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Share 2016-09-27 12:13 RATOS B 39.56 SEK

Euromaint

Operations

Euromaint is Sweden’s leading independent maintenance company for the rail transport industry. The company offers qualified technical maintenance to meet customer requirements for well-functioning rolling stock fleets.
Euromaint’s services and products guarantee the reliability and service life of track-mounted vehicles such as passenger trains, locomotives, freight wagons and work machines. The company’s customers are primarily train operators. Euromaint has deep technical knowledge about the customers’ trains and maintenance-specific skills.

It has operations in Sweden, a presence in Latvia and approximately 1,100 employees.

Market

There is an underlying growth in Sweden’s train market driven by such factors as greater respect for the environment when choosing means of transport. The growth rate for passenger traffic in Sweden is good, but goods transport is today presenting lower volumes due to raised track access charges and lower demand for heavier freights.

Euromaint holds a strong position in Sweden for train maintenance. Competitors include Alstom, Bombardier and Mantena.

The year in brief

In 2015, Euromaint mainly focused on further developing and streamlining the profitable Swedish operations, and conducting a strategic review of the German business, which had exhibited very weak growth for an extended period. This resulted in the divestment of the German business and subsequently, a substantial negative impact on earnings at the end of 2015.

Throughout the year, the Swedish operations have focused on winning ongoing and upcoming tenders, which Euromaint by and large succeeded in doing. The tenders that were landed cover light and heavy maintenance of SJ’s X2000 train fleet and carriages, as well as Norrtåg and Stockholm’s commuter trains.

Further streamlining and restructuring measures have been implemented to adapt operations to current volumes.

A capital contribution of SEK 30m was provided during the year.

Sustainability

Euromaint’s sustainability efforts stem from the vision of safe and reliable trains, which also promotes a sustainable society. The most significant sustainability issues for the company therefore are the environment, safety, and maintenance quality. The operations follow strict safety and quality regulations, and inspections are performed regularly. Business ethics and anti-corruption efforts are other top-priority issues. Euromaint works systematically with employee training based on the company’s Code of Conduct.

Development potential

The main reasons for Ratos’s acquisition of Euromaint was the company’s strong market position as independent maintenance company, a growing market due to escalating train transport and a potential for improvement within the company. Since the acquisition, Euromaint has focused on its core operations, i.e. maintenance of trains, initiated international expansion through an add-on acquisition in Germany, and continuously worked to improve deliveries and efficiency. While internal improvement efforts have taken longer than initially planned, they have produced results in the form of higher efficiency and quality. The German market did not grow as planned, and the German operations have been sold.

Our view is that Euromaint can now focus on its profitable Swedish core operations, with continued improvement potential and streamlining possibilities.

(Mainly from Ratos's annual report 2015.)