Change to Meet the ChangeChange to Meet the Changehkiod.com/document/Directors'...

Change to Meet the ChangeChange to Meet the Change

For Directors’ Symposium 2013For Directors Symposium 2013

TC ChewProjects DirectorProjects DirectorMTR Corporation 11 September 2013

MTR Corporation Page 1

Why organization changes?

New Technology Performance Gap

External Pressure For the Sake of Change

9/16/2013MTR Corporation

Crisis Following others

Change or Not Change?

Eastman Kodak Company• In 1976, Kodak had a 89% market share of photographic film sales in the United States

• In late 1990s, it began to struggle financially…D li i l f h hi fil• Decline in sales of photographic film

• Slow in transitioning to digital photography

McDonald’s• In 1960s, the baby-boomer trend, y

• Supply fast and inexpensive menu

• In 1970s and 1980s, the globalization trend• Transfer American Way of Life to many countries

• In late 1990s and 2000s, Health concerns


• Add “healthy” and “more natural” elements

Change : An Opportunity or Threat?

Changes in Business Environment:-Business Environment:

• Customers• EconomyEconomy• Technology• Government Policy • Information


Information• Competitors…

Changes : Customer ExpectationExpectation of Better Services


“Listening & Responding” sets our t i h i ht

Resources of over HK$1 billion made available for initiatives planned, including: -

customer experience on a new height

Train Service Improvement Deployment of Additional Staff

Interactive Digital Way-finder and Improved In-station Signage

‘Next Train’ AppImproved In station Signage


“Listening & Responding” sets our t i h i ht

Additional External Lifts Additional Wide Gates

customer experience on a new height

Additional Toilet Facilities Additional Seats in Stations


Barrier-free AccessRetrofitting External Lifts to connect station concourses with street level

4 lifts Completed in 20124 lifts Completed in 2012

1 lift - 2013

3 lifts - 2014

5 lift 2015

5 lifts - 2015

1 lift - 2018


Changes : Customer ExpectationExpectation of Corporate Social Responsibility


Corporate Social Responsibility -Fare Adjustment Mechanism

New Formula Announced on 16 April 2013 -Improve alignment of public and corporation’s interest

Fare Adjustment Mechanism

p g p p

MTR Corporate MTR Financial pSocial

ResponsibilityPrudence as

Listed Company


Changes : Technology

How people spend their time How people spend their time hil t ki t ?hil t ki t ?

Technology Advancement and its Impact on Social Behaviours

while taking metro?while taking metro?Present …Present …

In the PastIn the PastIn the Past…In the Past…

9/16/2013 MTR Corporation

Market situation...

• 16.6M mobile service subscribers in Hong Kong1

96% f hHigh mobile

• 96% of smartphone users use mobile internet daily with average 39 Apps installed2

gpenetration

Journey Planning on

• Full 3G coverage and 4G network available in 7 lines of MTR

• Free WiFi hotspot service in all 84

Good mobile connectivity

the move

Free WiFi hotspot service in all 84 MTR stations in MTR

1. Real time information2 M i f f t ti

• Contingency arrangement• Relevant info to facilitate the use

of MTR

Increasing demand for information

2. More info for station facilities

3. Tailored Apps for different segments


1. http://ofca.gov.hk/en/media_focus/data_statistics/key_stat/index.html2. http://cw.com.hk/news/hong-kong-tops-asia-mobile-internet-usage

Evolution of MTR Apps

Launch of Traffic News

3 Major enhancement since its first launch in 2010:

• Static Info Real time Traffic New & Next Train • Basic Journey Planning Additional function like News

Traffic

Basic Journey Planning Additional function like barrier-free facilities search / Sightseeing info

1 A f ll 3 A i diff

2013Extend to West Rail Line

Traffic News

Next Train

•1 App for all 3 new Apps targeting different segments

2012First launch of MTR Mobile

Next Train

2011MTR Mobile

All-in-one platform

MTR Mobile

2010

Launch of MTR Tourist MTR

Tourist


2010

Gift redemption for MTR Club

1st launch of Next Train

MTR Mobile

Tourist

Next Train

MTR Mobile

Enhancement Destination based Journey Planning with First /

Last Train info All-in-one platform to host MTR Apps

Static Journey Planner

Web-based search


All-in-one platform to host MTR Apps Easy access of frequently used functions Newly added barrier-free facilities search

Traffic News function

Instant & direct communication for changes on train schedule during tropical cyclones,

Info dissemination through traditional


g p y ,festive seasons or serious service disruptions.

gmedia

Next Train

Real-time information of “Next Trains” for Airport Express, Tung Chung Line & West

Information displayed at the


p p g gRail Line

p yplatform only

MTR Tourist

Point-to-Point travel guide to over 600 local attractions Smart order function to facilitate itinerary planning with

Web-based search


the shortest path All MTR tourist products & info

Social Impact1,800,000 users for MTR Apps

Top #1 in Travel C t i ACategory in App Store & Google Play (Aug 2013)

15 local & international awards for MTR mobile since the launch in 2010


Changes : Government PolicyProperty Market and Housing Supply


MTR Rail + Property Model

GovernmentProperty Division operates based on the R+P Modelbased on the R+P Model for economic sustainability

