Development in the year under review

¹⁾ Previous year’s figure adjusted.

The number of passengers fell considerably because of industry-wide market development (including modal shifts, driving time extensions due to construction sites and traffic jams, and changes in mobility behaviour). In the development of operating performance, supply adjustments are reflected.

In a difficult market environment, the economic development weakened further, dampened by negative ex­change rate effects. The adjusted EBITDA and EBIT largely im­­proved as a result of one-off effects.

• The revenue development was at the previous year’s level due to exchange rate effects. When adjusted for exchange rate effects, a slight increase was recorded, which was a result of several factors including improved performance in London.
• Other operating income (+19.7%) rose in particular because of income from property sales.

The development of expense items was supported by positive one-time effects:

• The decline in cost of materials (–2.0%) was driven by exchange rate effects and lower energy expenses.
• Personnel expenses (–1.3%) decreased slightly due to exchange rate effects and a one-off effect related to a pension liability management exercise. Salary increases, in contrast, had a negative effect.
• Other operating expenses (+6.7%) increased due to higher insurance costs.
• Depreciation (+5.3%) was higher due to substantial capital expenditures in the previous year.

Capital expenditures declined considerably. This was mainly because of contractual capital expenditures in the previous year associated with transport contracts awarded in London and measures to improve services in the regions outside of London.

The number of employees fell in London, in particular as a result of the closure of the Watford garage in Septem­­ber 2018.

The performance development was affected by strikes, weather-related restrictions, and the cessation of transport contracts for Arriva Trains Wales (October 2018) and the Tyne and Wear Metro (March 2017). The delayed implementation of the North of England rail infrastructure program and timetable changes also had negative effects.

The economic development was notably impacted, es­­pecially by developments at Arriva Rail North. The en­suing expenses, including the cost of materials, could not be offset. As a result, the development of operating profit was weaker.

• Revenue development was positive because of higher support payments and revenues from fares. In contrast, the cessation of the Arriva Trains Wales and Tyne and Wear Metro services as well as negative exchange rate effects had a weakening impact.
• Other operating income (+ 24.7%) rose in particular because of financial contributions for projects costs (however, this was offset by other operating expenses being higher).

The development of expense items was mainly driven by Arriva Rail North:

• The notable increase in the cost of materials (+9.4%) was primarily a result of higher expenses for rail replacement transport, infrastructure utilization and maintenance. Ex­­change rate effects reduced expenses in this area.
• Personnel expenses (+2.0%) rose because of an in­­creased number of employees on average. Exchange rate effects, in contrast, reduced expenses.
• Other operating expenses (+4.1%) rose because of proj­­ect costs (however, this was compensated by other operating income being higher) and increased franchise payments.
• Depreciation was at the previous year’s level.

Gross capital expenditures decreased slightly due to timing of contractual capital expenditure requirements.

The number of employees fell because of the cessation of the Arriva Trains Wales franchise. This was partially offset by recruitment at Arriva Rail North.

¹⁾ Previous year’s figure adjusted..

The performance development in the Mainland Europe line of business was positive:

• The number of passengers, volume sold and volume produced increased in rail services (mainly due to the elimination of restrictions by construction work carried out in Sweden in the previous year). Strikes in the Netherlands, in contrast, had a dampening effect.
• The number of bus passengers generally rose because of the acquisition of Autotrans (August 2017) and VT-
  Arriva (December 2018). The volume produced was at the previous year’s level.

The economic development was positive: this was due to a one-­­off effect in addition to the acquisitions. In contrast, weather-related restrictions in Sweden and strikes in the Netherlands had a dampening effect.

• Revenue development was especially positive due to acquisitions. Exchange rate effects, in contrast, had a dampening impact.
• Other operating income (+ 1.2%) was close to the previous year’s level.

The development of expense items was mainly driven by the acquisitions and a positive one-time effect:

• The increase in the cost of materials (+ 5.6%) related to the acquisitions and shift from other operating expenses not affecting profits. Exchange rate effects and the refund of fuel duty in the Netherlands, particularly from previous years, had an offsetting positive effect.
• Personnel expenses (+0.9%) increased slightly, partly because of the acquisitions and skills shortages on the Central and Eastern European labor market. Exchange rate effects had an offsetting effect.
• The decrease in other operating expenses (–3.7%) was a result of shifts to cost of materials not affecting profits.
• Depreciation (+0.6%) was at the previous year’s level.

Capital expenditures increased considerably due to preparations for the commissioning of the new Northern Line contract in December 2020, in the Netherlands. Capital expenditures also increased in Italy and Sweden.

The number of employees rose mainly because of the acquisition of VT-Arriva. The cessation of a transport contract in the Netherlands (December 2018) had an offsetting effect.