)

Fremm

Eurofighter

7

Guidance for 2007 and 2008

• Confirming average Free Operating Cash Flow per Year (2006-08) of ca. €300 mln

• Dividend policy: increase together with profits

• Optimal capital structure: Net debt/Equity < 35-40%

• Net bank debt/EBITDA <2.0

€950-1,000mln €1,050-1,170mln

€13.1-13.7bn €14-14.7bnRevenues

(not Value of Production)

EBIT

2007 2008

8

Why inside the box?

By the end of today we hope you will understand better our ability to

deliver revenue growth and increase margins by managing effectively complex LONG TERM contracts

execute well some of the very large orders we have won over the last couple of years

improve execution capability by deeply implementing our project management approach

9

Roadmap for achieving improved performance: focus on efficiency…

Increase profitability Reduce industrial

and SG&A costs

Reduce working

capitalSelf–fund product investment

To consolidate grossmargins and cash flows

Complete review of industrial processes and launch detailed efficiency programmes forprocurement, production & logistics

Complete integration plans

By further reductions inG&A, IT, commercial costs etc

Extend procedures to cover entire life cycle of contract

By simplifying Group structure

Cost efficiencies to drive variable remuneration across Group

Focus on winning highmargin orders

10

… specifically through our project management model

Life Cycle Management (LCM) – managementand control of programmes throughout their entire life (from contract acquisition to contract management, from beginning to end)

Risk Management - structured approach for a continuous/ ongoing activity of definition and management of risks and contingencies

Project Phase Review - verification of progress of activities, scheduled at specific milestones of project life cycle, and are directed by an external and independent evaluator (the Chairperson)

EVA®

EVA® is a registered trademark of Stern Stewart & Co.

(Economic Value Added)

11

Strong diversification reduces overall risk profile

Better use of capital: each investment project competes within an internal capital market place for the allocation of a limited pool of financial resources

Better risk-return profile: Finmeccanica corporate reduces risk by allocating resources among different operating companies. No single programme accounts for more than 10% of Group revenues

In 2006-09 total funds from operations will be sufficient to fund all major capex programmeswhich match our expected optimised risk-return profile

Opportunities to enhance the value of our business portfolio through external growth will be funded primarily with other sources of cash (i.e. leverage and disposals)

Return

Risk

Efficiency frontier

12

Remuneration schemes across Group

Strongly aimed at value creation through tight link to EVA in compensation tools

In particular with reference to:MBO (Management By Objectives) - offered to approx. 90% of Group-wide executive population (ca. 2000) – EVA represents an important bonus/penality payout factor, together with FOCF;

PSP (Performance Share Plan - Stock Grant) – EVA accounts for 60% of Performance objectives to be achieved in order to obtain the payout, the remaining 40% depends on order intake

13

Looking ahead

Today we are managing at corporate and operating company level

A large and growing order backlog

An expected growth in orders higher than growth in revenues together with risingmargins embedded in orders expected between now and 2009

A platform from which we should deliver higher revenues and margins

Long term features of Aerospace & Defence programmes that cannot be stressed too much

Programme complexity which involves inherent risks connected to technology,high number of international partners and suppliers, dynamic environment

Long term success of Finmeccanica depends on effective long termmanagement of its programmes

The Management Model for the Finmeccanica Operating Companies

Marina GrossiCEO, SELEX Sistemi Integrati

16

Driving Group Strategic Objectives

FINMECCANICASectors

PROFITABILITY


GROWTH

Management Model

Long Term Roadmap

17

The virtuous circle towards Value Creation

Profitability

Enlarge offer portfolio

Strengthen & consolidate global positioning

Image improvement

Total Efficiency

InternalEfficiency

OutwardEffectiveness

New ProductsDevelopment

StrategicAlliances

Synergy withFinmeccanicaCompaniesBe part of the Group

Competitiveness

StrategicVision

• Intangible assets

• On time delivery• Performance requirementscompliance

• Cost-effectiveness ofLogistic activities

• Cost control• Processimprovement

•Country and productstrategies as driver in selecting partners

•Sinergic integrationof systems, productsand capabilities

•Exploiting Groupreferences

•Oriented investments

18

Applying Value Based Management Model

Choosing EVA® as Performance Indicator

WACCWACC Calculation of the WACC, with regards to the sectors of FinmeccaCalculation of the WACC, with regards to the sectors of Finmeccanica, wasnica, wasmade taking into account a target financial structure of a mediamade taking into account a target financial structure of a median Debt / Equityn Debt / Equityratio of comparable companiesratio of comparable companies

EVA EVA ®® = NOPAT= NOPAT-- CIN x WACCCIN x WACC

Company MarketValue

MarketValueAdded

Net InvestedCapital

= + ++ ......EVA1

(1+wacc)1EVA 2

(1+wacc)2EVA n

(1+wacc)n= + ++ ......

EVA1

(1+wacc)1EVA 2

(1+wacc)2EVA n

(1+wacc)n

ROIROI

ROEROE

DCFDCF

FINANCIALFINANCIALLOGICLOGIC

COST OFCOST OFCAPITALCAPITAL

FUTUREFUTUREPROSPECTSPROSPECTS

MEASUREMENTMEASUREMENTOF THE PERIODOF THE PERIOD

EVAEVA

ROIROI

ROEROE

DCFDCF

FINANCIALFINANCIALLOGICLOGIC

COST OFCOST OFCAPITALCAPITAL

FUTUREFUTUREPROSPECTSPROSPECTS

MEASUREMENTMEASUREMENTOF THE PERIODOF THE PERIOD

EVAEVA

19

Innovative bottom-up approach

Value Creation Supreme Company ObjectiveValue Creation Supreme Company Objective

VALUECREATED

BY PROJECTS

VALUECREATED

BYCOMPANY

VALUECREATEDFOR THE

SHAREHOLDERS

VALUECREATEDFOR THE

SHAREHOLDERS

20

VALCOM is a MANAGEMENT Model:

Enables FINMECCANICA to better manageBidding ProceedingsProject ExecutionDecision-making processes

The New Model: VALCOM®

Milestone Plan #NOME?#NOME?#NOME?#NOME?#NOME?#NOME?#NOME?#NOME?CUM MILESTONE A BILANCIO 2001

TOTALE 0 0 0 0 0 0 0 0Cum Milestones0 0 0 0 0 0 0 0

VALCOM

Company EVA = Company EVA = ΣΣ company’s projects EVAcompany’s projects EVA

With a FULL COSTING approach:

General Costs

Employed CapitalAt Project Level

The Management Tool created for VALCOM is integrated in Company INFORMATION SYTSTEM

21

Implementing the Management Model

VALUE MEASURE AT BID

STAGE

VALUE BASED ORGANIZAZION

SYSTEM

RISK MANAGEMENT

VALUE BASED CULTURE

BONUS VALUEAPPROACH

VALUE GENERATION

Shareholders Suppliers

Customers Employees

EVA ® and FINMECCANICA MODEL

MeasureExpectedEVA

TrainingBookletCD-RomIntranet

Groupguidelinesand companyprocedures

FNM guidelines and bonus value allocation

Building on success of each step

VALUEMEASURE

THROUGHOUTLIFE-CYCLE

Measureactual EVA throughout the life of theproject

Group guidelinesand sectorre-engineering

22

VALUE MEASURE AT

BID STAGE

VALUE GENERATION

A good tender is half the value

Using VALCOM Model for:

Acknowledging problems in advance

Simulating different scenarios

Sharing the project vision with all the team members

Creating a baseline for performance control EVAas a criterion to accept

contracts

All Bids managed through VALCOM


23

Empowering Value Culture


Making Value Creation a method for daily managementMaking Value Creation a method for daily management

Training:• embrace culture• understand model • VALCOM

Across the entireorganization from 1st level

management to all employees

VALUE BASED CULTURE

VALUE GENERATION

24

Dealing with risk

Milestone Plan#NOME?#NOME?#NOME?#NOME?#NOME?#NOME?#NOME?#NOME?CUM MILESTONE A BILANCIO 2001

TOTALE 0 0 0 0 0 0 0 0Cum Milestones0 0 0 0 0 0 0 0

VALCOM

RISK MANAGEMENT

1. Project Classification

2. Risk identification

3. Risk Assessment

4. Mitigation Plans

5. Risk Monitoring and Review

Avoiding crisis management situationsAvoiding crisis management situationsDelivering projects on time within budget costsDelivering projects on time within budget costs

VALUE GENERATION


25

Managing Projects and controlling Performance

MEASURE VALUE

THROUGHOUT LIFE-CYCLE

Cash-inCash-out

0

200

400

600

800

1000

1200

1400

1 2 3 4 5

EntrateUscite

years

Financial Break-Even Point

Creating Value

Cash-inCash-out

Maintaining expected EVA value throughout Project LifeMaintaining expected EVA value throughout Project Life

ContractAward

Design Integration

QualificationProduction Installation

Acceptance

In fieldSupport &

Service

VALUE GENERATION


26

Continuous and sole responsibilityFrom the bidding stage to project

conclusionEnsuring consistency between the bidbudget and the operating budget

Running the model through the Organization

Creating an organization model consistent with Value CreationCreating an organization model consistent with Value Creation

The pillars: IPT Leader

IPTIPT

VALUE BASED ORGANISATION

SYSTEM

VALUE GENERATION


27

Embedding the Model throughout the Company

BONUS VALUEAPPROACH

Responsibility for the resultsConsistency between company’s andmanagement goalsImpartiality and tranparencySolidariety between team members

