2014 ANNUAL REPORT A maintenance partner that … Annual Report...2014ANNUAL REPORT A maintenance...

ANNUAL REPORT

2014A maintenance partner that gets the trains on trackEuromaint provides maintenance services for an industry of great social importance – the rail industry.

Contents

Business areas focusing on value-creating partnerships | page 12

PASSENGERSA complete maintenance concept. Everything from light maintenance to full service commitment.

FREIGHT/GERMANYPlanned and remedial mainte-nance – in the workshop or by mobile units.

COMPONENTSReprocessing of components and complete material supply.

WORK MACHINESA complete maintenance programme for machines and tools used to maintain the railway infrastructure.

Maintenance contracts totalling SEK 1.4 billion under procurement on the Swedish market 2014–2017.

See Euromaint’s development since 2010 – in hard figures.

CLEAR DIRECTION FOR A STRONGER POSITION | PAGE 7

FIVE-YEAR OVERVIEW | PAGE 13

5 years

Operational activities

Group overview 1

Comments from the Chairman of the Board and CEO

4

Objectives, strategy and outcome, including sustainability

6

Business areas 12

Five-year overview 13

Financial reporting 2014

Directors’ report 14

The Group 16

The Parent Company 20

Notes 24

Auditor’s report 46

The Board of Directors 47

Company management 48

SUSTAINABILITY | PAGE 9 Employees trained in the Code of Conduct.

215 REFURBISHED PASSENGER CARRIAGES 2009–2014. Read more on page 9

66Proportion of renewable energy

pro cent

From a financial point of view, Euromaint has had a better year compared to 2013, but we still have a bit to go before we reach a satisfactory level.

COMMENTS FROM THE CEO | PAGE 4

READ MORE ABOUT EUROMAINT’S ENVIRON-MENTAL WORK | PAGE 11

5 years

As a means of transport, the train has a number of advantages. Good for the environment, comfortable, easy and cost-effective – to name just a few. During 2014, Swedish railways carried more than 200 million passengers and transported around 68,000 tonnes of freight, with marginal environmental impact. For those who take our shared environmental challenges seri-ously, rail transport is the unrivalled alternative. Punctuality and safety are essential when it comes to both passenger and freight transport. A lack of punctuality means high costs to society. In addition to the economic cost, poor punctuality runs the severe risk that for their next journey or consignment the customer will opt for an alternative method of transport – one that will have considerably greater impact on the environment. But efficiently run train services very much need all players to do their job. Euromaint’s role is to ensure that the trains are in the proper condition and maintained to schedule, so that they can go into service when they are supposed to. This is a task we take extremely seriously each and every day, and it gives us great pride.

GROUP OVERVIEW

1EuroMaint Annual Report 2014

2 EuroMaint Annual Report 2014

GROUP OVERVIEW

Rotterdam

DuisburgAntwerpen

Wolfsburg

LeipzigDelitzsch

Wustermark

Stockholm

Jelgava

MalmöLandskrona

Göteborg

ÅmålLinköping

HallsbergÖrebroVästerås

Gävle

Sundsvall

Vännäs

Luleå

Falköping

Borlänge

Kaiserslautern

Oberhausen Ingolstadt

Comfortable and punctual train journeys

PASSENGER TRAFFIC

According to the Swedish government agency Transport Analysis, around 15 train operators have approximately 2,700 carriages in service on Swedish railways, with around 200 million journeys being made in them. An important aspect of endeavouring to boost confidence in the train as a means of transport is better punc-tuality. For this, one among many prerequisites is that train maintenance should be performed in the right manner and at the right time, and this is where Euromaint plays a major role. The company offers rolling stock maintenance, component maintenance and material supply for multiple units, locomotives and passenger carriages. The company’s industrialised process ensures the highest quality and efficiency. Customers include A-Train, Botniatåg, DB, SJ, Tågkompaniet and Veolia.

200Over

million journeys

Euromaint offers maintenance of rolling stock to train operators, rolling stock owners, infrastructure contrac-tors and rolling stock manufacturers. Common core values, clear leadership, efficient processes and an open and honest dialogue together constitute essen-tial components of the long-term change work that is underway aimed at developing a stable, growing and profitable company with satisfied customers.

VISIONEuromaint will be Europe’s leading independent supplier of maintenance services for all parts of the rail transport industry.

MISSIONEuromaint will contribute to making the train the natural means of transport for meeting the environmental challenges of tomorrow.

CORE VALUESThe company’s core values (cooperation, taking responsibility, contributing, reliable) emphasise the importance of all employees taking responsibility and making a contribution to continuous improvements.

CUSTOMER PROMISESTo retain existing contracts and win new ones, Euromaint will always offer high quality at an attractive price, creating availability and reliability for customers, in addition to proactively developing efficient maintenance solutions. This can be summarised as quality, delivery and innovation.

EuroMaint in two minutes

Euromaint’s presence Workshop Service station Mobile maintenance only

Euromaint is a Swedish company with an international offering and operational activities in five European countries. These operational activities are represented by

more than 25 workshops and mobile service units in Belgium, Latvia, the Netherlands, Sweden and Germany. The offering is pan-European but the main markets are Sweden

and Germany.


GROUP OVERVIEW

Safe and punctual rail freight transports FREIGHT

In Sweden, around 68 million tonnes of freight are carried by rail in 11,000 freight wagons. It is crucial that the freight is delivered on time to the customer. Euromaint has turnkey maintenance solutions for freight wagons and locomotives. This includes regular overhauls, component supply and trouble-shooting. Euromaint maintains freight wagons and locomotives in workshops and on site – based on the customer’s wishes and needs. Customers here include AAE, DB, Green Cargo and Nacco.

1. Rolling 12 months

Source: Transport Analysis, Railway transports 2014, quarter 3

The trend of increasing use of the railway system continues. Between 2010 and 2014, the number of passenger journeys by train increased by 7.1 per cent. In total, more than 200 million journeys were made.

1. Rolling 12 months

Source: Transport Analysis, Railway transports 2014, quarter 3

Freight transports on the railways are more or less at the same level as in 2010. Compared to 2012 however, the volume has increased by 3.5 per cent.

Passenger traffic, SwedenMillions of passenger-kilometres. Average annual growth for 2010–2014: 1.4 per cent

Freight traffic, SwedenQuantity of freight carried in thousands of tonnes

68Over

million tonnes of freight transported

Accessible and available

INFRASTRUCTURE PROVIDERS

The railway infrastructure comprises 14,000 kilometres of track in rail traffic service, 1,900 kilometres of overhead power line and 881 signal boxes. Maintenance is handled by various players. Euromaint supplies mainte-nance for the work machines used by those

various players. Customers here include Jernbaneverket, SL and Strukton.

Since 2007 Euromaint has been owned by Ratos AB, a Swedish listed private equity company. Operational activ-ities are run by subsidiary Euromaint Rail’s four business areas – Passenger, Freight/Germany, Components and Work Machines. Each individual business area is tasked with creating clear customer value and contributing to overall profitability. Read more on page 12.

0

4,000

8,000

12,000

201412013201220112010

0

20,000

40,000

60,000

80,000

201412013201220112010


COMMENTS FROM THE CHAIRMAN OF THE BOARD AND CEO

Work on continuous improvement shows results

2014 ended on a high note with a new contract from Green Cargo. This was followed at the very beginning of the new year by an order that our German operations received from the Italian com-pany EAV. Our intensive work on improvements has started to show results and we are continuing to work systematically towards achieving further improvements throughout the business.

Green Cargo decided to enhance its collaboration with Euromaint by signing a 10-year contract for some of the maintenance of its electric and diesel locomotives and components. The Italian contract, which involves a commitment from us to renovate and modernise 12 items of rolling stock, gives the company access to a new and interesting market. Italy has many train operators and a rather ageing train fleet. The potential is immense. It is also worth noting that, despite the fact that price counts for so much within the industry, we won the contract primarily due to recogni-tion of our high quality. Hopefully there is now increasing under-standing of the importance of quality in maintaining safety on the railways.

From a financial point of view, Euromaint has had a better year compared to 2013, but we still have a bit to go before we reach a satisfactory level. Revenue fell by 5.9 per cent, amounting to SEK 2,274 million (2,416). The situation on the German market, where economic conditions remain poor, has affected profits for the year, but orders won during 2014 will start to make themselves felt in earnings for the second half of 2015. The Swedish opera-tions showed a reduction of 7.8 per cent. The operating profit (EBITA), adjusted for expenses affecting comparability, was SEK 77 million (67).

Euromaint has worked systematically on maintaining its strong position. This has meant, for instance, continuing its work within the four focus areas of stability, profitability, image and growth. One consequence of the changed conditions is that a number of employees have unfortunately had to leave the company, mainly in administration. It is never pleasant to have to reduce the

“Looking ahead, it is my hope that in 2015 we may see the beginning of a more serious commitment to infrastructure investments.”

Euromaint is always seeking to lead this development and be industry leader – primarily in Sweden – but we also want to achieve a strong market position in Germany. Improving and increasing productivity is important in an industry that, despite growth, has profitability prob-lems for players in both freight and passenger traffic.

During 2014, Euromaint carried on the process of making itself more competitive with continual change work at all levels of the com-pany. This work takes place in close cooperation with customers, and over the year we have been able to note further improvement in avail-ability for our customers, the train operators.

We develop our competence on an ongoing basis and use new tech-nology in the maintenance work. During the year we have also made significant investments in IT and our workshops. The aim is to meet the requirements for high quality at a competitive price and provide customers with the best possible availability for their trains and rolling stock and thus increase their revenue.

Looking ahead, it is my hope that in 2015 we may see the beginning of a more serious approach to infrastructure investments. Without investments and refurbishment of the rail network, we will not in future have access to a functioning and, not least, safe domestic rail network, which is of course absolutely critical if we are to see the industry develop in a positive direction.

Finally, I would like to express my sincere gratitude to all employees of Euromaint as well as to our customers and business partners.

Solna, Sweden, February 2015

Leif JohanssonChairman of the Board


COMMENTS FROM THE CEO

number of employees, but we have worked closely with the union and supported the individual employees in the transitional period.

If we continue to improve operations, develop and adhere to existing processes, and cooperate with each other within the company as well as with our customers, the potential for further improvement of our profit situation is in my view good.

In addition to working on reducing the company’s costs, we have also invested in making ourselves both more attractive and more efficient. We have listened to our customers and seen that the needs of the market have changed. One of the things we saw early on was that the demand for rapid reprocessing of bogies was set to grow. Our new bogie workshop in Örebro, which opened for business mid-year, is a very timely development. By halving the lead time, we attracted customers and achieved full capacity uti-lisation.

To create a more stable delivery, we have also worked further on implementing a new business system. We are now in the end phase of this long, resource-heavy

work, but in view of the gains it will deliver, the effort has been worth it. The system will allow us greater control of the entire operation, and this in turn will lead to fur-ther improvements in maintenance quality. During the year we have also highlighted responsibility and sustainability issues in our dialogue with employees. All employ-ees have undergone training in our Code of Conduct. Ultimately it is a question of becoming a better business partner for our customers and thereby a company that creates value for all our stakeholders.

The year has also seen challenges, linked in particular to the business environ-ment. Increased competition, combined with lower maintenance needs for a num-ber of customers, has led to telling changes for the rail industry. From being a fully state-financed industry, completely devoid of competition, it has become an industry with cut-throat competition among opera-tors and maintenance providers alike, requiring both flexibility and low overheads. The rail industry is now change-driven, with all players having to work continuously on improvements. It is no longer a place for the change-averse.

During 2015 we expect to see a number of major and important procurements. Euromaint is ready and equipped for these, thanks to the systematic improve-ment work that has been undertaken over recent years. We are developing our work-ing practices and processes, we are learn-ing lessons from the mistakes that have been made and we always put the cus-tomer’s safety and delivery first.

Our day-to-day work involves us in the continuous improvement of our opera-tion, while at the same time we have to ensure that our deliveries leave the work-shops on time, whether it’s night or day, weekday or weekend, summer or winter. I would like to thank all Euromaint’s employees who, through their efforts, make this possible.

Solna, Sweden, February 2015

Ove BergkvistPresident and CEO

Over recent years, Euromaint’s modern and industrialised maintenance process has contributed to significant improvements in delivery quality and greater availability as regards X2000, for instance. This has been achieved thanks to the close partnership with the customer and systematic internal cooperation.

INDUSTRIALISED PROCESS AND CLOSE CUSTOMER COOPERATION BRING RESULTS

OBJECTIVES, STRATEGY AND OUTCOME, INCLUDING SUSTAINABILITY




More cooperation leads to higher efficiency and sustainable results

The numbers of passengers and volumes of freight carried on the railways have increased over the past year. At the same time, eco-nomic conditions in the train maintenance market remain poor. Euromaint’s general strate-gic direction is clear. The aim is to be a stable business partner capable of providing high-quality maintenance solutions in order to ensure that customers’ rolling stock is maintained and can run according to plan.

The rail sector is still undergoing the structural change that started with dere-gulation. More players have appeared on the market. This shows that the train as a means of transport for both people and freight is a market with future potential. At the same time, competition means that rationalisation is needed in order to achieve improved efficiency and profitabi-lity. The maintenance needs of rolling stock are determined by developments in traffic, and these in turn are affected by changing market conditions.

In Sweden, Trafikverket (the Swedish Transport Administration) estimates that rail passenger traffic will grow by an average of around 1.4 per cent per year. According to Eurostat, rail passenger traffic in Ger-many has grown by an average of 1.8 per cent per year. The assessment here is also that the rate of growth seen in recent years will continue in the years ahead. Freight traffic is affected by changing market con-ditions to an even greater degree. In order to cope with fluctuations in demand for rail freight transport, rail hauliers such as Green Cargo in Sweden and DB in Germany regulate the number of locomotives and freight wagons that are in operation. This means that the demand for maintenance also varies over time.

Euromaint’s passenger traffic customers in particular expect the same high quality of maintenance work as ever, but at increas-ingly lower cost, despite an ageing rolling stock fleet. At the same time, the open market means that new operators with new, modern rolling stock are operating on our railways. This offers good opportunities for companies that have the right experience and expertise and that continuously develop their maintenance process and sourcing to match new needs and demands. Euromaint is that kind of company.

Maintenance market players range from small local niche maintenance partners to big global train manufacturers, offering maintenance solutions as additional ser-vices. In addition, some train operators opt to handle their maintenance themselves in their own workshops. This is particularly common in Germany.

The contract periods for rail traffic services put out to tender are often long. During the procurement process, an important task for the operator is to demonstrate how set targets are to be achieved. This means that methods used and the way rolling stock maintenance is approached are important factors when it comes to winning the contract. Strong competition, combined with the long contract periods, means that the consequences of losing a strategic procurement will affect the busi-ness for a long time to come. As competi-tion for traffic and maintenance becomes more intense, increased pressure on prices is also evident on the market. The conse-quences of winning a contract based on unrealistic pricing can however be disas-trous for both parties – and, in the final analysis, the passengers. For the industry, it is important to create a sustainable model where quality, safety and comfort are not forgotten in the rush to reduce costs and increase profitability.

Clear direction for a stronger positionIn order to be a competitive business partner for our customers, an attractive investment option for shareholders and a company that takes responsibility for its operations and employees, since 2011 Euromaint has pursued four focus areas: stability, profitability, image and growth. During the course of 2014, work to ensure long-term sustainability has intensified. The process of change is primarily about continuously improving the quality of cus-tomer deliveries, but also about reducing fixed costs. This will provide an opportunity for us to streamline further and become more competitive.

Euromaint’s adjusted profitability target is to achieve an annual EBITA margin of five per cent in the long term. The EBITA margin was 2.5 per cent (1.0). The saving measures undertaken since 2012, which continued throughout 2013 and 2014, have gradually produced results in the form of both lower costs and a more flexible cost base. These measures concern efficiency improvements, primarily within adminis-

Efficiency improvements throughout the entire company have reduced the proportion of fixed costs, and during 2014 the EBITA margin improved from 1.0 per cent to 2.5 per cent. The change process continues with a view to achieving the EBITA margin target of 5 per cent over time.

Net revenue 2010–2014SEK millions

Net revenue fell by 6 per cent during 2014. Revenue for Swedish operations, which accounts for 75 per cent of total revenue, showed a reduction of 8.4 per cent. Reve-nue from foreign operations increased by 1 per cent.

0

1,000

2,000

3,000

20142013201220112010

0

3 000

6 000

9 000

12 000

Q220131

20122011201020092008

EBITA margin 2010–2014Per cent

–1

0

1

2

3

4

5

6

20142013201220112010

–1

0

1

2

3

4

5

6

20132012201120102009



At the start of 2014, Euromaint was commissioned by Tågkompaniet (TKAB) to carry out maintenance until 2024 on the Regina trains TKAB ope-rates on behalf of X-trafik as of 15 June 2014. The maintenance is carried out at Euromaint’s workshop in Gävle. Euromaint has for some time been working with TKAB on Tåg i Bergslagen, and in the last few years has been awarded several maintenance cont-racts for Regina trains.

trative functions, as well as making changes to operations at facilities where mainte-nance and/or refurbishment contracts have come to an end or been lost. During 2014, 46 posts were cut back. A total of 131 employees left Euromaint. A challenge for the Swedish operations has been to bring greater flexibility to the cost base. The need to reduce fixed costs is particularly pressing in Sweden, as rents and charges for the workshops have increased dramat-ically in recent years, even though contracts run for long periods. This is due mainly to a lack of competition and the fact that the state, which owns Jernhusen, prioritises financial returns over the need for all play-ers to actively contribute to better-run train services.

