EVOLVE n.1

N°1

BE ADAPTIVE How to turn the change into evolutionary growth

MAY 2018

N° 1 - May 2018 www.mairetecnimont.com

THE MAIRE TECNIMONT GROUP MAGAZINE EDITED BY Department of Institutional Relations and Communication Court of Milan registration - N. 338 on the 06-12-2017 EDITOR IN CHIEF Carlo Nicolais PROJECT AND DESIGN Cultur-e www.cultur-e.it EDITOR Maire Tecnimont Spa Registered Office Viale Castello della Magliana, 27 - 00148 Roma - Italia Operative Headquarters Via Gaetano De Castillia, 6A - 20124 Milano – Italia PRINTER Gam Edit Srl Via Aldo Moro, 8 - 24035 Curno BG www.gamedit.it Issue completed: 25/05/18 The rights due for published texts are available for all parties that we were not able to contact.

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EDITORIAL The challenge of being "Adaptive" Editorial by Carlo Nicolais, Head of Group Institutional Relations and Communication

STRATEGIES The blue ocean of innovation

Overwhelmed by an unusual change

It is driven by the predilection for change, it wants to see us awake and ready for creative intuitions.

Blockbuster, Kodak and Fujifilm: companies erased by innovation.

Stories of adaptiveness

Italian model of resilience

Starbucks and Cirque du Soleil: companies that have ridden the change.

"Olivetti after Adriano" is a book about Adaptive Business Model.

HISTORY Avant-garde engineering

Fabrizio Di Amato, an honorary engineer

The origins and development of a discipline, example of Italian companies that have made history.

Maire Tecnimont Chairman and Majority Shareholder receives a degree from Politecnico di Milano.

SPECIAL The adaptiveness that makes you win

(Smart) working in progress

Maire Tecnimont Group CEO Pierroberto Folgiero tells about industrial evolution of the Group.

A research by Politecnico di Milano describing the development in our Country.

What counts in the future is the result

Maire Tecnimont for Milan

Round table on Smart Working: the plans of private groups and the new projects of the Public Administration.

The new "MEETinG" hub at Garibaldi Towers.

REPORTAGE The right place to work The Group headquarters become smarter.

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SUSTAINABILITY A new discontinuity Interview with Marco Frey, president of the Global Compact Network Italia.

TERRITORIES Amurski, between Russia and China

Negotiating without prejudice

Maire Tecnimont is executing a â‚Ź 3.9 billion gas treatment project for Gazprom.

Interview with the project director Maria Selli: "Working with Russians the key word is persistence".

MOTTOS From change to the call to arms A thread that unites the Group's values, the different steps of a journey towards the future.

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THE CHALLENGE OF BEING

"ADAPTIVE" n the last issue celebrating the tenth anniversary of the listing of Maire Tecnimont Group and telling about the ongoing energy transition in the natural resource processing market, we wrote that Italian companies could play a proactive role in this scenario, also thanks to the engineering capabilities inherited from the historical tradition of the petrochemical industry. In this new issue, we decided to scrutinize the Italian “model”, exploring with testimonials and reconstructions the potential of a creative talent and the special skills of engineers to team up around a project.

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EVOLVE magazine - born at the end of 2017 as a tool to share experiences and results - continues the same way, in order to provide readers with a sequence of stimuli and narratives useful to better interpret economic and geopolitical changes under way. “Mottos”, the pillars of the Maire Tecnimont corporate culture having more than two years common legacy, will be scrutinized and published on a regular basis. They accompany us proactively along a path of professional and personal growth.

The “Be Adaptive” motto, as explained in the following pages, is among the most important ones for

our Group. The flexibility in accepting project challenges, the ability to adapt to change in terms of work and culture, is a kind of compass for all those who have chosen a path - as suggested by our CEO Pierroberto Folgiero - disseminated by entrepreneurial attitudes.

In the opening articles, as already done in the previous issue with the philosopher and mathematician Nassim Taleb, we have chosen to talk about Adaptiveness from a critical point of view, analyzing the so-called “Blue Ocean Strategies” and describing the impact that innovation has generated in some big companies such as Blockbuster, Kodak and Polaroid, but also Starbucks, Apple and Cirque du Soleil. In this context, the history if Italian technological development represents - as a recent book demonstrates - a case of great interest to be considered when thinking of transformations of industrial models.

Furthermore, to better understand the Adaptive Model in our industry, we have given voice to some historical events related to the main engineering and plant engineering companies, including Fiat Engineering, Tecnimont and KTI. Editorial research, combined with the collection of precious testimonies of esteemed contemporaries, proved that in fact, many trends in Italian companies (their moments of glory, as well as the phases of crisis) are more linked to the life of the people who inspired them than to the external economic dynamics. In other words, the main changes in the Italian engineering landscape have often been catalyzed by technical and managerial figures and by their decisions to remain in the company rather than leave and start new companies.

As an example of entrepreneurial “Adaptiveness” we are going to talk about honorary degree in Chemical Engineering

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EDITORIAL | EVOLVE

conferred recently to Fabrizio Di Amato by the rector of Politecnico di Milano. An important recognition for a private entrepreneur and his ability to adapt to market developments.

We enter the world of Maire Tecnimont to discover guidelines of its evolution strategy: an industrial vision that focuses on skills, transformation of internal processes and work spaces within the Smart Working, to which we also dedicate our photographic reportage section: this format has now become a sort of backbone of EVOLVE, a form of visual communication through high quality images.

The last two sections are dedicated to business sustainability and to the territories, as further dimensions of discontinuity that companies are facing. In the first (in addition to presenting the new Sustainability Report issued by Maire Tecnimont, the first in the history of the Group) we scrutinize “Adaptiveness� in an interview with Marco Frey, president of the Global Compact Network Italia Foundation, who explains how some large companies have accepted sustainability as a strategic corporate value and a real business objective. Finally, in the territories section, we discuss internationality as one of the keys of Maire Tecnimont growth: a way to get to know each country through the engineering and business culture events.

In this episode, dedicated to Russia, we talk about the project of Maire Tecnimont in Amurski, a 3.9 billion euro contract to build a gas treatment plant.

The project represents a real dimension jump for the Group, engaged in the Russian Far East, on the border with China. Our colleagues working into the task-force are also witnesses of how in these cases engineering is a profession directly experiencing cultural diversities, remodeling the presumed uniqueness of Western values with respect to the rest of the world. This is considered in the daily life of the project, adapting languages and codes of communication in a process of interculturality practiced on the field.

Carlo Nicolais Maire Tecnimont Group Head of Institutional Relations and Communication

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OCEAN

THE BLU OF INNOVATION IT IS DRIVEN BY THE PREDILECTION FOR CHANGE: IT IS A GROUP ACTIVITY, NOT A SOLITARY RESEARCH. IT NEEDS CONNECTIONS, CONTAMINATION, DEBATE AND COLLABORATION. IT WANTS TO SEE US AWAKE AND READY FOR CREATIVE INTUITIONS, NOT IMMOVABLE WAITING FOR PREPACKAGED PROJECTS FROM THE TOP OR GENERATED FROM THE CHAOS. hat do Blockbuster, Kodak and Polaroid have to do with Starbucks, Apple and Cirque du Soleil?

And why, while many companies rode the wave of technology to survive, a minority of old-style entrepreneurs - that is, lacking an innovative insight - continued to coddle in culturally outdated business models? To ignore or underestimate the technological innovation?

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Perhaps it is useful to dwell on the timeline, analyzing what the experts in strategies and change management say. And peering at the stories of some companies that - thanks to the changes necessary for their economic growth - have overcome difficulties and crises, by rethinking their products, processes and forms of industrial organization. Turning the obstacles into opportunities and adapting themselves to sudden changes in the markets.

After Copernicus, Darwin and Freud, digital is the fourth revolution. This idea is supported by the philosopher Luciano Floridi, director of the Digital Ethics Lab at the University of Oxford, who states: “Technology can help us support strategies for equitable

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STRATEGIES | EVOLVE

and sustainable growth. But the real challenge is not innovation, but governance. I am optimistic about our ability to create ever better technological solutions: not so much about our ability to find a better use to them”.

Ethical management of innovation is one the focal points at the center of the debate on artificial intelligence, Industry 4.0 and interaction with human beings. Innovation is a term that represents the ability to discover and unite resources not previously connected to each other. To create products and solutions that can effectively impact business and society. Innovation, however, arises from the predilection for change: it is a group activity, not a solitary search. It needs connections, contamination, debate and collaboration. It wants to see us awake and ready for creative intuitions, not immovable waiting for prepackaged projects from the top or generated from the chaos. Innovation comes if we are ready to welcome it.

If we go back to the multinationals like Blockbuster or Kodak - who eventually lost their game, resisting the change - we ask ourselves: how would their story end if they had supported the technological and digital revolution? What would be the reaction to Schumpeter, one of the leading economists of the 20th century, who clarified in his theories the difference between Invention, Innovation and Dissemination?

