First Rail Holdings Media Planning and...

Summer 2016 Introduction to FirstGroup

First Rail Holdings

Media Planning and

Buying

October 2018


Agenda

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▪ Welcome & Domestics

▪ Oystercatchers

▪ FirstGroup Background

▪ First Rail Holdings

▪ TOC specifics

▪ Tendering Process

▪ Speed Dating

▪ Close


Oystercatchers

Oystercatchers is one of the UK’s leading marketing management consulting, and

marketing outsourcing companies. We advise senior marketers on agile marketing

transformation and are trusted by marketing professionals to deliver industry

leading, client specific solutions.

We transform marketing models, agency and supplier partnerships and improve the

ROI of every brand we touch.

Oystercatchers has been built on the belief in the transformative power of

marketing, and a drive to help brands, agencies, and marketers accelerate their

performance.

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Oystercatchers:

Our pitch process

Focused

Selection

Ambition

Kick Off

Stakeholder

alignment

Procurement +

Marketing

Briefing

Bespoke

data

request

issued

Strategic

&

Creative

Check-Ins

Agency fee

proposal

submitted

Final

Response

&

Decision

Fee analysis

presentation

Optional Fee

negotiations

Ma

rk

etin

gP

ro

cu

re

me

nt


Introduction to

FirstGroup


FirstGroup overview

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▪ Leading transport operator in UK and North America

▪ We carry around 2.1 billion passengers a year

▪ Revenues of more than £6.4bn a year

▪ We have 100,000 employees across the Group

▪ Five divisions:

− First Student

− First Transit

− Greyhound

− First Bus

− First Rail


FirstGroup divisions – North America

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▪ First Student

− Largest provider of student transport in North

America

− 48,000 employees across more than 460 locations

▪ First Transit

− One of the largest private sector providers of public

transit management and contracting in North America

− 19,500 employees and more than 330 contracts

▪ Greyhound

− Only national operator of scheduled intercity coach

transportation in the US and Canada

− 6,000 employees serving around 4,000 destinations


FirstGroup divisions – UK

▪ First Bus

− One of the largest bus operators in the UK

with approximately 5,800 buses and around

a fifth of the local bus market outside London

− 16,500 employees serving eight of the 11

most densely populated cities in the UK

▪ First Rail

− One of the most experienced rail operators in

the UK and the only one to run every sort of

railway - long distance, regional, commuter

and sleeper operations – and carrying more

than 260m passengers in 2017/2018

− 10,000 employees with three rail franchises

and one open access operator

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First Student

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▪ Clear market leader in highly fragmented marketplace

▪ Five million student journeys per school day

▪ First Student operates one third of outsourced

market, with a diverse portfolio of

more than 1,100 medium-term contracts

▪ Creating a sustainable competitive advantage

from scale

▪ Strong customer relationships and satisfaction

scores

▪ Strengthened operating model positioning

business to realise full potential


First Transit

▪ More than 340 million passengers a year

▪ Strong returns from typically low capital requirement

▪ Established credentials and proven track record are

key

▪ Market leader in highly fragmented marketplace

▪ Diversified 330 contracts across core business

segments

▪ Scale and expertise enables us to leverage existing

relationships for new business wins

▪ Further scope to promote outsourcing

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Greyhound

▪ Iconic brand synonymous with affordable long distance travel

▪ The only national network of scheduled intercity coach services

▪ Around 17m passengers per annum with a fleet of

approximately 1,600 vehicles

▪ Greyhound Express attracting users back to bus

travel plus a new customer demographic

▪ Unique scale drives success of Express - strong

feeder traffic, quickly reaching sustainable flows

with fewer new miles added enabling fast, profitable

expansion

▪ Operating model transformed – more modern,

efficient business with strong growth and returns

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First Bus

▪ Market revenues of approximately £4.2bn per annum (excluding London) almost entirely

privatised, bus travel diversified by journey type

▪ Our First Bus division operates around a fifth of local bus services in the UK, outside of

London.

▪ We carry around 1.6m passengers every day

▪ Traditionally strong, diversified networks in

good bus territories

▪ Proactive and responsible partner to our local

authorities, experienced at working together

to deliver passengers’ needs

▪ Reforming business model and repositioning

portfolio to focus on areas with greatest growth

potential and to improve returns

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First Rail

▪ Consistent strong performance and highly successful record

▪ Strong team, well regarded with unique experience of diverse operations, running every

type of railway – inter-city, commuter, regional and sleeper services

▪ Trusted partner on key infrastructure projects

▪ Clear focus on meeting needs of passengers,

taxpayers and delivering an economic return

for shareholders

▪ Highly successful track record as long term player

in rail sector

▪ Experienced bidding team with a record of

delivering

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Great Western Railway

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▪ GWR provides high speed, commuter, regional and branch line train services, carrying

more than 103 million passengers every year across the Great Western rail franchise

area, which includes South Wales, the West Country, the Cotswolds, and large parts of

Southern England.

