BRIEFING BY ENTITIES ON 2015/16 STRATEGIC AND …DOT PERFORMANCE INDICATORS (KPI) FOR ATNS 2015/16 Item no. Business objectives Objective measures Annual performance indicators Targets

PORTFOLIO COMMITTEE ON TRANSPORT 2ND TERM PROGRAMME

14 April 2015

BRIEFING BY ENTITIES ON 2015/16 STRATEGIC AND ANNUAL PERFORMANCE PLANS 2015/16

TABLE OF CONTENT

ATNS MANDATE

ATNS STRATEGY

ANNUAL PERFORMANCE

ATNS CORE PROGRAMMES 2015/16

FINANCIAL PLAN

ATNS MANDATE

ATNS MANDATE

ATNS was incorporated in 1993 in terms of ATNS Company Act, Act 45 of 1993.

The Act mandates ATNS to provide Air Traffic Management Solutions and associated services on behalf of the State in accordance with ICAO Standards, recommended practice as well as the South African Regulations and Technical Standards.

AREAS OF RESPONSIBILITY

AREAS OF RESPONSIBILITY

ATNS is responsible for air traffic

control in approximately 10% of the world’s airspace.

CIVIL AVIATION REGULATORY & DELIVERY CONTEXT

ATNS STRATEGY

ATNS STRATEGIC PROFILE – 2015/16

STRATEGIC PROFILE

ATNS STRATEGY

ATNS Strategy is influenced and linked to industry planning initiatives

and governmental expectations.

ATNS has an outward, market-driven strategy focus

ATNS adopts a critical thinking process in formulating the strategy that

includes steps which eventually bring to the surface the Critical Issues

that management will address and resolve over a defined period of

time with the aim to achieve the desired profile.

ATNS STRATEGY

These Critical issues are the bridge between the current profile and

the future strategic profile of ATNS.

Reviewed annually for implementation success with new critical

issues developed in order to achieve outcome-oriented goals.

STRATEGIC THINKING PROCESS

ATNS STRATEGY

OUR VISION

To be the preferred supplier of air traffic management solutions and associated

services to the African continent and selected international markets

To provide safe, expeditious and efficient air traffic management solutions

OUR MISSION

ATNS STRATEGY

OUR VALUES

Safety

Accountability

Customer Satisfaction

Fairness & consistency

Continuous Improvement & Innovation

Open and effective communication

Employee engagement and development

ATNS STRATEGIC IMPERATIVES

Deliver continuous improvement of our safety performance

Become a transformative

organisation that invests in its people

Play a leading role in the deployment

of air traffic management in

Africa and selected international

markets

Maintain long-term financial

sustainability

Provide efficient air traffic management

solutions and associated services

that meet the needs and expectations of the ATM community

Deploy and use leading technologies to the benefit of the

ATM community

Represent ATNS’ broad-based strategic outcomes that the company wishes to achieve as a result of its existence and objectives.

ATNS STRATEGY LINKAGE

NATIONAL DEVELOPMENT PLAN DOT GOVERNMENTAL OUTCOME ATNS STRATEGIC IMPERATIVES

Establish effective, safe and

affordable Public transport

A transport sector that is safe

Deliver continuous improvement

of our safety performance

Establish a competitive base of

infrastructure, human resources and regulatory frameworks

An efficient and integrated transport infrastructure network

for social and economic development

Maintain long-term financial sustainability

Provide efficient air traffic management solutions and

associated services that meet the needs and expectations of

the ATM community

ATNS STRATEGY LINKAGE

NATIONAL DEVELOPMENT PLAN DOT GOVERNMENTAL OUTCOME ATNS STRATEGIC IMPERATIVES

Produce sufficient energy to support industry at

competitive prices, ensuring access for poor households,

while reducing carbon emissions per unit of power by about one-

third

An increased contribution of transport to environmental

sustainability

Deploy and use leading technologies to the benefit of the

ATM community

Play a leading role in the deployment of air traffic

management in Africa and selected international markets

Increase employment from 13 million in 2010 to 24 million in

2030.

