SIRTI, A NEW BEGINNING.
THE COMPANY PRESENTS ITS 2018-2020 STRATEGIC PLAN.
NEW MANAGEMENT, DIVERSIFIED DEVELOPMENT AND GROWTH, COMPETITIVE TRANSFORMATION, INTERNATIONALISATION, CREATING VALUE FOR THE CUSTOMER, DIGITAL REVOLUTION: THESE ARE THE INGREDIENTS FOR THE NEW SIRTI ERA.
THE COMPANY, LED BY ROBERTO LOIOLA AND WHOLLY OWNED BY PILLARSTONE,
FOCUSES ON INNOVATION, RESEARCH AND DEVELOPMENT.
REVENUE OF 750 MILLION AND EBITDA AT 7.8% BY 2020.
Milan, 20 March 2018 – Sirti, a market leader in infrastructure, presents its 2018-2020 strategic plan.
With the acquisition of 100% of the capital and long-term debt by Pillarstone, Sirti is going through a historic phase that has no precedent and is focusing, for its development, on a new team of managers led by Roberto Loiola, CEO, who took office last September.
Strengthening the financial structure, and therefore the company’s equity soundness, constitutes a strong base from which to develop the company’s strategy for the coming years.
Sirti’s new strategy
The new strategy has two prongs: on the one side is the development of a diversified business by strengthening the four Business Units (Telco Infrastructures, ICT, Transportation, Energy & Utilities), and on the other side is the competitive transformation of the company, adapting it to the market’s new challenges. The plan also sees the Group’s international expansion.
Strengthening the Business Units
For the Telco Infrastructures Business Unit, it means strengthening engineering and operations, with approximately 400 new hires. Sirti intends to continue to be a leader in the transformation of the nation’s infrastructure through the huge “Ultra Broadband” project that will bring a new generation of infrastructure connectivity to more than 7,000 Italian municipalities and for which a significant design and implementation effort is required. The new technologies and methodologies developed by Sirti to design and build networks, maximising the speed of execution and simultaneously minimising the environmental and social impacts of the works, will, therefore, play a fundamental role.
For the Energy & Utilities Business Unit after the initial phase featuring the acquisition of two companies in the energy sector (Basso Spa and Foi & Vitali Spa) and the creation of the new Sirti Energia, the company further strengthened the Business Unit by hiring 220 new employees who will enable the extension of its coverage of the utilities sector, including the water and gas sectors.
For the ICT Business Unit, which has already passed revenue of €100 million, a programme of expansion is under way through various M&A operations. Of particular interest to the ICT Business Unit’s strategic lines are IoT, Cybersecurity and Cloud solutions.
For the Transportation Business Unit, the plan for the next few years is to focus substantial resources, €14 million over three years, in R&D to develop innovative railway signalling products, designed in Sirti’s railway centre of excellence in Genoa. For this sector, Sirti’s industrial plan sees sustained growth in revenue in the next three years in line with the country’s investment plans for infrastructure and some overseas developments.
Strategic transformation programmes
In addition to the strategies for the 4 Business Units, the company is implementing 3 transformation programmes known as: “People & Culture”, “Focus on Customer”, “Sirti goes Digital”. These three strategic pillars will help achieve the macro objectives mentioned above: the development of a diversified business and the competitive transformation of the company.
In order to transform a company of more than 4,400 employees, the starting points are the people and the organisational culture, that represent critical success factors. As part of this programme, an enormous effort will be needed to introduce a new performance measurement system – which will be rolled out to the entire corporate population – within an organisational context based on sustainability and merit, involving significant investments in skills and a decisive drive to continuous improvement in competitiveness.
The driving force generated by the entrance of the Fund has resulted in Sirti S.p.A. pursuing an important hiring programme of 393 people in 2017 and another 223 by other companies in the Sirti Group. In parallel, the company (which in the meantime has reached an important agreement with the Corporate Partners on renewing the Level II supplemental contract) has kicked off a procedure involving 234 redundant positions to be managed in 2018 with incentive measures and professional conversion courses. This is a strong generational and managerial renewal, accompanied by a significant training and education programme for employees, which is necessary to meet the technological challenges that the company will face in the coming years.
