Comparing the Different Types of Public Trains and rail Train Services

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2 1 Contents Contents Arriva's vision is to be recognised as the leading transport services organisation in Europe. We operate by a set of values that help us to deliver high quality services to our passengers and transport authority customers. Arriva is one of the largest providers of passenger transport in Europe. Our buses, trains and trams provide more than 2.2 billion passenger journeys every year. We deliver transport solutions for local and national authorities and tendering bodies. For communities and the users of public transport we offer transport choice and the opportunity to travel. Arriva is part of Deutsche Bahn, one of the world s leading passenger transport and logistics service providers, operating in more than 130 countries worldwide. Contents 1 Message from the chief executive 2 About Arriva 4 Who we are 6 Where we operate 8 Growth strategy 10 How we work 12 Our stakeholders 14 dobrodošli vítejte velkommen willkommen üdvözöljük benvenuto welkom witamy Our businesses 16 Arriva UK bem-vindo Arriva UK 18 Arriva Transport Solutions 26 Arriva UK Trains 28 Arriva Mainland Europe 38 dobrodošli vítajte Arriva plc T +44 (0) F +44 (0) E enquiries@arriva.co.uk W Arriva plc 1 Admiral Way Doxford International iness Park Sunderland SR3 3XP United Kingdom Sustainability 60 dobrodošli Safety 61 Sustainable business 66 Our people and culture 68 Environment 73 bienvenido välkommen welcome

3 2/3 Message from the chief executive Arriva s breadth of experience in different transport markets is arguably unsurpassed in Europe, and we re still growing. We develop strong, long-term relationships with our clients and our industry partners that are built on trust, transparency and continuous improvement. We employ a diverse range of committed, skilled and passionate people; we nurture their talent and recognise their contribution to the success of our business. This is why we retain so many of our contracts, why we are a valued and trusted partner, and why people enjoy fulfilling and rewarding careers with us. While we are a large, international business, we are a local business wherever we work. We are close to our markets and this enables us to predict and respond quickly to change, including complex legislative requirements and increasingly high customer expectations. Our operations range from managing local bus services to running inter-city trains, from being the local non-emergency ambulance service provider to delivering major multi-modal transport contracts. Arriva has a significant role to play in supporting transport and tendering authorities as they move towards competitive tendering. We help shape the local transport markets of the future by offering innovative, customised solutions. Changes in the transport market are presenting new opportunities for Arriva to further expand our leading market positions and to enter new markets, whether by mode or location, across Europe. We are also exploring opportunities for growth in other markets. We are an established part of Deutsche Bahn (DB), one of the world s leading passenger transport and logistics service providers. The DB group s vision, DB2020, underpins our business strategy and the delivery of profitable, sustainable growth. DB2020 has three main pillars: Economic, Social and Environment. DB s backing also brings a wealth of international transport expertise, along with access to capital for development and investment. Economic We focus on sustainable, profitable growth to ensure a stable, healthy and successful business. We bid for contracts and make acquisitions where we know we can bring value and which will benefit from our expertise and the synergies we can apply. We set the standards for quality and customer satisfaction in our markets with many of our businesses proudly reporting record-breaking satisfaction levels. Social We have an inclusive approach to training and development and, when we find great talent, we nurture it and help people to develop further. We believe in empowering leaders and we encourage entrepreneurial and innovative approaches to local and regional transport solutions. Environment Message from the chief executive To our clients, Arriva is a valued, trusted partner and strategic adviser, and we share the same key drivers: efficiency, reliability, value for money and customer service. To our passengers, we are the local operator that helps ensure their day s activities go to plan. We are customer orientated and do everything we can to help each of our customers reach their destinations safely, easily and on time. We have an engaged workforce driving our success, and our reputation enables us to appoint and retain talented management and top quality professionals. If you want to take a fulfilling, worthwhile journey, share yours with us. David Martin Chief executive Passenger transport plays an important role in reducing the overall impact of transport on the environment. We promote the development of public transport and we support and encourage modal shift: reducing the number of cars on the roads and thereby reducing the impact of transport on the environment. We bring a wealth of knowledge of fuel and eco technologies, and work with manufacturers and agents to lessen further the impact of passenger transport on the environment. 14 countries 19,500 buses 474 patient transport vehicles 2.2bn+ passenger journeys a year 715 train sets 54,500 employees 221 trams/metro...and we're still growing

