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Ragnar Norbäck
Chief Executive Officer |
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The outlook for public bus transports is bright. Already the most common mode of public transport, it is growing steadily and appears to be approaching a major modern breakthrough. As municipalities and county councils invest in their infrastructure, quality aspects are slowly but surely gaining more attention.
The future also looks promising for Concordia Bus. The customers rely on our services and we are gradually enhancing both our products and our ability to do more with less. Improved resource-efficiency is one of the main drivers behind our rapid earnings growth, which is unparalleled in the industry. |
Earnings up by more than SEK 200 million
Concordia Bus delivered a financial result that is fully on par with the promised growth. In the span of two years, we have improved our operating result by a half million Swedish
kronor. The year’s increase was approximately SEK 200 million, enabling the company to post its first-ever operating profit.
An internal dialogue about the factors that create success in our industry lies behind the transformation of Concordia Bus. Every day, I meet inspired employees that can serve as role models for all of us in the company. At each and every depot there are traffic supervisors, bus drivers, traffic planners and other staff who together give our customers and clients the highest measured quality in the industry. They love their jobs and are dedicated to doing them well. I am proud of everything they have achieved and share their sense of commitment.
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The right transport services at the right cost
I am very satisfied with the financial development and am convinced that there is still a great deal more this company can accomplish. We have already taken several steps along the way to creating even better bus transports throughout the Nordic region and a still more resource-efficient and credible Concordia Bus.
A provider of road transport services stands or falls with its ability to develop and deliver the services customers want at a price that covers the related costs and provides a reasonable surplus. However, the existence of a predefined transport network limits our freedom to define the product we deliver, and means that good planning and resource efficiency are decisive in meeting the set targets.
The perspective is almost ecological – we should never use more resources than we need. The point is not to expend more effort, but to do everything more efficiently than we did yesterday and more efficiently than our competitors today.
I believe that the realignment of Concordia Bus into a process-driven company was a turning point. By measuring ourselves against a set of carefully defined performance indicators and making use of benchmarking, we have been able to enhance our quality while at the same time significantly strengthening our earnings.
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Stealing market share from cars
We are not challenging the railways and have no dispute with other providers of road transport services, whether they operate in the open market or enjoy the protection of a granted concession. It is cars we all want to steal market shares from, the thoughtless recreational motorists and private automobiles that day after day drive to and from work carrying only a driver. We are committed to increasing the use of public transport for the benefit of the taxpayers and the environment, as much as for our own sake.
A modern bus requires fewer than four passengers to be an environmentally superior alterative to the automobile. And even greater environmental gains are possible by increasing the number of passengers on the buses.
We and other major transport providers are working strenuously to minimize environmentally hazardous emissions and reduce the use of fossil fuels. These efforts have been successful and our long-term ambition at Concordia Bus is to reach a point where our operations are climate- and eco-neutral. In the meantime, increased ridership on our buses nonetheless has a faster and greater effect without any cost to the county transport authorities or the taxpayers.
Here, there is a natural affinity of interests between all players in the public transport sector, whether clients or contractors. If we and other operators are given better scope to offer transport services that are truly customer driven, we can finally create the product needed by society today and in the future.
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Incentive agreements are the key
Overly detailed tender documents that specify not only the needs to be satisfied but also how this is to take place are an everyday burden for public transport operators. And when the amount of compensation is also fixed and regulated on the basis of production, the situation is further aggravated. Despite this, so-called gross cost contracts have become even more common than before. An already shackled transport operator is left without any incentive whatsoever to increase the number of passengers or improve their satisfaction.
Concordia Bus advocates wider use of incentive agreements in the public transport sector. It must be profitable for all parties when the operator does everything right. Higher quality transports that lead to more passengers on the buses and lower environmental impact should provide scope to supplement the operator’s fixed compensation with a variable component based on ticket revenues.
Our own profitability is now stable and expected to strengthen further. We have proven our ability to calculate, win and deliver on contracts better than most. The internal risks are low, but there are external risks that are beyond Concordia Bus’s control, particularly the price of fuel, environmental requirements and access to qualified manpower.
I have already spoken of the company’s many dedicated managers and employees, but I am well aware that our employee programs have not yet reached all the way out to the front lines where supervisor meets driver and driver meets customer. The transport contracts of the future require employees who know what is expected of us all and can easily follow up their performance. This is where we are headed.
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Ragnar Norbäck
CEO |
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