Ensure that skilled, technical, professional and

managerial posts better reflect the country's racial,

gender and disability makeup

An increased contribution to job creation

Become a transformative

organisation that invests in its people

ATNS BUSINESS CONCEPT

NO. DESCRIPTION

1. Our strategy will be to focus on the ATM needs and expectations of the ATM community, primarily in South Africa, with a greater emphasis on the rest of Africa and other selected global markets.

2. We will develop a thorough understanding of the global ATM community with emphasis on product and service offerings, technology developments and clients in order to effectively respond to the needs and expectations of our selected markets with innovative and relevant ATM solutions and associated services.

3. We will source, develop, market, distribute and support a complete range of ATM solutions and associated services that meet the needs and expectations of access, equity, safety, security, efficiency, predictability, environmental sustainability and affordability, thereby supporting our clients and the ATM community at large.


NO. DESCRIPTION

4. It is an imperative that we continue to enhance our ATM solutions and associated service provision in South Africa, in order to maintain a platform from which we can develop and leverage strategic partnerships, our global influence as well as harmonised technologies and methods, to become the leading ATM provider in Africa, to secure our future growth, revenue, profit and relevance as a provider of choice.

5. We will expedite our expansion into the rest of Africa and other selected global markets, through a focused business approach, whilst expanding our range of services in ATM that are appropriate for market needs and expectations.


NO. DESCRIPTION

6. Our business model will be supported through attracting, developing, retaining and appropriately rewarding a diverse and motivated team, that has the right skills, experience, commitment and drive to implement this strategy, creating win-win solutions.

7. The effective implementation of this strategy will ensure a well-equipped resource base, responsible governance, industry transformation, enhanced sustainability and support the global ATM system.

AREAS OF EXCELLENCE #1

BUSINESS INTELLIGENCE

We must excel at ensuring that we have strategic far-sightedness, detailed insight and understanding of global market dynamics, and readily available information on technological and business trends, suppliers, products, clients and competitors.


MARKET EXCELLENCE

We must excel at obtaining, developing, retaining and utilising specialist resources, capabilities and technology to formulate and provide air traffic management solutions and associated services, to ensure that they are innovative, of high quality, reliable and affordable, whilst ensuring that our operations across the entire business are reliable, consistent, efficient, timeous, sustainable and cost effective, in order to exceed client performance levels in accordance with requirements as the provider of choice.


RELATIONSHIP MANAGEMENT

We must excel at building lasting relationships with our people, communities, government and other strategic partners – suppliers, clients and the ATM Community - that are built on trust, are flexible, relevant, supportive, robust and are conducive to creating win-win situations.

ATNS CRITICAL ISSUES 2015/16

1. Build a trusting relationship with employees by living the values

2. Review and implement a revised structure to implement the ATNS strategy (regulated & non-regulated)

3. Develop and resource a business intelligence function (including market intelligence)

4. Develop and implement a funding and delivery model for the acceleration of the non-regulated business

5. Develop and implement a performance management mechanism to monitor the implementation of the strategy

6. Develop and implement a talent management plan (including succession planning)

7. Investigate, develop and provide a 3rd party funding solution plan by country

ANNUAL PERFORMANCE

DOT PERFORMANCE INDICATORS (KPI) FOR ATNS 2015/16

Item

no.

Business

objectives

Objective

measures

Annual performance

indicators

Targets as at 2014/15

Targets 2015/16

1. TRANSPORT SAFETY AND SECURITY

1.2 Safety service provision

Reduce the ATNS safety events rate

Number of safety events per 100 000 air traffic movements. Inclusive of all movements.

2.0 safety events per 100 000 air traffic movements

2.0 safety events per 100 000 air traffic movements

1.2 Safety service provision

Increase the successful safe operation .

Providing successful safe operation and application of separation standards based on IFR flight hours to equate to 99.995% and an error margin of 0.005%.

N/A 99.995% successful safe operation and an error margin of 0.005%.

1.3 Operational Efficiency

Reduce overall traffic delays

Average delay per delayed flight.

120 sec 120 sec


Item

no.

Business

objectives

Objective

measures

Annual performance

indicators

Targets as at 2014/15 Targets 2015/16

1. TRANSPORT SAFETY AND SECURITY

1.4 Operational Efficiency

Achievement of CNS Systems Availability

Average CNS Systems Availability

C: 99.67% N: 98.65% S: 99.77%

C: 99.67% N: 98.65% S: 99.77%

1.5 Ensure commercial sustainability

Ensure financial sustainability

Meeting financial target as per Budget.