4 4/5 About Arriva Arriva operates a wide range of services including local buses, inter-urban commuter coaches, local, regional and national train services, trams and light rail, waterbuses, demand response, non-emergency patient transport and airport-related transport services. We provide accessible transport for people whatever the reason for their journey. We offer an attractive alternative to the private car whether travelling to work or school, accessing leisure activities, visiting friends or going shopping. We work across a range of transport markets, delivering high quality services to passengers and to our transport clients, who range from health care commissioners and transport authorities to local, regional and national governments. It is not always immediately obvious that we are the local bus or train operator. Some of our clients choose to retain their own brand, and we operate on their behalf to their specified criteria. We have a flexible approach that, coupled with our unrivalled breadth of skills and experience, has earned Arriva the reputation of being a valued, trusted partner across Europe. Arriva: setting the standards for passenger transport management. Operational excellence through continuous improvement Innovation and transfer of best practice group-wide Continued high levels of customer satisfaction In-depth understanding of different market, political and regulatory environments Experience of predicting and responding to changing markets and complex legislation Ability to anticipate changing customer demands and increasing expectations Trusted partner and strategic adviser Strong focus on value for money Proven track record of delivery Key recent events 2013 Acquires the central eastern European business of Veolia Transdev (Croatia, Czech Republic, Poland, Serbia, Slovakia, Slovenia) Secures a two-year extension to 2016 for London Overground joint venture rail contract with Transport for London, UK Begins operating two eight-year bus contracts across Budapest, Hungary, in a joint venture Starts to operate non-emergency patient transport contracts in Greater Manchester, Sheffield, Homerton and the South West, UK Starts operating the second phase of E20 Sweden s largest integrated multi-modal passenger transport tender Begins a two-year rail tender in northern Poland 2012 Arriva Danmark s Vestbanen train contract in western Jutland is extended until 2018 In the Netherlands, begins two major eight-year bus contracts in South Holland and north and south west Friesland; re-wins contract to operate bus services on the island of Schiermonnikoog, and begins the Achterhoek-Rivierenland and Vechtdallijnen rail contracts Starts operating the first phase of E20 multi-modal passenger transport tender in Sweden Acquires patient transport specialist company Ambuline in the UK, and starts to operate non-emergency patient transport contracts in the East Midlands, UK Acquires Midland bus company, UK 2011 Acquires UK open access rail operator Grand Central Arriva s German operations are sold, completing the undertakings given to the European Commission by Deutsche Bahn on its acquisition of Arriva. inesses operated by DB outside of Germany become part of Arriva including Chiltern Railways, London Overground Rail Operations, Tyne and Wear Metro, Pan (Denmark), Östgötapendeln and Botniatåg (both Sweden) 2010 Is acquired by Deutsche Bahn of Germany Starts an eight-year Jutland rail contract in Denmark Begins the bus element of the Achterhoek-Rivierenland bus/rail contract in the Netherlands Begins an eight-year bus contract in Halland, Sweden Awarded and begins a 10-year Polish rail contract Begins a five-year contract to operate and maintain the Metro do Porto tram network in Portugal 2009 Begins a 164-bus operation in Stockholm, Sweden Expands Swedish rail operations with a second contract between Göteborg and Örebro Begins a 12-year contract providing rail services between Freilassing and Berchtesgaden in Bavaria, Germany About Arriva

5 6/7 Who we are Who we are Our executive committee sets Arriva s strategy and direction. It is also responsible for the implementation of the strategy, and oversees the sound running of operations. It monitors operational and financial performance, assessment and control of risk, and prioritisation of growth opportunities. With representatives from the group s divisions and main functions, the committee ensures that Arriva develops as a single entity in order to tap into our full potential and deliver sustainable growth. Deutsche Bahn Arriva is part of Deutsche Bahn (DB), and is responsible for Deutsche Bahn s regional passenger transport services outside Germany. Deutsche Bahn AG, the parent company, is based in Berlin and was founded in Today, it is one of the world s leading mobility and logistics companies, providing mobility and logistical services globally and operating in more than 130 countries worldwide. DB's goal is to become the world s leading mobility and logistics company. History Arriva s roots are in Sunderland in the UK, where we still have our head office. Back in 1938 the Cowie family opened a second-hand motorcycle shop in Sunderland the first venture by what has grown to be an international business trading across Europe. We entered the UK public transport market in 1980, and became the country s second largest bus company in We began our journey in the mainland European bus market in 1997 with an acquisition in Denmark. David Martin chief executive David joined the group in 1996, becoming a board member in 1998 with specific responsibility for the group s international operations and development. He was appointed chief executive in Martin Hibbert finance director Martin has responsibility for the group s finance division including financial reporting, taxation and treasury operations; the group s legal and company secretarial departments, and the group IT function. He joined Arriva in Alison O Connor director human resources Alison is responsible for the group s HR, communications, health and safety and European public affairs agendas. She joined Arriva in Mike Cooper deputy CEO and MD Mainland Europe Mike was appointed deputy chief executive with accountability for Mainland Europe in He joined Arriva in 2005 as managing director of Arriva s regional bus business. Bob Holland MD UK Bob was appointed MD UK in 2013, responsible for Arriva s UK bus and UK trains divisions. He