All resources working closely to-gether to acquire more businessOur ambition is to grow long term in Scandinavia and Germany, organically and through acquisitions. Growth will not, how-ever, be at the cost of profitability in each individual business opportunity. Euromaint is focusing its strategic and operational resources entirely on delivering the mar-ket’s most professional maintenance in existing contracts, winning new business and regaining the trust of customers that have tried other maintenance solutions. The aim is that the customer benefit pro-vided by the company’s unique production systems for control and improvement of

maintenance processes should be enjoyed by more customers.

Over the period 2014–2017, around 10 major maintenance contracts in Sweden worth the equivalent of approximately SEK 1.4 billion in annual revenue will be put out to tender. During 2014, Tågkompa-niet chose Euromaint as business partner for the maintenance of the trains operated on behalf of X-trafik, while SJ opted for other business partners for maintenance of roll-ing stock operated on behalf of Västtrafik.

In the next few years a number of major procurements will take place, mainly in Sweden. This creates opportunities for Business Area Passengers. Business Area Work Machines is currently operating in a relatively positive business climate. Oper-ations are focusing on further entrenching Work Machines’ position as trusted pro-vider of maintenance solutions to the play-ers that maintain track and other railway infrastructure, predominantly in Sweden and Norway. Business Area Components has to defend its position and ensure that its operational activities are prepared for the new business opportunities that will arise with the forthcoming overhauls of multiple units. An important investment for future growth has been to rebuild the bogie workshop in Örebro. The time needed to complete a bogie overhaul has more than halved from 15 days to an aver-age of seven. This is an important com-petitive advantage.

In Germany, the freight operation has to focus on profitable overhauls, and the passenger operation on acquiring business in the field of heavier maintenance, such as overhauls of multiple units, EMU/DMU trains (Electric Multiple Unit and Diesel Multiple Unit) and rolling stock modifications. Availability contracts, as they are known, will not be a focus area for the German passenger operation over the next few years. In addition, warranty work, i.e. dealing with faults on rolling stock in connection with rolling stock deliveries, as well as during the warranty period, will also involve new and interest-ing business opportunities.

Equity/assets ratio was

Maintenance contracts

totalling SEK1.4billion under procurement 2014–2017

40%



2014 saw Euromaint complete the contract to refurbish 55 2nd class pas-senger carriages for SJ. The contract was a continuation of the refurbish-ment of 160 carriages completed by Euromaint in 2009–2011. The refur-bishment was carried out at Euromaint’s workshop in Notviken, Luleå. Some measures were of a cosmetic nature, such as repainting, replacing seats and lighting, and others were more techni-cal, such as emergency brake override, door overhaul and renovation of the vacuum system.

The focus for Euromaint’s work on sustainability is to supply our customers with safe and available trains, to provide a safe working environment for our employees and to reduce our environmental impact. Sustainability work is gov-erned by the UN Global Compact’s 10 principles, the owner’s priori-ties and the company’s vision, mission and risk analysis.

Euromaint’s mission is to make the train the natural means of transport to meet the environmental challenges of tomorrow. Rail transport of passengers and freight is by far the most environmentally efficient means of transport. It is also a safe way of travelling and transporting freight. To achieve minimum impact on the environ-ment and the best possible safety, a mod-ern and industrialised maintenance pro-cess has been developed, where the focus is on quality, safety and environment. The objective for not only the ongoing change processes but also the work on sustaina-bility is to reduce the risks inherent in the operations and also boost confidence in Euromaint in the market.

The right prerequisites and individual initiativeDelivering safe trains starts with Euromaint employees being able to carry out the work in a safe working environment, having the right skills, clear instructions and protec-tive equipment that is fit for purpose. Each individual workshop performs its risk assessments based on the specific assign-ments being carried out. In addition, any incidents that occur are always followed up, so as to ensure they will not reoccur and that the working environment is continu-ously being improved. The maintenance work is ring-fenced by rigorous and specific requirements governing safety and the necessary skills. Separate requirements

are imposed for all rolling stock types and different maintenance work demands dif-ferent safety levels. This means that the employees need to undergo internal roll-ing stock and safety training on an ongo-ing basis in order to be properly qualified to work on existing and new contracts.

A value-creating cultureIn order to build a healthy, modern corpo-rate culture, Euromaint has both developed and implemented its core values of coop-eration, responsibility, contribution and reliability as well as a Code of Conduct that all company employees must adhere to in their everyday work. Over the past two years, all employees have been trained in both the Code of Conduct as well as other issues related to responsibility and sustain-ability. The company is heavily committed to these issues, and the internal change processes are continuing with undimin-ished enthusiasm so as to develop a cul-ture that takes pride in delivering value to customers, owners, employees and society in general.

Planning improves availability, quality and safetyEuromaint has to be a reliable business partner from the moment a contract is signed to when delivery is made and the invoice issued. By continually keeping our customer promises in the areas of quality, delivery and innovation, the company cre-ates the conditions to win new contracts from existing customers and attract new ones. These days there is not always spare capacity in the form of locomotives, wagons or carriages and high-value compo-nents such as wheels, bogies and traction motors. Rolling stock must therefore be maintained as efficiently as possible with-out compromising on quality or safety. Euromaint works with its customers to shorten the time spent in the workshop. This cooperation enables the undertaking of very precise maintenance planning. Ulti-mately it is a question of creating a pleasant travelling experience for the customers of our customers, i.e. the passengers, with comfortable trains that run on time. It is

Focusing on sustainability reduces risks and boosts market confidence

employees have been trained in

the Code of Conduct and sustainability



Proportion of female employees

per cent9

All of Euromaint’s Swedish workshops are quality certified to ISO 9001. The traffic safety and quality work comprises mainly audits, safety meetings and certified training. In practice, this means that Euromaint’s working prac-tices meet the Swedish Transport Agency’s and customer requirements that all traffic safety factors must be reviewed in systematic fashion. At the inter-nal training centre, employees are trained to ensure they are always properly qualified for their work tasks. All employees also undergo regular health checks and drug tests.

THE REQUIRED COMPETENCE AND SYSTEMATIC SAFETY WORK

Sweden Germany TotalSick leaveShort-term, 0–14 days, % 2.9 2.0 N/ALong-term, >15 days, % 4.1 5.4 N/A

Number of employees, per type of employment (LA1)Open-ended contract 1,128 7601 1,888Temporary employment 12 291 41Paid by the hour 15 121 27Apprentice 0 671 67Total 1,155 8681 2,023

Employees by gender and age, number (LA1)<30 years, total 133 116 249 female 15 13 28 male 118 103 221proportion of total, % 12 10 22>30–50 years, total 384 309 693 female 54 28 82 male 330 281 611proportion of total, % 33 39 36>50 years 638 364 1,002 female 30 39 69 male 608 325 933proportion of total, % 55 46 52Total, number 1,155 789 1,944 of which female 99 80 179 of which male 1,056 709 1,765

1. Incl. Holland

Employee turnover (LA4) Sweden Germany Total<30 years, female, % 113 62 N/A<30 years, male, % 92 42 N/A>30–50 years, female, % 28 7 N/A>30–50 years, male, % 32 7 N/A>50 years, female, % 30 5 N/A>50 years, male, % 13 22 N/A

Hours of training, (LA10), hours per personProduction staff 50.2 6.3 N/ASalaried employees 4.5 3.3 N/A

Proportion of females and males, management and Board of Directors (LA13) Female Male TotalManagement, individuals 3 5 8Proportion of females and males (100% in the age groups >30 years), % 38 63 100Board of Directors, individuals 2 5 7Proportion of females and males (100% in the age groups >30 years), % 29 71 100



important that the workshop has the proper resources in place to deliver effi-cient, high-quality maintenance and that trains arrive at the workshop at the right time. It is also important that Euromaint should be able to deal with unforeseen events as and when they arise.

Risk-managed environmental work with a strong local commitmentMaintaining trains in a way that is as safe and environmentally friendly as possible is part of the normal day-to-day routine at Euromaint’s workshops. The local environ-mental work in each workshop is based on careful risk inventories and a programme of action which is monitored regularly. During the course of 2014, a method has been established which aims to systemat-ically document all locally identified risks and those measures which have been implemented. This will create a common knowledge bank that allows comparisons and knowledge to be exchanged between different workshops. The aim is to strengthen the local environmental work and to develop management as well as goals and follow-up work going forward. The priority areas for the environmental work are energy consumption, the handling of chemicals and landfill waste. These have been selected on the basis of the risk inven-tories drawn up by each individual work-shop and the business-related priorities decided at company level. The latter have their basis mainly in customer require-ments, cost-efficiencies and the vision that rail transport should be the natural means of transport for meeting the environmental challenges of tomorrow.

There is a limited number of workshops in Sweden. Many of them are getting on in years, designed at a time when environ-mental issues did not have the priority they do today. Bringing down electricity consump-tion in the premises has been a priority for a number of years. Euromaint is therefore engaged in ongoing dialogue with the work-shop property managers. Action already taken includes regulating temperatures so that they remain more constant regardless of time of day, the kind of work undertaken in the premises or the time of year. An important measure has been to minimise

the time the doors stand open. In addition, light fittings have been replaced with more energy-efficient alternatives, and a review has been undertaken of the workshops’ compressed air systems with a view to min-imising leakage from hoses and couplings. During the period 2007–2014, energy con-sumption decreased by 4.8 million kWh, or 20 per cent. This equates to the amount required to heat around 200 detached houses, and represents a cost saving of approximately SEK 4.8 million. The target for 2014 was to reduce energy consumption by 3 per cent. The outcome was a reduction of 5.5 per cent. Approaching 2015, the tar-get is to achieve a reduction of 3 per cent. Euromaint has been sorting its maintenance waste since 2006 and waste handed over for landfill has decreased markedly since then. In 2014, around 22 tonnes were handed over for landfill, a reduction of 25 per cent compared to the 2013 figure. This relates mainly to complex waste consisting of combined fraction groups.

Currently around 1,200 different chemi-cals in total are used in Euromaint’s work-shops. Reducing use of chemicals is impor-tant in order to both lower the environmental impact of maintenance and create a better working environment. Chemicals are cate-gorised at different risk levels, where lev-els 4 and 5 indicate that the agent may be harmful to people and the environment. All chemicals are handled in accordance with a detailed set of rules and all employ-ees involved are trained so as to ensure correct handling. Euromaint’s aim is to replace chemicals from levels 4 and 5 with alternatives that are more environmentally friendly. This is a process that takes place in dialogue with customers and the various workshops. Because chemicals required for rolling stock maintenance are specified in the maintenance instructions the man-ufacturers have provided, Euromaint can-not choose more environmentally friendly alternatives until the customer has approved the replacement and updated the mainte-nance instructions. At the start of 2014, Euromaint was using 217 chemicals cate-gorised as belonging to level 4 or 5. During 2014, Euromaint discontinued the use of a total of 15 of these chemicals, which is a reduction of 7 per cent.

20is how much Euromaint’s energy consumption in Sweden has fallen since 2007

per cent

Breakdown of energy use 2014

66%

Proportion of renewable energy

Nuclear power, 7%

Coal power, 12%

Miscellaneous (incl. gas), 15%

Euromaint’s direct energy use (EN3) amounted to 27,453 MWh (29,037). 66 per cent of the energy used came from renewable energy sources.

Total weight of waste for landfill (EN22) in kg 2014 2013Total 429,708 416,094 Sweden 22,443 29,994 Germany 407,265 386,100


AFFÄRSOMRÅDEN

Four business areas focusing on value-creating partnershipsEuromaint conducts operations in four busi-ness areas. Their task is to use common core values and customer promises to establish value-creating partnerships and create maxi-mum profitability in each part of the total offering.

PASSENGERSThe business area offers a complete maintenance concept for rolling stock to train operators, rolling stock owners and public transport author-ities. The customers can purchase either all or parts of the maintenance offering, everything from light maintenance to full service commitments, including reprocessing and overhauls. The payment model often uses a full service commitment based on the customers’ rolling stock being available for traffic. In practice, this sees the customers paying according to the number of kilometres travelled by the trains. Euromaint and cus-tomers thus have a clear shared incentive for the rolling stock to be used in service. The business area is also responsible for the Swedish offering within maintenance of rolling stock for freight traffic.

FREIGHT/GERMANYThe business area has a comprehensive range of maintenance services for freight rolling stock and an offering under development for rail passenger rolling stock in the German market. The offering covers planned and remedial maintenance (both in the workshop and by mobile units) and completion of wagons, as well as overhauls, refurbishments and reprocessing of compo-nents. The planned maintenance is based on framework agreements that define the actions to be carried out in accordance with an established maintenance plan. Remedial damage maintenance is carried out either against tender or on a running account basis. Major and more far-reaching actions, such as overhauls and refurbishments, always follow established maintenance plans.

Number of employees on 31 Dec: 789 (849). Business Area Manager: Robert Lehmann.Examples of customers: AAE, Aretz, BASF, DB, Ermewa, GATX, Nacco, TWA, VTG, Wascosa. Workshops/facilities: Delitzsch, Duisburg, Ingolstadt, Kaiserslauten, Leipzig, Oberhausen, Wolfsburg, Wustermark, Antwerpen, Rotterdam.

COMPONENTSThe business area offers reprocessing of components and complete material supply to all types of customers in the rail transport industry, everything from stock-keeping to intelligent logistics solutions and the sale of spare parts. As a logistics supplier, the business area generates income from contracts that can cover parts of the supply chain or complete responsibility for the supply of spare parts and reprocessed components. The business area not only maintains external cus-tomer relationships with train operators and other maintenance companies, it also fulfils a role as

supplier to Euromaint’s other business areas with regard to reprocessing of components and provision of spare parts. The business area has its own warehouse, stocking approx. 55,000 items for maintenance of rolling stock.

Number of employees on 31 Dec: 399 (288). Business Area Manager: Ingela Erlinghult. Examples of customers: Alstom, Arriva, Bombardier, Inlandsbanan, JBV, Metro, Transitio, TRV, Tågab, other business areas within Euromaint. Workshops/facilities: Jelgava, Åmål, Örebro.

WORK MACHINESThe Work Machines business area offers a complete maintenance programme for machines and tools used for mainte-nance and construction of the railway infrastructure, such as track and over-head lines. The business model consists either of framework agreements that contain fixed actions, which are usually sub-ordered by the customer, plus ser-vice packages based on the machines’ running hours, or an administration agreement. Corrective maintenance and mobile maintenance are carried out either against tender or on a running account basis.

Number of employees on 31 Dec: 39 (36). Business Area Manager: Gustav Jansson. Examples of customers: Jernbaneverket, SL, Strukton.Workshops/facilities: Stockholm, Åmål.

Number of employees on 31 Dec: 696 (934). Business Area Manager: Henrik Dagberg.Examples of customers: A-Train, AAE, DSB, Green Cargo, SJ, Tågkompaniet, Veolia, Väst trafik. Workshops/facilities: Borlänge, Falköping, Gävle, Göteborg, Hallsberg, Landskrona, Linköping, Luleå, Malmö, Stockholm, Sundsvall, Vännäs, Västerås, Örebro.


FIVE-YEAR OVERVIEW

Five-year overview

SEK millions2014 Q42

2013 Q42 20142 20132 20122 2012 20111 20101

INCOME STATEMENT

Net revenue 601 622 2,274 2,416 2,484 2,489 2,860 2,814

Operating expenses –569 –592 –2,196 –2,366 –2,407 –2,420 –2,727 –2,835

Other income/expenses 5 2 19 18 33 33 28 63

EBITDA 37 32 97 68 111 102 161 41

Depreciation, amortisation and impairment losses –10 –11 –40 –42 –51 –51 –57 –56

EBITA 27 21 57 25 60 51 104 –15

Depreciation, amortisation and impairment losses of intangible assets – – – – – – –2 –4

EBIT 27 21 57 25 60 51 102 –19

Financial income 2 – 3 9 2 2 3 2

Financial expenses –9 –15 –37 –44 –48 –48 –51 –63

EBT 20 6 23 –10 14 5 54 –79

Tax –32 18 –40 26 –18 –18 43 33

Profit/loss from discontinued operations – – –6 –5 –9 – –118 –30

Profit/loss for the year/period –11 24 –23 11 –12 –12 –21 –77

Profit or loss attributable to parent company’s owners –11 24 –23 11 –12 –12 –21 –77

Items affecting comparability – –1 –20 –42 –30 –30 –35 –184

Operating EBITA 27 23 77 67 90 81 139 169

STATEMENT OF FINANCIAL POSITION

Goodwill – – 715 712 – 710 712 –

Other intangible fixed assets – – 10 3 – 8 9 –

Property, plant and equipment – – 205 176 – 164 185 –

Financial assets, non-interest-bearing – – 10 16 – – 24 –

Total non-current assets – – 940 907 – 882 930 –

Inventories – – 414 421 – 432 454 –

Receivables, non-interest-bearing – – 434 480 – 459 690 –

Cash, bank and other current investments – – 27 22 – – – –

Total current assets – – 875 924 – 892 1 144 –

TOTAL ASSETS – – 1,815 1,831 – 1,774 2,075 –

Equity attributable to parent company’s owners – – 722 719 – 594 737 –

Provisions, interest-bearing – – 8 12 – 11 19 –

Provisions, non-interest-bearing – – 32 24 – 32 47 –

Liabilities, interest-bearing – – 534 552 – 577 628 –

Liabilities, non-interest-bearing – – 518 522 – 548 632 –

Financial liabilities, other – – 1 1 – 11 11 –

TOTAL EQUITY AND LIABILITIES – – 1,815 1,831 – 1,774 2,075 –

KEY RATIOS

EBITA margin (%) 4.6 3.4 2.5 1.0 2.4 2.1 3.6 –0.5

Operating EBITA margin (%) 4.5 3.7 3.4 2.8 3.6 3.3 4.8 –

EBT margin (%) 3.4 0.9 1.0 –0.4 0.6 0.2 1.9 –2.8

Return on equity (%) – – –3.2 – – –1.8 – –

Return on capital employed (%) – – 4.7 – – 4.1 – –

Equity/assets ratio (%) – – 40 39 – 33 36 –

Interest-bearing net debt – – 514 542 – 588 647 –

Debt/equity ratio – – 0.8 0.8 – 1.0 0.9 –

Average no. of employees – – 2,123 2,291 2,437 2,437 2,442 2,373

1) Business area Refurbishment and Euromaint Industry operations for 2010 and 2011 are reported as discontinued/divested in accordance with IFRS. 2) Operations in Germany and Belgium for 2012, 2013 and 2014 are reported as discontinued operations in accordance with IFRS.


