VR Track Sweden AB is a subsidiary of VR Group, the national railway company of Finland. As a new entrant in the Swedish railway maintenance and infrastructure construction markets, VR Track faces several challenges, including requiring large capital investments with long-term contractual commitments, obtaining necessary operational certificates, dealing with severe weather conditions in northern Sweden, and ensuring an adequate skilled workforce. However, entering these markets is not impossible. VR Track aims to be the first operator of "Yellow Machines" equipped with the European Rail Traffic Management System in Sweden.

1. Challenges for New Entrants to the Maintenance and Infra
Construction Markets of Swedish Railways
Timo Riihimäki – VP International Business, VR Track Oy

2. The Organization of VR Group
President and CEO
Mikael Aro
Corporate Communications
Corporate Development
and the Environment
Safety Internal Auditing
Infra- Russia and
Passenger Corporate Human Finance and Corenet
Logistics structure International
Services Services Resources Accounting (60%)
Construction Business
Avecra
(60%)

3. Board of Directors
Managing Director
Joachim Ytterstene
Human resources: Technical:
Mats Karmefjord Stefan Karlsson
Finance: Market:
Roger Åkerblom Magnus Ranneberg
Business development:
Veronica Luxemburg
Investment: Maintenance:
Peter Johansson Christer Ivarsson

4. Milestones of VR Track Sweden
CERTIFICATES FROM
2010 2011 2012 TRANSPORTSTYRELSEN 2013
ANALYSIS OF MITTBANAN & NEW M.D. NEW STRATEGY & COMPANY IMPROVEMENT
THE OPTIONS ÅDALSBANAN APPOINTED OBJECTIVES BOARD IN PROFITABILITY
WEAK PROFITABILITY & HQ TO NEW CONSTRUCTION
OPERATIONS OF THE FILIAL STOCKHOLM MANAGEMENT FILIAL TO AB BUSINESS
GROUP ORGANISZED

5. Vision & Mission of VR Track Sweden AB
To become the railway industry’s
solid frontline services provider in
Sweden by exploiting the technical
know-how with focus on
customers & personnel.
Company’s Mission is to provide
quality railway maintenance- and
BEST-construction services
within the selected geographical
areas in Sweden.

6. Key Figures & Facts of VR Track Sweden AB in 2013
Turnover > 300 MSEK
Average Personnel 200
Subcontractors 35
Order-book >700 MSEK
2%
Profitability +

7. Markets Outlook
• Freight tonne kilometers
Ten years frame-work investment budget for are estimated to grow
constructing roads, railways and waterways of 2,7 % per year to 2020
217 billion SEK • Passenger kilometers are
estimated to grow 1,4 %
per year to 2020
• Required rate of
replacement of rails,
sleepers and ballast will
Plus ten years frame-work grow at 30 % rate in the
budget for operation and near future
maintenance of the national • Required rate of
railway network of 64 billion replacement of switches
SEK and crossings will grow
at 200 % rate in the
near future (450
MSEK/year)
• Increasing maintenance
to avoid further
The annual construction disturbances for traffic at
and maintenance market Plus 3,6 BSEK additional least to 2017
relevant to VR Track is money mainly to
• Stop further ageing of
BSEK class and maintenance in 2012-14
assets by reinvestments
increasing
• More design & build
projects
• New investments for
increased capacity

8. The Generic Market Drivers and Constraints
Growing
uncertainty in
Constraints
Punctuality
the global improvement
economy by reduced
may have traffic may
impact on Drivers restrict traffic
Sweden to grow
Government’s
clear strategy to Ageing
invest on public infrastructure
transportation
Climate-smart High-Speed
Transportation train projects
THE
MARKETS Increased
Public cost for
pressure; operations
Additional and
money to Passenger/FTK
maintenance
improve the growth
leads to less
punctuality prospects
money for re-
Increased investments
track access
charges may Drivers
hold back the
“From roads
development New rolling to rails”
Drivers stock
investments Constraints
Constraints
Sensitivity on
political
decisions

9. Entering to the markets as new entrant is
challenging but not impossible…

10. The Major Challenges Faced as New Entrant
• The required capital vs. return
• Long-term contractual commitments
• Operational certificates in stand-alone
solution
• Gage
• Severe weather conditions up north
• Poor availability of skilled workers
• Enable the use of skilled resources in
between SWE and FIN
• ERTMS

11. VR Track Sweden AB to be the first ERTMS Yellow Machine
Operator
• Tka7 work-horse for catenary works, snow
removals, ballast works etc.
• VR Track as launching customer
• Four Tka7s equipped with ERTMS so far
• Delivery schedule challenges due to
certifications
• Machines in full operation Spring 2013

12. Thank you -
time for questions