has led the UK rail division since 2007, and before that spent six years developing Arriva s mainland European businesses. The group employs around 300,000 employees. Across Europe, more than 11 million passenger journeys are made every day in buses and trains operated by DB s passenger transport division. More than 400 million tonnes of freight is carried via rail and around 95 million shipments carried via land transport annually in the group s transport and logistics division in Europe alone. Around 1.1 million tonnes of air freight and more than 1.9 TEU of ocean freight are carried by DB s worldwide networks. DB is focused on delivering its DB2020 strategy: to become a profitable market leader that is focused on its customers and quality; a top employer and an eco-pioneer. More information is available on Following a strategic business review in 1998, Arriva focused on capitalising on opportunities in passenger transportation in the UK and mainland Europe. We are now established as one of the leading passenger transport operators in Europe. We provide bus and train operations in the UK, Czech Republic, Denmark, the Netherlands, Poland, Portugal and Sweden. We run bus operations in Croatia, Hungary, Italy, Serbia, Slovakia, Slovenia and Spain. In 2010 we were acquired by Deutsche Bahn of Germany and subsequently sold our German operations, which we had grown to a 400 million turnover business over five years. We are now the growth arm of Deutsche Bahn, responsible for the group s growth and development of regional passenger transport outside of Germany. Full executive and senior management biographies are available at

6 8/9 Our scale and our expertise mean that we can operate a range of transport modes across our business, in a variety of markets and in different regulatory environments. We are still growing and have the capability to provide our services in other territories. DENMARK SWEDEN CZECH REPUBLIC POLAND Employees 2,900 es 860 Train sets 101 Waterbuses 12 Employees 4,100 es 1,230 Train sets 43 Waterbuses 3 Employees 3,230 es 815 Train sets 161 Trams 44 Employees 3,200 es 1,960 Train sets 4 Employees 1,500 es 755 Train sets 31 SLOVENIA CROATIA SLOVAKIA HUNGARY SERBIA Employees 460 es 300 Employees 240 es 120 Employees 1,530 es 815 Employees 950 es 410 Employees 565 es 245 UK Employees 24,800 es 5,900 Train sets 357 Metro 45 Patient transport 474 SPAIN People es Train sets Trams / Metro Waterbus Patient transport Croatia Czech Republic 3,200 Denmark 4,100 1, Hungary Italy , ,340 2,360 Netherlands 2, Poland 1, Portugal 6,800 3, Serbia Slovakia 1, Slovenia Spain Sweden 3, UK ,800 5, Employees 885 es 440 PORTUGAL Employees 6,800 es 3,290 Train sets 18 Trams 126 ITALY Employees 3,340 es 2,360 Trams 6 Waterbuses 4 14 countries 19,500 buses 474 patient transport vehicles 54,500 employees 715 train sets 221 trams/metro 2.2bn+ passenger journeys a year...and we're still growing Employee and vehicle statistics include associates Where we operate Where What we wedo operate Netherlands

7 Growth strategy Our business is growing strongly by retaining contracts, winning new ones and by acquisition. We work hard to continually improve our businesses to ensure sustainable future growth. Our contracts range from major inter-city rail services, to providing non-emergency ambulance services on behalf of the UK National Health Service, and shuttle facilities at airports. We are focused on bidding for contracts and making acquisitions where we believe we can run operations well and where we can use our knowledge and experience to make a real difference. We are also focusing on growing organically, exploring new ways that we can bring our skills and experience to transport provider clients. Our philosophy is underpinned by high quality service delivery, investment, innovation and value for money, delivered by our professional teams across Europe. We can mobilise teams quickly and effectively. Our transport experts take complex contracts from bidding stage to operational delivery efficiently and professionally. We bring the people, skills and expertise and can work in a range of operating environments, contractual requirements and to different legal jurisdictions. Why our clients choose Arriva as a partner We have in-depth market understanding and an unrivalled breadth of experience in European passenger transport markets. We deliver what we say we will deliver we are dedicated, honest, transparent and realistic. We help create tailored solutions, which is why so many transport authorities want to work with us. We value local management and provide central support. Recent growth Growth strategy The sustainable growth of our company is central to our work and the future of our business. Our comprehensive experience and unrivalled knowledge of transport markets across Europe is what sets us apart: it makes us valuable to clients and passengers, and helps us deliver our strategy. Our growth strategy is to focus on: capitalising on the growth opportunities presented by transport market liberalisation investing selectively in targeted acquisitions winning and retaining contracts building close partnerships with our stakeholders, including contract-awarding authorities, and national and local governments improving our existing businesses through best-practice governance, constant service enhancement and innovation respecting and developing the skills of our employees. Order book The order book represents the expected future revenue from assured contracts already won by fully consolidated group companies. It tracks estimated future revenue over the life of contracted business based on nominal contract values. The total value of the order book at 31 December 2013 was 16.4 billion. It includes contract wins, retentions and extensions, and Arriva s acquisitions in central eastern Europe. Arriva group order book at December 2013 bn 10/11 Growth strategy Expanded operations across central and eastern Europe Won two eight-year bus contracts in Budapest, Hungary Won five non-emergency patient transport NHS contracts in the UK Extended Danish train contract until 2018 Won two major eight-year bus contracts in the Netherlands Won Sweden s largest integrated multi-modal public transport tender Acquired specialist patient transport company Ambuline, UK Acquiring new businesses Winning and retaining new contracts Growing organically Sustainable growth