Direct all people toward the aim of Value CreationDirect all people toward the aim of Value Creation

Bonus for IPT members based onproject EVA performance

Managers MBO linked to Company or Business Unit EVA results

The principles:

VALUE GENERATION


28

Provide structureand means

for managingbusiness

to achieve the 3 pillars of Finmeccanica Strategy

Driving Group Strategic Objectives

ManagementModel

FINMECCANICA Domains

FINMECCANICASectors

Value Creation

PROFITABILITY


GROWTH

SELEX Sistemi Integrati S.p.A.Via Tiburtina, Km 12.400

00131, RomaItalia

T: +39 06 41501

Quality of processes equals quality of delivery

Gian Piero CutilloSenior VP, Administration and Control

32

Main features of Finmeccanica’s businesses

Finmeccanica Group’s Companies mainly manage their businesses developingand manufacturing products & services through programs/projects characterizedby the following key features:

products and services are mainly customized to fit Client needs (low standardization)

projects usually last several years;

a typical project goes through different phases, from the bid preparation to the development, the production and the Client support: the Project Life Cycle

the project life cycle run across the Company’s main Operational Processes(Marketing & Commercial, R&D, Engineering, Procurement, Manufacturing, etc...)

complex projects imply several risks which cannot be avoided, but can bedynamically managed and mitigated

33

The Project Life Cycle

Project Life Cycle – Main Phases

Technicalassistance &

logisticalsupport

Production, installation

and testing

Operational planning, design and

development

Contractnegotiation

Marketing & bidpreparation

Bid submissionNegotiationAgreementSign the contract

System qualification Parts productionAssemblyTestDelivery

Project Organisation and Start upOperational plan (time/costs)Architectural designSystem designSystem Integration

Warranty mgmtTraining and assistance tothe clientSpare parts mgmt

All the activities that have to be performed for the completion of a project aredefined "Project Life Cycle"

Market and Tender researchGathering of informationBid/ No Bid decisionBid preparation

34

Finmeccanica projects and the “Project Life Cycle"

Marketing & CommercialMarketing & Commercial ProcurementProcurement ManufacturingManufacturing ……

After sale,logistics

After sale,logistics

R&D, Engineering

R&D, Engineering

The project life cycle runs across the Company’s main Operational Processes

The full governance of these Processesis a must to guarantee

effectiveness and efficiency of Project management and controlalong the entire project life cycle

Operational Processes

The Project Life Cycle through the main Operational processes

35

Engineering

Marketing Research

Tech. Research

Marketing & Commercial

Research &Development

Sign the Contract

Deliver tothe Client

Procurement

Process & Product Quality Assurance

Project Management

Service & Logistics

Manufacturing

Project Life Cycle through the main Operational processes

Integrated Risk Management

Main Operational processes• Project Planning• Project Monitoring and Control• Supplier Agreement Management• Integrated Project Team (IPT) • Risk Management

36

Main operational processes: Marketing and Technical Research for New-Product development

HOLDING

“N-P BP”

Technical identification, configuration and description, and coherency with Company’s Technological Plan Strategic value and coherency with Company’s Strategic PlanMarket analysis and Commercial planCompetitive analysisAlternative solution analysisDevelopment and Industrialization planCosts and Investments planRisk ManagementFunding planIncome/Financial PlanValue creation

New product development

processes and procedure

Marketing Research

Tech. Research

New-product / New-technologyDevelopment

OPERATING COMPANY

“New-Product Business Plan” preparation, analysis and evaluation

“New-Product Business Plan” analysis and validation

37

Risks are innate to the projects. They cannot be avoided but can be dynamically managed and mitigated

Main operational processes: Risk Management process

The governance of risks according to a structuredRisk Management Process along the whole project life cycle

guarantees the achievement of project goals, avoiding crises situations andminimising the impact of risks

Integrated RiskManagement

Risk Management processes and

procedure

38

Main operational processes: Offering process

Marketing & CommercialOffer Team identification

Representatives from different Departments that play a key role in completing the Offering, sharing their point of

view (Commercial; Technical; Program management; Risk management; AFC; Legal Affairs, Offset, Logistics

and Procurement )

Bid Manager appointment

Market research

Offer preparation

Offer Summary Table

Offeringprocesses and

procedures Approvalprocesses

(Operating Company and Holding involved)

Bid submission and commercial

negotiation

Bid / no Bid Evaluation

(strategic analysis)

Contractsigned

39

Engineering

Main operational processes: Industrial processes

Concurrent engineeringDesign to CostConfiguration ManagementClient Requirement Management and Technical Performances AssuranceCost and Schedule ManagementDesign ReviewsTechnical Change Management

Research &Development

Procurement

Manufacturing

Supplier qualification

Supplier rating

Global sourcing

Partnering (risk sharing partner)Make or Buy processes

Product planningStd Bill of Material and Routings and Std CostsVariance analysisLean manufacturingExcellence Centers

Spare Parts service Chain

Inventory pooling

Customer satisfactionService &Logistics

R&D andSupply Chain processes: key principles

40

Main operational processes: Process & Product Quality Assurance

Process & ProductQuality Assurance CMMI (Capability Maturity Model Integration) is

the methodology for modeling, defining and measuringthe maturity of main operational processes (ability to control and to guarantee the quality of provided products)

Six Sigma is a data-driven approach of quality improvement that values defect prevention overdefect detection

41

Earned Value ManagementEarned Value Earned Value ManagementManagement

RiskManagement

RiskRiskManagementManagement

Economic Value AddedEconomic Economic

Value AddedValue Added

Phase ReviewPhase ReviewPhase Review

EVA methodology applied to single projects in order to evaluate the value creation at the bidding phase and during the entire project life cycle, taking into account income and financial figures

Verifications of the progress of activities, which are scheduled at specific events of the project life cycle, and are directed by an external and independent evaluator (the Chairperson)

Structured approach for a continuous/on going activity of definition and management of risks and contingencies

Standard process for project management and performance measurement, based on EVM methodology for managing physical and accounting progress of activities

To guarantee a structured and effective control of each single projectalong its life cycle, Finmeccanica established a complete

“Project Control Framework”

Finmeccanica “Project Control Framework”

RiskManagement

RiskRiskManagementManagement

42

COMPANY/BU SYNTHESIS

COMPANY/BU SYNTHESIS

PROJECT MANAGEMENT AND CONTROL

PROJECT MANAGEMENT AND CONTROL

CORPORATE

COMPANY/BU COMPANY/BU COMPANY/BU

Project Project Project Project Project Project

• Monitoring of mainprojects

• Syntheticanalysis/indicators

• “Drill-down” on critical projects

0,0

0,5

1,0

1,5

2,0

2,50,0 0,5 1,0 1,5 2,0 2,5

Hot Bird 7SAR 2000

Linea Tec ASI

Skyplex W3A

Amos

Radarsat 2

Mars Express

Yamal

Cosmo

CPI

PERFORMANCE PROGRAMMI GENNAIO-FEBBRAIO 2002

PERFORMANCE PROGRAMMI GENNAIO-FEBBRAIO 2002

PRELIMINARE

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ficie

nza

SPIAnticipoRitardo

*

250

k

€

*

*

• Detailed analysis (ie. physical progress, performances, timing, costs, risk management, EAT/EAC, ...)

• Synthetic analysis by company/BU

CORPORATE MONITORINGCORPORATE

MONITORING

CO

MP

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EP

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TIN

GC

OR

PO

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31/12/01

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L’elevata pendenza indica che si ipotizza nei

successivi 7 mesi una velocità di esecuzione

molto elevata

Si ipotizza un recupero totale

dell’inefficienza sui costi

Time now

PROGRAMMA HOT BIRD 7 AL 31/08/2001

PROGRAMMA HO T BIRD 7 AL 31/08/2001

2302

11070

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L’elevata pendenza indica che si ipotizza nei

successivi 7 mesi una velocità di esecuzione

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Si ipotizza un recupero totale

dell’inefficienza sui costi

Time now

PROGRAMMA HOT BIRD 7 AL 31/08/2001

PROGRAMMA HO T BIRD 7 AL 31/08/2001

“FNM Project Reporting” is the architecture developed to control projects

Company and Corporate Reporting

FINMECCANICA

“INSIDE THE BOX”

47100707

FREMM: Multi-Mission European FrigatesOCCAR: Programme Management Approach

SELEX Sistemi Integrati: Risk Management Approach

Admiral Flaviano FolignoFREMM Italian Program DirectorOCCAR-EA

Luigi FestaRisk Management DirectorSELEX Sistemi Integrati

48OCCAR Organisation for Joint Armament Co-operation100707

OCCAR is a multi-national organisationfor the management of collaborative

defence equipment programmesOCC

AR S

cope

6 major European Programmes220 Staff

3,3 Billion EUR Budget 2007

Our missionTo facilitate and manage collaborative European armament Programmes and

Technology Demonstrator Programmes to the satisfaction of our customers.

Our visionTo be a centre of excellence, and first

choice in Europe, in field of collaborative acquisition

of defence equipment.