Our model of “Adaptive Business Model” was near. In Ivrea, in the province of Turin. His name was Adriano Olivetti, a “revolutionary entrepreneur” by profession. A man who, thanks to the combination of personal philosophy and social vision, was able to create a new factory experience, unique in the

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BLUE ocean characterized by new markets, current demand and solid profitable growth. Thanks to a metaphor that refers to the blood of a battle for survival (red) and the endless opportunities that organizations can create (blue), as evidenced by the history of the industry. In line with an approach aimed at maximizing opportunities and minimizing risks, the authors of Blue Ocean Strategy highlight a series of recurring errors that “Non Adaptive” companies commit when they avoid tackling innovation.

Companies trapped in the ocean of competition Too many companies let the competition decide their strategy.

Time and focus are dedicated to observing rivals, rather than seeking solutions to increase value for their clients. Focusing on innovation, and no longer on competitors' positioning, will push companies to downsize their price policies and seek new quality factors, creating new markets.

world, in a historical period when the paradigms of capitalism and communism clashed.

“Olivetti after Adriano” will be examined on the following pages, while now we recommend another book to familiarize yourself with a model that has revolutionized the business world. The system to discover new markets where others have not yet arrived is concentrated in the pages of “Blue Ocean Strategy”, an international best-seller written by two INSEAD professors (the French business school, one of the most prestigious in the world): a Korean W. Chan Kim, consultant for the European Union and management guru the world over, and an American Renée Mauborgne, member of the World Economic Forum.

The book has so far inspired and reassured over three and a half million readers. Managers and entrepreneurs from all over the world have got to know and experimented with a way to get out of the RED ocean of competition and navigate to the

Companies trapped within the boundaries of their industry If a team of managers limits itself to a zero-sum strategic analysis, it will remain within the boundaries of the current market, where the gain of a company amounts to the loss of its peers. But the structure and boundaries of a market are not fixed elements, they can be redefined by the actions and beliefs of those who operate them, thanks to the power of imagination.

Innovation and creativity are not a black box According to Schumpeter's vision, which outlined the entrepreneur as a solitary and creative figure, innovation was a sort of mysterious box, driven mostly by chance. The creators of the Blue Ocean strategy instead demonstrate, with dozens of examples, how strategic creativity (and not only artistic or scientific) can be unleashed in a controlled way thanks to collaborated. People at various levels who will take part in the definition of a strategy, and no longer only in the execution.

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OVERWHELMED

BY AN

UNUSUAL CHANGE

ome entrepreneurs distinguish themselves as innovators: they perceive and seize new opportunities, then introduce them in the production process. If we analyze the scenarios, we will see how in the last decade - thanks to the emergence of new global trends and a growing demand for creative solutions - many players have been forced to rethink their strategies, to produce innovative value at a lower cost. The rise of blogs, rating platforms and social networks has also multiplied company information intended for the public regarding products, services and offers. Thus pushing companies to renew themselves and to avoid following paths trodden by the peers. To this must be added the increasing speed and ease with which a payer can go

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global, thanks to low entry costs, the digitalization of the markets and the dizzying growth of emerging countries.

The fate of Blockbuster, Kodak and Fujifilm Let's analyze some historical examples of “Non Adaptive� companies, of companies where management remained anchored to old business models, unable to take advantage of innovation. This is the case of Kodak and Fujifilm, two leading companies in their sector, in a situation of monopoly in their country. With the birth of a new technology (digital), the American company Kodak imploded until failure, while Fujifilm survived the technological challenge and managed to dominate the market again. Some companies adapt to change and know how to ride it, others do not.

Fuji immediately developed an innovative three level strategy: extracting as much money as possible from the old business of photography, taking digital advantage in new directions and diversifying its business. First, it did not hesitate to demolish the old mentality and to go new ways. Fuji's CEO, Shigetaka Komori, did something unthinkable for the Japanese mentality: he destroyed the plans and philosophy of his predecessors, or those who had chosen him for the task. A taboo that in Japan is tantamount to betrayal. But only in this way the company has managed to survive.

Another example? Blockbuster was founded in 1985, becoming the most famous brand in the world in the rental of movies and video games. In the mid-90s it was present in 25 countries, including Italy, with millions in turnover. With the arrival of the new millennium, due to its inability to tackle the digital, the company was stifled by Netflix, other pay-per-view companies, and the all-reaching Internet. In 2013 last 300 stores were closed selling them two years earlier to the Dish Network, a US company operating in the satellite TV sector.

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STORIES OF ADAPTIVENESS

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STARBUCKS AND CIRQUE DU SOLEIL. COMPANIES THAT EMBRACED CHANGE, MODIFYING THEIR STRATEGIES AND CREATING NEW MARKETS TO EXPAND AND GROW SUCCESSFULLY. orn as an unknown roasting company in Seattle, Starbucks revolutionized the coffee industry by shifting the focus from the sale of the product for everyday use to the atmosphere in which customers enjoy their personalized beverage. The strategy did not require new revolutionary technologies but was based on a paradigm shift in consumer experience. Starbucks becomes famous for its coffee, homemade desserts and a chance to sit at a table and use Wi-Fi for free. The chain of Italian-inspired cafés is now an icon for hipsters and aspiring writers: people who, together with students and freelancers, can spend several hours among the sofas looking for an inspiration.

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Cirque du Soleil is absolutely one of the most significant examples. In less than twenty years it has achieved a turnover that Circo Barnum (former world leader in the sector) achieved in over a century! A dizzying growth occurred in a sector in a clear crisis, where strategic analyzes indicated nothing but limited potentials and excessive costs. With poor ticket sales, fierce animalists and growing competition from sports and technology, Cirque du Soleil revolutionized its strategy, creating a completely new market, and targeting adult spectators having specific theatre and music tastes.

It abandoned the classic circus model for children, animals (too expensive to manage), international stars (expensive), three-ring tents, hard seats and sawdust. A higher price of the ticket was accepted by adult audience (even without children), attracted by the refined and exotic atmosphere. Product differentiation and cost containment: these are the two winning factors! Without damaging the target groups of the competition, simply moving to a Blue Ocean market. Combining the idea of circus and theater and undermining the belief that circus and innovation are incompatible.

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THE ART OF

COPYING NAURE

Joseph Glidden was an unknown gentleman who in 1874, noting the structure of the thorns a widespread plant in Texas had developed to defend against insects, invented the barbed wire. George De Mestral was a Swiss engineer who in 1941 observed the structure of the burdock seeds that can be very difficult to extract from his dog's coat. Admiring the hook shape and clinging capacity under the microscope, he invented Velcro, the material we use today for mountain backpacks. One of the most widespread diabetic syringes in the world owes much of its success to a painless needle whose shape is inspired by the proboscis of the mosquitoes, which must be able to suck the blood without the victim noticing it.

As Davide Reina from Bocconi tells us, innovation that imitates nature (the Anglo-Saxons call it “Biomimicry”) is a serious process. Based on scientific reasons, it is attracting the attention of venture capitalists, interested in financing the ideas of the so-called Bioneers.

The potential is endless: millions of animal and plant species have developed extraordinary tools for effectiveness and performance, potentially able to become prototypes and industrial innovations, usable in different applications. The ability of each species contains a wealth of prior knowledge, refined by natural selection over centuries: a treasure ready to be used.

News taken from: • W. Chan Kim, Renée Mauborgne, “Blue Ocean Strategy”, Rizzoli Etas • E. Piol, M. Citelli, “Olivetti after Adriano”, Guerini e Associati • W. Ruffinoni, “The code of the future”, Marsilio • M. Neri, “A more social web wants safe rules”, Il Messaggero • E. Franceschini, “A revolution, two destinies”, La Repubblica • D. Reina, “Biomimicry, the art of copying nature”, Corriere Innovazione • G. Mosca, “Companies that we believed to be timeless”, Wired.it

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ITALIAN MODEL OF RESILIENCE any have written about him.

Among others, we are grateful to Esterino Piol and Mario Citelli, who wrote the essay “Olivetti after Adriano”, published by Guerini e Associati. Piol stayed in Olivetti for over forty years, becoming a member of the board and vice president. Citelli spent twenty years as a manager before moving on to the Telecom

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group. Both were surrounded by the fame of Adriano, they saw how the seeds of innovation sown by him in the company were reaped by the internal management, as well as by thousands of entrepreneurs at the top of multinational companies all over the world. Thankful to a history of Italian excellence.

Olivetti has survived all its competitors in the '50s and' 60s: in the mid-90s it was the oldest office equipment company in the world. It remained alive because, as a good chameleon, it had managed to dynamically transform its business model: from an office equipment company to a systems and services company, finally becoming a telecommunications company. The formula was a classical Italian export company, but that of a company that creates a network of operating units, deeply rooted in the various countries, both in an industrial and commercial sense, making the most of local management.

Olivetti is a unique example of technological success the system “Italy” did not know how to handle. It shows that in its DNA there were values and skills that allowed innovation and management of the various transformations of the business model. Thanks to an industrial mission that was always a priority with respect to the financial assessment.

In any case, the authors believe that even in the third millennium Olivetti's Adaptive Business Model represents an excellent basis for new business initiatives and an incentive for change for our economic-social ecosystem. Technological innovations have always been a huge opportunity for those who can ride them, but also a danger for companies that do not know how to grasp them (or that catch them too early, in the absence of demand and the market).