8 How we work Transport markets vary by country, by region and by mode of transport. In the main, passenger transport providers operate either within contractual structures, for instance on behalf of local or national authorities, health care commissioners and other commissioning bodies, or in deregulated markets. iness model examples Contracted services Gross cost: Denmark service tendering in Denmark is well established with around 90 per cent of services tendered. Six passenger transport authorities in Denmark have responsibility for bus service provision. They set out the routes, ticket prices, timetables, contract duration and service standards in their regions, and invite bus operators to bid to operate specific routes. Winning a route for Arriva means that we operate the services for a set period on average six years at a price agreed with the transport authority. 12/13 How we work Arriva operates different business models according to the structure and needs of the local market. Contract specifications can range from cost-plus through to taking revenue risk or having quality and passenger number incentives, dependent upon the settings specified by the contract awarding body. Contracted services With contracted services, the primary customer is usually some form of public sector body. A regional government or transport authority may offer various forms of contract giving an operator the right to operate services, usually exclusively, on a particular route or in a specific area. Most of our mainland European bus and rail markets are contracted services. In the UK, the London bus market and the rail market are contracted services. There are two main types of contracted arrangement: gross cost and net cost. With gross cost contracts, the tendering authority agrees to pay an operator a specified sum to provide the specified service for a specified period, keeps the passenger revenue and often sets the routes and specifies the vehicles. The London bus market, some of our rail operations in Sweden and bus contracts in Denmark, Sweden and Madrid are gross cost contracts as are our bus contracts in Budapest, Hungary. With net cost contracts, the operator takes on both the revenue risk and the cost risk, and keeps passenger revenue. The tendering authority generally provides a contribution in the form of additional contracted income, where the cost of providing such a service would not be commercially viable if it depended solely on the passenger income that it could achieve. Examples of net cost contracts are UK rail, Swedish bus and some rail, Polish rail, Italian bus and some Dutch bus and rail contracts. Deregulated services With deregulated services, the commercial relationship is directly between Arriva and our passengers. As passenger payments are the main source of income, services have to be profitable in order to be sustainable. They need to generate the financial returns which underpin investments in replacement vehicles, our depot facilities, and the expansion and development of services. Operators accept the revenue risk, so if the travelling public decides to switch to another form of transport, the lost revenue directly affects our finances. Most bus operations in the UK outside London operate on a purely commercial basis. Our operations in Spain (excluding Madrid) and Portugal also operate on a largely commercial basis. To ensure operators maintain high quality services, the authorities set quality and service incentives and penalties. Contracted services Net cost: Sweden Competitive tendering in the Swedish bus market is well established, and the rail market is completely deregulated. Transport authority Storstockholms Lokaltrafik (SL) introduced a new business model for its E20 bus and rail services operating in and around Stockholm, Sweden s capital and largest city. For the first time bus and rail services were combined into a Verified Boarding Passenger contract, with the contractor, Arriva, paid solely for the number of verified passengers travelling. The 100 per cent incentive-driven contract delivers some 94 million passenger journeys a year. To encourage higher quality services and improved customer satisfaction, SL has passed to Arriva responsibility for decisions relating to issues including traffic planning, marketing and customer service. Arriva constructed the timetables for all the contracted services, and can make changes to the timetables with SL s approval. Deregulated services Commercial: UK Outside of London, bus services have operated to a deregulated system since privatisation in the mid 1980s. operators like Arriva can run any type of bus service as long as they give notice of any introduction, changes or withdrawals. Services are operated on a commercial basis. Operators keep all the passenger revenue and they bear the revenue and cost risk. Where there is deemed to be a social need for services, local authorities may contract operators to provide services on routes that would not otherwise be commercially viable. Legislation is paving the way for the liberalisation of transport markets across Europe. Liberalisation describes the opening of markets to competition through competitive tendering. Market liberalisation, as intended by European legislation, adds value and helps to ease pressure on the public purse. Arriva was a pioneer in the first wave of transport market liberalisation in Europe and has a huge amount of experience of a wide variety of contracting models. Market liberalisation is an opportunity for Arriva to add value and is a major growth driver for the group.