FREM

M p

rogr

amm

e• FREMM – Multi-Mission

European Frigate– Co-operative programme between

Italy and France

– Construction of a total of 27 ships(17 French & 10 Italian)

OCCAR

END USER

French Navy Italian Navy

PRIME CONTRACTORS

OCCAR

END USER

French Navy Italian Navy

PRIME CONTRACTORS

• Total budget of € 11B(€ 4.6B Italy and € 6.4B France)at economic conditions 2005


Programme performance management

Management ofrisks/opportunities

related toschedule, cost and

system performance

Active RiskManager

BalancedScorecard

Customer orientation & continual improvement

ISO 9001:2000

OCC

AR-E

A m

etho

dsan

d to

ols


Learning& growth

Internalprocesses

Financial

Customers

Providebest valuefor money

Achieve operationalexcellence

Preparefuture challenges

Becomearmaments

organisationof choice

Improve programmedelivery effectiveness

Be first choicefor Europeanprogrammes

Maintain & enhancedialogue on defence

collaboration

Ensure efficient use of resources

Provide effectiveplanning & management

of funds

Improve programmemanagement

processes

Facilitateintegration ofProgrammes

& TDPs

Improvecorporate support

InnovateDevelop competencies

Empower staff

C1

C2

C3

F4 F5

I6 I7 I8

L9

Stra

tegi

cai

ms

–Co

rpor

ate

leve

lCorporate issueProgramme issue


Learning& growth

Internalprocesses

Financial

Customers

Improve programmedelivery effectiveness

Be first choicefor Europeanprogrammes

Maintain & enhancedialogue on defence

collaboration

Ensure efficient use of resources

Provide effectiveplanning & management

of funds

Improve programmemanagement

processes

Facilitateintegration ofProgrammes

& TDPs

Improvecorporate support

InnovateDevelop competencies

Empower staff

C1

C2

C3

F4 F5

I6 I7 I8

L9

Stra

tegi

cai

ms

–FR

EMM

Pro

gram

me

Corporate issueProgramme issue

Providebest valuefor money

Achieve operationalexcellence

Preparefuture challenges

Becomearmaments

organisationof choice


Achievement meets or exceeds target

Achievement misses target with minor deviation

Achievement misses target with major deviation

OCC

AR K

ey P

erfo

rman

ce I

ndic

ator

sPerformance metrics

Status end of July 2007 – Fictitious example

58%60%65%Customer satisfactionC3.1

96,0%≥ 90%≥ 90%Training effectiveness L9.2

≥ 78%

≥ 81%

≥ 95%

100%

≥ 75%

100%

± 5%

0/-8%

± 3%

0/-6%

100%

≥ 95%

≤ 1,4m

Target2007

81,2%

79,4%

91,3%

66,7%

65,0%

100%

-2,9%

-3,4%

+2,4%

-5,6%

100%

97,2%

0,2m

Achieved07/07

≥ 67%% of Programmes having an up-to-date Life Cycle Costing baselineI7.3

≥ 67%Average Risk Management maturity levelI7.2

≥ 78%Staff morale indexL9.1

≥ 81%Index of satisfaction with corporate service levels I8.2

≥ 95%OCCAR-EA Manning level I8.1

100%Availability of up-to-date technical requirements & documentation I7.1

± 5%Operational Forecast of Outturn against April Forecast of Outturn F5.4

0/-8%Operational Forecast of Outturn against approved budgetF5.3

± 3%Administrative Forecast of Outturn against April Forecast of Outturn F5.2

0/-6%Administrative Forecast of Outturn against approved budgetF5.1

100%Percentage of Programmes within assigned cost envelopeC1.3

≥ 95%Predicted Achievement of Systems’ PerformanceC1.2

≤ 1,4mAverage in-year High Level Objective slippageC1.1

Target07/07Key Performance Indicators – Corporate level


FREM

M K

ey P

erfo

rman

ce I

ndic

ator

sPerformance metrics

Status end of July 2007 – Fictitious example

66%65%75%FREMM Customer satisfactionC3.1

≥ 95%

Yes

≥ 65%

100%

± 5%

0/-8%

± 3%

0/-6%

Yes

≥ 95%

≤ 1,4m

Target2007

91,3%

Yes

60%

100%

+0,7%

-2,2%

-0,4%

-0,6%

Yes

100%

0,0m

Achieved07/07

YesAvailability of up-to-date FREMM Life Cycle Costing baselineI7.3

≥ 58%FREMM Risk Management maturity levelI7.2

≥ 95%FREMM Programme Division Manning level I8.1






YesFREMM Programme within assigned cost envelopeC1.3

≥ 95%Predicted Achievement of FREMM Systems’ PerformanceC1.2

≤ 1,4mAverage in-year FREMM High Level Objective slippageC1.1

Target07/07Key Performance Indicators – FREMM Programme

Achievement meets or exceeds target

Achievement misses target with minor deviation

Achievement misses target with major deviation


OCC

AR K

ey P

erfo

rman

ce I

ndic

ator

s58%60%65%Customer satisfactionC3.1


≥ 78%

≥ 81%

≥ 95%

100%

≥ 75%

100%

± 5%

0/-8%

± 3%

0/-6%

100%

≥ 95%

≤ 1,4m

Target2007

81,2%

79,4%

91,3%

66,7%

65,0%

100%

-2,9%

-3,4%

+2,4%

-5,6%

100%

97,2%

0,2m

Achieved07/07















58%60%65%Customer satisfactionC3.1


≥ 78%

≥ 81%

≥ 95%

100%

≥ 75%

100%

± 5%

0/-8%

± 3%

0/-6%

100%

≥ 95%

≤ 1,4m

Target2007

81,2%

79,4%

91,3%

66,7%

65,0%

100%

-2,9%

-3,4%

+2,4%

-5,6%

100%

97,2%

0,2m

Achieved07/07
















≥ 95%

Yes

≥ 65%

100%

± 5%

0/-8%

± 3%

0/-6%

Yes

≥ 95%

≤ 1,4m

Target2007

91,3%

Yes

60%

100%

+0,7%

-2,2%

-0,4%

-0,6%

Yes

100%

0,0m

Achieved07/07














≥ 95%

Yes

≥ 65%

100%

± 5%

0/-8%

± 3%

0/-6%

Yes

≥ 95%

≤ 1,4m

Target2007

91,3%

Yes

60%

100%

+0,7%

-2,2%

-0,4%

-0,6%

Yes

100%

0,0m

Achieved07/07













Corporate Scorecard

DivisionalScorecards

Consolidation


WBSContractsScheduleEngineeringDeliverables

V Low Low High V HighMedium

V LowLow

High

V High

Medium

Impact

Probability

V Low Low High V HighMedium

V LowLow

High

V High

Medium

Impact

Probability

Handle

Mo-ni-tor

Identify

Ana-lyseCommunicate

Handle

Mo-ni-tor

Identify

Ana-lyseCommunicate

Ris

km

anag

emen

t to

ol

Risk register & Reporting tool

SchedulePerformance

CostStrategic

Aims

Programmeimpact dimensions

Link

Risk exposure =Probability x impact


StrategicStrategic(Performance)(Performance)managementmanagement

Cust

omer

Vie

w

HLO = High Level ObjectiveKPI = Key Performance indicator

ManagementManagementof risksof risks

related torelated toachievementachievement

of of HLOsHLOs

ProgrammeRisk Sharing

OCCAR Programme Division Customer

KPIs on Programme Slippage,Predicted System

Performance &Programme Cost

KPIs on Accuracy of Budgeting

& Forecasting

ProgrammeStatus

Reporting

ISO 9001ISO 9001--basedbased

continualcontinualimprovementimprovement

ProcessProcess--relatedrelatedQualityQuality

IndicatorsIndicators

“Deliver 1st systemby dd/mm/yy

compliant with specifications S

at cost of XXX EUR”

[Change to] Customer

requirements

ProcurementStrategy

Contracting

Finance

Delivery(Certification,

Qualification, etc)

Schedule, Cost& System

PerformanceHLOs

Integrated Business Management Frameworkis key to successful programme management

© 2007 SELEX Sistemi Integrati. All rights reserved 58

Frigates for tomorrow’s mission

Integrated, flexible and modular design;

…..within an ambitious delivery schedule

Truly multimission frigates;

Ambitious crew reduction;

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

TRANCHE FERME

TRANCHES CONDITIONELLES


An industrial and engineering cooperation


A joint vision of risk management to reduce risks and maximise value creation

Process People

Commitment

Process People

Commitment

At Individual Company Level At joint Industry-Customer Level

Sharing and mitigating

jointly


Working together

ADVERSE EFFECTS

Extended time of integration;Rework;Lack of common approach;Design duplication;

BENEFITS

High level communality;Lean and more efficientorganisation;Lower costs and risks;

Command & Control designed by Selex

Sistemi Integrati (centre of excellence)

Command & Control designed by individual

companies

Autonomous Configuration Integrated Configuration


SELEX Sistemi Integrati approach to risk management…

Market Bid prep. and Design and Develop. Production Support &negotiation Services

1A, 1B 5, 63A, 3B, 42A, 2B 7

Market Bid prep. and Design and Develop. Production Support &negotiation Services

1A, 1B 5, 63A, 3B, 42A, 2B 7

Monitoring & ReviewR&O Register

Project Classification

A, B, C


A, B, C

- R&O Management Plan

- R&O Identification Report

- R&O Assessment Report

- Mitigation/Capture Action Plan

- Recovery Plan

- R&O Management Plan

- R&O Identification Report

- R&O Assessment Report

- Mitigation/Capture Action Plan

- Recovery Plan

Risk Register: 77 risks

• Value of the Project

• Strategic Impact

• Risk Level


Risk Areas Analysis051021

RISK FALL BACK PLAN REPORT(PIANO DI RECUPERO SUI RISCHI DI PROGETTO)

