Extended Covid-19 impact
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Economic conditions
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Political/ geopolitical/ regulatory landscape
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Brexit
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Potential impact
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Potential impact
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Potential impact
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Potential impact
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- Once restrictions are lifted and mobility recovers, there may be lasting implications such as residual fear of travelling on public transport; significantly less travel for shopping; or a material change in working patterns with more of our passengers working from home
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- Declining economic conditions potentially impact demand for discretionary travel
- Improving economic conditions may impact the Group’s ability to recruit drivers and other staff, or cause inflationary pressure on costs
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- Changes to government policy, funding regimes or the legal and regulatory framework may result in structural market changes or impact the Group’s operations in terms of reduced profitability, increased costs and/or a reduction in operational flexibility or efficiency
- Franchise renewal risk in Spain
- UK bus franchising or alternative models
- Financial or reputational cost of failure to comply with changing regulations or legislation
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- An economic downturn in the UK could adversely impact demand for our services
- Reduced travel volumes to/from UK airports could affect demand for our UK coach services
- Supply chain disruptions could result in respect of imports from the EU
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Management/mitigation
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Management/mitigation
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Management/mitigation
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Management/mitigation
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- Re-balance investment across our portfolio in the short term, e.g. less reliance on airport work
- Remain flexible to scale service up and an down in line with changing demand
- Continued focus on customer service, highlighting the benefits to society of quality public transport
- Relentlessly work with customers and staff to ensure safety is paramount
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- Geographical diversification of the Group provides a natural hedge to some economic risk
- Strategic plans are stress tested for differing economic and pandemic scenarios
- Strong strategic focus on people/talent management and recruitment/retention
- Delivery of excellence in service and operations
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- Constant monitoring of the political landscape and focus on effective stakeholder management
- Political risk is specifically considered when considering bids or new market entry
- The Group carries out appropriate lobbying and communication, highlighting especially the importance of public transport to central and local government
- Focus on operational excellence and delivering value in our franchises and contracts, and to our fare paying customers
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- Ongoing close monitoring of specific Brexit-related risk issues
- Geographical diversification reduces Group-level risk; exposure to the UK market is less than 25% of total revenue
- Supply chains risk assessed
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Opportunity
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Opportunity
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Opportunity
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Opportunity
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- The Group’s leadership positions in many diverse and attractive markets are likely to strengthen, as other operators are unable to withstand the impact of the pandemic
- When the world emerges out of the pandemic it will be confronted with the need to power an economic recovery with high quality, cleaner and greener public transport at its heart. The alternative is inefficient, congested towns and cities with dirty air.
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- Despite a generally unsettled and a deteriorating economic outlook due to the pandemic, private consumption and demand conditions for public transport, particularly urban, continue to be strong
- Higher unemployment rates relieve pressure on staff costs and turnover
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- Political and social pressure continues to grow on congestion and clean air, which favours public transportation
- Increasing city regulation and investment in bus and Bus Rapid Transit (BRT) schemes
- Continued liberalisation of markets in many territories
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Change in risk in the year
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Change in risk in the year
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Change in risk in the year
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Change in risk in the year
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- This is a new risk for 2020
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- Due to the pandemic, economic growth is expected to slow or even reverse in our major markets in the short to medium term
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- The Spanish franchise renewals process has paused and is the process is being reviewed
- Continued strengthening of our relationships with key political stakeholders and our reputation as a high quality, innovative partner
- Birmingham’s Draft Transport Plan is pro public transport, demonstrating the direction of travel amongst enlightened local authorities
- Significant support of public transport by governments during the pandemic
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- Whilst the achievement of a deal between the EU and the UK has eliminated much of the uncertainty, the full impact of the changes continues to create risks, albeit significantly more limited
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