9 Our stakeholders We have a broad range of stakeholders and aim to operate in ways which benefit their different sets of interests. For some, we are a trusted partner or a strategic adviser. For others, we help keep their day running as planned. Whatever the relationship, whether it is directly with the passenger or with a partner or tendering organisation, we work hard to deliver consistently high levels of professionalism and service. Passengers Our passengers expect a safe, clean, service and a reliable journey. We strive to meet their expectations by delivering a service that keeps them happy and encourages our customers to use our services again. At Arriva UK, overall customer satisfaction has consistently achieved a 90 per cent plus rating over the past 10 years. In a recent independent National Rail Passenger Survey, Grand Central was the highest passenger-rated long distance train operator. Arriva s four other UK rail businesses surveyed all achieved overall passenger satisfaction levels above the national average. Arriva topped the table in client body customer satisfaction ratings in Copenhagen, Denmark, with 85 per cent of passengers satisfied with our services. For our passengers, we aim to provide: a reliable service safety and comfort an attractive alternative to the private car. Contract-awarding authorities Contract-awarding authorities and bodies choose Arriva because we have a strong track record of meeting our commitments, and we provide a high quality service and value for money. Providing strategic advice and innovative transport solutions is what distinguishes us from others. Clients benefit from our unrivalled knowledge and experience, gained from years of operating across a range of differing markets. We are adept at managing business change, process management, handling complex legislative requirements in different markets, and working within different cultures. For our transport clients, we aim to provide: the benefits of an experienced, trusted partner a willingness to share our expertise improved services/high quality operation management of smooth mobilisation value for money services that their communities rely on satisfaction for their customers our passengers. We, together with our clients, share the same key drivers that ensure commercial success and sustainable operations: Efficiency Reliability Value for money Customer service Arriva Transport clients Employees Across Europe, we are a significant employer in many countries. Our employees represent a diverse range of backgrounds and cultures. We value our people and the important role they play in our success, and believe in recognising and celebrating individual contributions. Our aim is to maintain a supportive, respectful working environment in which each individual is given training and development opportunities to enable them to fulfil their true potential. We encourage flexibility and a willingness to learn, and we embrace questioning the status quo to continually improve our business. For our employees, we aim to provide: worthwhile long-term employment training and development opportunities a safe, supportive and motivating work environment the opportunity to provide a valuable service to their local community. iness partners For our business partners, we aim to provide: trust and transparency reliable operational support and professional management teams expertise in transport and process management. 14/15 Our stakeholders Wider community For the wider community, we aim to provide: responsible management of the environmental impact of our operations social and economic benefits of accessible travel as an attractive alternative to the private car.

10 Our businesses Arriva is growing strongly by retaining contracts, winning new ones and by acquisition. We work hard to continually improve our businesses to ensure they are sustainable and fit for growth. 16/17 Our businesses Arriva in the UK Arriva UK Arriva UK is one of the UK s biggest bus operators, providing services in London, the north east, north west and south east of England, Yorkshire, Midlands and Wales. We provide a wide range of rural, urban and inter-urban bus services. We are able to respond quickly to changing needs and new opportunities and we work closely with many local authorities to bring improvements for our customers. Arriva in Mainland Europe Arriva is a leading European transport provider and a trusted partner. We have a range of operations across 13 countries including buses, coaches, trains, trams and waterbuses. We work closely with local and national transport authorities and transport providers for whom we provide unrivalled experience and skills through our top quality management teams. The European transport market, worth some 140 billion, is opening up to tendering. There are many opportunities for Arriva to bring value and to deliver innovative, high quality, cost effective transport solutions. Arriva UK Trains Arriva UK Trains has some 14 years' experience of running trains in the UK. We are a leading train operator with around 14 per cent of the rail market. We operate five major rail contracts and own an open access rail operating company. Our operations Our scale and our expertise mean that we can operate a range of transport modes across our businesses, working to a range of business and contracting models. Our contracts have a track record of continually improving performance and punctuality and we are committed to further improvements. We are well positioned to bid for future rail franchises and are exploring further open access opportunities. BUSES Local, commercial services Contracted services Sightseeing tours Airport landside/airside School services Tendered services COACHES Contracted services Private coach hire Tour services Inter-urban Arriva Transport Solutions A specialist UK transport business, Arriva Transport Solutions works with public sector organisations to identify and deliver innovative solutions to help fulfil their transport needs more efficiently, through greater integration while delivering excellent service standards and better value for money. TRAINS Rural, commuter lines Long distance mainlines Station management Under/Overground Contracts Maintenance WATERBUSES Canal/harbour buses Contracted services We can provide transport solutions across a range of public sector services including special educational needs transport, social care transport and non-emergency patient transport. TRAMS/METRO Joint ventures Contracts Station management Under/Overground Maintenance CARS & AMBULANCES Non-emergency patient transport Special educational needs transport Social care transport

11 Arriva UK We operate a range of commercial and contracted bus services, working closely with local and tendering authorities across the country. 18/19 Arriva UK In addition to the Arriva-branded networks throughout the UK, we also operate some locally branded services, including Hinkley, Yorkshire Tiger, Wardle Transport and Network Colchester. With a fleet of some 5,900 buses, Arriva is one of the UK s largest operators, providing services for customers in London, the north east and Yorkshire, north west and south east of England, the Midlands and Wales. We also provide a number of express and longer distance routes, such as the Green Line coach service, which provides regular services between central London and the Home Counties. We provide transportation for airports and airlines, including terminal transfer services, crew and passenger coach movements, car park and hotel shuttle bus contracts. We also work in partnership with airport authorities, ground handlers and airlines. Many of these activities are handled by the Arriva-owned TGM Group. Arriva operates open-top bus tours of London through our commercial sightseeing business, The Original Tour. We have a bus and coach distributor, Arriva and Coach, based in Cleckheaton. It retails new and second-hand buses and coaches, and provides fleets for short and long-term rental. Arriva also owns a majority stake in Zeta Automotive, a technology company that has developed a range of leading edge products that enable the reduction of fuel consumption and emissions output. It also provides a wide range of innovative electronic vehicle management solutions. iness strategy Bangor Newcastle Sunderland Liverpool Manchester Leeds Leicester London Arriva UK has a clearly defined business strategy based around four key pillars: Creating growth in the core business Strengthening our operating efficiencies Becoming the partner of choice for local authorities Creating additional non-core growth Operationally our focus is firmly set, as always, on our passengers, transport authority partners and other transport clients. We are constantly evolving to ensure we are able to respond quickly to changing markets and customer needs so that we continue to grow successfully and sustainably. Our wealth of experience and our employees skills underpin our ability to provide a wide range of relevant transport solutions that people want and will use.

