Management review

It has been an exciting year of progress in all three divisions which has translated into a strong financial performance, particularly after absorbing increased fuel prices and substantial bidding costs for three UK rail franchises. Demand for our services has grown strongly across Europe in 2007, as demonstrated by the growth in our order book.

Higher demand goes hand in hand with increasing passenger expectations for safe, reliable and timely services. That challenge, shared between operators and transport authorities, is best met by working together to improve delivery, a challenge we are happy to meet.

As our transport networks spread across Europe, we are increasingly thinking and acting like a network organisation. When we enter a new market the accumulated learning and experience of our new colleagues is connected, not just to a central UK corporate base, but to every Arriva business in every country where we operate. Our passengers, our employees and our investors all now benefit from a web of relationships amongst our 40,000 people.

The transfer of best practice, the spread of innovation and the achievement of scale economies are no longer piped thinly between small, far-away outposts and a dominant, central UK hub. Today, a typical Arriva business development team, an engineering task force or a marketing project group speaks with many accents, is familiar with many European cultures, and can tap into a wealth of knowledge to respond to, and sometimes lead, a changing world.

Innovative real-time information systems pioneered in Denmark helped us win a contract in Sweden by showing how we can maintain trains more effectively, and are now being considered for use in the UK, whilst train maintenance best practice in Portugal has influenced the spread of efficient overnight maintenance across the group. Our experience using biodiesel in our Berlin bus and rail operations has increased our know-how for running buses in the UK and Portugal on biodiesel blends.

Whether in the form of better services, lower prices, improved customer satisfaction or a quicker payback on investment, the benefits of such cross-fertilisation flow to our passengers and tendering authority customers, to our employees, and to our investors.

We aim to be amongst the top three private operators wherever we work. Our strong financial results are built on a year of excellent operational performance across the group, and there is much to be pleased about in all three divisions.

Divisional results