DIRECTORS’ REPORT

Directors’ report

The Board of Directors and the CEO of Euromaint Gruppen AB, Corp. ID number 556731-5402, with registered office in Stockholm, hereby submit the Annual Report for operational activities during the financial year 2014.

ShareholdersEuromaint Gruppen AB is a wholly-owned subsidiary of EMaint AB, company registration number 556731-5378, with registered office in Stockholm, which is owned by Ratos AB. Euromaint Gruppen AB acquired 100 per cent of Euromaint AB on 1 September 2007 from the previous owner AB Swedcarrier.

Operations and organisationEuromaint strengthens its customers’ competitiveness through services and products that increase the availability, reliability and ser-vice life of production equipment in the rail transport industry.

Through operational activities in Euromaint Rail AB, Euromaint can be found throughout Sweden, from Luleå in the north to Malmö in the south, in Jelgava in Latvia, and since 2010 in Germany and the Netherlands. The head office is in Solna.

The business environmentRail is a central part of the European infrastructure for the transport of passengers and freight. It is a common interest for the EU as a solution to many of the challenges facing Europe as it tries to provide for sustainable development. National rail systems are being opened up in accordance with the EU’s principles on free movement and free competition. This is a process that has reached different stages in different countries. Passenger traffic is still largely a national ques-tion, while the EU has long worked to create the conditions for a well- functioning pan-European rail freight market. A deregulated market benefits Euromaint in its role as an independent player for mainte-nance, without links to train operators or manufacturers. In Sweden, Trafikverket (the Swedish Transport Administration) estimates that rail passenger traffic will grow by an average of around 1.4 per cent per year. According to Eurostat, rail passenger traffic in Germany has grown by an average of 1.8 per cent per year. The assessment here is also that the rate of growth seen in recent years will continue in the years ahead. Freight traffic is affected by economic conditions to an even greater degree. In order to cope with fluctuations in demand for rail freight transport, rail hauliers such as Green Cargo in Sweden and DB in Germany adjust the number of locomotives and freight wagons that are in operation. This means that the demand for maintenance also varies over time. In 2014 a still weak freight economy continued to negatively affect revenue in Sweden. However, the perception is that Euromaint has not lost shares of the total markets.

Competitiveness In order to be a competitive business partner for our customers, an attractive investment option for shareholders and a company that takes responsibility for its operations and employees, since 2011 Euromaint has pursued four focus areas: stability, profitability, image and growth. During the course of 2014, work to ensure long-term sustainability has intensified. The process of change is primarily about continuously improving the quality of our delivery to the cus-tomer, but also about endeavouring to reduce fixed costs. This will provide an opportunity for us to streamline further and become more competitive. Euromaint is an independent supplier of maintenance services, which is an important factor in making us an attractive busi-ness partner. Our business model makes it clear that, as an independ-ent partner, the company shares the same goals as the customer when it comes to optimising activities for increased profitability.

EmployeesThe average number of employees in the Group was 2,126 (2,282).

Environmental impactCommon to all of Euromaint Rail AB’s production areas is that their main environmental impact is on air and water and, to a certain extent, soil. Its activities are classified as environmentally hazardous, and require reporting to the environmental authorities. The environ-mental authorities decide whether the degree of environmental haz-ard requires licensing or reporting. If Euromaint Rail AB does not receive the environmental licences required for production, this can limit the company’s ability to fulfil its commitments to its customers. If there is a short delay in licences being issued, it is possible to switch workshop activities in order to limit economic damage. Euromaint Rail AB’s units are obliged to submit reports in accordance with the Ordinance concerning Environmentally-Hazardous Activities and the Protection of Public Health (1998:899). Notifiable activities carried out by Euromaint Rail AB include rolling stock cleaning, painting, de-icing, the handling of diesel fuel, etc.

SustainabilityThe focus for Euromaint’s work on sustainability is to supply our customers with safe and available trains, to provide a safe working environment for our employees and to reduce our environmental impact. Sustainability work is governed by the UN Global Compact’s 10 principles, the owner’s priorities and the company’s vision, mission and risk analysis. In order to build a healthy, modern corporate culture, Euromaint has both developed and implemented its core values of cooperation, responsibility, contribution and reliability as well as a Code of Conduct that all company employees must adhere to in their everyday work. Over the past two years, all employees have been trained in both the Code of Conduct as well as other issues related to responsibility and sustainability. The local working environment in each workshop is based on careful risk inventories and a programme of action which is monitored regularly. During the course of 2014, a method has been established which aims to systematically document all locally identified risks and those measures which have been imple-mented. This will create a common knowledge bank that allows comparisons and knowledge to be exchanged between different workshops. The aim is to strengthen local environmental work and to develop management as well as goals and follow-up work going forward.

Risks and uncertainty factorsThe Group’s companies have a customer structure in which a few customers account for a large proportion of the Group’s revenue. The loss of one major customer, or a significant customer contract, would result in considerable demands for an adjustment of the companies’ operational activities to match the reduced revenue. During a transi-tional period, the profitability of companies would be reduced in any such scenario. However, as customer relationships often include several different contract territories with varying contract lengths, this risk is distributed over time.

The Group and the industry in general are affected by the weather conditions, where severe winters with restricted passability for rail traffic could affect costs. Otherwise, the company is affected by the general trends in demand and market conditions in each industry.

Multi-year review and key ratiosFor key ratios see “Five-year overview” on page 13.

Financial instruments and risk managementThrough its operations, Euromaint is exposed to financial risks, including the effect of changes in prices on the loan and capital mar-


DIRECTORS’ REPORT

kets, exchange rates and interest rates. The Group’s overall risk manage-ment focuses on the unpredictability of the financial markets and aims at minimising potentially unfavourable effects on the Group’s financial results. Financial operations in the Group are centralised in Euromaint Rail AB’s finance function, which is responsible for the sourcing of capital, cash management and financial risk management. The oper-ational activities are regulated through the Group’s financial policy.

The following important financial risks are dealt with:Market risksThe risk that the value of, or future cash flows from, a financial instrument will vary due to changes in market prices. Currency risk and interest rate risk constitute market risks.

Currency risksCurrency risk refers to the risk of exchange rate fluctuations nega-tively affecting the Group’s income statement, balance sheet and/or cash flows. Currency risks exist, both in the form of transaction risks and translation risks.

Interest rate risksInterest rate risks refer to the risk of a negative effect on the Group’s financial results resulting from changes in market interest rates.

Other risksCredit riskCredit risk is the risk generated by the fact that the credit rating of the investor’s counterparty can change in an unpredictable manner, thereby resulting in a loss for the Group.

Liquidity and refinancing riskRefinancing risks refer to the risk that the refinancing of mature loans will become difficult or costly and that Euromaint will thereby have difficulty fulfilling its payment obligations. Liquidity risk refers to the risk of difficulty in fulfilling the obligations associated with financial liabilities.

For more information about financial risks, see Note 18.

Events of material significance in the financial yearDuring 2014, Swedish operations have been affected by reduced demand for freight maintenance, as freight operators have chosen to significantly limit locomotive maintenance, citing underlying market conditions. One consequence of these changed conditions is that we have had to modify our cost structure during 2014, which has resulted in a number of employees leaving the company. Within the passenger business, work to develop our maintenance concept and enhance quality as well as helping existing customers with suggestions for improvement has continued. This has resulted in good delivery, good availability and stronger margins. On the contract side, SJ has chosen to terminate its existing maintenance contract on its entire passenger fleet of X40, X2000 and X3000 carriages as well as passenger carriages where Euromaint currently maintains three of the four fleets. The notice period runs for 18 months and expires in March 2016. Pro-curement of new contracts is in progress and Euromaint intends to tender for all fleets.

German operations have continued to be characterised by weak market conditions for freight traffic, which together with a slightly reduced margin in the passenger business has given rise to negative developments in both profit and cash flow in 2014. Despite a less than satisfactory profit, the year ended positively with a significant order from the Italian train operator EAV that will be delivered during 2015.

Future developmentEuromaint has a strong position in the Swedish train maintenance market. Together with its extensive operations in Germany, this means that Euromaint is well established in the increasingly deregulated Euro-pean rail market. Changes in maintenance strategies among the German freight transporters mean that Euromaint needs to adjust its German

freight operation and take a closer look at the possibility of increasing its share of the maintenance of passenger carriages. Euromaint is already the leading independent player for train maintenance in Europe and, thanks to its position, Euromaint has good opportunities to take advantage of the ongoing deregulation of the train operator market in Europe. A large number of passenger contracts will be awarded in both Sweden and Germany during the course of 2015.

Euromaint has identified a number of areas that must be fulfilled in order to attract current and potential customers; these areas constitute the Group’s customer promises. The focus areas are:Stability – be a stable partner and operate a stable businessProfitability – create profitable growth, good control of costs and strong cash flowImage – strengthen the market’s confidence by standing for quality, delivery and innovationGrowth – grow in the Nordic countries as well as in the rest of Europe, organically and through acquisitions

Based on these areas, Euromaint wants to further strengthen its position on the market.

The Parent CompanyEuromaint Gruppen AB handles group-wide financing agreements with banks. Apart from that, there are no external activities. Revenue amounted to SEK 0 thousand (0) and operating profit/loss to SEK –900 thousand (–734). The profit/loss for the year amounted to SEK –25,947 thousand (–62,166).

Consolidated revenue and resultsRevenueTotal earnings amounted to SEK 2,296 million (2,439).

Operating profitOperating profit amounted to SEK 51 million (26 million), giving an operating margin of 2.5 per cent (1.0).

Financial itemsNet financial income amounted to SEK –34 million (–96).

Cash flowCash flow for the period after investments amounted to SEK –10 million (–50).

Equity/assets ratioThe equity/assets ratio amounted to 40 per cent (39). The equity/assets ratio is measured as equity and shareholder borrowings in relation to the balance sheet total.

Appropriation of profits in the parent company

Proposed appropriation of profits

The parent company’s profit/loss for the year was SEK. –25,947,130

Available to the Annual General Meeting, SEK:

Retained earnings 777,440,144

Profit/loss for the year –25,947,130

Total 751,493,014

The Board of Directors proposes that the accumulated profit be appropriated as follows:

Carry forward 751,493,014

Total 751,493,014

The income statement and balance sheet will be presented for adop-tion at the Annual General Meeting on 25 March 2015.


THE GROUP

Consolidated statement of income and other comprehensive income for the GroupSEK thousands Note 2014 2013

Operating income

Net revenue 2, 3, 4 2,274,268 2,415,519

Other operating income 5 22,137 23,629

Total operating income 2,296,405 2,439,148

Operating expenses

Cost of goods and services sold 4 –743,314 –843,800

Other external expenses 6, 7 –476,136 –495,721

Personnel costs 8 –985,983 –1,025,431

Amortisation 9 –2,780 –4,468

Depreciation 10 –37,440 –37,803

Result from participations in associates –227 –

Result from sales of subsidiaries – –

Total operating expenses –2,245,880 –2,412,650

Operating profit 50,525 26,498

Financial income 11 2,616 9,276

Financial expenses 4, 11 –36,603 –105,277

Net financial items –33,987 –96,001

Profit/loss before tax 16,538 –69,503

Tax 12 –39,641 25,561

Profit/loss for the year from continuing operations –23,103 –43,942

Profit/loss from discontinued operations – –5,001

Profit/loss for the year –23,103 –48,943

Other comprehensive income

Items that have been transferred or can be transferred to the profit/loss for the year

Change to translation reserve for the year 11,128 6,335

Change to hedging reserve for the year 161 877

Currency adjustment – –

Tax attributable to other comprehensive income – –

Items that cannot be transferred to the profit/loss for the year

Revaluations of defined benefit pension obligations 113 –1,171

Other comprehensive income for the year –11,701 6,041

Comprehensive income for the year

Profit/loss for the year attributable to

parent company shareholders’ share of the profit/loss for the year –23,103 –48,943

Comprehensive income for the year attributable to

parent company shareholders –11,814 6,041

Earnings per share

Earnings per share, undiluted –231 –489

Earnings per share from continuing operations

Earnings per share, undiluted –231 –489


THE GROUP

Consolidated statement of financial position

SEK thousands Note 2014 2013

Assets

Non-current assets

Intangible fixed assets 9 724,635 715,081

Property, plant and equipment 10, 13 204,746 175,814

Participations in associates 15 – 224

Deferred tax assets 12 10,489 15,815

Total non-current assets 939,870 906,934

Current assets

Inventories 16 413,872 421,307

Trade receivables 17, 18, 19 281,216 316,678

Receivables from Group companies 17 34,514 32,608

Tax assets 17 – 6,092

Other receivables 17, 19 36,975 22,323

Completed, not invoiced 17, 20 9,298 10,007

Prepaid expenses/accrued income 17 71,832 92,609

Cash and cash equivalents 21 27,349 22,350

Total current assets 875,056 923,974

TOTAL ASSETS 1,814,926 1,830,908

Liabilities and equity

Equity

Share capital 100 100

Other capital contribution 1,170,998 1,096,543

Reserves –9,035 –20,324

Retained earnings including profit/loss for the year –440,427 –357,548

Equity attributable to parent company shareholders 721,636 718,771

Non-current liabilities

Non-current interest-bearing liabilities 13, 18, 19, 22 475,000 509,000

Provisions for pensions and similar obligations 23 7,905 11,947

Other provisions 24 20,675 21,934

Deferred tax liabilities 12 11,475 2,183

Other non-current liabilities, interest-bearing 22 16,995 10,519

Other non-current liabilities, non-interest-bearing 19 3,136 3,876

Total non-current liabilities 535,186 559,459

Current liabilities 25

Advance payment from customers 4,262 12,887

Trade payables 4, 19 231,869 253,612

Liabilities to Group companies 19 44,291 –

Liabilities to credit institutions, interest-bearing 19, 22 41,565 32,861

Other current liabilities 19 26,864 28,369

Invoiced, not completed 26 – 47,973

Accrued expenses/deferred income 25 209,253 176,976

Total current liabilities 558,104 552,678

Total liabilities 1,093,290 1,112,137

TOTAL EQUITY AND LIABILITIES 1,814,926 1,830,908

Pledged assets and contingent liabilities 27

Pledged assets, floating charges 142,240 209,772

Contingent liabilities 96,334 68,510


THE GROUP

Consolidated statement of changes in equity

SEK thousands Note Share capital

Other capital

contribution Reserves

Retained earn-ings including

profit/loss for the year

Total equity

Equity attributable to parent company shareholders

Opening equity 1 January 2013 100 432,316 –31,607 –309,763 91,046

Adjusted opening balance effect IAS 19 – – 4,071 –11,313 –7,242

Adjusted opening equity 1 January 2013 100 432,316 –27,536 –321,076 83,804

Shareholder contributions received – 664,227 – – 664,227

Group contributions received/given – – – 32,608 32,608

Current tax attributable to Group contributions – – – –7,174 –7,174

Dividend 1 – – – –11,792 –11,792

Profit/loss for the year – – – –48,943 –48,943

Other comprehensive income for the year – – 7,212 –1,171 6,041

Comprehensive income for the year – – 7,212 –50,114 –42,902

Closing equity 31 December 2013 100 1,096,543 –20,324 –357,548 718,771

Opening equity 1 January 2014 100 1,096,543 –20,324 –357,548 718,771

Adjusted opening balance effect IAS 19 – – – – –

Adjusted opening equity 1 January 2014 100 1,096,543 –20,324 –357,548 729,899

Shareholder contributions received – 74,514 – – 74,514

Group contributions received/given – – – –44,249 –44,249

Current tax attributable to Group contributions – – – 9,735 9,735

Dividend 1 – – – –25,434 –25,434

Reclassification – –59 – 59 –


Other comprehensive income for the year – – 11,289 113 11,402

Comprehensive income for the year – – 11,289 –22,990 –11,701

Closing equity 31 December 2014 100 1,170,998 –9,035 –440,427 721,636

Change in translation reserve1

Opening translation reserve 1 January 2013 –30,569

Adjusted opening balance effect IAS 19 4,071

Change for the year from the translation of companies 6,335

Closing translation reserve 31 December 2013 –20,163

Opening translation reserve 1 January 2014 –20,163

Change for the year from the translation of companies 11,128

Closing translation reserve 31 December 2014 –9,035

Change to hedging reserve

Opening hedging reserve 1 January 2013 –1,038

Change for the year 877

Closing hedging reserve 31 December 2013 –161

Opening hedging reserve 1 January 2014 –161


Closing hedging reserve 31 December 2014 –

1) Exchange rate differences when translating financial statements of foreign operations.