051021

Impact(K� ) (K� ) (K� )

1 1 27-lug-06 PROPOSTO 6.3 3 6 01/02/08 HAT FOC ASW 30/04/12 30/04/12 YES

2 1 20-gen-06 PROPOSTO 6.3 3 6 02/01/07 CDR 28/02/08 28/02/08 YES

3 1 20-gen-06 PROPOSTO 6.3 2 4 01/09/10 FAT FOS GP#5 30/09/20 30/09/20

4 1 20-gen-06 PROPOSTO 6.3 2 6 30/04/07 FAT FOC ASW 30/04/12 30/04/12 YES

5 1 20-gen-06 PROPOSTO 5.2 2 4 28/02/08 FAT FOC ASW 30/04/12 30/04/12 YES

6 1 13-set-06 PROPOSTO 5.3 2 6 01/06/09Rilascio Release SW nave FOC GP 31/07/10 31/07/10 YES

7 1 13-set-06 PROPOSTO 5 2 4 01/02/08 FAT FOC ASW 31/08/11 31/08/11

8 1 20-gen-06 PROPOSTO 5.1 1 2 01/05/10 SAT FOC GP#5 01/03/21 01/03/21


10 1 13-set-06 PROPOSTO 5.2 2 4 01/02/08 HAT FOC ASW 15/12/11 15/12/11


12 1 20-gen-06 PROPOSTO 6.4 2 4 01/03/09 Prima FAT HW (nave GP) 01/01/10 01/01/10

13 1 20-gen-06 PROPOSTO 6.1 2 4 01/10/09 HAT FOC ASW 30/04/12 30/04/12

14 1 15-set-06 PROPOSTO 5 1 2 01/02/09 FAT FOS GP#5 30/04/20 30/04/20

15 1 20-gen-06 PROPOSTO 6.1 2 4 01/02/08 FAT FOC SW 30/04/12 30/04/12

16 1 15-set-06 PROPOSTO 5.3 1 2 30/09/06 Installazione FOC GP

15/12/10 15/12/10

18 1 20-gen-06 PROPOSTO 6.1 2 4 03/08/06Prima FAT SW (nave GP) 01/11/09 01/11/09 YES

R. Veronesi

v. Mandese

Rischio di rivalsa economica da parte di OSN su attività di installazione

Possibile sottostima delle funzionalità nuove CMS

Extra costi per la definizione, qualifica e produzione della Multi Functional Console V. Mandese

Modifiche al CMS a seguito dell'accettazione della documentazione di progetto e della Valutazione Operativa da parte del Cliente (MMI)

V. Mandese

Ridotta efficienza delle attività di bordo e SSIAC R. Veronesi

Prolungamento attività di integrazione e collaudo in fabbrica R. Veronesi

Progettazione HW con bassa marginalità V. Mandese

Necessità di un aggiornamento Tecnologico V. Mandese

Riorganizzazione della società DATAMAT R. Veronesi

Necessità di realizzazione di simulatori R. Veronesi

Prolungamento attività a bordo R. Veronesi

Mancanza di risorse chiave o con skill adeguati per le fasi di impostazione del progetto A. Neri

Risk Title Risk Owner

Impatti da mancato consolidamento Horizon/NUM A Neri

(RAPPORTO DI VALUTAZIONE DEI RISCHI DI PROGETTO)

T. STYLES

RISK ASSESSMENT REPORT

IPT Leader / PM : PROJECT : FREMM - CMS

COR :

Rilavorazione del SW per aggiornamento della piattaforma

A. Neri

Rilavorazioni/modifiche alla funzionalità (ASW) Anti-Subsurface Warfare di nuova realizzazione

A. Neri

Rallentamento dei flussi informativi durante la fase di progetto e realizzazione del sistema dovuto alla complessità contrattuale

R. Veronesi

Rallentamento attività di testing in fabbrica R. Veronesi

MilestoneAffected by theRisk Occurring

Action PlanTechn Manag PredictedStart Date

Milestone Date

Planned Revised

Risk ExposureRisk

FactorRisk Value

Date : 04/07/2007

Proba-bility

RiskAreaRisk ID Date

Issueno. Status

CLASS : A

TOTAL RISKS: TOTAL RISK EXP:

TOTAL CONTINGENCY:

051021

PROJECT :

RISK ACTION REPORT(RAPPORTO DI INTERVENTO SUI RISCHI DI PROGETTO)

FREMM - CMS

Risk Factor AnalysisCUSTOMER

REQUIREMENTS7%

MANUFACTURING11%

PROCUREMENT8%

PROJECT MANAGEMENT

39%ENGINEERING35%

FREMM

Class A62%

FREMM

Class B23%

Class C15%

Medium25%

High57%

Low18%


Risk ID Risk/Opportunity Risk

Owner Mitigation Action / Capture Plan Action Owner

Technical Milestones Date First Level

Milestone

Traffic Light

Milestone

8

Possible corrections and modification due to remarks to the System Design Documentation may cause delay in the CDR acceptance and release of Product Baseline and consequent delay in the development and manufacturing process.

Project Manager

Build sufficient review time into the overall programme and ensure review deadline are clearly defined

Project Manager CDR 28/02/08 CDR Acceptance

5 The FATs might be not completed at the contractual date, due to longer FAT activities than planned.

Technical head

Define and agree with the Customer, well in advance of the FAT date, the test procedures and test methods

Project Manager / Technical

Head

FAT Subsystems FOC GP 15/12/09

9 Late delivery of GFx and PFx could cause delays in the programmes for sub-system supply

Project Manager Continuous monitoring with the Customer Project

Manager FAT Subsystems FOC GP 15/12/09

11 The integration phase between the first LPI radar (new development item) and the navigation radar (item to be offer) could start in delay

Technical head

To anticipate the interface analysis between the two radars and the installation analysis

Technical head FAT Subsystems FOC GP 15/12/09

12Additional effort and cost to cover studies and possibile system modifications resulting from a lack of detailed operational requirements and corresponding analysis

Technical head

Action a dedicated team that, by the SDR, analises the functional requirements and system performance and defines a clear set of Acceptance Tests

Technical head FAT Subsystems FOC GP 15/12/09

FREMM

FAT FOC GP Acceptance

…and to project milestones control

… to increase the number of milestones of the project deliveredon time and within budget

Risk-Opportunity Owner Mitigation Owner Milestone


Risk escalation process

pmr Form A Rev. 102 050201

COR: Class: ACOP: Area: 5.1 Risk ID: Issue: 1Status: Date: 20/04/06

Sect. A1

rveronesiRisk Owner: R. Veronesi

RISK IDENTIFICATIONIdentificazione del rischio

Prodotto dal PMR PROJECT: FREMM CMS PASSANTE TF

81V0137 IPT Leader/PM:

APPROVATO WP: STANDARD1 Originator: R. Frangella

Risk Title: Command and Control Design duplication

RISK IDENTIFICATION - Identificazione del rischioRisk description - Descrizione del rischio:To respect the requirement (operator console with 3 monitor) could be necessary to improve HW graphical performanceOperator cannot execute assigned task on the three monitors

RISK ASSESSMENT REPORT

ID Risk

Status Risk description Probability Risk Factor

Milestone Milestone Date

Mitigation Action

1 Open A lack of direct exchange of information with the end user or delays in the transfer of information, resulting from the contractural structure of the programme, may have a negative impact on the design and development phases for new or modified sub-systems.

30% 6 End of Contract

28-02-21 Ensure participation of SSI in Customer and End User meetings which could result in requests for modification to the scope of supply. This is partly considered in the SOWs

4 Open Could be necessary to perform a technology refresh due to a long period of the project (15 years)

30% 6 FAT first FOC ASW

31-12-10 Monitoring of technology evolution and early definition of Obsolescence Management actions.

Joint Risk Assessment

Work Package

System

ProgrammeRisk

review

Critical crew reduction target


Working together to achieve an ambitious requirement…

Main Requirement:Design a frigate to be manned by a reduced

crew of 108 people

Key Domains: OPERATIONALOPERATIONAL SYSTEM

TECHNICAL

• Chain of Command

• Skills of operator

• Management & Maintenance

• Workload

• Level of Automation

• Working Condition


Waterfall Chart - Crew reduction

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0

mag-07 ago-07 nov-07 feb-08 mag-08

Date

Ris

k Le

vel

Risk Factor (RF) Planned Risk Factor (RF) Current

1

2

3

5

4

…and reduce risks to an acceptable level and meet the target

Actions

Agree rules and procedures to minimise operator

intervention

Develop a new algorithm for an overall data fusion

(image & data)

Level of Automation Threat evaluation and Weapon assignment

Requirements

Ambiguous Friendor Foe classification

Key Risks

Workload Conduct tactical operations

Operator cannot execute assigned task on the three monitors

Ergonomic studies to balance number of tasks

and complexity

Ownership

Shared

Industry

Shared

SELEX Sistemi IntegratiRole and Strategic Approach toSystems of Systems

Angelo PansiniSenior VP, Strategy & Product Planning

6969

SELEX Sistemi Integrati legacy capabilities

See Decide Act

Organisation& Procedures

C&C

SensorsEffectors

ICT Infrastructures

SensorsSensors ShootersShooters

7070

SELEX Sistemi Integraticore business and new “mission”