▪ We will run the franchise until at least March 2020, bringing our experience of managing

the route over many years to ensure the successful delivery of the major programme of

infrastructure upgrades on the network. The £7.5bn Great Western Mainline

modernisation programme is the biggest investment on the route since Brunel. During this

time, we are introducing new or refurbished trains on every part of the network meaning

additional and more frequent services, reduced journey times and more seats, particularly

on key commuter routes. Our aim is to reinstate the ideals of our founder, Isambard

Kingdom Brunel. And deliver a rail service for the 21st Century.

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▪ In September 2015, First Great Western became Great Western Railway (GWR). The re-

brand was centred on the promoting company’s commitment to putting its people and

customers first. Inspired by the legacy of Brunel, the new branding is a modern

adaptation of the traditional Great Western Railway look and feel, drawing on its 182-

year-old heritage to inspire a new identity. As part of the new look, travellers can now see

refreshed branding, new uniforms and the phased introduction of new train liveries.

▪ As part of the re-branding, GWR has undertaken a vast amount of work to implement its

new vision, values and ways of doing business with its colleagues and customers focused

on ‘revaluing rail in hearts and minds of the travelling public’. It’s more than a rebadging

exercise. It’s a complete shift in our ethos as a train operator. It means we no longer

behave as a franchisee, but as a custodian – responsible for reinvigorating the west by

returning the railway to its former glory. GWR has launched a new award winning creative

campaign in October 2017. It features the Famous Five characters who embody a

quintessentially British sense of adventure. They are travelling in GWR brand new Hitachi

class 800 trains across the South West of England and South Wales

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▪ THE NETWORK

▪ GWR runs one of the most complex rail franchise in the UK:

▪ London and Thames Valley (LTV) – the majority of commuter / outer suburban services

from London Paddington into the Thames Valley region including Berkshire, parts of

Buckinghamshire and Oxfordshire – Represents 16% of revenue.

▪ High Speed Services (HSS) – long distance inter-city services along the Great Western

Mainline to South West England, South Wales and Bristol – Represents 74% of revenue.

▪ Regional Services (West) – through the West of England to the south coast – Represents

10% of revenue.

▪ The Night Rivera sleeper service – between London and Penzance

▪ Airport services – to London’s Heathrow and Gatwick Airports

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▪ PRODUCT & SERVICE IMPROVEMENT MILESTONES

▪ 2016

▪ New, higher capacity, electric trains in the Thames Valley between Hayes & Harlington

and London Paddington. These new trains are fully air conditioned and offer at-seat

power and free WiFi for everyone. They are rolled out across the whole of the Thames

Valley - including Maidenhead, Reading, Oxford and Newbury - over the next few years.

▪ This has enable us to start planning the movement of our existing diesel trains to increase

capacity in both the Bristol and Bath area and the West of England.

▪ 2017

▪ Since October 2017 our new Intercity Express fleet, has replaced our existing long-

distance trains across the network between London and Bristol, Bath, Swindon, Newbury

and Reading.

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▪ PRODUCT & SERVICE IMPROVEMENT MILESTONES

▪ 2018

▪ Since Summer 2018, we have upgraded our trains running between London and

Somerset, Devon and Cornwall.

▪ 2019

▪ A new time table will be delivered in 2019 and once Network Rail’s electrification work is

fully completed, IET trains will increase capacity by up to 25%, shorten journey times into

London by up to 20 minutes, and allow us to run 54 more trains between London and

Bristol every day.

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South Western Railway

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South Western Railway

▪ Joint venture First Group and MTR Europe Franchise since August

2017

▪ Carry 235M passengers per year across urban and suburban,

regional and long distance routes between London Waterloo and

the South and West of England including Bristol, Exeter and

Portsmouth.