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AVANT-GARDE ENGINEERING

hy does the history of Italian engineering deserve to be known? First reason, because together with the historical and artistic heritage, fashion, design, good food and good wine, together with Ferrari and other industrial companies, Italian engineering is one of the real strengths of our country. The prestige acquired over the years in Italy and abroad, conquered in the most competitive markets, placed our country at the top of the world. The other reason concerns the contribution that it has given and continues to give to the innovation in civil and industrial culture in our country. In particular with regard to plant engineering, oil services and more.

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If we move to the literary field for a moment, looking for a character that is a symbol of that professional passion and that specific technological DNA, we can come across the hero of “La chiave a stella”, the novel published in the Seventies in which the writer (and chemist) Primo Levi narrates the story of Libertino Faussone, known as Tino, a skilled worker specialized in the installation of metal structures, suspension bridges, oil facilities. Experiencing work adventures all over the world - from Alaska to India, from Africa to Russia - Faussone is a sort of epic symbol that fights against the forces of nature, with the only baggage of its experiences and abilities. A Piedmontese, also in his language, the language of Fiat poor in words; a man who acts, creates himself and with his work

THE ORIGINS AND DEVELOPMENT OF A SECTOR THROUGH ITALIAN COMPANIES THAT HAVE MADE HISTORY. becomes ennobled in his spiritual part. Presenting that novel, Primo Levi said: “To love one's work (which unfortunately is the privilege of few) is the best approximation to happiness on Earth: but this is a truth that only few know”.

From literature to history, focusing on the specifics and briefly telling the path of Italian engineering and plant engineering companies, one element that must not be forgotten is the close relationship between the Polytechnic Universities and the business world. A plate placed on the entrance wall of the “Giulio Natta” Department of Chemistry, Materials and Chemical Engineering in Milan reminds us how that Faculty, with its strong soul and tradition of research, has been over the years a real engine for industrial growth. A bi-directional synergy: just as the industry stimulates and supports the University, the universities keep shaping those high-quality engineering skills, typical of that “human capital” successfully operating in the most important companies of the sector.

Since the time when Milan started its industrialization, in the second half of the nineteenth century, researchers and students of the Politecnico have developed a true engineering culture of international importance, which reached its peak with the Nobel Prize of 1963 for Giulio Natta. Thanks to the help of chemistry, engineers and technicians try, on the one hand, to create new materials to modernize important sectors (such as textiles), and on the other hand, start the first energy production plants in Italy and in the world. After the Second World War, the Italian oil engineering industry was shaped, an industry that still today makes us famous abroad (although our country has scarce resources).

Some experts in the history of economics note how the excellence of our engineering schools - combined with the creative abilities

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enhanced by project challenges and the search for solutions to complex problems - is the basis of a specific sector: design and construction of large industrial plants, especially power, steel and petrochemical plants. Although ours is the country of small and medium-sized enterprises (small and limited assembly lines), plant engineering has gained over time a reputation so high to compete fearlessly with international players at the highest levels, such as the United States, Japan and Western Europe.

If the golden age of major plant projects in the advanced countries fell on the decades 1950-1970, today multinationals (including Maire Tecnimont) have just turned their strategies abroad, working mainly to meet the demand of the so-called “emerging” markets (Russia, China, Middle East, India). In recent years the presence of Italian technology in the five continents is evidenced by the thousands of plants built by our companies and our experts. Italy is not only “Made in Italy” stamped on fashion clothes, but also on complex technology made possible by tenacious and passionate work of thousands of engineers.

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The history of this sector is made up of the intertwining of corporate brands and the memories of the past. Not having enough space here, there is only time for a quick reference to some large plant engineering companies (such as Fiat Engineering, Tecnimont, Snamprogetti, Italimpianti, Danieli Engineering, Snia Engineering) and international subsidiaries such as KTI, Technip Italy, Foster Wheeler etc.

Golden age Fiat Engineering - founded in 1936 as the Construction Division of Fiat Group - was created to enhance the industrial development of the parent company, based on the most advanced canons of architecture and industrial technology of the time, and in conjunction with the project of the new plant of Mirafiori in Turin. Until the beginning of the seventies, as part of Fiat group, the company developed an engineering culture of excellence in the field of industrial plant engineering. Becoming independent in the globalized world, Fiat Engineering diversified its focus on complex civil engineering, infrastructures and power plants in Italy and abroad. It was then merged into Maire Tecnimont Group thanks to the acquisition by Maire group in February 2004.

Thanks to relations with some Italian companies, it started its work as an EPC Contractor for combined cycle plants such the new cogeneration plant for Moncalieri, just outside Turin. Over the years the company has absorbed more skills thanks to the entry of several resources coming from Fiat Avio. To cut it short, it can be said that over the years the company's transformation has not diminished the growth of engineering know-how, expanding it to new energy, environment and geo-technologies.

“We Italians are not only very good at building plants - says Carlo Masetti, who joined Tecnimont in 1973 - we are among the best in the world as far as engineering development vision is concerned.

The strategic capacity that distinguishes us - continues Masetti, today a consultant for the technological department at Maire Tecnimont - requires that the “intelligences” adapt to the spirit of the countries in which they operate, with the idea of contributing to the growth of the community where the plant will be built”.

Speaking of Tecnimont, the Milanese engineering company dating back to Montecatini-Montedison, means to evoke a brand, which managed over the years to establish itself all over the world in the oil processing and chemical engineering, with a historical leadership in polyethylene and polypropylene plants (the latter synthesized in 1954 by the Chemistry Nobel Prize Giulio Natta).

“Italian engineers have been pioneers all over the world - explains Dario Pirovano, in Montedison since 1970, today Senior Business Development Consultant at Maire Tecnimont - thanks to the innate ability to adapt to complex and evolving situations. The so-called “Italian genius” can still be seen today in the specialized approach to the problem, with an almost handicraft cut, and in the

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extraordinary ability of mediation between the parties. In Iran, after the war, we rebuilt from scratch a plant thanks to the creative flexibility that allows us to imagine in detail a project that still does not exist. Then, goes on Pirovano, we are the number one in the systematization of what is parallel to plant building. Economic, logistic, supply and customer relations aspects; but also, attention to the growth of human resources, for the management of careers, attention to lifestyles and family needs”.

Being recognized as problem solver means knowing how to quickly identify competitive advantages (beating the competition). An intrinsic quality of KTI (Kinetics Technology Int.), 35 years of international experience in process engineering, then acquired by Technip Italia and subsequently, in 2010, merged into the Maire Tecnimont group. Alfio Millacci - who after graduation in 1961, was among the most active players in the legendary CTIP (700 plants built worldwide in the oil and petrochemical sector, including 6 refineries, between 1934 and 1997), in Technipetrol (Rome engineering company, famous in Italy and abroad as the main contractor of large industrial complexes, which later became Technip Italy) and then landed in KTI - confirms what was said before: “Italian engineers have shown an extraordinary knowledge in every field. Oil processing engineers, given the complexity of the plants, are still today recognized as the best ever in managing the variability that is encountered in the implementation phase of any project”.

KTI raised Gaetano Iaquaniello, now vice president of Innovation Strategy in KT, who since the eighties experienced all the transformations of a company strongly oriented towards designing and building furnaces for the oil and petrochemical industry. The

HISTORY | EVOLVE

company from its very beginning started to develop new technologies to achieve international leadership in the fields of hydrogen, ammonia, methanol, ethylene, sulfur and industrial furnaces. “KTI group - explains Iaquaniello - was at the time structured as three operational centers: one in the Netherlands for plant engineering, one in Rome for furnaces, small hydrogen plants and sulfur lines, and one in California to follow the American market and available technologies. Among the strengths, I would point out the investments dedicated to the continuous professional growth of managers, who had to attend master programs at the most famous international Business Schools”. In fact, an “intangible” heritage of human resources that over time has represented a reservoir of excellence, necessary to develop “adaptiveness” and thus

13 The so-called 'Italian genius' consists of a specialized approach to the problem

overcome the various changes linked to market scenarios. An “ante litteram” managerial philosophy that anticipated innovation, the development of international human resources and a style of business that makes the difference.

Sergio Paggi testimony - current vice president of Research, Technology, Process and HSE at Maire Tecnimont - underlines the importance of an Italian engineering DNA that goes beyond the boundaries of EPC contracting. “We continue to be welcomed into the world as experts in technological problem solving capable of seeing beyond their core business.

Although today the most important research centers have moved to the United States, Asia and the Middle East, Italian engineers continue to show flexibility necessary for the execution of a project. A philosophy that starts from the relationship with the Universities, where companies today more than ever try to intercept “talents” oriented towards project management and entrepreneurial sensibility”. “To the young people - we’d like to quote Carlo Masetti - I always tell to get their hands dirty, not to think that everything can be resolved with technology and computers. Certain intuitions, certain brilliant ideas, come to us only when we go to the construction site, we talk to people, we get in touch with everyone's experiences. Because it is a chess game even with the customers, the partners, the technicians, the suppliers and even in the future it will have to be played “live” on site.

