Driving our business forward through our three strategic priorities
Delivering operational excellence
We aim to be the safest, cleanest, most reliable, convenient and best value transport provider in the modes we operate
2019 performance
- Another year of record passenger numbers in UK coach and ALSA, with Group passenger journeys growing by 5.1%
- UK bus named the safest public transport company of all those the British Safety Council audited across the world
- First full year of no at-fault fatalities; we remain committed to the highest levels of safety, after launching our Target Zero campaign across all businesses in 2018
- All eligible businesses have EFQM1 five-star ratings; UK bus and coach re-awarded the British Safety Council Sword of Honour
- UK coach won a number of awards including the British Quality Foundation UK Excellence Award for commitment to excellence and continuous improvement
- ALSA was accredited with the AENOR Social Responsibility Certificate, recognising corporate social responsibility, good governance and continuous improvement
Future outlook
- Network reviews driving efficiency across UK and ALSA
- Development of on-demand services and multi-modal solutions
- Increased ancillary revenue drivers in UK and ALSA, as well as Charter and Charter School revenues in North America
- Further advances in partnership working to address common challenges and cement position as trusted partner
- Demonstrate environmental leadership
- Pledge to never buy a diesel bus in the UK again
- Lead the transition to zero emission coaches
- Ambition to be zero carbon emissions in UK bus by 2030 and in UK coach by 2035
- Mobilisation of third service on the RRX rail contract in Germany
Measuring our progress
We believe securing modal shift on to cleaner, greener and safer vehicles is both a social good and will drive further profits in passengers, profit and cash.
Metric: FWI2 and Carbon emissions reduction
Risks
Deployment of technology
We utilise technology to raise customer and safety standards, drive efficiencies in our business and facilitate growth
2019 performance
- New mobile websites and ticketing apps are driving higher online transactions, higher conversion rates and lowering costs
- Proportion of journeys through digital channels in UK bus increased to around two thirds; and up 7% to 45% in ALSA
- Our real-time RMS in ALSA and UK coach continue to grow revenue, passengers and yield
- Continued roll-out of Lytx DriveCam technology across ALSA, North America and UK, delivering a reduction in the number of collisions and associated costs
- Partnering and investing with local innovation hubs and universities to access new ideas and emerging technology
- All UK buses procured in 2019 were electric vehicles (EV)
- Autonomous vehicle trial in Spain
Future outlook
- Further optimisation and automation of RMS to drive incremental demand and higher fleet utilisation
- Increasing use of analytic software to enhance operations, driving safety and efficiency improvements
- Harnessing ideas from our innovation hubs and universities e.g. using AI and big data to redesign routes to optimise running times and driver hours
- Continuing enhancements to websites, apps and ticketless payment systems
- Completion of the roll-out of Lytx DriveCam; rolling out of a Driver Fatigue alert system in our coach operations
- Building technology platforms, capabilities and expertise to provide integrated transport solutions
- Ongoing development of multi-modal solutions and on-demand services
Measuring our progress
A rising proportion of sales transacted through our digital channels demonstrates that our customers value more convenient and faster ways to pay. At the same time, the transfer of transactions away from traditional ticket offices and third party sales agents to digital channels is driving operational efficiencies, reducing costs and increasing the opportunity for new commercial partnerships and revenue streams.
Metric: Passenger journeys
Risks
Growing our business through acquisitions and market diversification
We continue to grow our diversified, international portfolio of transport businesses through selective acquisitions and diversification into complementary markets
2019 performance
- We acquired nine businesses in the year, both in existing and complementary markets:
- Five in North America, including the significant acquisition of WeDriveU, providing entry into the fast-growing corporate shuttle market
- Three in ALSA, including new market entries into Aragon and the Canary Islands
- An accessible transport operator in the UK, providing entry into a new market
- Doubling the size of our business in Morocco with entry into two new large cities, Rabat and Casablanca
- Successful mobilisation of two services for the Rhine-Ruhr Express (RRX), in German Rail
Future outlook
- Further selective acquisitions, principally in North America and Spain
- Extending our offering into new regional markets and cities or building further scale in existing markets and cities
- Pioneer new ways to access transport with multi-modal services within big cities, providing complete mobility solutions, through integrated platforms
- Investments in assets that provide platforms for future growth
Measuring our progress
We maintain a disciplined approach to investing and target project returns well above our cost of capital, typically targeting returns of 15%. Across the business as a whole, disciplined allocation of capital is measured through a focus on ROCE, a key element of executive remuneration.
Metric: Return on Capital Employed ('ROCE')
Risks