Finance construction & improve ridership

Synergy of Rail + Property

Improve accessibility & land value

Society & Economy


Society & Economy

Economic Sustainability for MTR’s Property BusinessProperty Business

Savings to the Public P

Significant Land P iPurse Premium

EconomicEconomic Sustainability

Flying Start for Developers

Synergy & Convenience DevelopersConvenience


Be Responsive and Proactive• Property business is subject to a dynamic and competitive

environment

Evolving Regulatory Environment

Property Business•Property Development

Recognize & Embrace Changes

Develop Adjustments

•Property Development•Property Investment

•Property Management

g

Competitive Business

Increasing Expectations from

Communicate

Environment Community


& Training

Changes : Global MarketOpportunities of International Business

EuropeEurope

• 65 cities built new or expanded rail s stem bet een 1980 and 2007

AsiaAsia

• Kuala Lumpur, Bangkok, Manila, Delhi, Kolkata, Mumbai, Seoul and others have added rail

USUS

• Light Rail System has grown from 15 in 1995 to 29 currently

system between 1980 and 2007 others have added rail

• India and China are building metros in 14 and 82 cities respectively

Middle EastMiddle East

• Metro/light rail is being constructed or planned in Doha, Saudi Arabia Dubai KuwaitSaudi Arabia, Dubai, Kuwait

AustraliaAustraliaSouth AmericaSouth America

• Numerous metro lines are being planned / constructed in Sydney, Gold Coast, Perth and Melbourne

• Metro lines are being constructed various cities in Brazil, Chile, Venezuela, Peru and Argentina


Numerous rail transit systems being planned / constructed worldwide

Introducing Rail + Property Model in Mainland -Longhua New TownLonghua New Town

Rail Deal: Approved in 2009 under a Build-Operate-Transfer modelRail Deal: Approved in 2009 under a Build Operate Transfer model

Property Deal: MTR won the bid for the property development site at the Shenzhen Longhua Metro Line Depot (Developable GFA: 206,167 m2) in A t 2011August 2011

• Enhanced the urban design via Transit Oriented Development Study

• First-of-its-kind project, successfully modifying HK R+P model to suit the local context


Opportunity to Replicate the Model in Other ProjectsProjects

• Beiyunhe Station (北運河站) atop Tianjin Metro Line 6 (天津地鐵六號綫)

• RMB¥2,075 million;

• A mixed use development of p278,650 m2

深圳轨道交通6号线沿线物业综合开发研究Shenzhen Rail Transit Line 6 Property Development Study

主持单位：深圳市发展和改革委员会深圳市规划和国土资源委员会

深圳轨道交通6号线沿线物业综合开发研究Shenzhen Rail Transit Line 6 Property Development Study

主持单位：深圳市发展和改革委员会深圳市规划和国土资源委员会

Transport-Oriented Development (TOD) Land and Planning Study for

Shenzhen Line 6 endorsed by the


2013.04

深圳市规划和国土资源委员会委托单位：深圳市地铁集团有限公司主持单位特邀顾问：香港铁路有限公司研究单位： AECOM/中规院/铁工院联合体

中原地产/同致诚/利安

2013.04

深圳市规划和国土资源委员会委托单位：深圳市地铁集团有限公司主持单位特邀顾问：香港铁路有限公司研究单位： AECOM/中规院/铁工院联合体

中原地产/同致诚/利安

Shenzhen Line 6 endorsed by the Expert Panel Review on 19/4/2013

Opportunities of International Business• Bidding for O&M Franchise in UK

• Essex Thameside

• Thameslink

• Crossrail

• North West Rail Link in Australia


Internal Changes : Corporate EfficiencyCoMET Bench Marking


Internal Changes : Corporate Efficiency

Strong requirements for retention of knowledge and

Knowledge Management

g q gexpertise in corporation:

•Aims to be a leading multinational company

8 KM systems were implemented in MTR

Aims to be a leading multinational company•Business expansion •Staff age profile •New recruit etc•New recruit, etc.

Change the Way We Collaborate with Others


Internal Changes : Corporate EfficiencyRisk-based Asset Management

• Capability Assessment

• RailASSURE

• Asset Life Assurance (ALA)

• Long Term Asset Replacement• Long Term Asset Replacement

• Efficient Organization

Equipment Maintenance Work Order Maintenance Analysis and

Act


Equipment Management

Maintenance Planning

Work Order Management

Maintenance budgeting

ymanagement

reporting

Plan Do Check

MTR Corporate StrategyAspirations for 2021:

• Raise recurring EBIT significantly• Becoming a truly multinational companyBecoming a truly multinational company• Expand network size substantially, serving more people and

commuters around the world• Be the undisputed global leader in service quality• Be the undisputed global leader in service quality

Strengthen our gHong Kong

corporate citizen reputationreputation

Accelerate ourGrow and Accelerate our success in the Mainland and i t ti ll

Grow and enhance our

Hong Kong core b i

MTR Corporation

internationallybusiness

9/16/2013

B f h d ’t b b ili f !9/16/2013MTR Corporation

Be aware of changes, don’t be a boiling frog!

Thank You

2013/9/16

MTR

Corporation 2013/9/16MTR Corporation Page 32

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