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FABRIZIO DI AMATO, AN HONORARY

ENGINEER A PATH OF DEVELOPMENT OF AN INDUSTRIAL GROUP IN THE SIGN OF ADAPTIVENESS

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hen, in the first spring day afternoon, in the heart of the Politecnico di Milano, Fabrizio Di Amato crosses the threshold of the classroom named after the Nobel Prize winner Giulio Natta, and still furnished with the original wooden benches, his natural attitude is briefly replaced by emotion.

For the chairman and majority shareholder of Maire Tecnimont an honorary master’s degree in Chemical Engineering will remain an experience of great intensity. An unforgettable day both in personal and professional terms: a further step in an entrepreneurial journey that has allowed him to project into the world the value and excellence of the chemical engineering “Made in Italy”.

The ceremony began with the words of Professor Ferruccio Resta, rector of the Politecnico di Milano: “We are honored to award Fabrizio Di Amato with this degree. Ours is a great community that, thanks to the skills of our students and the relationships with companies and institutions, is constantly committed to ensuring that Italian engineering obtains important results outside the borders. Therefore,

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ENTREPRENEURIAL INTELLIGENCE MADE IN ITALY we are happy to welcome a person here who - having founded his first company at 19 - remains a source of inspiration for our young engineers”.

“In our opinion - continued Resta - one of Fabrizio's merits is having driven forward these principles, believing in the development of human capital as a competitive advantage. His business vision is based on the importance of technology and innovation but recognizes the value and skills of individuals as a winning factor. We are often grateful to those who are committed to representing our country in the world, with products and original skills. Valuing Italian engineering abroad is the task for Made in Italy ambassadors, and it makes us, Politecnico University, proud of the work we do”.

“Laudatio” by Professor Maurizio Masi (Department of Chemistry, Materials and Chemical Engineering) demonstrates how the degree “Honoris causa” to the engineer Di Amato is not just a prize, but a shared and convinced choice and of the university professorship. “Engineer has two roots: the Latin one that connects it to the ingenuity, and the Anglo-Saxon one that binds it to the engine. A true engineer is homo faber par excellence and must combine the two meanings. His task is to change the world around him to adapt and, with the best intentions, improve it according to its needs. If necessary, his hands get dirty, they shape and modify what they find, plan, build, experiment, bringing variations and improvements over time. These characteristics fit perfectly with Fabrizio Di Amato, a successful Italian entrepreneur. His results are not a product of fortune or family inheritance, but of a hard work commitment, always aimed at innovation and respect for the environment”.

Final words are read by Professor Giovanni Lozza, Dean of the School of Industrial Engineering and Information: “With this honorary degree in Chemical Engineering to the Knight Fabrizio Di Amato, our University can give an example to the students of an entrepreneur passionately dedicated to his work, who since his young age has had to assume great responsibilities, who has always been adaptive to the new market conditions with his readiness to look forward, without fear of growing”.

Twenty-five minutes of Lectio Magistralis (“The construction of the Maire Tecnimont industrial group: chemical engineering Made in Italy projected into the new energy scenario”) during which he spoke of the fundamental steps that led him to be awarded with such a prestigious recognition. Fabrizio Di Amato told his personal story, full of entrepreneurial attitude and characteristic episodes linked to those decades of great development for Italian industry and engineering. “A story of intelligence and skills put to good use - explained Di Amato - in a country scarce in natural resources, but abundant in human resources. If I think back, I remember starting as an outsider, in an industry dominated by historical companies and consolidated businesses”. For the young entrepreneur it was important to go where other operators did not: looking for new scenarios, creating new market spaces. Looking for the so-called 'blue oceans', i.e. those territories that do not yet exist from the point of view of business development. “In the 1990s great changes give us a hand: the market is shaking, and new spaces are opening up for us. The so-called 'creative destruction', as economists say. The history of acquisitions starts, choosing the companies for their skills and qualities of people. Meritocracy, the recognition of talent has always been a fundamental value for me”.

In 2000s, Fabrizio Di Amato - whose company in the meantime had reached 20 million turnover and 400 employees - choose to change strategy, deciding to invest and focus on competences.

The acquisition of Fiat Engineering first and Tecnimont then reach the objective to develop their great unexpressed potentials, and the international profile of these companies. “Integrating Fiat Engineering and Tecnimont was a real injection of trust and entrepreneurial energy, to the benefit of companies not used to competition. Turning them into entities capable of competing on the market, we embarked on a course to excellence, as general contractor, to manage increasingly important and complex projects all over the world”.

“Maire Tecnimont - Di Amato concluded - thanks to this integration is today a world leader with an approach that focuses on talent and entrepreneurship, in continuous collaboration with universities. This, we know, is the era of a new revolution: the world of hydrocarbons is changing, the environmental issue is a global challenge, and Italy can play a role as a world leader, both in traditional chemistry and in green technologies. The answer to change is, once again, putting our greatest resource at the center: the intelligence. Our goal as an Industry, a University, a whole Society, is the creation of an environment, of a great House that generates and welcomes the new Giulio Natta and gives them the opportunity to make a difference in the challenges of today's and tomorrow's chemistry”.

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16

THE ADAPTIVENESS THAT MAKES

YOU WIN

n the industrial vision of Maire Tecnimont Group, being “Adaptive” does not mean reacting passively to change, nor modifying the strategies in a defensive way just to fend off a blow coming from the market. To Be Adaptive means to conceive individual challenges as an opportunity for growth and a moment of positive reprogramming. A lever for innovation, remodeling the path that leads a multinational company to important and profitable goals.

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The numbers do not tell everything, but they tell a lot. In 2017, the turnover and profitability growth of the Group led by Fabrizio Di Amato and Pierroberto Folgiero (50 companies in 40 countries worldwide) testified to the effectiveness of a company strategy that started long ago. In a sector - that of hydrocarbons - sensitive to geopolitical tensions and global demand for typical goods of advanced societies.

Re-reading the 10 year history of Maire Tecnimont from the moment of its listing in 2007 till today, we will discover that the company's growth has always been linked focused on technology, engineering competences and the research of new Blue Oceans, also geography-wise. Three pillars whose complexity, also intended as the ability to face impossible businesses and go beyond the comfort zone, is our bread and butter.

“Maire Tecnimont has inherited the great tradition of petrochemistry of Giulio Natta, the Nobel Prize winner for chemistry and

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MAIRE TECNIMONT CEO PIERROBERTO FOLGIERO TELLS ABOUT THE INDUSTRIAL EVOLUTION OF THE GROUP. LOOKING AT THE DNA THAT HAS DRIVEN GROWTH, THE BLUE OCEAN STRATEGIES AND NEW MARKET PROSPECTS.

inventor of polypropylene - explains CEO Pierroberto Folgiero - a historical DNA that we have put at the center as a constituent value. This engineering excellence, which has never been a simple element of self-referentiality or conservatism, was to be joined with other DNA genes, innovation and technology that in combination would make, metaphorically speaking, the organism stronger”.

Such a contribution came from the acquisition of Stamicarbon in 2009 (which made it possible to achieve world leadership in fertilizer technology) and KT Kinetics Technology in 2010 (which expanded and strengthened our presence in gas treatment market as well as in refining units, such as sulfur and hydrogen plants). “Being re-focused on technology - continues Folgiero - was a winning strategy which enabled us to leverage those distinctive competences which had characterized internationally Tecnimont as an excellence since its foundation”.

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FINANCIAL DATA

17

FY 2017 Results Revenues

Backlog in €mn

in €mn

4,000

3,524

3,500 3,000

8,000 7,000

7,229 6,893

6,516

6,000

2,435

2,500 2,000

5,000 4,000

1,670

1,500

3,000

1,000

2,000

500

1,000

0

2015

2016

0

2017

2015

Consolidated Net Income

2016

2017

EBITDA

in €mn

140

126.6

120 100

in €mn

250

85

80 60

150

49*

40

100

20

50

0

193.5

200

2015

2016

2017

0

*Restated applying the normalized 2015 tax rate of 36.7%

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160 131

2015

2016

2017

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18

Who is afraid of Business Disruption?

Recently Vittorio Bo - editor and director of the Genoa Science Festival - explained how in the last three hundred years the technique has produced fundamental and extraordinary changes that have allowed us to expand our life models and to process the matter by means of technology. “Man - Bo wrote - was not the only creature to evolve, the solitary genius. But in science and in art, every discovery and innovation are the result of a process of continuous creative accumulation and exchange of knowledge”.

Making a scientific parallel, this tells us the timeline of Maire Tecnimont: its altered DNA acted as “business disruption”, as an element of discontinuity that forces towards new business models due to the disappearance of entire sectors and the distortion of traditional competitive logics. “Our people - explains Folgiero live the business disruption of the sector as an opportunity to demonstrate to themselves and to the market their leadership”.

