URBAN TRANSPORT DIVISION

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Deirdre Martin
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1 URBAN TRANSPORT DIVISION Rafael González Hernández General Manager, Urban Transport Division Madrid, 6 th April

2 2 o Agenda o Overview of Spanish Urban Transport Market o ALSA Urban Transport Division o Growth opportunities o Conclusions

3 Urban: Investment summary 3 o Highly defensive core public service provider. o Diverse portfolio of city bus operations with very long concessions. o Partially subsidised service with strong local support. o Effective consortia structures in place. o Consistent revenue growth despite recession. o Exciting off-shore bid wins and opportunities. o Significant domestic outsourcing and acquisition opportunities.

4 Alsa Urban Division 4 o Represents approx. 30% of National Express Spain revenues. o Critical mass gained from the Continental Auto acquisition in 2007: Madrid commuter, Almeria. o 19 urban contracts; focused mainly on Spain s medium size cities and towns, plus exposure to high growth Moroccan market in Marrakech and Agadir. o Partly subsidised revenue model

5 Urban Transport Market 5 o 50% of Spain s population lives in metropolitan areas (only 5% of the country's area). o 1,800 million passengers/year (excl. Metro). Increasing trend of urban mobility. o Trend to create multi-operator urban Consortia: increases use of public transport. o Largest cities still in-source: cities with inhab. 77% population is still served by municipal providers. o Market with structural public subsidies (43% of the cost).

6 Urban Transport Market 6 o Significant opportunity in the privatisation of public transport companies in Spain s major cities (Madrid, Barcelona, Valencia) 500,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000,000 50,000,000 0 Las Palmas Malaga Palma Mallorca Sevilla Tenerife Valencia Barcelona Madrid Vitoria Cordoba Valladolid San Sebastian Burgos Huelva Tarragona Gijón Santander 0 Reus Fuenlabrada Estimated Revenues No. of buses

7 Urban division Oviedo León Aviles Palencia Madrid Cartagena Velez Almeria Marrakech Agadir

8 Fast and profitable growth 8 o High growth business over the last 8 years. o Step change due to Continental Auto acquisition. o Scale advantage to large urban operations.

9 Contract models 9 o Contracts without public subsidy o Contracts with public subsidy and/or guarantee of economic balance o Contracts with payments per amount/quality of production

10 Future growth Opportunities 10 o Range of opportunities for organic growth: o Extend network where contract is payment per Km operated. o Rearrangement of Networks. o New routes and service adjustments. o Extend area of operations. o Growth of Tourist Bus/Sightseeing. o Tramway growth. o Capacity and positioning in international projects. o Application of Group synergies.

11 Urban trams 11 o Trams/Light rail currently popular as infrastructure investment projects. Tramways both operating and under development in Spain o Low investment capacity by City Councils: o Consortium or public/private approach. o Current preference for public operation : o (Jaén, Palma de Mallorca). o Alsa is one of only a few private operators of city tram operations: o Velez; o Madrid Light Rail.

Alsa-operated trams 12 Madrid Light Rail o Line 1: Las Tablas -> Pinar

4 km o Stations: 5 underground, 4 surface o Trains: 8 units o Length of

5 million passengers/yr o Km operated: 480,000/yr Velez Malaga Tramway o

12 Alsa-operated trams 12 Madrid Light Rail o Line 1: Las Tablas -> Pinar de Chamartín o Route length: 5.4 km o Stations: 5 underground, 4 surface o Trains: 8 units o Length of travel:15 minutes o Demand: 4.5 million passengers/yr o Km operated: 480,000/yr Velez Malaga Tramway o Route length: 4.8 km o Stations: 9, all above the surface o Trains:3 units o Length of travel: 20 minutes o Demand: 550,000 passengers/yr o Km operated:112,398

Wide range of services still to bid for: tourist bus,

13 Morocco 13 o Excellent opportunity for growth o Gradual privatisation of urban transport; o Fast set up, low cost; o Wide range of services still to bid for: tourist bus, inter-urban. o Easily managed from Spain. o Access to market through reputation in Spain.

14 Conclusion 14 o A dynamic and growing business. o Market in constant growth with embedded social/political protection. o Long-term contracted model. o Existing exposure to higher growth and operational flexibility in Morocco. o New Opportunities.

15 Q&A 15

PROF. JUAN DE OÑA ASSOCIATE PROFESSOR TRYSE RESEARCH GROUP UNIVERSITY OF GRANADA. Contact:

PROF. JUAN DE OÑA ASSOCIATE PROFESSOR TRYSE RESEARCH GROUP UNIVERSITY OF GRANADA HTTP://TRYSE.UGR.ES Contact: jdona@ugr.es Contents: General Presentation of the Spanish Infrastructures and Transport Program