11 Jan 2017 07:00
Acquisition of c2c franchise by Trenitalia
National Express Group PLC ("National Express") has reached an in principle agreement for Trenitalia, the passenger rail transportation company part of FS Italiane Group, to acquire the c2c franchise.
Completion of the acquisition is conditional upon final consent from the Department for Transport and is expected to occur within the next three to four weeks. The total consideration is expected to be in the region of £70 million, resulting in a small net profit for National Express.
Following initial partnership discussions regarding future franchise bidding, Trenitalia UK made an offer that National Express' board believes represents the best, and a fair, deal for its shareholders. National Express is immensely proud of its record at c2c, where under its tenure services have been transformed to become consistently the UK's best performing rail operation. While not ruling out participating in future UK rail contracts, National Express has seen significant growth in North America and continental Europe in recent years. National Express believes there are further opportunities for growth in these markets.
The high-quality services and operations run by c2c make an excellent fit with Trenitalia's customer-centric approach. Trenitalia has decided to invest in UK rail on the basis of the market's fundamental strength and potential for growth, particularly in light of the Secretary of State for Transport's recently announced vision for reform.
The acquisition is the first step in Trenitalia's plans to expand in the UK rail passenger market, in line with the internationalisation plans of the entire FS Italiane Group. In December 2015, Trenitalia became the first new entrant to be awarded a "PQQ Passport" by the Department for Transport and since then is pursuing a number of franchise opportunities including beyond today's deal.
Trenitalia will retain c2c's existing management and staff and build on its successful track record of delivering value for passengers. In addition to delivering the existing plans for the franchise, Trenitalia has also committed to invest for further improvements for all c2c's customers based on innovative technologies at the heart of its strategy for the franchise globally.
Under National Express, the c2c franchise has been transformed with National Express introducing more services, new trains and recently pioneering new customer service standards. In February 2016, c2c became the first rail franchise in the UK to introduce automatic compensation for registered smartcard customers for any delay over 2 minutes without the need to complete claim forms. c2c was also the first rail service to offer flexi-season tickets.
Dean Finch, CEO of National Express Group, said: "National Express has been immensely proud of c2c's transformation on our watch. From converting c2c into the UK's consistently best performing franchise, we have also recently pioneered customer service standards with automatic delay compensation and flexi-season tickets, for example. While this has, therefore, not been an easy decision, the board believes the transfer of c2c to Trenitalia UK presents opportunities for all concerned.
"We have been impressed by the commitment and interest shown by Trenitalia and are grateful for the support shown by DfT in this process. Trenitalia has significant rail credentials and is excited by the opportunity to invest in the new agenda set out by the Secretary of State. For National Express, while not ruling out participating in future UK rail bids, this allows us to pursue further growth opportunities in the markets where we have seen strong returns in the recent years."
Barbara Morgante, CEO of Trenitalia, said: "We see significant chances to invest in UK Rail and this in principle agreement with National Express allows us to foster these ambitions. This is why we are extremely delighted to have this exciting opportunity to run the UK's consistently best performing railway and serve the people of East London and South Essex. We will work closely with customers and local stakeholders to apply our vision and deliver improvements that will be visible and valuable; we are confident that British customers will benefit from our skill and capabilities developed in the highly competitive Italian market.
"We are also closely monitoring the Railways Franchising Programme as we intend to participate in tenders issued by the DfT to strengthen our presence in UK."
For further information:
National Express Group PLC
Matthew Ashley, Group Finance Director Tel: +44 (0) 121 460 8657
Anthony Vigor, Director of Policy and External Affairs Tel: +44 (0) 121 460 8401
Email: anthony.vigor@nationalexpress.com Mob: +44 7767 425822
Maitland
Rebecca Mitchell/ Neil Bennett Tel: +44 (0) 207 379 5151
Email: natexp-maitland@maitland.co.uk Mob: +44 7951 057351
Tancredi Group (for Trenitalia)
Giovanni Sanfelice di Monteforte/ Tel: +44 (0) 207 887 7636
Salamander Davoudi Mob: +44 7775 858152
Email: giovanni@tancredigroup.com
salamander@tancredigroup.com
There will be a conference call for investors and analysts at 9.00am on 11 January. Dial in details are as follows:
UK Toll Number: 0203 139 4830
UK Toll-Free Number: 0808 237 0030
Participant pin: 68053141#
About c2c
c2c operates services between Fenchurch Street and Shoeburyness, serving 26 stations in East London and South Essex.
c2c has consistently delivered the best performance in the UK rail industry, holding the UK records for annual punctuality (97.5%) and 4-weekly punctuality (98.8%) by a franchised train operator.
c2c has been named London's best commuter operator in the Which? magazine's survey of rail companies.