With a strong entrepreneurial spirit, and in line with the Blue Ocean strategy (best-seller written by W. Chan Kim and Renée Mauborgne), Maire Tecnimont realized that to be competitive in a rapidly evolving market, one must first integrate the different technological leaderships acquired. “But we also needed a financial discipline - continues Folgiero - a third ingredient that allowed the other two to consolidate. In a business model like ours, to be at the same time technological leaders (in competition with Japanese and German) and cost leaders (in competition with Koreans and Chinese), to bring together innovation and competitiveness, a financial matrix was needed to help us succeed on both fronts. A financial strategy to enter as a leader the so-called Blue Oceans in remote geographies. Once in the classic strategy manuals it was written that differentiation (technological in our case) lets you have a price premium compared to the cost leaders; as if the two things were necessarily incompatible. Today it no longer works this way: today you must be the best and at the same time the most competitive. Indeed, in the process of evolution if you are the best sooner or later you will also become the most competitive”. Numbers that allowed the Group to close 2017 with revenues of 3.5 billion euros, +44.7% year on year.

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SMART

AND GREEN FUTURE “Operating as raw material processing company in downstream and petrochemicals - continues the CEO - the factors that drive our business will continue to be linked to the global demand for polyethylene and polypropylene. But from the “Be Adaptive” perspective, and with the tendency to reduce the markets linked to sources of fossil origin, together with the continuous investments in digital technology, we will work hard on what I call raw material adjacencies. Among these are the sectors of biochemistry and bioplastics, the so-called Green Chemistry, which represents a sort of Blue Ocean, where we can assert our resourcefulness in innovation and the ability to anticipate demand”.

Maire Tecnimont looks with strategic interest into the production of renewable energy. With the worldwide growth of unconventional source power generation, we need large companies that can manage logistical complexities and design plants with green energy technologies. Qualities that the Group has consolidated over the years, anticipating market trends and investing relentlessly in research and acquisition of patents.

Smart future, then? Certainly, in the name of innovation, both in business as we have seen and in human resources management, which have become the focus of the transformation project related to Smart Working (discussed on the next pages). Folgiero says: “Despite the crisis in the sector, our Group went against the trend and hired about 2,500 people. We continue to think that the strength of our company is its people, their competence and in attitude to the challenge. As a multinational contractor we export our “ingenuity”, a product of a century-old Italian tradition. But in an evolved model, even the working system had to innovate, using the IT leverage and

new type of work organization. Workplace it is no longer a place where you just have to go every morning. We have thought of a smarter solution when everyone should work in the right place to achieve the best results, be it a site, a supplier’s workshop or a co-working desk. It is a cultural change that at first glance rethinks and optimizes our spaces, but in reality, implies a new way of working focused on breaking down the team's objectives into tasks, to be carried out from time to time in a potentially different location. I expect that a model of this type will also increase our productivity given the multi-geographic and extremely dynamic context in which we operate”.

When the companies of the third millennium become agile and “open”, the old school managers will resist. Those are nicknamed

by Folgiero 'delay elements'. “There is always a good reason not to do something new and different. Conservatism is often passed off as wisdom. Resistance to smart working is a good example”.

“There are two types of “delay elements” opposing smart working says Folgiero smiling - Romantics, who are convinced that human warmth is always essential to stimulate creativity, and therefore people cannot do without physical contact with other people. And Cynics, who do not trust the filters of technology and prefer to always have the employee nearby. In reality, smart working will provide the right place for a specific activity from time to time and increase physical contact with the person involved in that work, thanks to IT links to own dematerialized desk”.

Thinking back to the Blue Ocean strategies, we know that by 2020 more than a third of today’s skills considered important will change. The so-called Fourth Industrial Revolution is considered by experts not as a simple improvement of technology and automation, but a real 360-degree rethinking of the way of working. Some of the trades we know today will disappear, some will grow and some that today do not even exist will become commonplace. What is certain is that, to sustain this real leap into the future, the workforce will need to align the so-called skillset to keep up. In a word, always be more “Adaptive”.

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(SMART) WORKING IN PROGRESS

THE RECENT RESEARCH OF THE POLITECNICO DI MILANO DESCRIBES THE DISSEMINATION OF THE PHENOMENON IN OUR COUNTRY. A COMPOSITE FRAMEWORK, WHERE BIG COMPANIES, SMES AND PAS RUNS VERY DIFFERENT STREETS, EMERGES. his is confirmed by the results of the research Smart Working: under the iceberg tip, created by the Smart Working Observatories of the School of Management of the Politecnico di Milano. The Agile Work in Italy records an important increase. In fact, the number of smart workers in our Country is constantly growing.

More and more people enjoy considerable discretion in defining their working methods, in terms of place, time and tools used. And the data collected by the Observatories - now in its sixth year of activity - and presented in Milan during a conference at the Bovisa Campus, are clear: in 2017 there was an increase in smart workers of 14% compared to 2016 and of 60% compared to 2013. Overall, 305 thousand agile workers can be estimated in Italy.

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The Politecnico di Milano, which monitored the evolution of the phenomenon in Italy through direct comparison with the main corporate actors (IT and HR managers) and institutional interlocutors (PA), describes

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a rather complex situation. Smart working in Italy increases significantly in large companies, where in 36% of cases is, in fact, an already structured reality. On the other hand, in medium and small businesses it is still struggling to get a share: even 40% of them are not interested in the phenomenon. Finally, in the Public Administration something is changing: if today only 5% of public administrations present structured smart working projects (and 4% implements it in an unstructured way), 48% of the sample declares, in any case, a strong interest in its introduction.

Yet the potential economic and social benefits are enormous: the implementation of a “mature” model of smart working would lead to an increase in productivity at the level of the Country system of €13.7 billion overall. For workers, even a single day a week of remote working could save an average of 40 hours per year of travel; for the environment, on the other hand, it would result in a reduction in emissions of 135 kilograms of CO2 per year.

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PROF. MARIANO

CORSO: “2018 WILL BE THE YEAR OF TRUTH” Mariano Corso, Scientific Director of the Smart Working Observatories of the School of Management of the Politecnico di Milano, highlights the most important results of the latest published research: “Often only some aspects of smart working are emphasized, namely, those that make up the iceberg tip. Indeed, smart working is not limited to working remotely, to the flexibility of working hours, to setting up new common spaces in offices or in technological innovation. There is a world to discover made of results, goals and benefits: for example, smart workers record a productivity increase of 15%, a greater commitment and engagement, a newfound balance between professional and private life; for companies, there is an optimization of workspaces and related costs of 30%, the development of new modes of leadership, a strengthening of employer branding and the ability to attract talent. Above all, smart working can drive companies towards a culture focused on results and meritocracy, thus banning forms of counter-productive control and presentialism”.

But today research estimates that only 9% of large Italian companies believe they have achieved this ambitious goal. Yet the advantages are for everyone, as Mr. Corso states: “There are currently over 305,000 smart workers in Italy, but there are at least 5 million workers whose jobs would allow this model to be implemented, with significant increases in productivity and positive effects on private life and society”.

None excluded, the expert warns: “2017 was an important year because the regulatory framework was clarified with the Agile Working Law, thus removing alibis from those who believed that the legal requirements for the application of this model were missing. 2018 will be the year of truth because we will understand if smart working can finally be applied also to Public Administrations”. Mr. Corso concludes with a suggestion: “To really promote the spread in the public sector, and above all to reap the maximum benefit, it is necessary to accompany the change with support to public managers in order to assist them in reasoning by processes, thus identifying performance indicators and managing and evaluating employees based on goals”.

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THE

AGILITY

THAT BRINGS

RESULTS or many people managing part of the work, meetings and professional relationships remotely is now a daily procedure. But, based a more careful analysis, smart working is a phenomenon that could have a strong impact on the issue of equal opportunities. Monica Parrella, General Manager of the Presidency of the Council of Ministers and Coordinator of the “Agile Work Project for the future of the PAs” is convinced of the above and explained the reasons to the Politecnico during the conference Smart Working: under the iceberg tip. “Smart working in Public Administrations can pave the way for real gender equality: data in the private sector report us that - even more than women with family commitments (as previously happened for part-time jobs) - men are mainly interested in the smart working phenomenon.

Changing the work organization, no longer linked to mere presence at the office, rewards the logic of the result, wherever and whenever it occurs”.

F

Maurizio Di Fonzo, Director of Human Resources, Organization and Change Management of AXA Italia, agrees with this vision. After a pilot phase, for more than a year the insurance group has made it possible to work remotely up to two days a week for 1,400 employees (94% of the total in Italy). “Some episodes of the history of AXA Italia demonstrate how smart working is a formidable accelerator of a corporate cultural change. An example?

During the refurbishment of the Rome office, which had a single canteen reserved for managers, we decided to reconfigure the offices in Rome and Milan (with “gastronomic islands” for specific food needs) and implement a strong investment in technology to enable employees to work remotely”. But what has changed is the top management’s approach to working activities, Mr. Di Fonzo emphasizes: “Today everyone works in open space, even the CEO has no office. There are no plates on the doors,

FROM THE PLANS IN THE BIG COMPANIES TO THE NEW PA PROJECTS. but only the pleasure of working together. Which are the results? 97% of people say they are happy to be part of a company with this philosophy, two-thirds claim to have increased their engagement with AXA. Many people reject more paid job offers from companies where there is no smart working. What about the bosses? All agree in recording an increase in productivity: people are more oriented to make their own contribution, to think as entrepreneurs of themselves”.