The company applies hedge accounting for currency and interest derivatives. See Note 1 for more information.


THE GROUP

Consolidated statement of cash flows


Operating activities

Profit/loss after financial items in continuing operations 22,571 –69,503

Profit/loss after financial items in discontinued operations –6,033 –5,001

Depreciation/amortisation 40,220 42,311

Other items not affecting liquidity 21 5,938 58,618

Income tax paid –17,496 10,818

Cash flow from operating activities before changes in working capital 45,200 37,243

Changes in working capital

Increase (–)/Decrease (+) in inventories 7,434 11,012

Increase (–)/Decrease (+) in trade receivables 35,462 34,115

Increase (–)/Decrease (+) in other current receivables –27,680 –71,125

Increase (+)/Decrease (–) in trade payables –21,743 14,265

Increase (+)/Decrease (–) in other current liabilities 16,987 –38,646

Cash flow from operating activities 55,660 –13,136

Investing activities

Acquisition of intangible assets and property, plant and equipment 9, 10 –65,741 –36,696

Cash flow from investing activities –65,741 –36,696

Cash flow from operating activities –10,081 –49,832

Financing activities

Synthetic options – –967

Borrowings – 120,950

Amortisation loans –32,095 –152,009

Repayment of shareholder borrowings – –564,226

Dividend paid –25,434 –11,792

Shareholder contributions received 40,000 664,227

Group contribution received 32,608 16,000

Cash flow from financing activities 15,079 72,183

Change in cash and cash equivalents for the period 4,998 22,351

Cash and cash equivalents at beginning of the period 22,351 –

Cash and cash equivalents at year end 21 27,349 22,351


PARENT COMPANY

Parent company income statement

Parent company statement of comprehensive income


Operating income

Net revenue 2 0 0

Total operating income 0 0

Operating expenses

Cost of goods and services sold 4 – –

Other external expenses 6 –900 –734

Personnel costs 8 – –

Amortisation 9 – –

Depreciation 10 – –

Impairment of shares in subsidiaries 14 – –

Total operating expenses –900 –734

Operating profit –900 –734

Financial income 11 12,597 9,007

Financial expenses 11 –28,513 –87,994

Net financial items –15,916 –78,987

Profit/loss before tax –16,816 –79,721

Tax 12 –9,131 17,555




Other comprehensive income

Change to hedging reserve for the year 161 877

Other comprehensive income for the year 161 877

Comprehensive income for the year –25,786 –61,289


PARENT COMPANY

Parent company balance sheet


Assets

Non-current assets

Intangible assets 661,915 –

Participations in Group companies 14 156,761 935,200

Deferred tax assets 12 – 45

Non-current receivable Group companies 163,597 187,780

Total non-current assets 982,273 1,123,025

Current assets

Receivables from Group companies 17, 19 478,260 456,185

Prepaid expenses/accrued income 17 11,779 14,397

Miscellaneous 168 101

Cash and cash equivalents 17 –

Total current assets 490,224 470,683

TOTAL ASSETS 1,472,497 1,593,708

Liabilities and equity

Equity

Restricted equity

Share capital 100 100

Reserves – –161

Non-restricted equity

Retained earnings 777,440 898,041


Total equity 751,593 835,814

Non-current liabilities 22

Non-current interest-bearing liabilities 13, 18, 19 475,000 509,000

Other 1,461 1,667

Total non-current liabilities 476,461 510,667

Current liabilities 25

Trade payables 4, 19 – 708

Liabilities to Group companies 19 200,865 221,514

Liabilities to credit institutions, interest-bearing 22 34,000 25,000

Other current liabilities 9,102 5

Accrued expenses/deferred income 476 –

Total current liabilities 244,443 247,227

Total liabilities 720,904 757,894

TOTAL EQUITY AND LIABILITIES 1,472,497 1,593,708

Pledged assets and contingent liabilities 27

Pledged assets 217,624 204,582

Contingent liabilities – –


PARENT COMPANY

Parent company’s changes in equity

Restricted equity

SEK thousands Share capitalHedging

reserveRetained earnings

Profit/loss for the year

Total equity

Equity

Opening equity 1 January 2013 100 –1,038 245,570 –62,145 182,487

Appropriation of profits – – –62,145 62,145 –

Shareholder contributions – – 664,226 – 664,226

Dividend – – –11,792 – –11,792

Group contributions received – – 79,720 – 79,720

Current tax attributable to Group contributions – – –17,538 – –17,538


Other comprehensive income for the year – 877 – – 877

Comprehensive income for the year – 877 – –62,166 –61,289

Closing equity 31 December 2013 100 –161 898,041 –62,166 835,814

Opening equity 1 January 2014 100 –161 898,041 –62,166 835,814

Appropriation of profits – – –62,166 62,166 –

Shareholder contributions – – 74,514 – 74,514

Dividend – – –25,434 – –25,434

Group contributions issued – – –44,249 – –44,249

Group contributions received – – 102,569 – 102,569

Merger profit/loss – – –165,835 – –165,835


Other comprehensive income for the year – 161 – – 161

Comprehensive income for the year – 161 – –25,947 –25,786

Closing equity 31 December 2014 100 – 777,440 –25,947 751,593

The number of shares in the parent company amounts to 100,000 (100,000).The par value in the parent company is 1.

Change to hedging reserve

Opening hedging reserve 1 January 2013 –1,038


Closing hedging reserve 31 December 2013 –161

Opening hedging reserve 1 January 2014 –161


Closing hedging reserve 31 December 2014 –


PARENT COMPANY

Parent company cash flow statement


Operating activities

Profit/loss after financial items –16,816 –79,721

Other items not affecting liquidity 21 20,650 47,585

Income tax paid –34 –

Cash flow from operating activities before changes in working capital 3,800 –32,136

Changes in working capital

Increase (–)/Decrease (+) in trade receivables – –

Increase (–)/Decrease (+) in other current receivables 14,990 –168,390

Increase (+)/Decrease (–) in trade payables –708 689

Increase (+)/Decrease (–) in other current liabilities –98,422 –37,722


Investing activities

Acquisition of intangible assets and property, plant and equipment – –

Cash flow from investing activities – –


Financing activities

Synthetic options – –968

Borrowings 58,183 120,950

Amortisation loans –25,000 –55,000

Repayment of shareholder borrowings – –564,226

Dividend paid –25,434 –11,792

Shareholder contributions received 40,000 664,227

Group contribution received 32,608 84,368

Cash flow from financing activities 80,357 237,559

Change in cash and cash equivalents for the period 17 –

Cash and cash equivalents at beginning of the period – –

Cash and cash equivalents at year end 17 –


NOTES

Notes

Note 1 | Accounting and valuation policies

This annual report and the consolidated financial statements were adopted by the Board and the CEO on 4 March 2015, and are proposed for final adop-tion by the Annual General Meeting on 25 March 2015.

Ratos formed the Euromaint Gruppen AB on 25 April 2007. Euromaint Gruppen AB acquired Euromaint AB on 1 September 2007.

The parent company is a registered limited liability company domiciled in Stockholm. The address for the head office is Svetsarvägen 10, SE-171 41 Solna, Sweden. The parent company in the largest group to which Euromaint Gruppen AB, 556731-5402 is a subsidiary, and in which the Consolidated Financial Statements are drawn up, is Ratos AB, 556008-3585, Stockholm.

The most important accounting policies applied in the preparation of these consolidated financial statements are listed below and have been applied consistently to all periods unless otherwise stated. The Group’s accounting policies have also been consistently applied by Group companies.

Statement of compliance with applicable regulationsEuromaint Gruppen’s Consolidated Financial Statements have been prepared in accordance with the Swedish Annual Accounts Act and International Finan-cial Reporting Standards (IFRS) issued by the International Accounting Stand-ards Board (IASB) and interpretations from the International Financial Report-ing Interpretations Committee (IFRIC), as they both have been adopted by the EU.

The Consolidated Financial Statements are also prepared according to the Swedish Financial Reporting Board’s Recommendation RFR 1. (Supplementary Accounting Rules for Groups). The accounting policies relating to the parent company correspond to the policies for the Group except as shown below under the heading The Parent Company. The parent company’s Annual Report is prepared in accordance with the Swedish Financial Reporting Board Recom-mendation RFR 2 (Accounting for legal entities) and the Swedish Annual Accounts Act.

Basis of preparation of the statementsThe accounts are based on historical acquisition costs, apart from certain financial instruments. For further information on this point, please consult the section Financial Instruments, below.

Important estimates and assumptions for accounting purposesThe preparation of statements in accordance with IFRS requires the use of a number of estimates and assumptions about the future; these are made by the company management. The estimates for accounting purposes that result will, by definition, rarely correspond to the actual results.

Estimates and assumptions are reviewed regularly. Changes to estimates are reported in the period in which the change is made if the change only affects this period, or in the period in which the change is made and future periods if the change affects both the current period and future periods.

Uncertainty in estimatesSome assumptions about the future and certain estimates and assumptions at the balance sheet date have special significance for the valuation of assets and liabilities in the balance sheet. Discussed below are the areas where the risk of changes in value during the following year is greatest due to the need to change assumptions or estimates.

Goodwill impairment testingGoodwill arising from business combinations represents the difference be-tween the acquisition cost and the fair value of the acquired identifiable net assets. Impairment testing for goodwill is performed once a year. The recover-able amount (i.e. the higher of value in use and fair value less selling expenses) is normally established based on the value in use, derived using discounted cash flow calculations. This in turn requires the expected future cash flow from the cash-generating unit to be estimated and an appropriate discount rate is established for calculating the cash flow’s present value.

Pension obligationsThe value of pension obligations for defined benefit pension plans is based on actuarial calculations using assumptions regarding discount rates, expected returns on plan assets, future salary increases, inflation and demographic conditions.

Obsolescence of inventoriesIn value terms, inventories consist mainly of items acquired according to an estimated maintenance plan for different train models. Since these cycles are long-term (5–12 years), there is an uncertainty in the assessment. The com-pany has an obligation to stock items (spare parts) over a long period for individual train models, which have a very long economic and technical life.

Percentage of completion accounting methodWith the percentage of completion accounting method there is uncertainty, as the work runs for several years, in predicting the final financial outcome of a major refurbishment project. Reconciliation is therefore made during the period from the beginning of the project until completion, but because this consumes both time and money, this is only performed a certain number of times during the year.

Provision for warranties for work carried outFor so-called availability work, faults in a provided service or a non-functioning product are corrected during a short period after the service has been provided. The cost of the work or replacement of a non-functioning product is included in the agreed business deal.

For refurbishment work, there is a need for warranties to the customer. These warranties run for two to five years. Since each refurbishment job is a unique part of the company’s operations and cannot be compared with any other refurbishment job, the cost for warranties is difficult to assess. The com-pany tries to estimate the warranty costs that may arise, and make provisions for these, but some uncertainty remains over the final outcome.

Changed accounting policiesNew and changed IFRS applied with effect from 1 January 2014 have not had a significant effect on the consolidated financial statements.

New IFRS that have not yet been appliedA number of new and changed IFRS only come into force in the next financial year and have not been applied in advance when preparing these financial state-ments. There are no plans to apply future requirements or changes in advance.– IFRS 9 Financial Instruments is intended to replace IAS 39 Financial

Instruments: Recognition and Measurement. IFRS 9 will enter into force on 1 January 2018 and early application is permitted provided the standard is adopted by the EU.

Other new and amended IFRS with future application (listed below) are not expected to have any material impact on the company’s financial statements.– Amendments to IFRS 10 and IAS 28: Sale or Contribution of Assets between

an Investor and its Associate or Joint Venture– Amendments to IFRS 11 Joint Arrangements: Accounting for Acquisitions

of Interests in Joint Operations– IFRS 15 Revenue from Contracts with Customers– Amendments to IAS 16 and IAS 41: Bearer Plants– Amendments to IAS 16 and IAS 38: Clarification of Acceptable Methods of

Depreciation and Amortisation– Amendments to IAS 19 Employee Benefits: Defined Benefit Plans: Employee

Contributions– Amendments to IAS 27 Separate Financial Statements: Equity Method in

Separate Financial Statements– IFRIC 21 Levies– Annual improvements to IFRS (2010–2012), (2011–2013), (2012–2014)

Consolidated financial statements Euromaint Gruppen’s income statement and balance sheet comprise all the companies over which the parent company directly or indirectly exercises a controlling interest. A controlling interest means the right to directly or indi-rectly shape a company’s financial and operating strategies in order to obtain economic benefits. A controlling interest arises when a shareholding totals more than half of the voting rights. When assessing if there is significant influ-ence, potential voting shares that can be used or converted without delay are taken into consideration.

Intra-group transactions and balance sheet items, as well as profit on trans-actions between Group companies are eliminated. Unrealised losses are also eliminated, unless the transaction provides evidence that there is an impair-ment requirement for the transferred asset.


NOTES

Consolidation principles and business combinationsSubsidiaries are companies under the control of Euromaint Gruppen AB. Controlling interest means the right to directly or indirectly shape a compa-ny’s financial and operating strategies in order to obtain economic benefits. When assessing if there is a controlling interest, potential voting shares that can be used or converted without delay are taken into consideration.

Acquisitions on 1 January 2010 or laterSubsidiaries are reported according to the acquisition method. This method means that the acquisition of a subsidiary is considered a transaction by means of which the Group indirectly acquires the subsidiary’s assets and takes over its liabilities. The acquisition analysis establishes the fair value on the acquisition date of the acquired identifiable assets and assumed liabilities, as well as any holding without a controlling interest. Transaction fees, with the exception of transaction fees related to the issue of equity instruments or debt instruments, arising are recognised directly in the profit/loss for the year.

When combining businesses where the transferred compensation, possibly a holding without a controlling interest and the fair value of a previously owned share (in the event of phased acquisition) exceeds the fair value of acquired assets and assumed liabilities which are recognised separately, the difference is recognised as goodwill. When the difference is negative, a low price acqui-sition, this is recognised directly in the profit/loss for the year.

Transferred compensation in conjunction with the acquisition does not include payments related to the regulation of previous business relationships. This type of regulation is recognised in earnings.

The company’s acquisitions have not included any conditional purchase sums.

Acquisitions made between 1 January 2004 and 31 December 2009For acquisitions made between 1 January 2004 and 31 December 2009, where the acquisition cost exceeds the fair value of acquired assets and assumed lia-bilities, as well as contingent liabilities reported separately, the difference is recognised as goodwill. When the difference is negative, this is recognised directly in the profit/loss for the year. Transaction fees, with the exception of transaction fees related to the issue of equity instruments or debt instruments, arising have been included in the acquisition cost.

Foreign currency – translationForeign operations’ financial statementsReceivables and liabilities in foreign operations, including goodwill and other consolidated surplus and deficit values, are translated from the foreign oper-ations’ functional currency to the Group’s reporting currency, the Swedish krona, at the rate on the balance sheet date.

When preparing the consolidated financial statements, all items in the income statement for foreign subsidiaries are recalculated to Swedish krona using the average exchange rates, which constitute an approximation of the exchange rates in force at the time of each transaction during the year. The changes in the Group’s equity arising from different exchange rates on the balance sheet date, compared with the rate on the previous balance sheet date, are recognised in other comprehensive income and accumulate as a separate component under equity, designated translation reserve. When disposing of foreign activities, the accumulated translation differences attributable to the sold foreign activities are reclassified from equity to profit/loss for the year as a reclassification adjustment at the time when the profit or loss from the sale is recognised.

Transactions in foreign currencyAll subsidiaries use the local currency as their functional currency. Transactions are reported at the rate on the transaction date, which is then translated. Mone-tary assets and liabilities in foreign currency are recalculated to the functional currency at the exchange rate in force on the balance sheet date. Exchange rate differences that arise from these translations are reported in the profit/loss for the year. Non-monetary assets and liabilities reported at historical acquisition cost are translated at the exchange rate at the time of the transac-tion. Non-monetary assets and liabilities reported at fair value are translated into the functional currency at the rate in force at the time of the valuation of fair value. The functional currency of the parent company is Swedish krona which also constitutes the statement currency for the parent company and Group.

Net investment in a foreign operation Monetary non-current receivables to a foreign operation for which no regula-tion is planned, or which will in all probability not take place within the foresee-able future, are in practice part of Euromaint’s net investment in the foreign operation. An exchange rate difference arising in the monetary non-current receivable is recognised in other comprehensive income and accumulated in a separate component in equity, designated translation reserve. When dis-posing of a foreign operation the accumulated exchange rate differences

related to monetary non-current receivables are included in the accumulated translation differences reclassified from the translation reserve in equity to the net profit/loss for the year.

Property, plant and equipmentOwned assetsProperty, plant and equipment is included at acquisition cost, less accumulated depreciation and accumulated impairment loss. The acquisition cost includes the purchase price and costs directly attributable to the asset, such as the cost for getting it in place and in such a condition that it can be used in accordance with the aim of the acquisition.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is likely that future economic benefits associated with the asset will flow to the Group and the acquisition cost of the item can be measured reliably. All other types of repairs and main-tenance are reported as expenses in the income statement during the period in which they arise.

Leased assetsAssets leased under finance lease contracts are recognised as non-current assets in the statement of financial position and are initially measured at the lower of the leased item’s fair value and the present value of the minimum lease payments at the start of the contract. The obligation to pay future lease payments is recognised as non-current and current liabilities. The leased assets are depreciated over the useful life of the asset, or if shorter over the agreed leasing period, while lease payments are reported as interest and the amortisation of debt.