TURN KEY “AIRPORT SYSTEMS” AND INTEGRATED AIR TRAFFIC CONTROL SOLUTIONS

The same approach is applicable to any Large System:

Vessel Traffic Management & Information SystemRailway and road transport systems

Power generation, transmission and distribution plants and infrastructures

Real TimeMulti-user

Multi-domainMulti-platform

Net-centricInteroperable

Standard-basedSafety/Security

SOASIM/TRAIN/ORG

Electronicsfor safety

Electronicsfor security

Electronicsfor management

($)

7171

SELEX Sistemi Integrati Role andMission within Finmeccanica

Avionic systems and equipments Airborne Radar systemsElectronic WarfareElectro-optics for airborne, space and surface applications Tactical UAVSimulators

IT for LogisticsAutomationAdvanced SW for AD&SIT applications and services for security

Military Comms and NetworksPMRCNI avionic systemsSecure Comms

Secure Telecom networks integration, operations & maintenanceValue Added Services for security applications

Large Systems for Defenceand SecurityNaval Combat SystemCNS/ATM Turn-key Systems

PLATFO

RM

S / EFFEC

TOR

S

S Y S T E M S

End-userEnd-user

SoSISoSI

72

Large Systems Segmentation

12

VTS

PortSecurity

SeaSurveillance

LandSurveillance

AirportSecurity

BorderControl

PublicSecurity

Intelligence

Territory Control

Power Infrastr.protection

RailwaySecurity

Critical Infrastr.protection

RegionalCivil Protection

NationalCivil Protection

MajorEvents

CrisisManagement

HomelandSecurity

Large SystemsLarge Systems

Large Systems for civil/governmental

applications

Large Systems for civil/governmental

applications

Large Systems for defenceapplications

Large Systems for defenceapplications

Network EnabledIntegrated Forces

Battlefield C2,C3, C4 & ISTAR

Infrastructures/Systems

Joint & Single Forces C4 & ISTAR Infrastructures/Systems

Air DefenceC2,C3, C4 & ISTAR

Infrastructures/Systems

C2, C3, C4, ISTAR, Integrated Systems

4+

7373

• Business size and growth ratesdifficult to be defined (< HS):

- Programme-Driven Market- “All-inclusive” Segmentation

• Demand still focused on more“advanced countries” and/or thoseinvolved in out-of-area operations

• For these, the trend is clear:

- Netcentricity- Capabilities vs products

• Need for standardisation and interoperability (Joint, Common, Combined) prevails over demands for customised solutions

• Business size and growth ratesdifficult to be defined (< HS):

- Programme-Driven Market- “All-inclusive” Segmentation

• Demand still focused on more“advanced countries” and/or thoseinvolved in out-of-area operations

• For these, the trend is clear:

- Netcentricity- Capabilities vs products

• Need for standardisation and interoperability (Joint, Common, Combined) prevails over demands for customised solutions

• Investments needed, but selective and “sensible”

• Multi-domain and multi-platform capabilities

• Customer-industry “intimacy”to elaborate sharedrequirements and solutions

• Strategic partnerships withlocal players: only pathway toadvanced markets

• Ability to scout other countries,where demand could emerge unexpectedly (from single Force C2 systems to large joint projects)

• Investments needed, but selective and “sensible”

• Multi-domain and multi-platform capabilities

• Customer-industry “intimacy”to elaborate sharedrequirements and solutions

• Strategic partnerships withlocal players: only pathway toadvanced markets

• Ability to scout other countries,where demand could emerge unexpectedly (from single Force C2 systems to large joint projects)

STRUCTURAL CHARACTERISTICSSTRUCTURAL CHARACTERISTICS KEY SUCCESS FACTORSKEY SUCCESS FACTORS

DefenceDefence

Business characteristics and Key Success Factors

7474

In recent years, demand has presented two dominant characteristics:

Over 60% market was generated in the US

Prevalence of governmental customers (both central and local)

In the near future the following trends are foreseen:

A growing importance of other geographical areas (European Union, Wealthy Middle Eastern countries, some Asian countries)

Increasing demand from the private sector (utilities, financial institutions, services providers, etc.)

Source: Civitas Group LLC, Novembre 2006

Security Market Characteristics

Risk Level / Vulnerability

Spending capacity

UK, Spain, Italy, Germany, Turkey, France, Greece

Algeria, Saudi Arabia, Israel, UAE, Bahrain, Qatar, Jordan, Libya, Kuwait

India, Australia, China, South Korea, Japan, Singapore,

Thailand Canada

Mexico, Venezuela, Colombia

Indonesia, the Philippines

Yemen, Pakistan, Angola

Northern Europe, Eastern Europe, Russia

Argentina

Chile

South Africa

NigeriaBrazil

Somalia

Potential Market

75

• Large-scale, fast-growingBusiness (growth rate >10%,faster than expected)

• Demand considerablyfragmented and diversified

• Demand for highly tailoredsolutions of growingcomplexity and integration

• New geographical areas, new customers

• Likely industry consolidation, high entry barriers, increasing dominance by large and highly capable A&D players

• Large-scale, fast-growingBusiness (growth rate >10%,faster than expected)

• Demand considerablyfragmented and diversified

• Demand for highly tailoredsolutions of growingcomplexity and integration

• New geographical areas, new customers

• Likely industry consolidation, high entry barriers, increasing dominance by large and highly capable A&D players

• A selective strategy thatprivileges most attractive market segments, best-suited to thecompany’s distinctive capabilities

• Lobbying and negotiating skills,group reference

• Timely, requirements compliant, competitive, and serviceoriented solutions

• Teaming up with customer inorder to gain a “perfect”understanding of his needs

• Ability to exploit dual nature (Defence/Security) of enabling applications and technology

• A selective strategy thatprivileges most attractive market segments, best-suited to thecompany’s distinctive capabilities

• Lobbying and negotiating skills,group reference

• Timely, requirements compliant, competitive, and serviceoriented solutions

• Teaming up with customer inorder to gain a “perfect”understanding of his needs

• Ability to exploit dual nature (Defence/Security) of enabling applications and technology

STRUCTURAL CHARACTERISTICS STRUCTURAL CHARACTERISTICS KEY SUCCESS FACTORSKEY SUCCESS FACTORS

SecuritySecurity

Business characteristics and Key Success Factors

76

=

f (quantity, “size”, spending attitude, spendingcapacity, institutional, private, local, national,

complexity of operating requirements, ability to manage technologically complex assets and infrastructures)

Ability to properly identify and characterisecustomers’ categories

Ability to properly identify and characterisecustomers’ categories

Strategic drivers (1)

Polizia di Stato

77

Ability to optimise business model in total accordance with customer's characteristics, identifying key success factors

Ability to optimise business model in total accordance with customer's characteristics, identifying key success factors


Customer“Categories”Customer

“Categories”Structural Category

CharacteristicsStructural Category

CharacteristicsOffer Proposition

& KSFsOffer Proposition

& KSFsApproach to the

customersApproach to the

customers

78

CIVIL EMERGENCIES & MAJOR EVENTS MANAGEMENT

PIPELINE CONTROL

KINGDOM OFSAUDI ARABIA

BG Hq

East Border DistrictEastern

North Border DistrictNorthAl JoufTabuk

South Border DistrictJazanAsseerNajranEastern

West Border DistrictTabukAl MadinahMakkahAsseerJazan

CentralW/houses

AirMarineLand

PerifericW/houses

هبش ةيبرعلا ةريزجلا The Arabian Peninsula

KINGDOM OFSAUDI ARABIA

BG Hq

East Border DistrictEastern

North Border DistrictNorthAl JoufTabuk

South Border DistrictJazanAsseerNajranEastern

West Border DistrictTabukAl MadinahMakkahAsseerJazan

CentralW/houses

AirMarineLand

AirMarineLand

PerifericW/houses

هبش ةيبرعلا ةريزجلا The Arabian Peninsula

Strategic drivers (3):portfolio of products and services offered by Selex Sistemi Integrati

Call CentresCall Centres

Regional Operational Centres (CRGN)

12

3

C2 HR

Info Mng

Regional Operational Centres (CRGN)

12

3

C2 HR

Info Mng

Wilaya Operational Centres (GW)

1..

11

C2 HR

Info Mng

Wilaya Operational Centres (GW)

1..

11

C2 HR

Info Mng

Territorial Operational Centres 1

..

Mobile Command Centre 1Mobile Command Centre 1Mobile Command Centre 1

TERRITORY CONTROL

LAND BORDER CONTROL

VTS & MARITIME BORDER CONTROL

OIL&GASINFRASTRUCTURES CONTROL

Algeria, Saudi Arabia, Malaysia, Oman, Turkey, Italy

Italy, Poland, Yemen

Libya, Algeria, Turkey

Libya

Ability to tailor systems in accordance with customer’s

required solutions

Ability to tailor systems in accordance with customer’s

required solutions

Italy, UK, China

79

Ability to measure efficacy and performance of solutions and correlate them with their technological content and value

Ability to measure efficacy and performance of solutions and correlate them with their technological content and value


80

Contract Value = F [C, S, CWs]

C= Complexity ; S = Scope ; CWs = Civil Works

Ability to “master” contractual terms in correlation with type of systems and solutions provided

Ability to “master” contractual terms in correlation with type of systems and solutions provided


Description

Organisational / Procedural

Complexity of building blocks (algorithms, lines of code,

maturity of technology) and of their mutual integration.