In line with these results also Giacomo Piantoni, Human Resources Director of the Nestlé Italia Group. “We took the first steps with the flexible schedule, part-time and remote work. Then, in 2011 the first stage of smart working was executed, although at the beginning the managers were worried about not physically seeing people. Since 2013, we have implemented a system of autonomous management of working time, with free and unmatched timings. In addition to benefits in terms of engagement and costs, the culture of the leadership model has changed (the result is important, not the hours worked) and the relationship between the boss and employee: instead of the old 'command and control', the manager must establish a climate of trust, develop delegation skills and generate entrepreneurship and a sense of responsibility. On the other hand, the world changes quickly and solutions must be taken with the contribution and ideas of all, no longer suggested from above.

If the manager is opposing, it turns into a boomerang for the company that professes smart working!”.

“The development of smart working technology - Enrico Miolo, Cisco's smart working initiative leader, concludes - is also helping Italian small and medium-sized manufacturing companies to manage work quickly and save on processes. Thanks to technological innovations, everything becomes extremely smart: meetings, training, relationships with customers as well as the production chain”. A new way of working that makes proselytes and will increase in the future the number of companies adhering to the smart working philosophy.

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Under the ICEBERG tip Digital Technologies

Working remotely

Rethinking of spaces

Time flexibility

Productivity

Space optimization

Leadership style

Employer Branding

Conciliation

Valorization of talents

Engagement Digital skills development

Inclusivity and social sustainability

Business continuity

Environmental sustainability

Result Based Culture

Female leadership

Meritocracy

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BE

ADAPTIVE BE SMART!

or a group like Maire Tecnimont, which belongs to a traditional industry sector, rethinking processes, spaces and behaviours in a smart working key is even more competitive than in digital companies, but it represents a new and wider opportunity for aggregation and involvement for the community”.

Maire Tecnimont Group CEO Pierroberto Folgiero of, introduced the “Be Adaptive, Be Smart!” event, during which - in the presence of the Mayor of the city, Giuseppe Sala - talks were made on smart working in Milan, on Maire Tecnimont’s project and the MEETinG space, the new hub dedicated to co-working that is emerging within the Garibaldi Towers, the Group's headquarters.

"F

“Personally, I have always worked in smart working”, Fabrizio Di Amato, Maire Tecnimont Chairman, said. “Today that technology allows it, there is the desire to extend this approach to our organization. We want to be pioneers and exploit its full potential: in my entrepreneurial vision, the relationship with people has always been essential. Working to achieve certain results is the method to be more empowered and at the same time to have more flexibility in managing time and the workplace”.

Many topics were discussed in the roundtable involving Ferruccio Resta, Rector of Politecnico di Milano, Alessandro Spada, Vice President of Assolombarda, Silvia Candiani, Managing Director of Microsoft Italy, andy Fabio Benasso, President and AD Accenture Italia. As the Rector Resta underlined, “the real challenge is for SMEs and for the Public Administrations. Human capital is essential for the success of companies: skilled workers will be increasingly attracted not only by economic conditions but also by a comfortable working environment”.

Silvia Candiani said she was “happy to support Maire Tecnimont in its path of innovation, according to a new way of working that responds to the need to adapt to the challenges of the market”. Illustrating the activities inside Microsoft, Mrs. Candiani has confirmed that smart working reinforces results orientation, helps spreading the culture of trust and increases the collaborative attitude among people.

The support on the topic comes, as well as from Fabio Benasso (“The big companies, which already begin to be structured in this sense, have understood that it is not just about adopting tools and technologies, but operating an organizational and cultural change”),

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SMART WORKING TESTIMONIALS, NUMBERS AND STRATEGIES. THE TOP MANAGEMENT OF MAIRE TECNIMONT PRESENTS TO THE MAYOR OF MILAN, GIUSEPPE SALA, THE MEETING SPACE, THE NEW HUB DEDICATED TO CO-WORKING.

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also from Assolombarda: “Being aware of the positive impact of smart working” Alessandro Spada said, “we started a service to support member companies: in less than a year we have supported more than eighty of them”.

Looking at the big picture, Pierroberto Folgiero explained that the Engineering and Contracting sector represents an excellent experimental laboratory to face the challenges of the Digital Revolution. “Historically, the figure of the engineer has preceded the times: in our business, he/she has always followed the whole process of implementing the plant, going beyond the simple boundaries of the office space, in order to go to the places necessary for his/her task. These projects are carried only thanks to a great commitment of cooperation, flexibility and variability of place and time”.

According to the CEO of Maire Tecnimont, Smart Working “combines the needs of productivity and business profitability, thus empowering people, making them feel accomplished from a personal and professional point of view. In our opinion, smart working is not remote working, but a tool to foster meritocracy and to further increase the diffusion of corporate Mottos, focused on trust, work to achieve objectives and a new balance between professional and personal life. On top of that, we should not neglect the remarkable results obtained with regard to the reduction of fixed costs the benefits for environmental sustainability”.

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MAIRE TECNIMONT FOR MILAN

o redefine the working model, Maire Tecnimont has redesigned spaces and technologies from a multi-media and multi-functional point of view.

Also the structure of the Milan headquarters, inside the Garibaldi Towers, has adapted to the change, starting from the layout of the common areas (the canteen and the hall) to a new design of individual workstations. What is the goal? Creating a context that helps people feeling in the “right and most suitable” place to carry out the tasks entrusted them.

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Presenting the smart working project and the new “MEETinG” hub to the Mayor Giuseppe Sala, Chairman

Fabrizio Di Amato recalled how the clients of the Group visiting Milan appreciate the city for the European atmosphere, the efficiency of the services, the artistic and cultural offer as well as the courageous choices in terms of sustainability and smart city. “Transforming our spaces - Di Amato said - means a greater involvement of the citizens of Milan. This is why we provide a space open to the territory, a hub of exchange, business and culture. We are ready to share our experience, our skills and our spaces with the city of Milan, the ideal place to grow a new culture of work”.

The canteen will no longer be the space dedicated exclusively to lunchtime, but it becomes a real meeting place, an even more welcoming environment that fosters sharing ideas and exchanging views, with more than 500 seats and five multimedia meeting rooms. The entire Hall of the complex of about 1,200 square meters

From the left: Fabrizio Di Amato, Giuseppe Sala, Ferruccio Resta and Pierroberto Folgiero

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is transformed into the “MEETinG” (Maire Tecnimont Hub Garibaldi), a co-working space, events and thematic activities open to the city, with more than 200 workstations and meeting areas, in an environment that fosters the exchange of ideas.

“Our city - the Mayor Sala has commented - evolves more and more in an innovative and sustainable way. We are ready for this transformation, also thanks to Maire Tecnimont and other companies that demonstrate how smart working is making an important leap in quality”.

In short, the project launched by Maire Tecnimont will progressively involve the 1,800 employees of the Milan offices, for a total investment of five million EUR in two years for technological adaptations, structural interventions and training. Over five thousand hours of training and coaching will spread the managerial culture and promote a work philosophy based on defining goals, evaluating performance and sharing feedback.

27

THE MAIRE

TECNIMONT JOURNEY TOWARDS SMART WORKING It’s called smart working, Italian Law number 81 of 2017 has recently disciplined it as Agile Working but Franco Ghiringhelli believes it should be called simply “working”. Thus, Maire Tecnimont HR, Organization and ICT Senior VP opened his speech. “While I was waiting for this event to start, I managed a series of emails through my smartphone, set new meetings, authorized transfers, checked delivery times of on-line orders. As a matter of fact, I worked: here is the true essence of the technological revolution. It is viral. It has affected all of us without distinction, involving all generations in the companies”.

Maire Tecnimont's decision to introduce of smart working, with the launch of the “BE ADAPTIVE! - Think Tank”, was born from the awareness of an irreversible process already underway: the Group immediately involved its employees as real protagonists of the transformation of the work organization model. The proposed initiative offered employees the opportunity to present, either alone or in groups, a business case related to the introduction of smart working at the Group's Milan offices. With the participation of over 150 colleagues and the presentation of 58 business cases, it was the first real confirmation of the quality of the approach implemented and its effectiveness in involving and engaging people in the process of transformation undertaken.

The projects were analyzed by an Evaluation Board, which was also attended by the Smart Working Observatories of the Politecnico di Milano; the five best proposals were rewarded with an economic award and the process of implementation in the company was started.

Ghiringhelli concludes: “The relationship with the trade unions has also been based on different logics, no longer limited to standardizing working hours, but aimed at greater accountability. This led to an innovative trade union agreement, with an extensive application of the recent legislation on Smart Working. In fact, the smart workers can work from the place they consider most effective for their work and, based on a schedule agreed with their manager, spend at the headquarters even just one day a week, in order to ensure continuity in interacting and sharing ideas with colleagues, thus avoiding losing contact with the company organization”.

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THE RIGHT

WORKPLACE “Our headquarters have also adapted to the logic of smart working. The spaces have been redesigned on a multimedia and multifunctional basis”.

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Massimo Rosi - CAE systems Department

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“Smart working is an opportunity to improve the planning of working activities and motivate employees. Empowered employees increase efficiency thanks to the possibility of reconciling work and private life”.