12 20/21 Regional bus Successes: regional bus Using the overall business strategy as a basis, Arriva UK has achieved significant success, both centrally and regionally. Here are some of the most notable achievements, listed under each of the four key pillars of our strategy. Arriva UK Entered the regional bus market in ,650 employees 4,300 buses The UK bus market is now at a mature stage of liberalisation. outside London was deregulated and subsequently privatised during the 1980s and operates on a commercial basis. Each operator s relationship is directly with the passenger. Revenue principally comes directly from passengers and through carrying concessionary travellers. Local authorities may also tender contracts where there is deemed to be a social need for services, which would not otherwise be commercially viable. Arriva is the third largest bus provider in the UK regional bus market. We primarily operate commercial routes, however we also provide some contracted services for local authorities, airport-related and express commuter transport. Creating growth in the core business More than 75 million was invested in new vehicles for Arriva s UK fleet in New buses regularly demonstrate an increase in revenue and recent investment in Oswestry and Tamworth (a total of 21 vehicles) showed an overall increase of over 5 per cent compared to the previous year s figures. Arriva successfully launched a new premium service, Sapphire, on four key routes. The 3 million investment on 41 new and refurbished vehicles, offers an enhanced customer experience, such as luxury seating, on board power points and free Wi-Fi. The routes have achieved an average revenue growth of 17 per cent. Plans are underway to introduce several more Sapphire services during The Catch the bus week campaign, devised and led by Arriva, and fronted by industry body Greener Journeys, saw all five major UK bus operators join forces to promote the benefits of bus travel. The campaign delivered an impressive six-fold increase to Arriva s average weekly mobile ticket sales, with more than 8,500 new customers downloading the m-ticket app for the first time. Strengthening our operating efficiencies Arriva continues to reduce its environmental impact through its eco-driving programme, which saves between 4 and 5 per cent per annum on fuel costs for regular vehicles. We have also introduced a new environmental policy aimed at improving energy-efficiency at 65 of our garages across the UK. It is predicted that the energy-efficient measures introduced will reduce CO2 emissions by around 7.5 tonnes a year. In Milton Keynes, Arriva successfully trialled an electronic fuel-saving device that demonstrated a 7 per cent saving on fuel bills. Econospeed, devised by Zeta Automotive, is a dynamic throttle controller that enables us to limit vehicle engine speeds and acceleration rates. Arriva s commitment to overall engineering excellence was recognised with two routeone Excellence Awards. Arriva Yorkshire s Jason Dixon won Engineer of the Year and Luton-based engineer trainer, Lloyd Mason, received a Special Recognition award for his dedication to delivering strategic learning and development objectives for engineers across Arriva s UK bus network. More than 75 million was invested in new vehicles for Arriva s UK fleet in 2013 Arriva operates eight electric buses on route 7 in Milton Keynes as part of a five-year programme to assess their technical and commercial viability. The new buses recharge their batteries wirelessly during their working day so can run continuously for 17 hours at a time. They also remove approximately five tonnes of particulates and emissions from the city s streets and could save some 600 tonnes of CO2 emissions a year. Our customer satisfaction ratings continue to underline success in our core offering. Overall customer satisfaction has achieved a consistent 90 per cent plus rating over the past 10 years. Arriva s Lloyd Mason receiving his Special Recognition award at the 2013 routeone Excellence Awards

13 22/23 Arriva UK Becoming the partner of choice for local authorities London bus Building and maintaining excellent relationships with our local authority partners is firmly at the heart of our business. Our local managers and directors work closely with transport authority teams and other local stakeholders for the benefit of passengers and local communities. Arriva North West has joined forces with Merseytravel, Wirral Council, Cheshire West and Chester Council and other operators to improve and integrate services in the Liverpool, Ellesmere Port and Chester areas. In what is termed a Quality Partnership there are combined and co-ordinated timetables and tickets can be used across all operators on the agreed routes. A national e-newsletter, Connections, is distributed to all local authority and stakeholder partners and offers them an insight into the great work we are doing in their region. Arriva delivered transport solutions for the London Olympic and Paralympic Games Creating additional non-core growth Arriva played a major part in the delivery of transport solutions for the London Olympic and Paralympic Games. More than 600 vehicles and 1,600 drivers were deployed, spread across four major LOCOG contracts (London Organising Committee of the Olympic and Paralympic Games). We also set up temporary depot facilities for more than 500 buses and drivers, featuring rest areas, catering and safe vehicle management. VOSA Authorised Testing Facilities (ATF), offering MOT tests to commercial vehicle fleets outside of Arriva, continue to have significant success in the North West region. Arriva s Green Lane and Birkenhead garages are open for contracted third party work throughout the week, with Green Lane now operating close to capacity. In addition to this, all six garages in Merseyside now offer a full steam clean, brake and multi-check facility for third party vehicles. Major player in London bus