Architecture of organisational processes and structures

NetcentricityComplexity dependent on distributed-architecture and SOA,VAS,

NCO environments

Solution Functional and technical complexity of solution proposed

Geographical distribution and/or replication of sub-systems

Fixed infrastructures, technical plants, etc.

Parameter

Scope

Civil works

Com

plex

ity

8181

1. New ATMAS solutions: exploiting the concept of “turn key systems”

2. World leader in Homeland Security: integrated solutions for territorial security and border control

3. Key player for other Security applications: crisis and major events management, protection of critical infrastructures

4. Consolidation of naval business: from Command & Control to Combat System – to be achieved through definition of “naval mission” concept

5. System Solutions for Defence applications: from tactical to strategic C4ISTAR systems

SELEX Sistemi Integrati Strategic Guidelines

Pursue the new mission as a major player in the area of large-scale, security and defence systems

Pursue the new mission as a major player in the area of large-scale, security and defence systems

Civil and Governmentalapplications

Militaryapplications

Mission

In strict confidence

N E FranksManaging DirectorSelex Sensors & Airborne Systems Ltd.

In strict confidence

This is an unpublished work created in 2007, any copyright in which vests in SELEX Sensors and AirborneSystems Limited. All rights reserved.

The information contained in this document/record is proprietary to SELEX Sensors and Airborne SystemsLimited unless stated otherwise and is made available in confidence; it must not be used or disclosedwithout the express written permission of SELEX Sensors and Airborne Systems Limited. Thisdocument/record may not be copied in whole or in part in any form without the express written consent ofSELEX Sensors and Airborne Systems Limited which may be given by contract.

Seaspray 7500E Radar System for US Coast Guard HC-130H

85

SELEX S&AS Ltd Proprietary Data – In strict confidence

Programme Scope

• To provide and install a technically capable, reliable and supportable surfacesearch radar system on the USCG HC-130H aircraft

• Selex Seaspray 7500E Radar System – state-of-the-art radar system

• Currently under contract to provide:• Development, implementation and approval of a prototype design• 1st installation on operational USCG HC-130 aircraft, ground, flight and

operational tests

• On successful completion of above, contract options:• Supply of up to 27 systems over a three year period• Long term support of the systems

87


Programme Risks

• Specific risks identified at programme outset:

• Short timeframe – 2 years

• New customer & remote working – USCG customer at Elizabeth City NorthCarolina; Pegasus at Stennis, Mississippi

• Unknown airframe (HC-130H) – relatively old, high mileage, unknown radome

• Radar upgrade from SS7000E to SS7500E mid-programme

• Performance testing at Pax River range – facility not used by Selex before –personnel & methods unknown

• Customer specific requirements for control & display of radar – alwaysopportunity for disagreement & confusion as quality judged on operator opinion

89


USCG 7500E Programme Milestones

Complete Forecast

3rd Qtr 4th Qtr 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 1st Qtr

Contract award

Loaned Seaspray 7000E Radar

Seaspray 7500E Radar DeliveredShakedown Flights

7500E Test at Test Range

Production Decision

1st Production Delivery

Training

2006 2007

7500E Training

2005 2008

7000E Training

90


Lifecycle Management Phases

Technical Bid Review

PLANNING, REQUIREMENTS, RISK AND OPPORTUNITY MANAGEMENT DOCUMENTATION

5Design Review

MARKETING AND BID ACTIVITY

POST OFFERSELLING AND

CONTRACT NEGOTIATION

DEFINITION, DESIGN AND DEVELOPMENT

SUPPORT DISPOSALPRODUCTION

3ADesign Review

3B DesignReview

LIFECYCLEPHASES

CONTRACTACCEPTED

OPPORTUNITYIDENTIFIED

ANALYSEMARKET

PREPARE BID/NO

BID INFORMATION

PREPAREPROPOSAL

INITIALDESIGN

SYSTEMDESIGN

INTEGRATION OF

SYSTEM

PRODUCTION, INSTALLATION

COMMISSIONING

IN FIELD SUPPORT &

SERVICE

REPEAT 7 AT LEAST ONCE A YEAR

DISPOSALMOBILISATION

SYSTEMQUAL

OPPORTUNITYQUAL

PROPOSAL SUBMITTED, CONTRACT

NEGOTIATED & ACCEPTED

1A 1B 2A 2B 2C 3A 4 5 6 7 (7) 83B0

DECISION TO COMPILE

BID/NO BID INRORMATION

BID/NO BID DECISION

CONTRACT ACCEPTED

START PROJECT

SYSTEM QUALIFIED

AND CUSTOMER ACCEPTED

DESIGN

HANDOVER TO

CUSTOMER COMPLETE & SUPPORT

IN PLACE

SATISFIED CUSTOMER

AND ONGOING SUPPORT

DISPOSAL COMPLETE

PHASE REVIEWS

OUTPUT OF REVIEW

SYSTEM DESIGN

ACCEPTED

DECISION TO PURSUE, ‘HOLD’OR DROP THE OPPORTUNITY

BID APPROVED AND PROPOSAL SUBMITTED

2CDesign Review

4 Design Review

6 Design Review

1B Design Review

2A DesignReview

REQUIREMENT UNDERSTOOD

KEY RESOURCES IN

PLACE

ACCEPT SPECIFICATION RESOURCES &

PLANS IN PLACE

SYSTEM ACCEPTED FOR QUAL

PROCEED TO BID

APPROVAL/TENDER

VET

91


Lifecycle Management Project Reviews

CONTRACT REVIEWScheck Progress

Driven by Time

DESIGN REVIEWScheck Product Quality &

MaturityDriven by Product Phase

PHASE REVIEWScheck Process

Driven by Programme Phase

Projects

Monitor

Monitor

Monitor

92


Contract Status Review (CSR)

• CSR – monthly review – in depth schedule, cost, technical, risk• An effective process/forum for the reporting & reviewing of the project

status with all stakeholders• Cost-to-go, estimated cost at completion, contingency application• All business parameters reviewed – supplementary orders, sales, margin, cash• Comprehensively documented via standard CSR pack• USCG project reviewed each month at Group & Site level

93


7500E Risk Mitigation - 1

• Assessment of Radome• Radome delivered to Edinburgh• Physical Dimension check • RF loss measurements made

• 7500 Scanner integration on aircraft• Pegasus successfully completed a

trial installation of a 7500E withradome on the surplus Nose Section

• Benefits• Confirmed radome clearance, routing

of cable forms, installation of aircraft racking

• Assisted with the development of theinstallation and removal procedure

Nose Section

94



• “Dry run” test of the 7500E testing using 7000E system at Pax Riverto increase probability of ‘first time right’ for formal 7500E trials

• Familiarisation with test process and people• Assessment of variability of range targets & confirmation of flight scenarios • Dry run of analysis process & evaluation modelling results • Facilitates the process to agree the formal Test and Evaluation Plan

• Calibration of Selex radar model with US Navy radar model• Allows rapid agreement between Selex & USCG as to outcome of Pax

River tests and hence enable rapid production contract decision/placement

95


• Integration of the “delta” from the 7000E to the 7500E radar system• 7500E system features were introduced into the 7000E prototype system

early via hardware and system software upgrades

• Additional capability introduced in Oct 06 ahead of time• Providing the USCG with improved operational capability • Giving additional data gathering opportunities for Selex


96


USCG User Interface Optimisation

• SELEX’s overall approach is to build the Seaspray 7500E user interfaceon the 7000E baseline and feedback from the Operator Trainingcourses, the USCG/Selex workshops and Operational use

• To date this has resulted in the introduction of 24 specificenhancements eg:

• Update to Waypoint symbology• “Track up” display orientation• Delete all tracks & re-initialise

• Customer delighted with outcome and ready to assist Selex in other areas

97


Summary

• USCG contract execution running to plan

• Best practice employed in terms of Project Management, IPT structure & customer & stakeholder inter-action

• Lessons learned:• Strong leadership with flexible & responsive IPT • Stay close to your customer and major suppliers • Stick to the schedule – develop workarounds if required• Do not “nickle & dime” the customer

• Lessons learned pulled through into future programmes

• USCG customer highly satisfied with our performance

Managing a new technological Paradigm The Boeing 787 Programme

Antonio PerfettiCOO, Alenia Aeronautica

103

Alenia Aeronautica integration in 787 Global Partnership

104

787 New Business Model

primes

1st-tier

2nd tier

primes

subsystem suppliers

> 1000 players

small primes

~ 50 players

Production Production PiramidPiramid

~ 50 pl.

> 1000 players3rd tier

~ 5-8 pl.