D/E =25% C/A =3.65 ROCE =11.2%

D/E =10-45% C/A =2.5:1 ROCE =12.6%


Item

no.

Business

objectives

Objective

measures

Annual performance

indicators


Targets 2015/16

1. TRANSPORT SAFETY AND SECURITY 1.6 Performance-

based navigation (PBN) ACSA Airports

Implement ICAO PBN concept in South Africa. Near-term implementation targets in line with South African PBN Roadmap.

7 Design Reports for

submission to

SACAA (RNP APCH)

10 Design Reports

for submission to

SACAA (RNAV 1 and

2 SID/STAR)

RNP APCH (Baro-VNAV

where operational benefits

can be gained) in 50% of

instrument runways

•Achieved 55.5%

•5 of the 9 ACSA airport

have RNP APCH’s

RNAV 1 and 2 SID/STAR for

50% of International

airports.

•Achieved 50%

•3 of the 6 International

ACSA Airports are serviced

RNAV 1 / 2 SID/STAR

RNP APCH in 100%

of instrument

runways located at

ACSA airports by 31

March 2016.

RNAV 1 and 2

SID/STAR for 5 (or

80%) international

airports (ACSA-

owned) by 31

March 2016


Item

no.

Business

objectives

Objective

measures

Annual performance

indicators


Targets 2015/16

1. TRANSPORT SAFETY AND SECURITY 1.6 (b)

Performance-based navigation (PBN) Non-ACSA Airports

Implement ICAO PBN concept in South Africa. Near-term implementation targets in line with South African PBN Roadmap.

9 Design Reports for

submission to

SACAA (RNP APCH)

N/A

100% of contracted

designs..


Item

no.

Business

objectives

Objective

measures

Annual performance

indicators

Targets as at

2014/15

Targets 2015/16

2. INFRASTRUCTURE DEVELOPMENT AND HIGH-LEVEL INVESTMENT PLAN FOR TRANSPORT

2.1 Development of

optimized and efficient aviation infrastructure in a cost-effective manner.

Adoption and approval of CAPEX Implementation of CAPEX 2015/16 Strategic plan Roadmap Operational plan

Compliance with the acquisition and implementation of milestones of the CAPEX plan.

R151m R242m


Item

no.

Business

objectives

Objective

measures

Annual performance

indicators

Targets as at

2014/15

Targets 2015/16

2. INFRASTRUCTURE DEVELOPMENT AND HIGH-LEVEL INVESTMENT PLAN FOR TRANSPORT

2.2 Operation of the satellite communication networks SADC VSAT 2

Optimize revenue and ensure network availability.

Achievement of the revenue and network availability as per SLA targets.

SLA – 98.5% Revenue – R26.5m

SLA – 98.5% Revenue - R26.8m

2.3 Operation of the satellite communication networks NAFISAT

Optimize revenue and ensure network availability.

Achievement of the revenue and network availability as per SLA targets.

SLA – 98.5% Revenue – R26.1m

SLA – 98.5% R 26.4m


Item

no.

Business

objectives

Objective

measures

Annual performance

indicators


3. THE FIGHT AGAINST FRAUD AND CORRUPTION

3.1 Comply with relevant legislation, regulation and standards.

100% compliance

Reports with no material findings from auditors. Sound internal control systems.

Unqualified audit report. Zero material non-compliance findings.

Unqualified audit report to be achieved for 2014/2015. Zero material non-compliance findings

3.2 Fraud and whistle-blowing policy

Fighting corruption and promoting good governance.

Matters investigated as per policy timelines.

Resolution of all matters raised within 90 days.

Resolution of matters reported through the Whistle Blowing within 90 days.


Item

no.

Business

objectives

Objective

measures

Annual performance

indicators

Targets as at

2014/15

Targets 2015/16

4. ENVIRONMENTAL PROTECTION 4.1 Implementation of

environmental plan.

Measure ATNS Carbon footprint

Human resources/training

Performance assessment

ATNS 2014/15 Carbon footprint inventory report Trained ATNS employees on Sustainability and climate change matters.

