Key strategic goals

The key strategic goals of JSC FPC are defined by Strategic Management System, with a strategic management mechanism at its core.

As a national passenger rail carrier and the face of Russian Railways (hereinafter referred to as the Holding), the Company is aimed at meeting the demands of the economy and society. This means focusing on innovation-based and socially-oriented developments for competitive high-quality transportation services. In turn, this implies a high degree of JSC FPC involvement into state-level decision making.

State objectives involving JSC FPC

JSC FPC 2030 Development Strategy (approved by the Board of Directors of JSC FPC on June 28, 2012), in its evolutionary version that was chosen as the basic one, sets the following strategic goals and development indicators:

Network’s total traffic

  • 102.2 billion passenger-kilometres by 2015
  • 105.0 billion passenger-kilometres by 2030

EBITDA margin

  • 14.2% by 2015
  • 19.2% by 2030

Investment into development

  • RUB 105.7 billion over the period from 2011 through 2015
  • RUB 668.8 billion over the period from 2016 to 2030

Average annual revenue growth

  • 6.3% over the period from 2011 through 2015
  • 5.4% over the period from 2016 through 2030

Average annual net assets growth

  • 1.8% over the period from 2011
    through 2015
  • 7.3% over the period from 2016
    to 2030

Rolling stock acquisition

  • 2,078 carriages over the period from 2011 through 2015
  • 14,518 carriages over the period from 2016 to 2030

Strategic Projects

According to JSC FPC’s strategy, achieving these goals involves implementing a number of strategic goals, which, along with performance indicators, are set for the period to 2030 (approved by the Board of Directors of JSC FPC on June 28, 2012).

JSC FPC will implement these strategic projects, regardless of the economic development scenario; only the scale of the projects to be implemented and the resources required may differ.

  • Extend the use of dynamic pricing and loyalty programme.
  • Improve the efficiency of luggage, mail and freight transportation.
  • Optimise investment in rolling stock.
  • Quick-to-implement product and service improvement measures.
  • Improve the route network and expand multimodal transport services.
  • Improve product offers.
  • Develop key skills and competencies in major functional areas.

Strategy implementation results

In 2014, the actual figures for passenger traffic, revenue from transportation services, investment, carriage acquisition and EBITDA margin did not meet the target values.

The following factors, which had emerged in 2013 and which are going to continue in the medium term, had a negative impact on FPC’s efforts to implement its strategy:

  • A falling demand for long-distance passenger service;
  • Less state subsidies than had been expected and no state support for investments;
  • Increasing competition from airlines.

The decline in demand for passenger was due to a drop in the standard of living against the backdrop of rising transportation service tariffs and Russia’s poor economic performance.

The population’s mobility, which is the key factor behind the demand for long-distance service, is linked directly to the state of the national economy and the welfare of households and businesses.

2014 saw a slowdown in the rate of Russia’s economic growth. The country’s performance at the macroeconomic level failed to reach the projections that had been used as the basis in drafting JSC FPC 2030 Development Strategy.

JSC FPC Strategy indicators

Changes in the Macroeconomic Environment of JSC FPC

Key macroeconomic indicators 2014
RF Ministry of Economic Development’s 2013-2015 forecast (published on 11 May 2012).Projection included in JSC FPC Development Strategy According to Rosstat’s dataActual figure for 2014
GDP growth rate, % 3,7 0,5
Real wages growth, % 2,6 1,3
Inflation, % 5,2 11,4