The assets that are leased according to operational leasing are not recog-nised as assets in the statement of financial position. Operating lease con-tracts do not give rise to a liability either.

Depreciation/amortisation principlesTo allocate their acquisition cost down to the estimated residual value, there is straight-line depreciation according to plan of property, plant and equipment over the estimated useful life, according to the following percentages per year:

Category Depreciation yearMachinery and equipment 5–10Computers and terminals 3Improvements to leasehold 20

The assets’ residual values and useful lives are reviewed on each balance sheet date and are adjusted if necessary. An asset’s carrying amount is written down immediately to its recovery value (the higher of net realisable value and value in use) if the asset’s carrying amount exceeds its estimated recovery value.

Profits and losses following disposals are determined by comparing the revenue from sales and the carrying amount, and the result is reported in the income statement.

Intangible assetsGoodwillGoodwill represents the amount by which the acquisition cost exceeds the fair value of the Group’s share of the acquired subsidiary’s identifiable net assets on the date of acquisition minus any write-downs. Goodwill is recognised as an intangible asset. Profit or loss on the divestment of a unit includes the remaining carrying amount of the goodwill relating to the divested unit.

Goodwill is allocated to cash-generating units when carrying out testing for impairment, which is done annually. Impairment testing for goodwill is carried out using the following procedure. The goodwill value as determined on the date of acquisition is allocated to cash-generating units, or groups of cash-generating units, which are expected to bring benefits to the company through synergies. Assets and liabilities that already exist in the Group at the time of acquisition can also be attributed to these cash-generating units. Any cash flow of this type to which goodwill is allocated corresponds to the lowest level within the Group at which goodwill is monitored by the company’s man-agement and is not a part of the Group greater than one segment. Impairment is necessary when the recoverable amount for a cash-generating unit (or groups of cash-generating units) is less than the carrying amount. A write-down is then recorded in the income statement.

TechnologyResearch projects or patent rights acquired in a business combination are capitalised and reported at the acquisition cost less amortisation and write-downs.

Subsequent expenses for capitalised intangible assets are reported as an asset in the statement of financial position. Only then do they increase the future economic benefits for the specific asset to which they relate. All other expenses are recorded as a cost when they occur.


NOTES

Depreciation/amortisation principlesAmortisation is reported in the profit/loss for the year over the estimated useful life of the intangible asset, unless such useful lives cannot be deter-mined. The useful lives are re-examined at least once a year. Goodwill and other intangible assets with an uncertain useful life or which are not yet ready for use are tested for impairment annually, and also as soon as indications arise that suggest that the asset in question has reduced in value. Intangible assets with definable useful lives are amortised from the date they are availa-ble for use. The calculated useful lives are:

Category Depreciation yearWorkshop streamlining 10

Impairment of non-financial assets Property, plant and equipment and intangible assetsAssets that have an indefinite useful life are not depreciated, but are tested annually for impairment. The assets which are depreciated are assessed in terms of any need for impairment whenever events or changes in circum-stances indicate that the carrying amount is not recoverable. If it is not possible to significantly determine independent cash flows for an individual asset, and its fair value minus selling expenses cannot be used, the assets are grouped to the lowest level when testing for impairment where it is possible to identify significantly independent cash flows – a so-called cash-generating unit.

A write-down is made according to the amount by which the asset’s carry-ing amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less selling expenses or value in use. When calcu-lating the value in use, future cash flows are discounted by a discount factor that takes into account the risk-free interest rate associated with the specific asset. An impairment is recognised as a cost in the profit/loss for the year. Once impairment losses have been identified for a cash-generating unit, the write-down sum is primarily assigned to goodwill. The other assets included in the unit are then proportionally written down.

An asset, except goodwill, that has previously been written down is exam-ined on each balance sheet date to determine whether a reversal is required.

Financial instrumentsFinancial instruments recognised in the statement of financial position include, on the asset side, cash and cash equivalents, trade receivables, derivatives and other receivables. On the liability side are trade payables, loans, derivatives and other liabilities.

A financial asset or financial liability is recognised in the statement of finan-cial position once the company has become a party to the instrument’s con-tractual terms. Trade receivables are recognised in the statement of financial position when the invoice has been sent. Liabilities are entered when the counterparty has delivered and a contractual obligation to pay exists, even if an invoice has not yet been received. Trade payables are entered when an invoice has been received.

A financial asset is derecognised from the statement of financial position when the rights in the contract have been realised, cancelled or the company loses control over it. The same applies to part of a financial asset. A financial liability is derecognised from the statement of financial position when the obligation in the contract has been fulfilled or is otherwise satisfied. The same applies to part of a financial liability.

Acquisitions and divestments of financial assets are reported on the trade date, which is the date on which the company commits to acquire or sell the asset.

Financial instruments and hedge accounting Forward agreements used to hedge currency changes for receivables and liabilities in a foreign currency are valued at the spot price on the day when the currency future is taken up for assessment of the underlying receivable or liability. The difference between the forward rate and the day rate when the agreement is entered into (the arbitrage premium) is amortised over the term of the forward agreement. Amortised arbitrage premiums are reported as interest rate income or an interest rate expense when the future is longer than three months.

Classification of financial instrumentsThe Group classifies its financial instruments into the following categories: financial assets or financial liabilities held for trading and measured at fair value via the income statement, trade receivables, liabilities measured at amortised acquisition cost and derivatives used for hedging purposes. The classification depends on the purpose for which the instrument was acquired. The classification is determined at initial recognition and is reassessed at each reporting date.

Calculation of fair valueWhen the market is not active for a particular financial asset, fair values are calculated through valuation techniques, whereby the Group makes assump-tions based on the market conditions prevailing at the balance sheet date. Market rates of interest form the basis for calculating the fair value of long-term loans. For other financial instruments where the market value is not specified, fair value is considered to correspond with the carrying amount.

Financial assets measured at fair value via the income statement.This category includes financial assets held for trading and those which, from the time of investment, are attributable to the category measured at fair value via the income statement. The Group’s assets in this category consist of de-rivative instruments that are not identified as hedges. Assets in this category are classified as current assets if they are held for trading or are expected to be realised within 12 months of the balance sheet date. Financial assets measured at fair value via the income statement are valued at their fair value initially, which means that transaction costs burden the income for the period, and following the acquisition date. Realised and unrealised gains and losses arising from changes in fair value are included in the income statement as financial items in the period in which they occur.

Trade receivablesTrade receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Trade receivables are recog-nised at the acquisition cost less any provision for impairment.

Trade receivables are deemed uncertain when payment is not seen as likely. The impairment losses for receivables are determined based on historic expe-rience of bad debts on similar accounts. Trade receivables with impairment losses are recognised at the present value of expected future cash flows. However, receivables with a short term are not discounted.

Impairments of trade receivables recognised at amortised acquisition cost are reversed if the previous reasons for impairment are no longer valid and full payment from the customer is expected to be received.

Financial liabilities valued at fair value via the income statementThis category includes derivatives with negative fair value that are not used for hedge accounting, and financial liabilities that are held for trading. The liabilities are valued continuously at fair value, which means that transaction costs burden the income for the period, and changes in value are reported in the income statement as a financial item.

Synthetic optionsSynthetic option programmes with market premiums are recognised and measured in accordance with IAS 39. Received premiums are recognised as financial liabilities. When a valuation of the options at fair value through an option pricing model corresponds to the premium the company has received, this means that there is no initial cost to the company. The liability is revalued continuously at fair value by applying an option pricing model, taking the existing conditions into account. Changes in value over the option’s term are reported as a financial item, as well as other income and expenses in respect of financial assets and liabilities. If a synthetic option is exercised by the holder, the financial liability, as previously revalued at fair value, is settled.

Any realised profit is recognised in the income statement as a financial item. If the synthetic options mature without value, the reported liability is recog-nised as income.

BorrowingLoans are initially recognised at the loan sum including transaction costs, and are then reported at amortised acquisition cost applying the effective interest rate method. Borrowings are classified as current liabilities if payment of the liability is to be made within 12 months following the balance sheet date.

Trade payablesTrade payables are initially reported at the acquisition cost equivalent to fair value with additions for transaction costs and are subsequently measured at amortised cost using the effective interest rate method.

Cash and cash equivalentsCash and cash equivalents include cash and bank deposits.

AssociatesAssociates are companies in which the Group has a significant, but not con-trolling, interest in operational and financial management, ordinarily through a shareholding of between 20 and 50 per cent of the voting rights. From the date that the controlling interest is obtained, the shares in the associate are recognised in the consolidated financial statements using the equity method.


NOTES

The equity method means that the value reported in the Group of shares in the associates corresponds to the Group’s share in the associates’ equity as well as Group goodwill and other residual values of Group surplus and deficit values. In the consolidated profit/loss for the year, the Group’s share in asso-ciated companies’ profit/loss attributable to the owners of the parent company, adjusted for any depreciation, impairment and reversals of acquired surpluses and deficit values, is recognised in “Income from participations in associates”. These equity participations, reduced by dividends received from associates, constitute the main change of the reported value of equity in associates.

Any difference on the acquisition date between the acquisition cost for the holding and the owner company’s share of the net fair value of the associate’s identifiable assets and liabilities is recognised according to the same principles as for the acquisition of subsidiaries.

Transaction fees, with the exception of transaction fees related to the issue of equity instruments or debt instruments, arising have been included in the acquisition cost. When the Group’s share of reported losses in the associate exceeds the reported value of the shares in the Group, the value of the shares is reduced to zero. Deduction for losses also takes place against long-term financial intermediaries without collateral, which financially constitute part of the owner company’s net investment in the associate.

Continuing losses are not recognised unless the Group provided guaran-tees to cover losses arising in the associate.

InventoriesInventories are valued at the acquisition cost or the net realisable value, which-ever is lowest. The acquisition cost for inventories is calculated using the first-in, first-out (FIFO) method and includes expenses that have been incurred from acquiring stock assets and transporting them to their current location and getting them into the appropriate condition. For manufactured goods and work in progress, the acquisition cost includes a reasonable proportion of indirect costs based on normal capacity.

The net realisable value is the estimated sale price in operating activities, once the costs of completion and sale have been deducted.

Contingent liabilitiesA contingent liability is recognised when there is a possible commitment deriving from events that have occurred and whose occurrence is only con-firmed by one or more uncertain future events or when there is a commitment that has not been recognised as a liability or provision due to it not being credible that an outflow of resources will be required.

ClassificationThe non-current assets, non-current liabilities and provisions consist essen-tially of amounts that are expected to be recovered or paid after more than 12 months following the balance sheet date. Current assets and current liabili-ties consist essentially of amounts that are expected to be recovered or paid within 12 months following the balance sheet date.

Income taxesIncome taxes are included in the consolidated financial statements with both current and deferred tax. Group companies are subject to taxation in accord-ance with the existing legislation in each country. A current tax liability or asset is reported as the tax estimated to be paid or received for the current or previ-ous years.

Deferred tax is reported on all temporary differences arising from the differ-ence between the tax value of assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred tax is calculated by applying the tax rates and tax laws that have been enacted or announced at the balance sheet date and are expected to apply when the deferred tax asset is realised or the deferred tax liability is settled.

Deferred tax assets are reported for deductible temporary differences and unused tax loss carry-forwards to the extent it is likely that future taxable prof-its will be available against which the temporary differences or unused loss carry-forwards may be utilised.

Remuneration to employeesPension obligationsGroup companies have various pension plans. The pension plans are financed through the payment of insurance premiums or through provisions in the balance sheet. The Group has both defined benefit and defined contribution pension plans.

A defined contribution pension plan is a pension plan for which the Group does not have any further payment obligations once the contributions are fully paid. Defined contribution pension plans in the Group are PA-03, Option ITP-S, and ITP in Alecta which is reported as a defined contribution plan due to lack of the information required to report the plan as a defined benefit plan. The

contributions are reported as personnel costs. Prepaid contributions are reported as an asset to the extent that a cash refund or reduction of future payments can be credited by the Group.

A defined benefit pension plan means that the employee is guaranteed a pension equivalent to a certain percentage of their final salary. The liability reported in the balance sheet for defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets.

The present value of the defined benefit obligation is determined by dis-counting the estimated future cash flows using the interest rate on govern-ment bonds with maturities comparable to the current pension liability. The calculation is performed by an qualified actuary using the Projected Unit Credit Method. The Group’s net obligations comprise the present value of the obligation minus the fair value of plan assets adjusted for any asset lim-its. The net interest cost of the defined benefit obligation is recognised in the profit/loss for the year under net financial income. The net interest is based on the interest that arises when discounting the net obligation minus the fair value of plan assets adjusted for any asset limits. Other components are rec-ognised in operating profit.

Revaluation differences comprise of actuarial profits and losses, the differ-ence between the actual return on plan assets and the sum that is included in the net interest and any changes in asset limit differences. Revaluation differences are recognised in other comprehensive income.

The special income tax comprises part of the actuarial assumptions and is therefore recognised as part of the net obligation. The part of the special pay-roll tax that is calculated based on the Swedish Act on Safeguarding Pension Obligations for legal entities is recognised for the sake of simplicity as an accrued expense instead of as part of the net obligation.

Yield tax is recognised in profit or loss for the period to which the tax per-tains and is therefore not included in the liability calculation. In funded plans the tax is charged to the return of the plan assets and is recognised in other comprehensive income. In unfunded plans the tax is charged to the profit/loss for the year.

Short-term benefits Short-term employee benefits are calculated without discounting, and are reported as a cost once the related services have been received. A provision is reported for the expected cost of profit-sharing and bonus payments when the Group has a valid legal or informal obligation to make such payments as a result of services received from employees and if the obligation can be esti-mated reliably.

Termination benefitsTermination benefits are payable for an employee’s employment terminated before the normal retirement date or when an employee accepts voluntary redundancy in exchange for such compensation. The Group reports the liability or cost when it is demonstrably committed either to terminating the employee according to a detailed formal plan without the possibility of revocation, or to providing termination benefits as a result of an offer made to encourage volun-tary redundancy. Benefits that are due after 12 months from the balance sheet date or longer are discounted to the present value.

ProvisionsProvisions are reported when the Group has an existing legal or informal obli-gation as a result of past events; it is more likely that an outflow of resources is required to settle the obligation than to not do so and the amount can be estimated reliably. No provisions are made for future operating losses. If there are a number of similar obligations, the likelihood of there needing to be an outflow of resources to settle this entire group of obligations is assessed. Where the effect of when payment is made is important, the provisions are calculated by discounting the expected future cash flow at an interest rate be-fore tax that reflects the current market estimates of the time value of money and, where applicable, the risks associated with the liability. The provisions for warranties, restructuring and pensions are reported under provisions.

Provision for warranties starts to be calculated when a service is completed or the goods have been released to the customer. In order to estimate the amounts, historical data related to repairs and exchanges are generally used.

Revenue recognitionRevenue is reported less VAT, any discounts and similar revenue reductions. Net revenue includes sales of services within maintenance, the refurbishment of rolling stock, and the maintenance and implementation of production fa-cilities for the manufacturing industry.

For refurbishment work, contract revenue is recognised in proportion to the assignment’s completion rate, which comprises accrued contract costs com-pared to forecast contract costs. This accounting is based on the view that


NOTES

the performance is fulfilled as the work is carried out and means that profits are gradually reported based on each assignment’s completion rate when the assignment’s final outcome can be reliably estimated.

For availability deals, known as kilometre contracts, revenue recognition is based on the number of kilometres that the rolling stock has travelled.

An anticipated loss for an assignment is charged in full immediately to the profit/loss for the period.

Financial income and expensesFinancial income relates to the positive exchange rate differences, interest income on financial assets, pension assets and bank deposits, profit from the change in value of financial assets valued at fair value via the income statement and any such profit from hedging instruments reported in income. Financial expenses are costs related to loans, pension liabilities, current bank charges, negative exchange rate differences, loss from the change in value of financial assets valued at fair value via the income statement, impairment of financial assets, and any such losses from hedging instruments reported in the profit/loss for the year.

LeasesOperating leasesLeases in which a substantial part of the risks and benefits of ownership are retained by the lessor are classified as operating leases. Payments that are made during the lease period are written-off in the income statement on a straight-line basis over the lease period.

Finance leasesFinance leases involve the financial risks and benefits associated with owner-ship largely being transferred to the lessee. Where this is not the case, it is a question of operating leases. Minimum lease payments are allocated between interest expense and amortisation of outstanding liabilities. The interest charges may be allocated over the lease period so that each accounting period is charged with an amount equal to a fixed interest rate for the liability reported in each accounting period. Variable charges are written-off in the periods they are incurred.

Cash flow statementThe indirect method is applied when reporting cash flow from operating activities.

Related party disclosuresRelated parties refers to the companies where Euromaint or parties related to Euromaint can exercise a controlling interest or a significant influence in terms of operational and financial decisions. The circle of related parties also includes the companies and individuals who have an opportunity to exercise a controlling interest or a significant influence over Euromaint Gruppen’s finan-cial and operational decisions. Related party transactions are reported in Note 4.

Related individuals are defined as the Chairman and Members of the Board, the Chief Executive Officer and other senior executives as well as close relatives of these people. Remuneration to the Board of Directors and the Chief Execu-tive Officer is presented in Note 8.