market since privatisation in ,200 employees 1,600 buses In London we run nearly 20 per cent of the capital s bus services under contract to Transport for London (TfL). Covering more than 60 million miles, we provide 400 million passenger journeys in the capital every year. Our experience, reputation for operational efficiency and high performance levels has consistently helped us to win new contracts and secure contract renewals. Privatisation of London s bus services initially began in TfL, now the city s transport authority, specifies the required routes, timetables and vehicles. Revenue comes from TfL, which pays us for running services on its behalf. Contracts are typically five years in length and a bonus/penalty regime is linked to service quality. The New for London Arriva London successes Arriva London was proud to be selected as the first company to operate the New for London, designed to replace the famous Routemaster buses. Inspired by the old Routemaster, it is modern, fully accessible and uses the latest green diesel-electric hybrid technology. It is the first new bus designed specifically for London s streets for more than 50 years. Arriva London s state-of-the-art control centres offer real-time information on the location of our 1,600 buses, alerting drivers to traffic problems and allowing controllers to make decisions to maintain a reliable service. Arriva London and Volvo collected a prestigious top award in the Green category at the routeone Excellence Awards, largely as a result of our commitment to hybrid technology. We currently operate more than 140 hybrid vehicles in London. Arriva s high standards of operational performance and commitment to quality have been consistently recognised. The company s Beddington Farm, Brixton and Wood Green garages have all been awarded London Garage of the Year in recent years, following independent nominations by TfL. Individuals have also been recognised for their excellent service, such as driver Steve Sobers, winner of the 2013 London Award for actions above and beyond the call of duty. Andrew Thomas was shortlisted in the same category, while Helen Webster was shortlisted for the Outstanding Newcomer award. On board eco systems have been fitted to vehicles across London. These monitor driver and vehicle performance and are instrumental in improving driving technique, while at the same time identifying potential fuel savings and reducing emissions. Arriva works closely with local authority partners to deliver improved services

14 Arriva UK : Delivering now for a successful future 24/25 Arriva UK Technology and innovation Since being the first bus operator to introduce mobile phone ticketing across a national network in 2009, more than 14 million m-ticket journeys have now been made, with more than 8 million in Our ecommerce-based, fully integrated mobile app, will be released in This reflects the fact that almost 60 per cent of visits to arrivabus.co.uk are made via mobile devices. Arriva UK was the first national bus group to introduce social media, in the form of Facebook and Twitter, across all its operational businesses, allowing greater marketing opportunities and a direct communication channel for customers to comment and contact the business. More than 70,000 customers now follow Arriva in the UK via social media networks and a full-time social media co-ordinator is working to drive our strategy forward. PayPoint, Payzone and epay electronic prepayments systems, which allow customers to purchase weekly and 4-weekly tickets from thousands of retail outlets throughout the UK, account for some five million journeys annually. Smartcard ticketing new smart-enabled ticket machines have now been fitted to all our vehicles across the UK fleet. The new technology enabled the launch of the Luton way smartcard in We are committed to several further schemes in Monthly visitors to arrivabus.co.uk now total 1.4 million, with mobile phone access leading the increase. Growth in web traffic has doubled over the last two years, with more than 15 million visitors to arrivabus.co.uk annually. Investing in the future By investing in our fleet, we immediately improve the look and feel of our services. A total of 403 new buses were delivered in 2013, bringing investment in fleet renewal in the UK to more than 395 million since Some 200 vehicles were distributed throughout the UK regional businesses, with 203 allocated to TfL contracted work in London. As part of our commitment to green energy, we have introduced 153 hybrid double deck vehicles 76 for London and 77 for the regional businesses. Arriva has also introduced 21 gas buses powered by renewable gas. Arriva invested some 22.2 million in 98 of the gas and hybrid vehicles, with an additional 4.5 million funding provided by the Department for Transport s Green Fund. The Original Tour invested in excess of 5 million in 32 new buses which joined the fleet in The business has also been recognised as a Sightseeing Provider of the Year at the UKinbound Awards of Excellence. Votes were cast by companies and individuals across the UK travel industry. Passengers across the UK are now increasingly seeing modern, low floor, environmentally friendlier buses on the roads in all of Arriva s operating areas. More than 95 per cent of vehicles in our UK bus fleet are now low floor, making bus travel more accessible to more people. We invest more than 5 million each year marketing our services and by raising awareness of the environmental benefits of bus travel, we encourage more people to consider using the bus, more often. Investing in our people The Original Tour Arriva is committed to developing skills to inspire, motivate and engage our people to recognise and respond to our changing environment, which will help us to better serve and predict the changing needs of our customers. Employee achievement across the UK is celebrated at Arriva s own national MAD Awards (Made a Difference). The