Annual Report 2010/2011 - pdf 7.05 MB - Nobina AB

stAtemeNt FrOm the CeO
Improvement in all areas
– with sights set higher
Nordic public traffic has undergone a range of reforms during our hundred years in the
market, but these changes were probably never greater than now. A new public transport
act will come into force, the remaining concession contracts will expire and the Nordic
contract model is being developed. mobility increases while more people are becoming
aware of our own impact on the environment. In retrospect, it feels positive to contribute
to future public traffic in a market where traffic companies are advancing their positions.
We achieved major improvements in all areas
in 2010. We strengthened operating profit by
SEK 40 million and implemented a more efficient
organizational structure, but our sights
were set higher. A key explanation for this
lower-than-expected outcome was that the
fiscal year began and ended with abnormally
cold and snowy weather, which increased
virtually all operating expenses – while fuel
prices rose. The winter had a negative impact
of SEK 62 million on profit for the year.
Despite these severe conditions, we managed
to maintain 99.8% of our driven routes and
greater profitability, primarily due to costconscious
thinking, better use of our buses
and most of all, dedicated employees who
actively contributed to the implementation
of our improvement activities. We have also
gained higher volumes in our existing contracts,
which is a ripple effect of our marketing
efforts and the political drive to double public
transport’s share of total travel.
SUCCESSES AND CHALLENGES IN OUR
NORDIC OPERATIONS
We strengthened our position in Sweden in
several key locations. We lost two SL contracts
with a total of 300 buses to Busslink in Stockholm,
which we regret, but are also happy
with our success in the rest of the country.
Service launches for half of the city traffic
in Malmö and several express routes in
Gothenburg were major events, as was winning
a new and interesting contract in Norrtälje
with SL, which will commence in the
summer. We are very excited about the new
Norrtälje traffic since it builds on a demandbased
remuneration model where Nobina as a
8 NOBINA | ANNuAl repOrt 2010/2011
traffic company will be responsible for designing
and marketing the offering to customers.
The Norwegian operations had a more
difficult year with efficiency problems and
loss of contracts. Operating traffic is more
expensive in Norway and we are struggling
to bring costs down to satisfactory levels.
But we also see great future potential in the
Norwegian market, which is currently
undergoing a series of changes. The trend
towards more public procurements is moving
fast and the market share is expected to
exceed 50% by 2011. In December, Stein
Nilsen became the new Managing Director
for Nobina Norway. With more than 20
years in the Nordic personal traffic sector,
I think he will be an excellent leader for the
Norwegian operations.
Nobina Denmark continued to develop
positively in 2010 and we are satisfied with
both the efficient operation and excellent
customer service. After just two years in the
market, Nobina was announced “Operator
of the year” by Movia, the largest client in
the country, and we recently secured more
traffic in a contract with them. We commenced
two new contracts and have high
hopes for continued growth, but will continue
to have start-up and expansion costs.
We maintained our position and an
unchanged market share in Finland, despite
a number of challenges and continued price
pressure. With a loss in the spring and one
win in the fall, our market share remained
unchanged throughout the year. The challenges
in the Finnish market are considerable,
but more contracts are expected to become
competitive in coming years and we have a
solid and efficient organization in place to
take advantage of market growth.
Our Interregional player Swebus is a wellknown
brand with a strong offering. After a
very good start to the year, where the ash
cloud contributed to a sharp increase in bus
travel, the end of the year was more difficult
– for two main reasons. Customers choose
more expensive transport when times are
better, and price competition is increasing
from public players. To strengthen our position
and clarify our value to customers, we
will invest more in sales promotion in the
future. Swebus launched a successful direct
transfer between Stockholm Central and
Arlanda at the beginning of summer. The
investment was initially costly but this
is a long-term venture and, to date, has
proceeded according to schedule.
STRUCTURAL CHANGES IN THE MARKET
In recent years, competition in regional
traffic has been difficult to break through in
all countries except Sweden and Denmark.
Public players have won contracts at prices
that we cannot possibly match given the
quality that we want to offer. But the trend
is unsustainable because under-priced contracts
have not been able to generate a profit
for these players. As a result, public players
are currently under review in Finland,
Denmark and Norway.
In Finland, the municipal main competitor
HELB, was challenged after the municipality
was forced to cover up the company’s
losses with increasing loans. The Danish
government has banned Danish company
DSB from participating in procurements