Aerostructures Manufacturer:In progress evolution

component suppliers

Alenia / Boeing relationship - Partner vs Subcontractor

Old Programmes 787 Programme

105

Alenia Aeronautica as integrator of a World Wide Supply Chain to support 787 challenging requirements

Global Aeronautica

Alenia Aeronautica 787 Supply Chain

TMX AEROSPACE

787 Global Partnership

New Approach on Supply Chain• Significant percentage of

activities outsourced• Higher level of responsibility

assigned: Design, Build and Support• World Wide distribution

106

Key strategy to win 787 challenges

– Collaboration with Boeing and Partners in Development and Testing ofnew technologies

– Common effort for continuous Product Improvement

– New Skills and Competencies required

– Big effort on Training for new Processes, Tools and Technologies

– High attention to resources experience and professional knowledge growth

Working Together approach

People at center of the process

107

Use of innovative Process and Information System to support integration of Partners and their Supply Chain across the Globe

Digital Product Definition Data IntegrationDigital Product Definition Data IntegrationGCE allows real time Concurrent Product Definition ensuring capability to share and integrate full Digital Engineering and Manufacturing data across World Wide distributed Life Cycle Product Teams (LCPTs)

Working together in a Global Collaboration Environment (GCE)

DATADATA

ENOVIA - CATIA V5

Alenia Suppliers

108

Starting before the Programme Launch up to the “Firm Configuration”(about two years) an Engineering Team peaking to 180 people has activelyparticipated in Everett to the “Joint Definition Phase”, dealing with :

-Architecture principles (shared with all Partners)

-Stress Analysis Methods/Tools familiarization and development

-Technology Development

-Programme Maturity Stages

-Testing and Certification planning

-Aircraft Requirements familiarization

-Programme Procedures familiarization and development

-Schedules

Joint Definition

1 2 3 4 5 6 7 8 9

ConfigSelection

Authorityto Offer

Start MajorAssembly First

DeliveryProgramme

Launch

FirmConfig First

Flight

Certification

ConceptDevelopment

2002 2003 2004 2005 2006 2007 2008

Flight Test Support

Firm ConceptComm Tech& Processes

BuildDetail Definition

9/15

Alenia Aeronautica early participation in 787 team to assess and develop new technologies

The largest Alenia participation in Conceptual Design of a New Airplane

109

Alenia 787 Dedicated Organization: Alenia Composite

G. Bertolone

CEO

A. Perfetti

COO

A. Perfetti

President

G. Ragni

Vice President A. Aurilio

CEO

C. Trematore

Executive VP

G. Caruso

ProgrammeDirectorate

M. Rosini

COO

E. Piccirillo

Supply Chain

110

PROGRAMME MANAGEMENT

CHANGE MANAGEMENT

EARNED VALUE

RISK MANAGEMENT

PHASE REVIEW

787 Life Cycle Management & Project Control

Alenia Aeronautica Best Practice are applied to manage and controleffectively 787 complexity and risks through the whole life cycle

111

TIER-1

Section 46

TIER-1

Section 46TIER-1

Horiz. Stab.

TIER-1

Horiz. Stab.

FacilitiesFacilities

Production Start UpProduction Start Up

Alenia Integrated ScheduleAlenia Alenia IntegratedIntegrated ScheduleSchedule

EngineeringEngineering

ManufacturingManufacturing

QualityQuality



QualityQuality

TIER-1

Section 44

TIER-1

Section 44



QualityQuality

TIER-0787 PROGRAMME

TIERTIER--00787 787 PROGRAMMEPROGRAMME

1ST A/PPROD. FLOW

1ST A/P1ST A/PPROD. FLOWPROD. FLOW

Process & ICT SystemsProcess & ICT Systems

Capital EquipmentCapital Equipment

Process QualificationProcess Qualification

NORMAP – Information System applied to manage and control planning for non recurring and recurring activitiesassociated to the 1st shipsets including external production

NORMAP – Information System applied to manage and control planning for non recurring and recurring activitiesassociated to the 1st shipsets including external production

NORMAPS CURVES CURVE

BOEING Pe3BOEING Pe3

Win Project

Status %

Win Project

Status %

Tier II SuppliersWin Project

Tier II SuppliersWin Project

SPI

Alenia 787 Programme Management model:Integrated Plan Architecture

112

Manage Configuration with Common Change Process

2003 2004 2005 2006 2007 2008

Test ProductionSupportJoint Definition BuildDetail DefinitionConcept Definition

Config Memo / Trade Study (PDDM Process)

Transition to Production and Initial Release(Product Definition Rev. New)

Flight Test Changes

Customisation

NonConformance / EQC

BASELINEMANAGEMENT

1st ProductionRelease

FirmConfig.

1st

CIStart MajorAssembly

Customer Introduction

Contractual Baseline Firm Config Baseline

PDDM management

CR/CN/CCNmanagementAlenia Change

Process85 Changes Pre

Firm Config 550 Changes Request Post

Firm Config managed up to now

Early start in managing changeswith formal Change Boardapproval process to makedecision on Trade-off studies controlling costs, schedule andrisks

First Flight

First DeliveryCertif

COMMON CHANGE PROCESS(Product Definition Rev. A, B, C, etc.)

113

787 Non Recurring Activities Planning & Control Model: Earned Value Indicators

787

Sect.46

OPB Fabr.

Systems FrameAssy

Loose Parts Verticaliz. MajorAssy

Progra

mm

eD

irec

tora

te

IdP

Pla

nnin

gTool

Des

ing

Tool

Fab

N/C

Pro

gr.

Engin

eering

SD

WN

SD

W

W/EW/E

1st 1st levellevel scheduleschedule((ArtemisArtemis Project Project ViewView)) 2st 2st levellevel scheduleschedule

((NormapNormap))

HoursHours estimateestimate((ArtemisArtemis CostCost ViewView))

C.O

.B.

(( Co

stC

ost

Bre

akd

ow

nB

reakd

ow

nS

tructu

reS

tructu

re))

CB

SC

BS

C.O

.R.

C.O

.B.

C.O

.B.

C.B

.S.

C.B

.S.

The model is Artemis/SAP based;

Work element (W/E) represents the elementary control account and is defined by the relation between WBS, OBS and CBS elements.

To Each W/E have been associated a planning baseline in terms of hours estimate and Tier 1 schedule (milestones aggregate).

The 2nd level scheduling is based on physical delivery (p/n level) and is the base to collect actuals.

EV indicators (SPI, CPI) calculated starting from W/E level

The model is Artemis/SAP based;

Work element (W/E) represents the elementary control account and is defined by the relation between WBS, OBS and CBS elements.

To Each W/E have been associated a planning baseline in terms of hours estimate and Tier 1 schedule (milestones aggregate).

The 2nd level scheduling is based on physical delivery (p/n level) and is the base to collect actuals.

EV indicators (SPI, CPI) calculated starting from W/E level

(Org

an

isati

on

(Org

an

isati

on

Bre

akd

ow

nB

reakd

ow

nS

tru

ctu

reS

tru

ctu

re))

OB

SO

BS

(Work (Work BreakdownBreakdown StructureStructure))

WBSWBS

114

787

Sect. 46/44 H/S

1st Batch 2nd Batch 1st Batch 3rd Batch2nd Batch3rd Batch

C.O

.R.

C.O

.B.

C.O

.B.

C.O

.P.

C.O

.P.

C.O

.P.

C.O

.P.

C.O

.P.

C.O

.P.

Oper

atio

n

Ass

embly

Network - L/N

Network

Network

Network

Network - L/N

Network - L/N

Network - L/N

Network - L/N

Network - L/N

Network - L/N

Network - L/N

Network - L/N

Network - L/N

Network - L/N

Network - L/N

Network - L/N

Network - L/N

Network - L/N

787 Recurring Activities Planning & Control Model: Earned Value Indicators

The Model is fully SAP based;

Networks are the elementary control accounts linked to production line number;

Networks are the input of MRP planning and per each Network a cost baseline is associated;

Actuals per Network are available in SAP;

EV indicators (SPI, CPI) are calculated starting from Network level.

The Model is fully SAP based;

Networks are the elementary control accounts linked to production line number;

Networks are the input of MRP planning and per each Network a cost baseline is associated;

Actuals per Network are available in SAP;

EV indicators (SPI, CPI) are calculated starting from Network level.

(( Co

stC

ost

Bre

akd

ow

nB

reakd

ow

nS

tructu

reS

tructu

re))

CB

SC

BS

(Work (Work BreakdownBreakdown StructureStructure))

WBSWBS

(Org

an

isati

on

(Org

an

isati

on

Bre

akd

ow

nB

reakd

ow

nS

tru

ctu

reS

tru

ctu

re))

OB

SO

BS

115

Risk Identification

Risk Assessment

Risk MitigationPlan

Risk Monitoringand re-assessment

Feedback

- Finmeccanica Best Practice- Alenia Procedure PA D01A - 787 Contract: Commonality Matrix

Alenia 787 Risk Mgt Procedure- IAF C01A

REQ

UIR

EMEN

TSPR

OC

ESS

Weekly PMO Meeting

Monthly report

1

2

3

4

5

1 2 3 4 5

HighM oderateLow

Consequence

Like

lihoo

d

7E7 ProgramAlenia Risk Grid (DRAFT)

15/01/2004

•Lead time Associato agli equipment•Rischi associati al mondo subfornitura

•Equipment non disponibili “off of the shelf”

•Disponibilità aeroporto capace di far operare il 747-LCF

•Rischio associato all’utilizzo carichi preliminari

•R ischi assocociati a disponibilità risorse/skills

•Impatti sulla fase associata alla ispezionedel prodotto• Rischi indefiniz ione processi/tecnologie

all’avviamento

•Rischi disconnect schedule

•Lead time facilities

Page: 1 of 1

Updated Risk list

787 Risk Management implementation

116

1

2

3

4

5

1 2 3 4 5

High

Moderate

Low

Consequence

Like

lihoo

d

Mandrel schedule slip

Impact for not completing Clean room by 12.31(assessment in progress)

Lead time Grottaglie Airport

Frame Ti sec. 44 (prelim. Loads)

Resources Plan for Grottaglie (hire, training)

Data management toward Suppliers

Technical support for new info tools R

R

R

R

Integration b/w systems and cell equipment R

PPV overlapping with production (no mitigation, some shipset at risk)

Frame: cutting machine lead time is not compatible with the programme R

Frame: fabrication process not mature R

R

Manage Top Risk Grid to focus on highly critical topics

Top Risks identified at Programme start on new technologies, new IT tools, facilities and resources

RR

R

117

Risk # n 56Risk Title: Function

:Updated: 06.30.07

Resp. Team: Risk Owner:

Risk Description: Fabrication process not mature

X

Risk Item Report – Mitigation Plan and Was/Is status

•Frame: fab process not mature Manufacturing EngineeringC. Suriano C. Suriano

CLAct.ECDSchd.Event Resp.Succ

Y/N.