Environmental performance assessments

Calculate ATNS Carbon Footprint Inventory for 2012/13 FY. S & CC Awareness training programme for ATNS employees

Environmental Assessment Report

Calculate and report on ATNS Carbon Footprint 2015/16 quarterly Deliver Environmental awareness training to 50% of ATNS employees

Environmental Assessment Report ( 1 Annual Report at year-end)


Item

no.

Business

objectives

Objective

measures

Annual

performance

indicators

Targets as at

2014/15

Targets 2015/16

5. TRAINING TO CONTRIBUTE TO JOB CREATION

5.1 Address societal challenges, thereby building a meaningful legacy for ATNS and the communities in which we operate.

ATS bursaries and engineering learnerships.

Trained ATS and engineering learnerships.

ATS - 60 Engineers Learnership 5 ETS – GEDP 6 Unemployed Graduates 6

ATS - 60 Engineering Learnership 6 ETS – GEDP 10 Unemployed Graduates 5

ATNS STRATEGY

Item

no.

Business

objectives

Objective

measures

Annual

performance

indicators



5.2 Manage the training pipeline for ATS and technical staff.

Adoption and approval of HC plan as per budget. ATS and TS training plan. Operational or implementation plan.

Achievement of the numbers as per budget. Adoption and approval of training plan. Compliance with the milestones of the plans.

ATCO 3 – 226 ATCO 2 – 37 ATCO 1 – 117 Eng. Technicians –74 Eng. Satellite Technicians - 5

ATCO 3 – 226 ATCO 2 – 37 ATCO 1 - 119 Eng. Technicians – 74 Eng. Satellite Technicians – 5

ATNS STRATEGY

Item

no.

Business

objectives

Objective

measures

Annual performance

indicators

Targets as at

2014/15

Targets 2015/16


5.3 Review and implement the HR plan to recruit, develop, retain, and reward employees across all disciplines.

Development programmes for employees, with emphasis on AIC and women.

Training investment as percentage of a salary bill.

3% Rand value of salary bill

3% Rand value of

salary bill

ATNS STRATEGY

Item

no.

Business

objectives

Objective

measures

Annual performance

indicators

Targets as at

2014/15

Targets

2015/16

6. BROAD-BASED BLACK ECONOMIC EMPOWERMENT

6.1

Achieve BBBEE targets. Achieve preferential procurement targets as set by the Transport Charter.

Percentage of discretionary spend on BBBEE. Total discretionary OPEX budgeted. Total CAPEX budgeted.

Achievement of BBBEE targets as per the Transport Charter.

BBBEE level 3 OPEX spend 65%, CAPEX spend 45%. Obtain the first BBBEE rating.

BBBEE level 3

ATNS STRATEGY

Item

no.

Business

objectives

Objective

measures

Annual

performance

indicators

Targets as at

2014/15

Targets

2015/16

7. EMPLOYMENT EQUITY

7.1 ATS EE targets( AIMO, ATSO, ATCO 1-3)

Achieve representation towards alignment of company staff profile with the demographics of the country.

1% increase : 2015/2016 AIC Target Retain 2014/15 ATS AIC Female Target

Achieve a target of 57% ATS AIC. Achieve a female target of 40% ATS.

Achieve a target of 58% ATS AIC. Achieve a female target of 40% ATS

ATNS STRATEGY

Item

no.

Business

objectives

Objective

measures

Annual performance

indicators

Targets as at

2014/15

Targets 2015/16

7. BROAD-BASED BLACK ECONOMIC EMPOWERMENT

7.2 ATNS EE targets

Increase representation of black (AIC) racial grouping with a particular focus on African and female representation towards creating alignment with the demographics of the country.

3% increase – year on year AIC (based on YTD) Retain 2014/15 AIC Female target (based on YTD) Retain 2014/15 target – people with disabilities (based on YTD)

Achieve a target 70% AIC. Achieve a company target of 46% female representation. Achieve a company target of 3.5% for people with disabilities.

Achieve a target 72% AIC Achieve a company target of 46% female Achieve a company target of 3.5% for people with disabilities.



PROGRAMME 1: The ATNS ATM Roadmap – ASBU

Supports ATNS strategic plan for implementing the ATM/CNS systems required for meeting user expectations

going forward.