Discontinued operationsWhen the Group intends to discontinue an operation that represents either a separate major line of business or a geographical area of operations, this is recognised as a discontinued operation in accordance with IFRS 5 – Non- current Assets Held for Sale and Discontinued Operations. Profit or loss after tax in the discontinued operation is recognised as a single amount in the income statement, separate from the statement of other comprehensive in-come and the statement for the comparative period, in order to present the discontinued operation separately from the remaining operations. The layout of the statement of financial position for the current and previous year has not been amended, in accordance with applicable regulations, in the same way.

Earnings per shareEarnings per share is calculated using the profit/loss for the year for the Group attributable to the parent company’s owners and on the weighted average number of shares outstanding during the year. When calculating the diluted earnings per share, the profit/loss and the average number of shares are adjusted to take account of the effects of diluting potential ordinary shares. During the year there has been no dilution of potential ordinary shares.

The Parent CompanyThe parent company’s Annual Report is prepared in accordance with the Swedish Financial Reporting Board Recommendation RFR 2 (Accounting for legal entities) and the Swedish Annual Accounts Act.

Differences between the parent company and the Group’s accounting policiesDue to the link between accounting and taxation, the rules on financial instru-ments and hedge accounting in IAS 39 are not applied to the parent company as a legal entity. In the parent company, financial fixed assets are valued at acquisition cost minus any write-down and financial current assets according to the principle of lowest value.

Interest rate swaps that effectively hedge cash flow risk in interest rate pay-ments for liabilities are valued at the net of accrued claim for variable interest and accrued liability for fixed interest and the difference is reported as an interest rate expense or interest rate income. The hedging is effective if the fi-nancial significance of the hedge and the liability is the same as if the liability had instead been taken up at a fixed market rate when the hedging relation-ship commenced. Any premiums paid for the swap agreement are amortised as interest over the term of the agreement.

Group contributionsGroup contributions are reported according to their financial significance. This means that Group contributions that are issued and received in order to minimise the Group’s total tax are reported directly in retained earnings.


NOTES

Note 2 | Distribution of net revenue

SEK thousandsThe Group

2014The Group

2013The Parent Company


2013Sale of services 2,052,464 2,188,033 – –Sale of goods 221,804 227,486 – –Total 2,274,268 2,415,519 – –

Note 3 | Distribution of net revenue by segment

The Group operates in two segments taking into account how the Group organises the sales of goods and services. The two segments are Sweden and Central Europe. All sales in the parent company are internal whereupon they are omitted. Distribution of net revenue in the Group is as given below:

The Group, SEK thousands 2014 2013Sweden 1,739,441 1,885,944Central Europe 534,827 529,575Total: 2,274,268 2,415,519

Note 4 | Transactions with related parties


2014The Group



2013Sales of goods and servicesRatos AB 150 – – –

Purchase of goods and servicesRatos AB 400 – – –Bisnode Kredit AB – 7 – –

Financial expensesEMaint (Ratos) – 61,028 – 61,028

Receivables from related partiesInwido – 32,608 – 32,608EMaint (Ratos) 34,514 – 34,514 –

Liabilities to related partiesRatos AB 44,249 – 44,249 –

The following table provides details of the transactions with related parties.Income Expenses

Ratos ABGroup

contributions

Companies in Note 4 are companies within the Ratos Group. Information on remuneration paid to senior executives can be found in Note 8.


NOTES

Note 5 | Other operating income and expenses


2014The Group



2013Other operating incomeProfit on the sale of non-current assets 174 117 – –Exchange gains on receivables/liabilities of an operating nature – – – –Miscellaneous 21,963 23,512 – –Total 22,137 23,629 – –

Other operating expensesLoss on the sale of non-current assets –222 –71 – –Exchange losses of an operating nature –3,248 –5,356 –5 –Total –3,470 –5,427 –5 –

Note 6 | Auditors’ fees


2014The Group



2013KPMGAuditing assignments 1,633 1,694 415 –Tax assignments 74 194 – –Other assignments 338 33 – –Total 2,045 1,921 415 –

PWCAuditing assignments 90 – – –Tax assignments – – – –Other assignments – – – –Total 90 – – –

Total 2,135 1,921 415 –

Auditing assignments refer to the review of the annual report and accounting as well as the administration by the Board of Directors and the CEO, other duties which are incumbent on the company’s auditors to perform as well as advice and other assistance as a result of observations made during the re-view or the implementation of such other duties.

Everything else falls under other assignments. The parent company’s audit fees for 2014 were paid by the parent company, while the audit fees for 2013 were paid by the then subsidiary Euromaint AB.

Note 7 | Operating leases

The GroupFuture minimum lease payments, SEK thousands 2014 2013Within 1 year 138,969 131,965 Between 1 and 5 years 133,983 131,516 More than 5 years 10,965 14,564 Total 283,917 278,045

Written-off lease rentals 127,333 125,646 Total 127,333 125,646

The rental of track, premises and IT equipment is recognised under the Group’s operating leases.


NOTES

Note 8 | Average number of employees and employee costs

The average number of employees broken down by gender isThe Group

2014The Group



2013SwedenFemale 103 115 – –Male 1,116 1,209 – –Total 1,219 1,324 – –

GermanyFemale 86 89 – –Male 792 839 – –Total 878 928 – –

Rest of EuropeFemale 2 2 – –Male 27 28 – –Total 29 30 – –

Group totalFemale 191 206 – –Male 1,935 2,076 – –Total 2,126 2,282 – –

Board membersFemale 5 6 1 1 Male 13 10 3 3 Total 18 16 4 4

The Chief Executive Officer and other senior executivesFemale 3 3 – –Male 6 6 – –Total 9 9 – –

Personnel costs


2014The Group



2013SwedenSalaries and other remunerationThe Board of Directors and CEOs 3,192 3,081 – – Of which bonuses and comparable remuneration – – – –Other employees 475,560 516,549 – –Total salaries and other remuneration 478,752 519,630 – –Payroll overheads 205,494 211,788 – – Of which pension expenses 48,275 43,596 – –

Other countriesSalaries and other remunerationThe Board of Directors and CEOs 2,088 1,946 – – Of which bonuses and comparable remuneration – – – –Other employees 249,747 248,850 – –Total salaries and other remuneration 251,835 250,796 – –Payroll overheads 49,521 51,815 – – Of which pension expenses – – – –

Remuneration and other benefits during the periodThe Chairman of Euromaint Gruppen AB received a fee of SEK 0 thousand (100) in 2014, with other Board Members receiving SEK 24 thousand (36). If employed by Ratos, no fee applies. The Chief Executive Officer of Euro-maint Gruppen AB receives a salary from Euromaint Rail AB. The CEO’s retirement age is 65. The CEO has a defined contribution pension promise of 30 per cent of monthly pensionable remuneration. The notice period is

twelve months for notice from the company’s side and six months for notice from the CEO’s side and during this time, salary is paid with full adjustment against other income.

Some employees in the Euromaint Group have taken up synthetic shares and options. However, these are not linked to each employee’s employment.

Benefits to management groups and employees in similar positions, in accordance with ÅRL, are recognised as benefits to other employees.


NOTES

Note 9 | Intangible fixed assets

Recovery valueThe calculated recovery value is made up of the value in use.

The value in use is calculated as the present value of future calculated cash flows generated by the asset during the estimated useful life. The assessment of future cash flows is based on realistic and verifiable assumptions that con-stitute the best estimates of the financial circumstances that are expected for the useful life. For example, personnel cost increases and other operating costs are based on anticipated inflation, which can be compensated through price increases in current contracts or indexing in fixed price contracts. Exchange rate forecasts are based on the current noted exchange rate taking account of existing currency hedges.

The assessment of future cash flows is based on the latest budgets/fore-casts and normally covers a three-year period. For calculations after this period the estimates of future cash flows are based on the assumption of a steady rate of growth deemed realistic for the cash-generating unit. For the 2014 calculation, a growth rate of 2 per cent has been used based on market posi-tions, plans for the future and growth in the market for each unit.

Estimates of future cash flows do not include future payments attributable to a future restructuring that the ownership is not obliged to implement.

As soon as the ownership is obliged to implement the restructuring, future cash flows then include savings and other benefits, as well as payments out that the restructuring is expected to give rise to.

Nor do assessed future cash flows include receipts and payments from financing activities. On the other hand, tax receipts and payments are included. When valuing a company, it is normal to include taxes. The calculated value in use should be compared with the carrying amount of ownership, which

includes both tax assets and liabilities. In order to make the valuation compa-rable with the carrying amount, the Group therefore includes receipts and pay-ments in the estimated future cash flows instead of reducing the group value by tax liabilities and receivables.

The company has chosen a discount rate after tax, as estimated future cash flows also include tax. The discount factor reflects market assessments of the time value of money and the specific risks associated with the asset. The dis-count factor does not reflect any such risks taken into account when future cash flows are estimated. As a starting point when calculating the discount rate, the company’s weighted average capital cost, its marginal borrowing rate and other market borrowing rates independent of the company’s capital struc-ture are used. For the 2014 calculations, the discount rate after tax has been calculated at 6.77 per cent.

Impairment testing of cash-generating units containing goodwillThe following cash-generating units have substantial reported goodwill values in relation to the total reported amount of goodwill in the Group:

SEK millions 2014 2013Railway Sweden 662 662Railway Germany 53 50Total 715 712

The impairment testing carried out by the company management, which has also been presented to the Board of Directors, has not resulted in impairment of the carrying amounts in the remaining segments in 2014.

2014 2013SEK thousands Goodwill Technology Total Goodwill Technology TotalThe GroupOpening accumulated acquisition costs 711,781 26,413 738,194 709,961 25,926 735,887 Investments during the year – 9,046 9,046 – 107 107 Correction – – – – – – Disposals – –67 –67 – – – Currency adjustment 3,192 673 3,865 1,820 380 2,200 Closing accumulated acquisition costs 714,973 36,065 751,038 711,781 26,413 738,194

Opening accumulated amortisation – –23,113 –23,113 – –18,394 –18,394 Correction – – – – – – Disposals – 67 67 – – – Amortisation for the year – –2,780 –2,780 – –4,468 –4,468 Currency adjustment – –577 –577 – –251 –251 Closing accumulated depreciation – –26,403 –26,403 – –23,113 –23,113

Net book value 714,973 9,662 724,635 711,781 3,300 715,081

2014 2013SEK thousands Goodwill Technology Total Goodwill Technology TotalThe Parent CompanyOpening accumulated acquisition costs – – – – – – Investments during the year 661,915 – 661,915 – – – Correction – – – – – – Disposals – – – – – – Sales of subsidiaries – – – – – – Currency adjustment – – – – – – Closing accumulated acquisition costs 661,915 – 661,915 – – –

Acquisition of subsidiaries – – – – – – Disposals – – – – – – Amortisation for the year – – – – – – Currency adjustment – – – – – – Closing accumulated depreciation – – – – – –

Net book value 661,915 – 661,915 – – –

All intangible assets are acquired. For information about amortisation, see Note 1. Goodwill with an indefinite useful life is attributed to separate subsidiaries during impairment testing, as these constitute cash-generating units.

The amount of goodwill in the parent company is a result of the merger between Euromaint AB and Euromaint Gruppen AB in 2014.


NOTES

Note 10 | Property, plant and equipment

2014

SEK thousandsBuildings and land

Land improve-

ments

Improve-ments to

leaseholdPlant and

machinery

Equipment, tools, fixtures

and fittingsConstruction

in progress TotalThe GroupOpening acquisition costs 10,812 – 52,381 159,152 325,545 40,328 588,218 Correction 3,3021 – – – – – 3,3021

Reclassification – 237 –15,536 – 15,299 – – Purchasing – – 3,523 3,236 21,489 32,939 61,187 Sales/disposals – – – –496 –14,523 – –15,019 Currency adjustment 692 – 214 2,749 2,760 5 6,420 Closing accumulated acquisition costs 14,806 237 40,582 164,641 350,570 73,272 644,108

Opening depreciation –2,602 – –35,529 –118,482 –255,791 – –412,404 Reclassification – –22 10,997 – –10,975 – –Depreciation for the period –1,392 –24 –2,468 –9,772 –23,784 – –37,440 Sales/disposals – – – 258 13,897 – 14,155 Currency adjustment –231 – –155 –1,593 –1,694 – –3,673 Closing accumulated depreciation –4,225 –46 –27,155 –129,589 –278,347 – –439,362

Closing planned residual value 2014 10,581 191 13,427 35,052 72,223 73,272 204,746

2013

SEK thousandsBuildings and land

Land improve-

ments

Improve-ments to

leaseholdPlant and

machinery

Equipment, tools, fixtures

and fittingsConstruction

in progress TotalThe GroupOpening acquisition costs 6,557 – 49,492 165,219 305,636 23,236 550,140 Correction – – – 1,4332 4,8932 – 6,3262

Purchasing 4,006 – 2,790 1,900 17,544 16,500 42,740 Sales/disposals – – – –10,892 –8,714 – –19,606 Currency adjustment 249 – 99 1,492 6,186 592 8,618 Closing accumulated acquisition costs 10,812 – 52,381 159,152 325,545 40,328 588,218

Opening depreciation –1,603 – –31,475 –116,987 –235,617 – –385,682 Correction – – – –1,4332 –4,8932 – –6,326 Depreciation for the period –908 – –3,972 –10,179 –22,784 – –37,843 Currency adjustment –91 – –82 –748 –806 – –1,727 Closing accumulated depreciation –2,602 – –35,529 –118,482 –255,791 – –412,404

Closing planned residual value 2013 8,210 – 16,852 40,670 69,754 40,328 175,814

1) Correction refers to a revaluation of non-current assets from previous years.2) Correction refers to incorrect opening balances from previous years.

The parent company has no property, plant or equipment; for this reason this division is not reported.


NOTES

Note 11 | Financial income and expenses


2014The Group



2013Interest incomeLoans and receivables 438 458 12,597 189 Pensions 968 – – – Change in value synthetic options – 8,818 – 8,818 Other financial incomeNet exchange rate change 1,210 – – – Financial income 2,616 9,276 12,597 9,007

Interest expensesChange in value synthetic optionsFinancial liabilities valued at amortised acquisition cost –30,379 –100,234 –25,596 –85,910 Pensions –1,179 – – – Loans and payablesNet exchange rate change – – – – Other financial expenses –5,045 –5,043 –2,918 –2,084 Financial expenses –36,603 –105,277 –28,514 –87,994

Income and expenses by financial category

SEK thousands

Financial assets/liabilities are measured at fair value

in the income statement – Held for trading

Financial assets measured according to the Fair

Value OptionLoans and

receivables

Liabilities valued at

amortised acquisition

cost

Derivatives used for hedging

purposes TotalThe Group 2014Income by categoryInterest income – – 438 – – 438 Other financial income 1,210 – – – – 1,210 Pension plan – – – 968 – 968 Valuation of synthetic options – – – – – – Total 1,210 – 438 968 – 2,616

Expenses by category Interest expenses – – – 30,379 – 30,379 Pension plan interest expenses – – – 1,179 – 1,179 Valuation of synthetic options – – – – – – Other financial expenses – – – 5,045 – 5,045 Total – – – 36,603 – 36,603

The Group 2013Income by categoryInterest income – – 458 – – 458 Other financial income – – – – – – Pension plan – – – – – – Valuation of synthetic options 8,818 – – – – 8,818 Total 8,818 – 458 – – 9,276

Expenses by categoryInterest expenses – – – 100,233 – 100,233 Pension plan interest expenses – – – – – – Valuation of synthetic options – – – – – – Other financial expenses – – – 5,043 – 5,043 Total – – – 105,276 – 105,276


NOTES

Income and expenses by financial category

SEK thousands

Financial assets/liabilities are measured at fair value

in the income statement – Held for trading

Financial assets measured according to the Fair

Value OptionLoans and

receivables

Liabilities valued at

amortised acquisition

cost

Derivatives used for hedging

purposes TotalParent Company 2014Income by categoryInterest income – – 12,597 – – 12,597 Valuation of synthetic options – – – – – – Total – – 12,597 – – 12,597

Expenses by categoryInterest expenses – – – 25,596 – 25,596 Other financial expenses – – – 2,918 – 2,918 Total – – – 28,514 – 28,514

Parent Company 2013Income by categoryInterest income – – 189 – – 189 Valuation of synthetic options 8,818 – – – – 8,818 Total 8,818 – 189 – – 9,007

Expenses by categoryInterest expenses – – – 85,910 – 85,910 Valuation of synthetic options – – – – – – Other financial expenses – – – 2,084 – 2,084 Total – – – 87,994 – 87,994

Note 12 | Tax


2014The Group



2013Total reported taxCurrent tax –21,858 6,929 –9,131 17,538 Tax attributable to previous years –2,659 60 – – Deferred tax –15,124 18,572 – 17 Total –39,641 25,561 –9,131 17,555

Differences between reported tax and estimated tax are based on the current tax rate consisting of the following components:Difference in estimated tax at current tax rateReported profit before tax from continuing operations 22,571 –69,503 –16,816 –79,721 Reported profit before tax from discontinued operations –6,033 –5,001 – –

Tax according to current tax rate, 22% (22%) –3,638 16,391 3,700 17,539

Effects of non-taxable income and non-deductible expensesEffect of other tax rates in other countries/ foreign subsidiaries 3,705 –2,761 – – Non-deductible expenses 9,931 –12,480 – – Non-taxable income –5,804 4 – – Effect of deficit utilised from previous years –25,166 – – – Write-down of previously capitalised tax loss carryforward –16,320 – – – Activation of previously unrecognised tax loss carryforwards 528 13,355 – – Tax attributable to previous years –2,659 60 – – Miscellaneous –218 10,992 –12,831 16 Total –39,641 25,561 –9,131 17,555

The Group’s effective tax for 2014 amounts to –239.7 per cent (–34.3) of taxable profit. The parent company’s effective tax for 2014 amounts to 54.3 per cent (–22.0) of taxable profit.