About National Express Group
National Express Group is a leading public transport operator with bus, coach and rail services in the UK, Continental Europe, North Africa, North America and the Middle East. The Group has a fleet of over 27,000 vehicles and more than 867 million journeys are made on National Express Services each year. National Express Group is quoted on the London Stock Exchange (NEX.L), and is a constituent of the FTSE 250 with 2015 underlying revenue of £1.9 billion. Further information on National Express Group can be found at: http://www.nationalexpressgroup.com.
About Trenitalia
Trenitalia is the passenger rail transportation company part of FS Italiane Group, a major industrial player with an increasing international presence, and growing profit (the net income rose +53.1% in 2015 over 2014). FS Group runs 8,000 trains a day, serving 600 million passengers and carrying 50 million tons of freight a year, over a network exceeding 16,000 kilometers. The Group's objective is to develop a large-scale mobility and logistics project capable of contributing to the country's economic growth. The holding company, FS Italiane, controls companies active in specific core businesses - all of which, in terms of safety levels and technological standards, are European leaders. Trenitalia, the Group's rail transportation company, is one of Europe's top railway operators, and manages passenger transport with its long haul connections, both on High speed (FrecciaRossa) and conventional lines, as well as regional and metropolitan services. Rete Ferroviaria Italiana is the national infrastructure manager ensuring the various railway companies access to the railway network, providing maintenance and safe circulation throughout the infrastructure, making investments to strengthen and develop the railway lines, stations and relevant technological systems. Other companies belonging to the FS Italiane Group include Busitalia, Italferr, Mercitalia Logistics, Ferservizi, Italcertifer, Centostazioni, GS Rail, FS Sistemi Urbani, Netinera Deutschland, TX Logistik and Thello.
Barbara Morgante - CV
Barbara Morgante was born in Livorno in 1962. After graduating from high school in Chieti, she began her studies at the University of Bologna, where she obtained a Degree cum laude in Statistical Sciences and Economics in 1986.
In 1987 she obtained a Master's Degree in Economic Development for the Advanced Tertiary Sector (accredited by ASFOR, the Italian Association for Management Training) at Unioncamere (the Italian Union of Chambers of Commerce) in Rome.
From 1988 to 1995, she worked as a corporate management consultant, dealing with projects in the areas of strategy, marketing and organisation for clients working primarily on the Transport, Construction and ICT sectors and in the Public Administration.
In 1995, she was employed by TAV (Treno Alta Velocità), initially as Marketing Manager and subsequently as Systems and Analysis Unit Manager.
In 1998, in her role as Marketing Manager, she moved into the Commercial Management area of the then Infrastructure Division of Ferrovie dello Stato (which later became Rete Ferroviaria Italiana, the Italian Railway Network). Thereafter, she held a number of different positions in the areas of Strategic Management, Quality and Systems, before becoming Strategy and Planning Manager of RFI SpA in 2006.
From 2008 to the end of December 2015 she was General Manager of Strategies, Planning and, from August 2014, Systems of Ferrovie dello Stato Italiane SpA, where she was in charge of strategic planning, investment control, M&A, environmental policy, transport models and studies, regulatory affairs and governing the corporate and Group ICT system.
She has been Chief Executive Officer Trenitalia SpA since 23st December 2015.
She has served on several Boards (including Trenitalia); she is currently a Board Member of Thello Sas, Chairwoman of Trenord Srl, Chairwoman of the Operating Committee and Supervisory Board of Netinera GmbH and the for the year 2017, Chairwoman of the High Level Passenger Meeting.