internal event sees staff from across the business become MAD winners in categories such as Safety, iness Performance, Engineering and Environment. There is also a King of the Road award for the best driver, voted for by the public, a Continually MAD award for long service and a UNITE award for services to the union. All awards are presented at a gala dinner attended by all the shortlisted candidates. The Big Picture, Arriva UK innovative employee engagement programme, continues to inform and educate our people at all levels, offering them the opportunity to communicate and engage with the company s objectives and key strategic aims. All Arriva UK employees experience the Big Picture workshop, while a monthly publication helps to update and inform managers on key projects that are aligned to the overall strategy. Employee surveys have indicated an increase in understanding of the company s strategies and priorities. In answer to the question I know what the company is trying to achieve in the next 12 months, positive responses improved from 33 per cent in 2009 to 67 per cent in The most recent survey showed that overall satisfaction and pride in the job increased by 4 per cent. The leadership development programme, Good to Great, enables supervisors, managers and leaders to develop their skills in key areas such as people management, negotiation and finance. The training calendar is continually refreshed in line with business needs. Since 2010 we have been able to demonstrate a significant return on investment as a direct result of the programmes, specifically the development of improved commercial and industrial relations negotiation skills. Many of our businesses have been awarded Investors in People status. Our Yorkshire and North West and Wales businesses have also achieved IIP gold standard, which underlines their commitment to people management, involvement and empowerment, performance measurement and continuous improvement. Arriva North East developed its 'Join us on our journey' employee engagement initiative to introduce the new company vision and plans for the future. The company has seen an improvement of 9 per cent in its overall employee satisfaction scores and is continuing its roll out of IIP across the region. Arriva has sold more than 14 million journeys via mobile phones

15 Arriva Transport Solutions 474 patient transport vehicles 1,050 employees Up to 5,000 non-emergency patient journeys every day Non-emergency patient transport services 26/27 Arriva Transport Solutions We work with a number of public sector organisations to deliver non-emergency patient transport and special educational needs services. An experienced, trusted partner, we help identify and deliver innovative and creative transport solutions tailored to meet specific needs. Manchester Sheffield Nottingham Dudley Hull Leicester We have decades of unrivalled transport and logistical experience and more than 30 years clinical expertise through our established Ambuline operations. We share the same priorities as our clients: efficiency, reliability, value for money and customer service. Gloucester Homerton London How Arriva Transport Solutions can help Arriva Transport Solutions is a specialist transport business within the Arriva group which helps public sector organisations to provide excellent transport services more efficiently, and deliver better value for money. Understanding client needs: We understand the need for public sector resources to be invested wisely while maintaining excellent levels of service delivery. We bring innovative thinking and explore new ways to achieve efficiencies while ensuring that reduced budgets and wider economic pressures do not affect service quality or standards. Improving services and putting patients first: We work with our clients to help identify opportunities for improvement, efficiency and innovation which enhance the experience for patients. We recognise that people have differing needs and care requirements and our people are trained to offer support so travelling is as seamless and as comfortable as possible. Delivering contracts: Backed by the Arriva group, we have excellent financial standing and a strong track record of meeting commitments and providing a high quality service. We continually develop our teams to ensure they can meet the needs of constantly changing markets and we have a broad base of industry partners who can provide specialist skills and specialist knowledge. Investment: We have invested 13 million in new ambulances and cars, control centres and technology to improve the quality and performance of patient transport services. The Arriva PTS Charter: Our PTS Charter sets out Arriva s commitment to delivering quality standards, punctual services and safe, clean vehicles while meeting patient needs and maintaining patient dignity at all times. Working in partnership: In the West Midlands we worked with the Dudley Group of Hospitals NHS Trust to develop a new phased arrival plan for renal patients. Patient waiting time is now reduced. Improving patient comfort and reducing our impact on the environment: We have introduced progressive driver training so our people can provide a smoother ride for our patients. This approach also helps us to deliver fuel savings and reduce CO 2 emissions. Finding efficiencies... Network planning Scheduling efficiencies Cost effective vehicle maintenance Better vehicle utilisation Reduced overheads Organisational change Process improvement Complex legislative requirements Understanding of different cultures...while... delivering excellent services ensuring resources are invested wisely offering maximum value for money Local operational focus Delivering outstanding local services Maintaining strong relationships with key partners and stakeholders Ensuring the safety, respect and dignity of patients and offering quality care For more information contact us at arrivatransportsolutions@arriva.co.uk