Deferred tax assets and liabilities are attributable to the following:Changes in deferred tax assets and deferred tax liabilities related to the hedging instruments have been reported in other comprehensive income, other changes have been reported in the income statement.


NOTES


2014The Group



2013Deferred tax assets Deferred tax attributable to deficits – 14,327 – – Hedging instruments (under Other comprehensive income) – – – 45 Non-current assets 755 –23 – – Other provisions 2,712 1,511 – – Transferred to “Deferred tax liabilities” 7,022 – – – Provisions at year end 10,489 15,815 – 45

Deferred tax liabilitiesProvisions for pension obligations 1,836 2,183 – – Non-current assets 9,639 – – – Provisions at year end 11,475 2,183 – –

Changes to deferred tax assets and liabilities are attributable to the following:Change in deferred tax assetsOpening value 15,815 –86 45 293 Deferred tax attributable to deficits –14,327 13,810 – – Non-current assets 778 2,801 – – Valuation of hedging instruments – – –45 –248 Other provisions 1,201 72 – –Other receivables – –782 – –Provisions for pension obligations 7,022 – – – Closing value 10,489 15,815 – 45


2014The Group



2013Change in deferred tax liabilityOpening value 2,183 5,027 – – Provisions for pension obligations –347 –1,639 – – Non-current assets 9,639 – – – Provisions – –1,205 – – Closing value 11,475 2,183 – –


2014The Group



2013Tax items reported directly against equityCurrent tax attributable to Group contributions – –7,174 – –17,538 Total – –7,174 – –17,538


NOTES

Note 13 | Finance leases

The GroupFuture minimum lease payments, SEK thousands 2014 2013Within 1 year 7,565 7,861 Between 1 and 5 years 16,955 10,519 More than 5 years – – Total 24,560 18,380

Future minimum lease payments exclude guaranteed residual values, as these do not constitute a future payment. Guaranteed residual values are included in the closing lease liabilities however. The guaranteed residual values amount to SEK 4,926 thousand (5,363).

Written-off lease rentals 7,513 6,664 Total 7,513 6,664

No variable fees are included in net income. The hire of rolling stock, machines and workshop equipment is reported under the Group’s finance leases.

For the majority of the finance lease contracts, at the end of the contract Euromaint can either purchase the equipment for an equivalent residual value of 10 per cent, recommend another buyer, or extend the contract (the new rental then becomes a quarterly rent per year as previously).

The Parent CompanyThere are no amounts to report for the parent company.

Note 14 | Participations in Group companies (refers to the parent company)

Company’s name Corp. ID no. Registered office

No. of partici-pations

Equity and voting

rights % Book value

2014 Book value

2013Euromaint Rail AB 556032-2918 Stockholm 190,000 100 156,761 –Euromaint AB1 556084-8458 Stockholm 1,000 100 – 935,200Closing value 156,761 935,200

Euromaint Rail Bemanning AB 556670-3095 Stockholm 1,000 100Euromaint GmbH Amtsgericht Leipzig Stadt HRB 25939 Leipzig / Germany 1 100Euromaint SIA 40003885784 Riga / Latvia 15,000 100

1) On 2 December 2013 the Board of Directors of Euromaint AB decided that the company would be merged with its parent company, Euromaint Gruppen AB (556731-5402). The merger was accomplished on 18 March 2014.

Note 15 | Participations in associates


2014The Group

2013Carrying amount at year start 224 215Investments – –Sales – –Income from participations in associates – –Comprehensive income from participations in associates – –Impairment –238 –Exchange rate differences 14 9Carrying amount at year end – 224

HoldingsThe following specifications show the Group’s associates.

Company’s name SEK thousands

Equity and voting rights %

Book value 2014

Book value 2013

Euromaint Mobile Service BV 50 – 224Associates owned by Group companies – 224

Note 16 | Inventories

SEK thousands The Group 2014 2013Gross stock 440,677 436,271Obsolescence reserve –80,489 –75,670Work in progress 53,683 60,706Net stock 413,872 421,307

Distributed as belowReplacement parts 84,772 90,588Spare parts 274,311 266,808Work in progress 53,683 60,706Miscellaneous 1,106 3,205Total 413,872 421,307


NOTES

Note 17 | Trade receivables and other receivables


2014The Group



2013Trade receivables 281,216 316,678 – – Receivables from Group companies 34,514 32,608 478,260 456,185 Tax assets – 6,092 – – Other receivables 36,975 22,323 168 101 Completed, not invoiced 9,298 10,007 – – Prepayments and accrued income 71,832 92,609 11,779 14,397 Total 433,835 480,317 490,207 470,683

Specification of prepayments and accrued incomePrepaid rent 37,722 33,784 – – Accrued income, maintenance measures 13,835 42,885 – – Miscellaneous 20,275 15,940 11,779 14,397 Total 71,832 92,609 11,779 14,397

Note 18 | Financial risks and risk management

Through its operations, Euromaint is exposed to financial risks, including the effect of changes to prices in the loan and capital markets, exchange rates and interest rates. The Group’s overall risk management focuses on the unpredictability of the financial markets and aims at minimising potentially unfavourable effects on the Group’s financial results. Financial operations in the Group are centralised within Euromaint Rail AB’s finance function. The finance function acts as an internal bank and is responsible for the sourcing of capital, cash management and financial risk management. The operations are regulated through the Group’s financial regulations.

The following important financial risks are dealt with:Market risksThe risk that the value of, or future cash flows from, a financial instrument varies due to changes in market prices. Currency risk and interest rate risk con-stitute market risks.

Currency risksCurrency risk refers to the risk of exchange rate fluctuations negatively affecting the Group’s income statement, balance sheet and/or cash flows. Currency risks exist, both in the form of transaction risks and translation risks. Euromaint is to some extent exposed to currency and transaction risks because of relatively large volumes purchased in foreign currency and small customer invoicing in the corresponding currencies. Purchases made in foreign currencies for major projects are hedged at 100 per cent or are agreed with variable currency clauses during the tender/contract process. The financial regulations do not require currency hedges for the current net flows. Euromaint is exposed to the follow-ing currencies: EUR, NOK, USD, GBP, DKK and CHF. Euromaint’s largest currency exposure is to goods purchased in EUR.

The net flow in EUR is approximately EUR 16,469 thousand (21,450) per year, which means that a 5 per cent change in the exchange rate will affect purchase costs before hedging by approximately SEK 7.5 million (8.9) before tax. Currency hedging is no longer practised against this net flow. Exposure relating to the transaction risk attributable to the other currencies is not sig-nificant. Currency risk in the form of translation risks is attributable to the EUR currency. Translation differences for internal investment loans in EUR are reported due to its character to equity.

Interest rate risksInterest rate risks refer to the risk of a negative effect on the Group’s financial results resulting from changes in market interest rates. Euromaint is affected by the general rate adjustments through its external loan portfolio. To counter this, SEK 150 million of the loans was previously hedged with a 2-year interest rate swap. This ended in February 2014. Subsequent to this, the loans have not been hedged via an interest rate swap. The underlying loans run for 3 months. Therefore, given the current size of the loan portfolio, an interest rate increase of 1 percentage point will increase Euromaint’s annual interest expense by SEK 5.0 million before tax.

Other risksCredit riskCredit risk is the risk generated by the fact that the credit rating of the inves-tor’s counterparty can change in an unpredictable manner, thereby resulting in a loss for the Group. Euromaint has procedures in place to minimise the ongoing customer credit risk in its operations. These procedures relate, for example, to credit testing, advances and warranty management, and ongoing credit monitoring. Identified customer losses during 2014 amounted to SEK 93 thousand (6,319). At the balance sheet date, Euromaint had indirect collat-eral of approximately SEK 4,262 thousand (12,887) in the form of advances from customers. The Group considers that there are no significant concen-trations of credit risk in respect of the financial assets.

Age analysis, due non-impaired trade receivablesNot due 209,122 Due 0–60 days 36,509 Due 61–180 days 21,821 Due 181–365 days 6,716 More than 1 year 7,048 Total trade receivables 281,216

Financial assets that are neither due for payment nor can be written down are deemed to have a good credit quality.


NOTES

Liquidity and refinancing riskRefinancing risks refer to the risk that the refinancing of mature loans will be-come difficult or costly and that Euromaint will thereby have difficulty fulfilling its payment obligations. Liquidity risk refers to the risk of difficulty in fulfilling the obligations associated with financial liabilities. Euromaint’s policy is to always have available cash and cash equivalents and secured refinancing to the extent required for the activity. As of 31 December 2014, there was a loan facility with Swedbank totalling SEK 709 million (734), including a bank over-draft facility of SEK 80 million (80) as well as a separate framework of SEK 120 million (120) solely dedicated to bank guarantees. As of the measurement day, 31 December 2014, Euromaint fulfilled all the requirements related to financial key ratios associated with the financing agreement.

SEK thousands The Group Book valueDue dates on bank loans and shareholder borrowings:Within 1 year 34,0001–5 years 475,0005 years or later –Total 509,000

For lease liability due dates, see Note 7.

Fair value of derivative instruments on the balance sheet date 2014 2013Contracts with negative fair values:Interest rate swap (due date 1–5 years) – –206

Loan terms and due date structure/interest rate renegotiationSEK thousandsLoans from credit institutions and shareholder borrowings Nominal sum Due date 1 year or less Within 1–5 yearsBank loans 314,000 2019-06-30 34,000 280,000Bank loans 195,000 2019-06-30 – 195,000Total 509,000 34,000 475,000

Transaction exposure along with currency hedged volumes Currency hedged sales converted to SEK thousands

2014 SEK thousands EUR thousands NOK thousands Other TotalCurrencyNet revenue – 3,668 41,739 – 45,407Net currency exposure – 3,668 41,739 – 45,407

No currency hedging takes place against the net flows.


NOTES

Note 19 | Information on fair value of financial instruments

The carrying amount of trade receivables, cash and cash equivalents, trade payables and other liabilities constitutes a reasonable approximation of fair value.

SEK thousands The GroupAs of 31 December 2014Liabilities by category

Financial liabilities valued at fair value via the income

statementLiabilities valued at

amortised acquisition costDerivatives used for

hedging purposesHeld for trading Book value Book value

Non-current interest-bearing liabilities – 475,0003 – Synthetic options and shares 1,461 – Liabilities to Group companies, interest-bearing – 44,291 –Current interest-bearing liabilities – 41,565 – Total 1,461 560,856 –

SEK thousands The GroupAs of 31 December 2013Liabilities by category





Non-current interest-bearing liabilities – 509,0003 – Synthetic options and shares 1,461 – – Current interest-bearing liabilities – 32,861 – Total 1,461 541,861 –

SEK thousands The Parent CompanyAs of 31 December 2014 Assets by category

Financial assets measured at fair value via the income

statement Loans and receivablesDerivatives used for


Receivables from Group companies – 641,857 – Total – 641,857 –

SEK thousands The Parent CompanyAs of 31 December 2014 Liabilities by category





Non-current interest-bearing liabilities – 475,0003 – Synthetic options and shares 1,461 – – Liabilities to Group companies, non-interest-bearing – 200,865 – Total 1,461 675,865 –

SEK thousands The Parent CompanyAs of 31 December 2013 Assets by category

Financial assets measured at fair value via the income

statement Loans and receivablesDerivatives used for


Receivables from Group companies – 643,965 – Total – 643,965 –

SEK thousands The Parent CompanyAs of 31 December 2013 Liabilities by category





Non-current interest-bearing liabilities – 509,0003 – Synthetic options and shares 1,461 – – Liabilities to Group companies, non-interest-bearing – 221,514 – Total 1,461 730,514 –


NOTES

Fair value of comprehensive income

SEK thousandsAssets

The Group 2014 The Group 2013Level 3 Level 3

Non-current investment, pension obligations, non-interest-bearing1 – –Total – –

LiabilitiesSynthetic shares and options2 1,461 1,461Derivative financial instruments – –Total 1,461 1,461

The same values apply to the parent company as for the Group in 2014 and 2013.

Only level 3 instruments are valued at fair value above other comprehensive income/income statement.

Level 3. Fair value based on input data that is not observable on the market. The value of the liability for the synthetic shares is based on an external measure-ment, where a Fair Market Value has been assessed using a DCF model (discounted cash flow). The cash flows have been calculated based on the com-pany’s business plans, market prospects, investment plans and growth forecasts and then discounted by a weighted average capital cost (WACC). For the 2014 measurement, a WACC of 6.77 per cent was used. When determining the discount rate, consideration has been given to specific risks in the market and to the company, risk-free rate, market loan margins and the company’s capital structure. The model calculates an Equity Value (EQV) based on the value of the entire company less the loan. The value of the liability for the synthetic options has been calculated using the Black-Scholes valuation method and is based on the company’s extent and terms for the incentive programme, share valuation and statistics on volatility and yield rates for government bonds.

1) Reported as net under provisions, pensions.2) Synthetic shares and options were valued by an external independent valuer in 2014.3) Non-current interest-bearing liabilities run with variable interest rates, which is why these are considered to be valued at fair value.

Financial assets and liabilities valued at fair value in the income statementSEK thousands Synthetic shares and options

The Group 2014

The Group 2013

The Parent Company2014

The Parent Company2013

Opening balance 1,461 11,246 1,461 11,246Profit/loss, income statement – –8,818 – –8,818Concluded – –967 – –967Closing balance 1,461 1,461 1,461 1,461

Note 20 | Completed, not invoiced

SEK thousandsAssets in the balance sheet

The Group 2014

The Group 2013

Accrued income 514,518 151,873 Invoiced amounts –505,220 –141,866 Total 9,298 10,007

For contracts reported according to the percentage of completion accounting method the degree of completion is determined in relation to the abandoned assignment charges compared to forecast assignment charges incurred. Information about the total assignment revenue and costs incurred reported in the income statement during the period is not provided as these charges are deemed to be sensitive.


NOTES

Note 21 | Cash flow analysis, other items not affecting liquidity


2014The Group



2013Changes in provisions –5,301 –4,470 – –Unpaid interest on shareholder borrowings – 61,028 – 61,028Merger – – –49,311 –Group contributions –44,249 – 25,712 –Shareholder contributions received 34,514 – 34,514 –Currency translation effects 11,128 –2,072 – –Other items 9,846 4,132 9,735 –13,443Total 5,938 58,618 20,650 47,585

Cash and cash equivalents comprise cash and deposits held with banks and similar institutions with maturities within three months from the date of acquisition and short-term cash investments with a maturity from the date of acquisition of less than three months, which are only exposed to an insignificant risk of changes in value.

Disposal of subsidiariesNo disposals have been made during 2014 or 2013.

Disposal of subsidiariesNo disposals have been made during 2014 or 2013.

Note 22 | Interest-bearing liabilities

Fair value for interest-bearing liabilities approximately corresponds to the book value, which is why calculation of fair value has not been computed. Book amounts for Group borrowing are as follows:

Book value/fair value Book value/fair value


2014The Group



2013Long-term componentBank loans 475,000 509,000 475,000 401,800Shareholder borrowings – – – 503,198Finance lease liability 16,995 10,519 – –Total 491,995 519,519 475,000 904,998

Long-term componentBank loans 34,000 25,000 34,000 25,000Shareholder borrowings 7,565 7,861 – –Finance lease liability – – – –Total 41,565 32,861 34,000 25,000

Checkräkningskredit limit 80,000 80,000 – –

The total loan facility with Swedbank includes SEK 759,000 thousand (784,000), and with other institutions SEK 0 thousand (0). A new bank agreement was determined on October 2013. According to the new agreement, the agreement covers an overdraft of SEK 80,000 thousand, leasing credit limit of SEK 50,000 thousand, guarantee limit of SEK 120,000 thousand and a bank loan of SEK 509,000 thousand.

The Group’s exposure, with respect to external borrowing, to changes in interest rates and the contractual timing of interest rate renegotiation is as follows:All loans with Swedbank run for 3 months (STIBOR 3 months).

The Group 2014

The Group 2013

The average term in months for outstanding external bank loans is therefore: 43.0 52.9Weighted average interest rates including interest margins were on the balance sheet date: 4.41% 5.09%


2014The Group



2013Interest rate duration1 year or less 34,000 534,000 34,000 534,0001–5 years 475,000 – 475,000 –Total 509,000 534,000 509,000 534,000

For maturity of bank loans and shareholder borrowings, see Note 18.For finance leases, see Note 13.


NOTES

Note 23 | Pensions and similar obligations

Defined benefit pension plansThe Group, SEK thousands 2014 2013Present value of partially or fully funded obligations (+) 39,242 44,263Present value of unfunded obligations (+) 7,904 11,772Total present value of defined benefit pension obligations (+) 47,146 56,035Fair value of plan assets (–) –53,953 –50,959Net of present value of the obligations and fair value of plan assets –6,807 5,076Effect of limitation rule on net assets (+) 14,711 6,696Net amount for defined benefit plans is recognised in the statement of financial position 7,904 11,772

The net amount for defined benefit plans is recognised in the following items in the statement of financial position:Provisions for pensions 7,904 11,772Net amount in the statement of financial position 7,904 11,772

Overview of defined benefit plans The defined benefit pension obligations that are included in the Group’s recognition of defined benefit pension liabilities are as follows: I. Defined benefit pension within the state occupational pension agreement

PA91/PA03, which was earned in the period when the state owned the company. These benefits are secured through insurance with KPA.