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“Digital evolution cancels distances: the use of information systems guarantees inclusion and redefines the concept of office.

There are no more physical places, but virtual collaboration spaces”.

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Stefano Sgarlata - ICT Department

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Laura Zucca - Procurement Department, Orpic Oman task force

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“Smart Working can pave the way for real gender equality in the work world. Changing the organization means rewarding the logic of the result”.

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“The new MEETinG hub is a space open to the territory to exchange ideas and let a new culture of work grow.

It’s a step towards the smart city of the future in a European key”.

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38

THE DISCONTINUITY

SUSTAINABLE BUSINESS

OF

WHEN, IN WHICH MODE AND HOW SUSTAINABILITY HAS CHANGED THE COMPANY STRATEGIES IN THE INTERVIEW WITH MARCO FREY, THE PRESIDENT OF THE GLOBAL COMPACT NETWORK ITALIA

Who is Marco Frey?

Born in 1961, Marco Frey graduated in 1986 in Economic and Social Disciplines at the Università Bocconi of Milan. In 2000, he won the Eisenhower Exchange Fellowships. He is Regular Professor of Economics and Business Management, Director of the research group on sustainability (SuM) of the Sant’Anna University in Pisa and Director of Research at IEFE (Institute of Economics and Energy and Environmental Policy). He is the President of the Global Compact Network Italy Foundation and of Cittadinanzattiva, a non-profit organization for civic participation and the protection of citizens' rights.

propose that you, the business leaders gathered in Davos, and we, the United Nations, initiate a Global Pact of shared values and principles, which will give a human face to the global market”. It was 31 January 1999 when Kofi Annan, Secretary-General of the United Nations, addressed these words to the political and economic world Gotha at the World Economic Forum in Davos, Switzerland. It was the first official invitation to the leaders of the economy to sign a “Global Pact” with the UN to tackle the most critical aspects of globalization. “This event marks an international watershed in terms of sustainability - Marco Frey, President of the Global Compact Network Italy (GCNI), says - The UN calls for a pact for a more sustainable economic development model, addressing directly to the business community”.

"I

The proposal was accepted and in 2001 the Global Compact, an initiative to promote the culture of corporate citizenship, managed on a global scale by the United Nations, was born. “Over time the focus on sustainability is growing more and more - Frey continues - as the so-called Rio+20 Conference demonstrates in 2012: here the presence of the business world figures becomes significant, with three thousand participants actively participating, presenting commitments and positive experiences”. The Paris Agreement on climate change of 2015 saw an increased participation too, with a significant process of joining companies to the 2030 Agenda that set the 17 Millennium Goals. And on the reason for the request to increase companies’ involvement in comparison to institutional actors, the GCNI Chairman has no doubts: “It's a necessity, since institutions alone cannot do it”.

“Today, we have reached the point that sustainability deeply affects the competitive choices of a company” - Professor Frey, who identifies the reason for this tendency in sensitivity that has developed on the theme of sustainable development by all the actors, whether they are consumers or other companies that request products and services, assures. On top of that,

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SUSTAINABILITY | EVOLVE

THE

FIRST MAIRE TECNIMONT SUSTAINABILITY REPORT

we should not underestimate the dynamics triggered by the sustainable choices of the competitors and the authoritative appeal of the United Nations internationally. “Practically, sustainability becomes a way of declining a model of economic development that is now considered necessary”.

Let's try to understand how sustainability can influence a company's strategy with the help of the President of the Global Compact Network Italy. “Today, the companies’ capability to adapt to the challenge of sustainability means changing business models. On the one hand we have new operators who are born with business models built specifically to meet this challenge: it is the case of companies like TESLA that is no longer just a manufacturer of electric cars, but it’s also involved in renewable energy to power its cars. On the other hand, these are simple transformations of business models by companies operating in traditional sectors: for example, in the energy sector the most sensational case is that of Erg, which has completely abandoned the traditional sector of Oil&Gas to engage in renewables”.

The matter becomes more complex especially for large companies that decide to be sustainable in the many countries in which they operate: “In this case - the expert specifies - companies try to apply business models that are homogeneous, but we must take into account the peculiarities and needs of different territorial contexts. This is an interesting and very complex challenge, because in the developing countries, social dimension of sustainability is involved and becomes an essential condition”.

Finally, there is a third element that, according to Professor Frey, companies should never underestimate: “Sustainability is combined with innovation: the ability to be adaptable to the dynamics of market evolution passes through the ability to combine innovation and sustainability. Many studies and researchers, such as UnionCamere's Green Italy, show that there is a close correlation between three factors: sustainability, innovation and internationalization, i.e. the ability to be globally competitive”.

Creating Value is the title of the Sustainability Report for 2017 approved by our Group, a document that shows the complexity of our commitment to sustainability for the first time in a comprehensive manner, both as a creator and as a distributor of value in different geographical areas. We are aware that our role as general contractor with a highly technological DNA enables us to have an impact on the areas in which we operate. The Sustainability Report prepared according to the guidelines of the Global Reporting Initiative (GRI), the most advanced international standard, provides a precise picture of the key role we can play in these environments, thus offering not only high-level services to our customers but also opportunities for local development.

The Report is an opportunity to recount and document the way in which the values and principles of social and environmental responsibility are developed in the Group's business model.

Based on our business activities, the document identifies the Sustainable Development Goals (SDG) to which Maire Tecnimont can contribute the most, thus explaining the involvement of each Group company and monitoring the results through specific KPIs. The Report aims at establishing a constant dialogue that fosters trust, creates mutual value and supports the sustainable growth of the Group's business in line with stakeholders' expectations, carefully identified and mapped in the document.

The Report, divided into seven chapters, addresses several topics: Our Corporate Identity, Sustainability at Maire Tecnimont, Governance and Ethics, People at the Center, Technology, Development and R&D, Creating sustainable value, Importance and Value of our HSE Policy.

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39

EVOLVE | TERRITORIES

40

AMURSKI, ON THE BORDER BETWEEN RUSSIA AND CHINA

real Russian gas highway to China, a country which is increasingly oriented towards energy sources other than coal.

In the next few years, in the Amur region (Russian Far East) Maire Tecnimont, leading a consortium with the Chinese company Sinopec, will implement a plant able to treat the gas and route it in the pipelines directed to China.

A

In addition to its economic dimension (the 3.9 billion EUR agreement is the largest in the Group's history), the project is important for its location: the company managed by Fabrizio Di Amato and Pierroberto Folgiero will be the only Italian company operating in that corner of Asian Russia. “We have been selected for the deep knowledge of the Russian market - Chairman Di Amato explains - along with our engineering and construction capabilities in complex areas. We are perceived as an international company with strong local roots”. The contract entered into with the Gazprom group includes, in fact, detailed engineering, procurement, construction, pre-commissioning, and commissioning of utilities, off-sites and infrastructures.

Russia

FOR GAZPROM, THE MAIRE TECNIMONT GROUP IS EXECUTING A 3.9 BILLION EUR CONTRACT FOR THE TREATMENT OF GAS IN FAR EASTERN ASIA. However, the real news is represented by the dimensions of the project and its numbers. Pierroberto Folgiero says: “The Amursky plant (whose site measures 850 hectares) will be built near the town of Svobodny, in the Amur region, and will be the largest gas treatment plant in the world with a capacity of 42 billion cubic meters per year, which, once extracted, will be used to produce fuels, fertilizers and plastics”.

The project task force will include more than 900 engineers from different disciplines, employed in 17 operating centers distributed over 10time zones, from Milan to Mumbai, from Moscow to Ningbo (China). 12 design institutes will also be involved, from St. Petersburg to Blagovenschensk and to the Svobodny site. These elements make you understand the level of challenge faced by the of Maire Tecnimont’s management, working in Amurski with a project characterized by large numbers.

During the construction of the plant, approximately sixteen thousand people involved in the project will populate a sort of city-campsite with extreme problems in terms of logistics and supply: the temperatures according to the seasons can fluctuate from -40 degrees to +40 in summer. The area is completely surrounded by the Siberian tundra for thousands of kilometers and Moscow is nine hours and six different time zones away.

In addition to this, a key topic is the transportation of materials (record quantities compared to any plant built in the past by Maire Tecnimont), which are organized logistically, delivered by different means of transport, challenging extreme climatic conditions that slow down shipping time. In short, a really extreme challenge, which commits the Group to an unprecedented planning and management effort. “An adventure - Pierroberto Folgiero concludes - from which we come out with great tenacity, focusing on the goal and sense of belonging to a mission that remains impossible only in the mind of those who do not have the courage to confront their own limits”.

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TERRITORIES | EVOLVE

NEGOTIATE

WITHOUT PREJUDICE

INTERVIEW WITH MARIA SELLI, TECNIMONT PROJECT DIRECTOR. “THE KEY WORD WHEN INTERACTING WITH THE RUSSIANS IS PERSISTENCE”. o you know that Russian managers prefer not to shake hands on the door of a meeting room because it is considered a bad omen? Has someone told you that people speak hierarchically in the meetings: first the CEO, then gradually all the others? And has someone told you that it is not appropriate to take off your jacket during the negotiations?