The company’s objective is to quickly become a Data Driven Company. This is the programme dedicated to the company’s continual digital transformation, which sees the introduction of new information systems, new operational processes and models, essential elements to achieving ever-better quality and execution efficiency. This programme will involve every department in the company and the aim, on the one hand, is to reduce superfluous costs, whilst on the other, it is to increase and enhance employee skills and enrich the services offered to customers. One particular focus is on the intelligent use of data as an element upon which to base the company’s ability to take strategic and operational decisions with assisted decision making. Sirti has, for some time, been working on initiatives to introduce data analysis into the company with the latest Artificial Intelligence and Big Data Analytics techniques in order to optimise work scheduling processes and to orchestrate on-site operations.
On this point, the roll-out of the “Virtual Factory” project has been completed. This project has introduced a digital platform for dynamically scheduling the operational activities of personnel. Through an Artificial Intelligence module, the platform can dynamically and automatically schedule, every day, more than 6,000 operations across Italy in a multi-objective logic that maximises the performance of on-site teams and minimises unnecessary movement.
Another interesting example of digital transformation is “Augmented Operations”, the experimental project aimed at introducing collaborative working tools and augmented reality to support the maintenance activities of telecommunications networks and technological systems, in a way to increase the versatility and the effectiveness of technicians in the field for the sole benefit of the customer. Through this new operational model, personnel in the field can connect to an expert from anywhere, share their thoughts on the problem and receive real time support through visual instructions.
Investments in R&D
The 2018-2020 strategic plan sees an R&D investment budget of more than €30 million, mostly aimed at the development of new railway signalling technologies, new technologies to create telecommunication infrastructure and new information systems to automate designing networks and orchestrating on-site operations. This investment will increase the company’s competitiveness and its ability to create value for the customer.
Economic and financial objectives
Regarding revenue for the next three years, progressive growth is expected, reaching approximately €750 million in 2020, and a greater diversification in the business (Energy & Utilities from 4% to 9% contribution to revenue, ICT from 18% to 20%, Transportation from 7% to 17%).
Value is expected to be generated through growth in EBITDA from the current 4.4% to 7.8% in 2020.
The estimates were done on the basis of investment plans by Sirti’s main customers, both in Italy and overseas, in relation to an increase in the penetration of ultra broadband networks (80% of UBB lines covered with FTTx technology in 2020), investments to modernise railway infrastructure (CAGR +8.1% 2016-2020), modernisation of the energy transmission and distribution networks and an increase in the spending on ICT infrastructure and systems.
John Davison, Chief Executive Officer of Pillarstone and President of Sirti, said: “We have always believed in this company’s potential, unique within an international context for its technological ability and know-how. With the resources that Pillarstone can make available, Sirti is, today, in the best condition to implement the new strategic plan and to take advantage of the opportunities found in the markets in which it operates”.
Roberto Loiola, Chief Executive Office of Sirti SpA, added: “The market scenario that we face today is one of profound change in every sector in which we operate. IoT, 5G, High Speed, Ultra Broadband, Smart City are the main technological and infrastructural transformations expected in the coming years and Sirti is excellently positioned in each of these areas. Major investments are planned in an increasingly aggressive and global competitive environment. All this requires the ability to adopt new operational models in the drive for increased speed, efficiency and flexibility, in order to better grasp the opportunities offered by the markets we oversee”.
2017 Revenue (P) = €673 million
Total 2018-2020 investment = €30 million
Employees = 4,400
Facilities in Italy: 30
International presence: Poland, Austria, Spain, United Arab Emirates, Saudi Arabia, Qatar, Romania.
Sirti S.p.A. – Sirti is a leading company in the design, construction, maintenance and integration of network infrastructure systems and management. Founded in 1921, it operates in the Telecommunications, ICT, Energy and Transportation sectors and employs around 4,400 staff. Sirti is also a successful international player in Europe and in the Middle East.
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 Pillarstone holds 100% of the capital and manages the entire long-term debt. It has invested €25 million of new financial resources and has the opportunity to further strengthen the company’s equity both with new financial resources (up to €12.5 million) and with possible mid- to long-term debt transactions.
 Adjusted EBITDA: earnings before interest tax, depreciation and amortisation, irregular and non-recurring items
 (P) = Preliminary and not yet verified by independent auditors