Risk Level if SuccessfulCommentDateAction/Event

Request A&P process improvement C. Suriano10.31.05 10.31.05

Boeing to look for relief in the specification 11.15.05

3 4

2 3 Casiello

Current Suspended

Risk Visibility

LowMediumHighClosed Archived

1

2

3

4

5

1 2 3 4 5

Consequence

Like

lihoo

dProgrammeIntegration TeamLocal

Risk Plan - BaselineRisk #1 Plan

Comment:

Company confidential

o

x

WAS

IS

118

Risk # n 50Risk Title: Function

: Updated: 06.30.07Resp. Team: Risk Owner:

Risk Description: The plan to hire/train Grottaglie personnel is behind schedule. This represent a major risk to the success of the programme.

X

Resource plan for Grottaglie (hire, training) Human resources

Rosato Martelli

CLAct.ECDSchd.Event Resp.Succ

Y/N.

Risk Level if SuccessfulComment

DateAction/Event

Issue recovery plan ASAP

Current Suspended

Risk Visibility

LowMediumHighClosed Archived

1

2

3

4

5

1 2 3 4 5

Consequence

Like

lihoo

dProgrammeIntegration TeamLocal

Risk Plan - BaselineRisk #1 Plan

Comment:

Company confidential

o

x

WAS

IS

Risk Item Report – Mitigation Plan and Was/Is status

119

Conduct Phase Reviews to certify Programmeperformance at each Life Cycle phase

A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J

20082007200620052004

787 Phase Review Schedule 26/4 Launch Firm Config.

CoordinationMeetings

Kick-off Delivery 1° S/S

1 st Phase

15/4 Prel. Loads3 th Phase Review

2nd Phase 3 th Phase 4 th Phase

1 st Phase Review

Training and preparation

2 st Phase Review 4th Phase Review

4 Life Cycle Phases have been identified on 787 Programme to be verified with PhaseReview process

•1° Phase : Commercial Offer preparation and submittal, Contract negotiation and signature.

•2° Phase : Firm Configuration freezing, Statement of Work update,Master Phasing Plan and Integrated Plan issue.

•3° Phase : Product Design and Industrialization, plant qualification

•4° Phase : Production Start and Production Rate Increase

120

Alenia Aeronautica and the Boeing 787 The Dreamliner is now a Reality with our contribution

121

Alenia Aeronautica and 787 long term value

47 customers have ordered 677 787s, making it the most successful launch of a commercial airplane

Using 20 percent less fuel per passenger than similarly sized airplanes, the 787 is designed for the environment with lower emissions and quieter takeoffs and landings. Inside the airplane, passengers will find cleaner air, bigger windows, more stowage space and improved lighting

That’s why all of us will probablyfly on 787 in the next 20 years

AWL2013-05-125

The Future Lynx ProgrammeThe Future Lynx Programme

Alan JohnstonMD, AgustaWestlandAlan JohnstonMD, AgustaWestland

AWL2013-05-126126

STRATEGIC PARTNERING

SPA & BTIA Signed…SPA & BTIA Signed…

22nd June 200622nd June 2006

AWL2013-05-127127

Agreement Structure

Strategic PartneringArrangement

Future Lynx Contract

• First sectoral implementation of Defence Industrial Strategy

• Politically high profile

• Delivery of first MOD commitment under the SPA

Business TransformationIncentivisation

Agreement

• Corporate Transformation• Challenging, with contractual

commitments for both Parties

AWL2013-05-128128

STRATEGIC PARTNERING ARRANGEMENT

Primary Business Objectives:

• Performance, cost, and time improvements

– Project delivery

– Operational availability

– Cost of Ownership

• AgustaWestland performance improvement

– improved value and reduced reliance on MOD business

• AW RW Design Authority (DA) and support capability skillsustainment onshore

AWL2013-05-129129

Future Lynx Contract Structure and Scope

• CED 9th June 2006 (Building on £36M Assessment Phase)

• Contract value £950M

• 70 Aircraft (40 Army, 30 Navy)

• Option for further 10 Aircraft (5 Army, 5 Navy)

• Contract Value profiled to meet MoD EP Profile

• In-Service Date: Army/BRH: July 2013

• In-Service Date: Navy/SCMR: Oct 2014 (excludes FASGW)

AWL2013-05-130130

Future Lynx Configuration

Armoured &crashworthy crew seats

New RadarNew Landing Gear

IR Suppression (role fit)

Wire Strike Cutters

12,000 hour Airframe @ 5790 kg Note growth potential to 6250kg at OSD

12,000 hour Airframe @ 5790 kg Note growth potential to 6250kg at OSD

CTS800 engines

Donor MRH & Transmission

New Tail Rotor

Donor AFCS

Integrated HUMS

EO Turret Daylight TV, TI,

LRF, LTD

Defence Aids SuiteFASGW enabled

I-Band Transponder

Mission Planning System

Flotation System

Integrated GMS

NVG Cockpit

External Fuel Tanks

Integrated Mission Recorder

IDM

SCMR Specific

BRH and SCMR fit

Bowman Data

Troop Seats

Standalone SMS

BRH SpecificTactical Data Link

ESM

AWL2013-05-131131

WHL Design and Manufacture Contract

• TCIF Contract has been agreed with the Authority using a TargetCost and Maximum Price arrangement

• A 50/ 50 share line is agreed• More Effective Contracting (MEC) built into contractual arrangements• Limit of Liability agreed for each MEC Phase:

– Phase 1 Air Vehicle + Mission Design and Initial Development (complete Feb 2010)

– Phase 2 Completion of Development and Initial Production (Complete Sept 2011)

– Phase 3 Full Production (Complete Apr 2017)• The three programme phases have defined milestone

requirements and the MoD will review progress 3 months prior tothe end of Phases 1 and 2 with an interim review part waythrough Phase 1

AWL2013-05-132132

The MEC Schedule - Overview

• Full Programme Launch 25th July 2006

• System Requirements Review 28th July 2006

• System Design Review 12th October 2006

• Internal Baseline Review (WHL) 1st December 2006

• Preliminary Design Review (A/V) 16th January 2007

• Critical Design Review (A/V) 30th April 2008

• Preliminary Design Review (A/V +M) 22nd July 2008

• Test Readiness Review 1st April 2009

• Critical Design Review (A/V + M) 16th July 2009

• Flight Readiness Review 3rd September 2009

• First Flight 3rd November 2009

• ISD (BRH) 29th July 2013

• ISD (SCMR) 15th October 2014

AWL2013-05-133133

Programme Management Process

• Key Decisions are to be focused through a Gated Process using System Engineering /Lifecycle Reviews

– Each Gate consists of Design Review (PDR,CDR etc) and a BusinessReview (Risk, Schedule, Financial etc)

– Review Gates align with MEC maturity

• Integrated Requirements Capture and Management

• Process Supported by IT with maximum integration of Product Data Structures, Design Tools and Programme Planning Systems

• Digital Product Initiative that has been outlined effects both the IPT and the Supply Base

AWL2013-05-134134

Programme Management and SE Process

StructuresManagement

Team

Rotors &TransmissionManagement

Team

MechanicalSystems

ManagementTeam

Avionics &Electrical

ManagementTeam

MissionAvionics

ManagementTeam

HolisticSystems Engineering TeamSenior Management Group

Air VehicleAttributes

ManagementTeam

LogisticSupport

ManagementTeam

Test, Evaluate& Acceptance(inc. Safety)Management

Team

AWL2013-05-135135

Programme Management Process

• Delegation of appropriate responsibilities toSET/CAM Leads:– Budgetary Accountability through EVM– Management of Project Requirements and

transition from design to production– Management of Risks– Variance Analysis and Corrective Actions– Integration with the Customer (Co Located)– Managing multi-disciplinary teams– Adherence to processes

AWL2013-05-136136

Future Lynx Organisation - Role of MoD

• Even Under Partnering and DIS, MoD is still theCustomer and WHL the Supplier

• WHL owns the programme

• Through Joint Working IPT will get enhanced visibility

• MoD will assist WHL in solving arising problems –There will be no unwarranted risk transfer back to MoD

AWL2013-05-137137

Future Lynx – An Overall Perspective

• Partnered Programme building on SPA and BTIA• In Depth Risk Reduction carried out during £36M

Assessment Phase• Strong Prime Contractor Management BUT with

excellent contractor working relationships • Effective and Constructive relationship in place with

IPT built on good leadership behaviours

AWL2013-05-138138

AWL2013-05-139139

IR Contacts

John D. StewartVP Investor Relations

+39 06 [email protected]

Emilia IannicelliEvents & On line IR


Investor Relations [email protected]

Website: http://www.finmeccanica.com/Investor Relations

Raffaella LugliniInvestor Relations Officer


Stefania GianfallaCustomer Support Buy & Sell Side


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