D

Reconstructing the codes of communication between a Westerner or rather an Italian and a Russian is not so simple in a Country divided between tradition and innovation, between formal and bureaucratic communication and the overwhelming advent of social networks, which in Russia have a very strong penetration. Many do not imagine that behind the scenes of a business with East-European contacts opens up a world of intercultural relations. In business negotiations, even those involving Russian managers who have studied at American and British universities, before arriving at a fluid

A long-lasting history Maire Tecnimont Group came to Russia in the 1930s, when the then Montecatini built one of the first Soviet ammonia plants based on its own technology. The presence in Russia was reinforced in the 60s and 80s thanks to the development of petrochemical plants, urea and fertilizers projects, and gas treatment plants. There are

N° 1 - MAY 2018

about 80 plants built in Russia and the Caspian Sea area altogether. In the last decade Maire Tecnimont has consolidated its market leadership thanks to a broad cooperation with local design institutes, component manufacturers and construction companies.

41

EVOLVE | TERRITORIES

42 It is necessary to in-depth know the culture and the habits of the counterparts

communication, the Italian interlocutor will perceive a sort of distance, an initial barrier. It would seem a formalism that hides distrust, but, indeed, we know that it is often the result of a different cultural approach, of different codes of behavior that must be analyzed previously and managed without collateral anxieties.

“The keyword is persistence”. says Maria Selli, Tecnimont Project Director for the new Amurski project, talking about the codes of communication required to conduct business negotiations in Russia. “We need to get to know the culture and habits of the interlocutors and present ourselves at the first meeting with particular attention to our style, with a sober and elegant appearance as well as punctuality, which is a sign of consideration and respect for a Russian”.

Understanding cultural differences is therefore essential to succeed in establishing solid interpersonal relationships with local partners. For the team of Maire Tecnimont, committed to sustained pace in the construction of the Amurski plant, is a key aspect to amalgamate a heterogeneous team at best, mainly made up of Russians, Italians and Chinese. “Through a targeted training project - Maria Selli continues - we are working in depth to help our people to accept the context in which they have to move and to understand how to act in a fluid way, without creating distrust”.

It is useful to arrive in another Country leaving behind the prejudices and stereotypes related to our way of thinking as well as our culture of reference. “The Russians - as well as Indians, Middle Easterners and any other community with whom we work together - are not exactly as we imagine them, as we have been used to seeing them in films or reading their stories in books. The training activity - Maria Selli explains - starts from common values when it comes to business. We exchange skills, strategic approaches and operational solutions. The Russians appreciate our origins and our

culture. They love the Italian way of life and the creativity that distinguishes us, always taking into account the geographical, linguistic and cultural difference”.

The experience of a multinational company, which every day interacts with engineers and technicians of half the world, brings out a fact: it helps us understanding that at least three quarters of the planet thinks very differently from us, the Westerners, accustomed to think and operate more in individual than in collective terms. “The language, the climate, the territory from which we come, the family and social context, the food we eat: these are all elements that support our convictions and contribute to form the communication modality with which we do business. Despite many years of international career, - Selli reveals I'm experimenting with different things with the Russians. I learned how to apply a hierarchical protocol, how to prepare the meetings so that everything takes place according to a preset script, like being on a theatrical stage. Some of us could see this as a fiction, but it is a mode of communication for Russians, a system to make you aware that the true understanding is first on a human level and only afterwards is based on numbers and projects”.

The behind the scenes of such a complex activity - such as the construction of a gas treatment plant, in the Far East, on the border with China - really put people to the test for climatic, geographical and linguistic aspects. Maria Selli concludes: “The difference is made by soft skills, the ability to adapt without being passive, thus reacting every minute to sudden news. It is not always possible to interact in English, but as I often say, this project is a fantastic test: despite running at supersonic speeds, once we reach the finish line important scenarios will open up for us. And we will be much richer culturally and humanly”.

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RELATIONS Look for a personal relationship and rely on the power of words, before putting the clauses of an agreement in writing. For the Russians it is important to build a live trust relationship, a direct face-to-face feeling.

With the Italians the feeling is almost always immediate and ease, with common arguments (hopes, fears, aspirations) and the pleasure of negotiating at the dinner table. Only then you will be ready to show written documents and contracts.

LANGUAGE or the benefit of what has been said above, there are some internationally valid rules that can help to face a meeting in the best way. Others, on the other hand, refer more specifically to the mentality and local culture that must be known for engaging in business relations with Russia.

F

PUNCTUALITY Being on time is always much appreciated. It is true that some cultures consider punctuality an essential factor while others are very flexible. But it is advisable to arrive at the established place about 15 minutes earlier because in Russia the company registration procedures are longer and more formal.

PERSISTENCE The Russian culture is a mix of European and Asian influences: this is why in the business the long negotiations and articulated confrontations are loved. As in the game of chess in which they are masters. Being skilled negotiators (and good at disguising real emotions and intentions) you need to be patient in speaking, listening and following all the steps proposed by the other party. Showing urgency in closing the discussion quickly is not appreciated.

It is preferable to be accompanied by a Russian native speaker who can guide the conversation and translate the communication. In meetings, the English language is obviously accepted but not obvious, if compared to other countries. Also, be ready to broaden the discussion at group level: that of the Russians is a story of shared responsibility, which can lead to theatrical attitudes and sudden changes in tone. A character trait that should not worry, because it belongs to the culture of the Russian people.

GOALS Clarity and precision. The Russians are very pragmatic and goal-oriented: it is useless to waste time in preambles or with sophisticated presentations. The business meeting must have a clear and well-defined value and purpose. It is better to immediately enter the heart of the business and explain the advantages of the collaboration. And if the Russian counterpart declares to be interested and ready for cooperation, for them it means “now”, within a week. Not in two months, when the business scenario could already be changed.

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TIPS FOR EFFECTIVE RELATIONSHIPS

TERRITORIES | EVOLVE

43

EVOLVE | MOTTOS

44

FROM THE CHANGE TO THE

CALL TO ARMS

I

n this issue of EVOLVE, we have repeatedly mentioned how, in the industrial field, innovation represents the ability to discover and unite resources not previously connected to each other. Speaking of the Blue Ocean strategies, we scrutinized the response to change, the adaptiveness in a proactive way.

We are delighted that the issue zero, released last December on the tenth anniversary of the listing, was welcomed with great interest. The intention of the editorial group is to use Evolve as a new communication channel of Maire Tecnimont Group to investigate “evolution” in a critical, theoretical and economic way.

But also, to better explain one by one the Mottos, the company “mantra” launched to accompany the ongoing turnaround.

FROM ADAPTIVENESS MOTTO TO THAT RECALLING AN ACTIVE ROLE IN ADOPTING NEW PARADIGMS. A THREAD THAT UNITES THE GROUP'S VALUES, LIKE THE DIFFERENT STEPS OF A JOURNEY TOWARDS THE FUTURE.

As we wrote last time, the Mottos have become the common heritage of the company, a sort of compass that inspires people's daily work. They became the expression of a corporate culture able to guide the work of leaders, managers and professionals at all levels.

The next issue will come out to address the topic “Ride the turnaround”, a sort of call to arms to become an active part in the change. As you know, ours is a complex business, based on the commitment of several components, both internal and external to the Group. The challenges, large design and build projects are won thanks to the contribution of a large and qualified supply chain, true partners focused on the final goal.

Maire Tecnimont applies a proactive strategy with its suppliers, using common resources to share risks and identify cost and time savings. As Pierroberto Folgiero, CEO, explained on several occasions, “today the market is constantly changing and requires new skills: from design to procurement, from construction to financing, to maintenance and specialized consultancy. For our Group, evolving towards a chain system means sharing the challenges for the sake of sustainable development”.

We will talk about this in the next issue of EVOLVE, with articles, interviews, photo reports and direct testimonies. For all of us the guideline will be “Master the change, be actively part of it!”.

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RIDE THE TURNAROUND!

The challenge of our Group: impeccably deliver our portfolio through operational and financial discipline.

Master the change, be actively part of it!

EVERY SINGLE DECISION COUNTS! Our work-success is the result of a thousand single choices made in the right sequence.

There is no time for procrastination.

Your contribution makes a difference!

BE ADAPTIVE!

Fast changes in the market create discontinuities while opening also opportunities to the most responsive players.

Agility is the key!

NOT JUST THE COMPANY, THIS IS YOUR COMPANY! Building together the success of our Group creates shared value to everyone.

Be entrepreneur in a network of entrepreneurs!

TAKE THE CHALLENGE!

Managing uncertainties is the core of our job…

As a sailor faces the sea every day.

Let the passion for results drive your actions!

STEP UP AND MAKE THINGS HAPPEN! Talk and listen directly to your colleagues. Sending an e-mail could not be a solution.

Let’s keep our doors open.

Beat the bureaucratic approach!

WE ARE RESILIENT!

Recovering quickly from drastic changes is part of our noble and precious DNA. We live in a tough environment, but adversity made us stronger.

Let’s capitalize on lessons learnt!

OUR TOMORROW IS NOW! These are extraordinary times.

If we stay focused on our corridor of growth we will be ready to build the next decade of Maire Tecnimont.

The floor is ours!

www.mairetecnimont.com