II. Professional and occupational disability annuities for former employees. Secured through depositing on account in the company’s balance sheet.

III. A number of employees that are covered by the ITP-S plan are entitled to early retirement pension according to the transitional provisions, a so-called transitional provision pension. The employees this concerns are a fixed group, i.e. no new individuals will be added. A transitional provision pension means that the employee is entitled to draw their pension from the age of 60 with a level of benefit of 65 per cent of their salary until the normal retirement age of 65. Payments to employees who have exercised the right to early retirement pension in accordance with the transitional provi-sions are untouchable pension obligations for the company and are secured through depositing on account in the company’s balance sheet.

IV. A few other retirement benefits derived from old state pension agree-ments.

Changes in the present value of the obligation for defined benefit plansThe Group, SEK thousands 2014 2013Obligation for defined benefit plans at 1 January 56,035 73,754Remuneration paid –9,925 –11,277Current service costs – 2Service costs for previous periods 389 –148Interest expense 1,052 873Revaluations:– Actuarial gains and losses on changed

demographic assumptions 223 –– Actuarial gains and losses on changed

financial assumptions 966 –1,987– Experience adjustments –1,594 –5,182Obligation for defined benefit plans at 31 December 47,146 56,035

The present value of the obligation is divided among the members of the plan(s) as follows:– Active members 0.8 (0.4) per cent– Paid-up policyholders 17.1 (11.0) per cent– Pensioners 82.1 (88.6) per cent

Changes in the fair value of plan assets for defined benefit plansThe Group, SEK thousands 2014 2013Fair value of plan assets at 1 January 50 959 57 130Contributions by the employer 1 605 –Interest income recognised in profit or loss 968 707Remuneration paid –5 448 –5 490The difference between actual return and return according to the discount rate of the plan assets 5 869 –1 388Fair value of plan assets at 31 December 53 953 50 959

The recognised plan assets consist of 100 per cent of the value of the Group’s insurance contracts in KPA concerning earned pension rights in old state pension agreements. The calculated value of the insurance is partly based on actuarial calculation methods and it is therefore not possible to report how the plan assets are distributed between shares, bonds and other types of securities.

Cost reported in the profit/loss for the yearThe Group, SEK thousands 2014 2013Current service costs – 2Service costs for previous periods 389 –148Net interest income/interest expense 211 193Net cost in the profit/loss for the year 600 47Actual return on plan assets 6,837 –681

Cost reported in other comprehensive incomeThe Group, SEK thousands 2014 2013Revaluations:Actuarial gains (–) and losses (+) on the obligation –405 –7,169The difference between actual return and return according to the discount rate of the plan assets –5,869 1,388Effects of change in asset limit, excluding amounts recognised in the net interest 7,888 4,610Net amount reported in other comprehensive income during the period 1,614 –1,171

Assumptions for defined benefit pension obligationsThe most important actuarial assumptions as of the balance sheet date (expressed as weighted averages)

The Group, per cent 2014 2013Discount rate at 31 December 1.40 1.90Future pension increase 0.90 1.20


NOTES

The mortality assumption according to the Finansinspektionen’s regulation FFFS 2007:31An example of the mortality assumption of expected remaining lifespan on which the obligation is calculated appears in the table below:

The Group, number 2014 2013Mortality assumptions at 65 – retired members:Male 19.7 19.7Female 22.8 22.8Mortality assumptions at 65 for members who are 45:Male 21.7 21.7Female 24.1 24.1

Sensitivity analysisThe effect on the present value of the obligation in the event of various changes in the actuarial assumptions on the balance sheet date is presented below; other assumptions are unchanged.

The Group, SEK thousands

The obliga-tion at 31

December 2014

Effect on the present

value of the

obligationOfficial assumption (see table above) 47,146 –Reduction of the discount rate by 0.5 percentage unit 49,183 4.3%Increase in the assumption on future pension increases by 0.5 percentage unit 48,306 2.5%Increase in the expected remaining lifespan by 1 year for a man currently aged 65, with corresponding changes for other ages and for women 49,889 5.8%

As of 31 December 2014 the weighted average term of the obligation amounted to 8 years (7).

The defined benefit pension obligations that are included in the Group’s recognition of defined benefit pension liabilities belong to all old pension agreements for which no new pension rights have been earned. In the future the Group may be forced to pay the indexing cost for the pension benefits which are insured with KPA; however, no such indexing cost is expected to arise in 2015. The Group estimates that no payments will take place in 2015 to funded and unfunded defined benefit plans which are recognised as defined benefit plans; however, SEK 25,009 thousand will be paid in 2015 to those defined benefit plans which are recognised as defined contribution plans.

The obligations for retirement pensions and family pensions for salaried employees in Sweden are secured through insurance with Alecta. According to a statement from the Swedish Financial Reporting Board, UFR 3, this is a defined benefit plan that includes several employers. For the 2014 financial year, the company has not had access to such information that makes it pos-sible to report this plan as a defined benefit plan. The pension plan according to ITP, which is secured by insurance with Alecta, is therefore reported as a defined contribution plan. The fees for the year for pension insurance policies taken out with Alecta amount to SEK 37,315 million (38,453). Alecta’s surplus can be distributed to policyholders and/or those insured. At the end of 2014, Alecta’s surplus in the form of the collective consolidation level amounted to 143 per cent. The collective consolidation level comprises the market value of Alecta’s assets as a percentage of the insurance obligations calculated in accordance with Alecta’s technical insurance calculation assumptions, which does not comply with IAS 19.

Note 24 | Other provisions

2014 2013SEK thousandsThe Group Warranties

Other provisions Total Warranties

Other provisions Total

Provisions at start of year 20,485 1,449 21,934 23,465 3,774 27,239 Provision for the year 8,276 561 8,837 10,695 – 10,695Utilisation during the year –9,507 –971 –10,478 –13,819 –2,555 –16,374Exchange rate difference 290 92 382 144 230 374 Provisions at year end 19,544 1,131 20,675 20,485 1,449 21,934

The parent company does not report any provisions. Provision for warranties starts to be calculated when a service is completed or the goods have been released to the customer.

In order to estimate the amounts, historical data related to repairs and exchanges are generally used.Provision for restructuring is reported when a detailed and formal restructuring plan has been established by the Group and when this has either started or

has been made publicly known.

Note 25 | Trade payables and other liabilities


2014The Group



2013Advance payment from customers 4,262 12,887 – – Trade payables 231,869 253,612 – 708 Liabilities to Group companies 44,291 – 200,865 221,514 Liabilities to credit institutions, interest-bearing 41,565 32,861 34,000 25,000 Other current liabilities 26,864 28,369 9,102 5 Invoiced, not completed – 47,973 – – Accrued expenses / deferred income 209,255 176,976 476 – Total 558,106 552,678 244,443 247,227

Specification of accruals and deferred incomePersonnel costs 106,551 101,160 – – Product liabilities 51,217 20,998 – – Accrued costs, maintenance measures 39,215 23,685 – – Miscellaneous 12,272 31,133 476 – Total 209,255 176,976 476 –


NOTES

Note 26 | Invoiced, not completed

SEK thousands The Group 2014 2013Invoiced amounts – 308,279 Accrued income – –260,306 Total – 47,973

For contracts reported according to the percentage of completion accounting method the degree of completion is determined in relation to the abandoned assignment charges compared to forecast assignment charges incurred. Information about the total assignment revenue and costs incurred reported in the income statement during the period is not provided as these charges

are deemed to be sensitive.

Note 27 | Pledged assets and contingent liabilities


2014The Group



2013Pledged assetsPledged shares in subsidiaries (net assets) 137,050 204,582 217,624 204,582 Pledged floating charges 5,190 5,190 – – Total 142,240 209,772 217,624 204,582

Contingent liabilitiesPension obligations, FPG/PRI 13 13 – – Other guarantees 96,321 68,497 – – Total 96,334 68,510 – –

Total 238,574 278,282 217,624 204,582

Floating charges on assets and shares in subsidiaries (Euromaint Rail AB) are pledged in Swedbank as security for their total credit commitment. Pledged shares have been recorded at the value of net assets in the Group for the current subsidiaries. The Group gives warranties on refurbishment and maintenance work of up to 5 years after the completion date.

Note 28 | Discontinued operations

In September 2013, the Group decided to wind up the company WLS Bel-gium and the Angermünde unit. Since the decision was taken, the units have been recognised as discontinued operations in the income statement for 2012–2014.

SEK thousandsProfit or loss for the year in discontinued operations 2014 2013Income – 3,666 Expenses –6,033 –8,667 Profit/loss for the year –6,033 –5,001

SEK thousandsNet cash flow from discontinued operations 2014 2013Cash flow from operating activities –6,033 –4,823 Cash flow from investing activities1 – 190 Net cash flow –6,033 –4,633

1) The business area is essentially considered not to have been the owner of the Group’s loans or assets, whereupon only the cash flow from the business area’s operating activities is recognised.

Stockholm, 4 March 2015

Leif Johansson Chairman of the Board

Ove Bergkvist Jonathan Wallis Kjell Carlsson Elisabet Wenzlaff CEO

Our auditor’s report was submitted on 4 March 2015KPMG AB

Fredrik SjölanderAuthorised Public Accountant


AUDITOR’S REPORT

Auditor’s report

To the Annual General Meeting of Euromaint Gruppen AB, corp. ID no. 556731-5402

Report on the Annual Report and the Consolidated Financial StatementsWe have audited the Annual Report and Consolidated Financial Statements for Euromaint Gruppen AB for 2014. The company’s Annual Report and Consolidated Financial Statements are included in the printed version of this document on pages 14–45.

The Annual Report and the Consolidated Financial Statements are the responsibility of the Board of Directors and the Chief Executive OfficerThe Board of Directors and Chief Executive Officer are responsible for preparing an Annual Report giving a true and fair view according to the Swedish Annual Accounts Act and Consolidated Financial Statements giving a true and fair view according to International Financial Reporting Standards (IFRS) as adopted by the EU, and the Swedish Annual Accounts Act, and for the internal controls which the Board of Directors and the Chief Executive Officer deem necessary in order to prepare an Annual Report and Consolidated Financial State-ments that do not contain material misstatements, whether these are due to fraud or error.

The auditor’s responsibilityOur responsibility is to express an opinion about the Annual Report and the Consolidated Financial Statements based on our audit. We have performed the audit according to International Standards on Auditing and generally accepted auditing practice in Sweden. These standards require us to comply with professional ethical requirements and to plan and perform the audit to obtain reasonable assurance that the Annual Report and the Consolidated Financial Statements are free of material misstatement.

An audit involves taking various actions to obtain audit evidence about amounts and other information in the Annual Report and the Consolidated Financial Statements. The auditors decide the actions that are to be taken, including by assessing the risks of material misstatement in the Annual Report and the Consolidated Financial Statements, whether these are due to fraud or error. During this risk assessment, the auditor takes into account the parts of the internal controls that are relevant for the way the company prepares the Annual Report and the Consolidated Financial Statements to give a true and fair view, in order to design audit procedures that are appro-priate taking into account the circumstances, but not for the purpose of making a statement about the effectiveness of the company’s internal controls. An audit also includes assessing the appropriate-ness of the accounting policies that have been used and the reason-ableness of the Board of Directors and Chief Executive Officer’s estimates in the statements, as well as assessing the overall presenta-tion in the Annual Report and the Consolidated Financial Statements.

We consider that the audit evidence we have collected is sufficient and appropriate to provide a basis for our opinion.

OpinionIn our opinion, the Annual Report has been prepared in accordance with the Swedish Annual Accounts Act and gives in all material respects a true and fair view of the parent company’s financial posi-tion as of 31 December 2014 and of its financial performance and cash flow for the year according to the Swedish Annual Accounts Act. The Consolidated Financial Statements have been prepared in

accordance with the Swedish Annual Accounts Act and give in all material respects a true and fair view of the Group’s financial position as of 31 December 2014 and of its financial performance and cash flow for the year according to International Financial Reporting Standards, as adopted by the EU, and the Swedish Annual Accounts Act. The Directors’ Report is consistent with other parts of the Annual Report and the Consolidated Financial Statements.

We therefore recommend that the Annual General Meeting adopt the income statement and balance sheet for the parent company as well as the statement of comprehensive income and consolidated statement of financial position.

Report on other requirements according to laws and other statutesIn addition to our audit of the Annual Report and Consolidated Financial Statements, we have also performed an audit of the pro-posed appropriation of the Company’s profit or loss as well as the Board of Directors’ and Chief Financial Officer’s administration of Euromaint Gruppen AB for the year 2014.

The Board of Directors’ and the Chief Executive Officer’s responsibilityThe Board of Directors is responsible for the proposal for the appro-priation of the company’s profit or loss, and the Board of Directors and the Chief Executive Officer are responsible for the administration according to the Swedish Companies Act.

The auditor’s responsibilityOur responsibility is to express an opinion with reasonable assurance on the proposal for the appropriation of the company’s profit or loss and on the administration based on our audit. We have performed the audit according to generally accepted auditing practice in Sweden.

As a basis for our opinion on the Board of Directors’ proposal for the appropriation of the company’s profit or loss, we have reviewed whether the Board’s proposal complies with the Swedish Companies Act.

As the basis for our pronouncement on discharge from liability, we have, in addition to our audit of the Annual Report and the Con-solidated Financial Statements, examined significant decisions, actions taken and circumstances in the Company in order to be able to determine the liability to the Company, if any, of any Board Member or the Chief Executive Officer. We have also examined whether any Board Member or the CEO has otherwise acted in contravention of the Companies Act, the Annual Accounts Act or the Articles of Asso-ciation.

We consider that the audit evidence we have collected is sufficient and appropriate to provide a basis for our opinion.

OpinionWe recommend that the Annual General Meeting appropriate the profit of the parent company according to the proposals contained in the Directors’ Report and discharge the Board Members and the Chief Executive Officer from liability for the financial year.

Stockholm, 4 March 2015

KPMG AB

Fredrik Sjölander Authorised Public Accountant


THE BOARD OF DIRECTORS

The Board of Directors

Leif JohanssonChairman of the BoardDate of Birth: 1949Board Member since: 2012Other appointments: Chair-man of the Board, Ålborg Fastighets A/S. Board Member, Arcus-Gruppen AS, Inwido AB, Profura AB, Latour IndustriesEducation: Bachelor of Science in Engineering and BusinessCurrent employment: Industrial advisor, Ratos

Elisabet WenzlaffBoard MemberDate of Birth: 1955Board Member since: 2013Other appointments: Board Member, Apoteket AB, Grönklittsgruppen ABEducation: Bachelor of Law, Stockholm University, Master of Law, University of PennsylvaniaCurrent employment: Self- employed

Jonathan WallisBoard MemberDate of Birth: 1974Board Member since: 2007Other appointments: Board Member, KVD Kvarndammen ABEducation: Graduate Business Administrator, Stockholm School of Economics, BA Stockholm UniversityCurrent employment: Senior Investment Manager at Ratos

Christian Johansson GebauerDeputy MemberDate of Birth: 1980Deputy Board Member since: 2014Other board appointments: –Education: Master of Science in Engineering, the Institute of Technology at Linköping UniversityCurrent employment: Invest-ment Manager, Ratos

Bertil HallénEmployee RepresentativeDate of Birth: 1954Board Member since: 2001Other appointments:Board Member, Göteborgs Hamn AB, ABF Göteborg Vuxenutbildning AB, Odin-skolan Fastighets AB

Karin NybergEmployee RepresentativeDate of Birth: 1952Board Member since: 2008Other board appointments: –Education: Upper secondary – humanities

Kjell CarlssonBoard MemberDate of Birth: 1951Board Member since: 2013Other appointments: Chair-man of the Board, Kopy Goldfields AB Board Member, Bruzaholms Bruk ABEducation: Master of Science in Engineering, Chalmers University of TechnologyCurrent employment: Senior Advisor


COMPANY MANAGEMENT

Company management

Ove BergkvistPosition: President and CEODate of Birth: 1968Employed by Euromaint: 2011

Gustav JanssonPosition: Business Area Manager Work MachinesDate of Birth: 1952Employed by Euromaint: 1978

Henrik DagbergPosition: Business Area Manager PassengerDate of Birth: 1972Employed by Euromaint: 2009

Mattias WessmanPosition: CIODate of Birth: 1974Employed by Euromaint: 2009

Ingela ErlinghultPosition: Business Area Manager ComponentsDate of Birth: 1965Employed by Euromaint: 2009

Jens WikmanPosition: CFODate of Birth: 1977Employed by Euromaint: 2012

Lena GellerhedPosition: HR ManagerDate of Birth: 1968Employed by Euromaint: 2007

Anne-Catherine WorthPosition: Communications ManagerDate of Birth: 1969Employed by Euromaint: 2012

Produced by Euromaint, Huvudsta Kommunikation and Elli Production. Translation: Kommunicera Communications AB. Photography, cover: Kasper Dudzik. Photography, other images: Bengt Alm, Lasse Eklöf, Lasse Fredriksson, Nacco Rail/A Cit Company, Kalle Nordlund and Photo by Maria.

Head officeEUROMAINT ABBox 1555SE-171 29 SolnaOffice address: Svetsarvägen 10, Solna, Sweden

Head office, GermanyEUROMAINT RAIL GMBHKarl-Marx-Straße 39D-04509 DelitzschGermany

2014 ANNUAL REPORT A maintenance partner that … Annual Report...2014ANNUAL REPORT A maintenance...

Documents

Transcript of 2014 ANNUAL REPORT A maintenance partner that … Annual Report...2014ANNUAL REPORT A maintenance...