PROGRAMME 2: NEWCO Programme

An opportunity for the non-regulated business to continue expansion into the region through a subsidiary

vehicle.

PROGRAMME 3: Business Processes

a project to provide a representation of the organization and its operational model in a visual manner, in order

to enable a unified organization understanding, operational standardization and the capturing of corporate

memory.


PROGRAMME 4: IT Repositioning

A follow-on programme from the 2010 IT Business enablement roadmap to enhance IT governance and

achieve new business integration as well as creation of new IT functions.

PROGRAMME 5: Training Model Review

An initiative to review current training model in order to optimise the Aviation Training Academy’s operations.

PROGRAMME 6: Remote Service Provision

A programme to enable aerodrome control services to be provided in an airport from a location away from the

said airport.

2015/16 FINANCIAL PLAN

KEY ASSUMPTIONS

DESCRIPTION PROJECTIONS

BER CPI1 5.7 %

Stats SA CPI2 6.3%

Tariff Increase3 0.8%

Salary Increase4 7.7%

Tax Rate 28%

USD1 11.0

Euro1 13.8

• Bureau of Economic Research (July 2014).

• Stats SA (July 2014). Used to inflate the salaries cost;

• Final Permission. Used to increase the tariff;

• Salary Increase( Stats SA CPI+1)

SUMMARIZED FINANCIAL RESULTS

Description 2013/14 Actual

2014/15 Forecast

2015/16 Budget

Tariff Revenue 1 159 327 1 196 118 1 207 798

Other Revenue 133 365 133 387 138 228

Total Revenue 1 292 692 1 329 504 1 346 026

Total Expenditure 855 555 1 057 565 1 069 924

EBITDA 437 137 271 939 276 102

Profit before Tax 338 869 192 480 214 993

Profit after Tax 244 262 138 584 147 661

ROCE 23.6% 16.8% 10.9%

CONSOLIDATED BALANCE SHEET

Details 2013/14 Actual

2014/15 Forecast

2015/16 Budget

Total Assets 1 863 431 085 2 131 629 743 2 522 939 509

Total Liabilities 237 074 826 373 209 299 601 495 479

Total Equity 1 626 356 259 1 758 420 444 1 921 444 030

TARIFF INCREASES

Description

Actual 2013/14

Budget 2014/15

Projection 2015/16

Projection 2016/17

Projection 2017/18

Traffic Movement Growth

-1.9%

-2.4%

1.6%

1.8%

2.0%

Tariff Increase

5.5% 5.6% 0.8%

1.7%

6.3%

ROCE

DEBT EQUITY RATIO

CURRENT RATIO

INTEREST COVER

CAPEX

ATNS CAPITAL EXPENDITURE PLANS

Description 2015/16 2016/17 2017/18

Communications 122 002 073 59 560 366 53 491 801

Display Systems 86 029 953 38 185 061 21 699 915

General Items - - -

General: Buildings 8 981 950 3 903 714 4 113 734

General: Computer equipment 1 585 050 1 673 020 1 763 029

General: Elect&Mech equipment 6 868 550 7 249 755 2 938 381

General: Office furniture and fittings 1 162 370 1 226 882 1 292 888

General: test equipment 2 324 740 2 453 763 2 585 776

General: Tools 581 185 613 441 646 444

Navigation 47 491 792 18 775 570 34 319 869

Software 21 609 096 5 193 194 8 203 083

Surveillance 136 073 351 84 776 428 15 476 786

Total 434 710 109 223 611 194 146 531 705

Contact us

Thank you

ATNS HEAD OFFICE

Postal address

Private Bag X15

Kempton Park

1620

Street address

Block C, Eastgate Office Park

South Boulevard Road

Bruma 2198

Gauteng

Republic of South Africa

Contact details

Tel: +27 11 607 1000

Fax: +27 11 607 1570

Website: www.atns.com

Email: [email protected]

http://www.atns.com

Documents

BRIEFING BY ENTITIES ON 2015/16 STRATEGIC AND …DOT PERFORMANCE INDICATORS (KPI) FOR ATNS 2015/16 Item no. Business objectives Objective measures Annual performance indicators Targets