▪ Run 1,700 services per day on some of the busiest routes in the

UK

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Commuter journeys represent 53% of all SWR journeys, but only 43% of earnings due to a lower average yield

Journey purposeSWR journeys

mSWR Earnings

Commute 113 53% 43%

Business 26 12% 16%

Leisure 75 35% 41%

Total 213 100% 100%

SWR journeys, earnings and yield, 12 months to Period 5 18/19


12

3

4

17

10

11

12

1314

15

16

8

9

7

65

282

116

235

311

376

51

186

82

191

159

135

70

257

1,033

Total SWR catchment adult travellers = 3,482K


SWR catchment adults have been divided into seven customer segments, defined loosely by life stage and modal preference

Retired

Time Rich

Experience Seekers

Car Dominates

No Mode Dominates

Rail Dominates

• Working pre-family ABC1s

• Commuting is primary travel need

• Spontaneous, time- poor risk takers

• Act on instinct

Empty NesterPre-family Family

• Retired AB• Love a loyalty scheme• More males than

females

• Working AB Family with school aged kids

• Mix of commuters and business travellers

• Time jugglers looking for ways to make life easier

• Planning is essential –hassle free is a must

• Working Family or stay-at-homes, mainly ABC1

• Planners

• Not prepared to inconvenience themselves

• Working pre-family / Family, overindex DE

• More females than males

• Value driven, non-premium

• Risk-averse planners who are time andcash poor`

• Empty nesters or working ABC1

• Travel for leisure, not for work

• More males than females

• Will pay for quality and looking for recognition of loyalty

Spontaneous

Pre-Kids 21%

Value Driven On

The Go Family13%

Rail Neutral Family10%

14%

Juggling Affluent

Family15%

Empty Nester

Leisure20%

% Prevalence in SWR catchment

• Retired AB• Traditional, risk averse• Buy premium

products and spend time researching products/services

Time Rich Service

Seekers7%


Juggling Affluent Family and Value Driven On The Go Family are large segments making frequent leisure trips,

with room to increase modal share

Current rail modal share, leisure

Total leisure journeys per year - all modes (m)

Leisure journeys – current rail spend = £383m*

Current SWRrail spend,

total segment(£m)

* Excludes SWR earnings from children and out-of-catchment customers


TransPennine Express

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▪ Operated a Franchise since 2004, previously in

partnership but now sole Franchisee until 2023.

▪ Services span the North of England and as far

North as key Scottish cities of Glasgow and

Edinburgh

▪ Highly competitive rail market operating

alongside Virgin trains , LNER, Northern and

Cross Country as well as coach operators and

low cost airlines into Scotland.

▪ New brand launch in 2016, with £500M

investment in TPE to transform for the future

▪ Investing in digital retail to drive sales through

own channels – website and app.

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▪ TransPennine Express carried 28m passengers last year, with the broad audience mix

made up of 70% leisure travellers, 20% business and 10% commuters.

▪ TransPennine Express have a segmentation model produced by Accent which gives us a

much richer understanding of the audience in terms of opportunity segments.

▪ The more targeted campaign segments TPE work towards are:

− B / C1 / C2 /16-34 year olds, planning discretionary leisure travel.

− Broader audience targeting is aligned to the railcard products aimed at seniors (over

55’s) and students, with specific promotions for these two audiences.

− Leisure and business travel to and from Manchester Airport.

▪ Geographical targeting is applied to the media activity and weighted towards the key

conurbations in the north and Scotland.

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▪ Growing the leisure traveller market is

the main growth target, however

business travel is seen as a growth

opportunity.

▪ From summer 2019, TPE will have

three new fleets of intercity trains, with

a 40% increase in capacity.

▪ All trains will have smart interiors,

improved first class and catering, free

WiFi and onboard entertainment.

▪ New routes will operate from Liverpool

to Glasgow from May 2019 and

services extended from Newcastle to

Edinburgh from December 2019.

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]

The Tender Process

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SmartSource

SmartSource - E-Tendering tool across FirstGroup

▪ Facilitates the tendering process

▪ Project Documents

▪ Forum

▪ Surveys

▪ Evaluation

Attachments Section - Project documents loaded here:

▪ Pitch Brief

▪ Supporting Information

▪ Evaluation Guidance

▪ New attachments referenced on the Forum or in a specific e-mail

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SmartSource

Forum

▪ All project questions asked via the Forum

▪ Submitter’s details are anonymous

▪ Will be treated as project ‘generic’ unless specifically requested by the submitter

▪ If deemed commercially sensitive, response to submitter only

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Anticipated Key Procurement Milestones

Pitch information day 01 October 2018

Pitch brief circulation w/e 5 October

Issue Tender Documentation by 12 October 2018

Halfway workshops/Bilaterals w/c 29 October 2018

Receive Tender Responses 14 November at 1200 noon

Final pitch Presentations w/c 19 November 2018

Finalise Evaluation and post-tender clarifications w/c 26 November 2018

Standstill Period 14 Dec – 24 Dec 2018

Contract Award / Go Live Jan 2019

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TOC 1-2-1’s

Speed Dating

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First Rail Holdings Media Planning and Buying

Any Questions

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First Rail Holdings Media Planning and Buying

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