This document discusses the transition of SJ from a public authority to a limited liability company owned by the Swedish state. Key points: - SJ was founded in 2001 as a limited liability company after previously operating as a public authority since 1988. - In the early 2000s, SJ struggled financially but was able to turn itself around through measures like dynamic pricing of tickets and investing in new trains. - Currently SJ operates most domestic rail passenger services in Sweden. It aims to be a modern, profitable, and customer-oriented travel company.

1. SJ – from Public Authority
to Limited liability company
Stockholm, April 16th, 2013
Elisabeth Lindgren, Vice President
Markets, Corporate Communication & Sales

2.  Sweden has more than
12,000 km of railway track
– 2,000 double tracks
– 10,000 single tracks
 SJ has a 55% share of the
total Swedish rail market
 SJ operates 90% of rail
passenger services in
Sweden exceeding 100 km
Rail traffic in Sweden

3. • SJ Regional
• SJ High speed
• SJ InterCity & SJ Night
Umeå/Luleå/Narvik

4. SJ AB
 Limited liability company
owned by the Swedish state
 The mandate
• To operate passenger rail
services
• both in competition and in
co-operation with others
 The requirement
• To be profit-making
• 10% return on equity

5. Dokumentnamn SJ 2004-04-19
SJ’s objective:
- A modern, profitable and customer oriented travel company -
 Approx. 4,000 employees
 Sales of SEK 8.5 billion in 2012
 Limited liability company
owned by the Swedish state
 110,000 passengers per day
 Travel services under our own
brand
 Contract rail services for
regional transport authorities

6. Modern milestones that
changed operations
 1988 Separation of operations
• Banverket - infrastructure
• SJ - passenger operation
 2001 SJ AB was founded
• from Public Authority
to Limited liability company
 Refined business
• Green Cargo, Jernhusen,
Euromaint, EDB, Unigrid
became separate operations

7. SJ as a limited liability Company
- modern history
 2001: -49 millions SEK
 2002: -994 millions
• ”Bancrupcy”
 2003: millions
• 1,8 billions in owner contribution
to stay in business (tax payers)
• New business model

8. Turn around
 2004: 192 millions
• New price model
– dynamic pricing
• 40 new trains are ordered (X40)
 2005: 1,2 billions
• Dynamic pricing in both
2 Class and 1 Class
 2006: 368 millions

9.  2007: 507 millions
• Internet auctions
 2008: 543 millions
• 20 new fast trains are ordered (2 billions SEK)
 2009: 460 millions
 2010: 294 millions
 2011: 38 millions
 2012: 498 millions
 2004-2012: 4,1 billions
Consolidation

10. Parameters of success
 Institutions of limited liability companies
– means operations on sound economic grounds
 Dynamic pricing
 Environmental thinking becomes share of mind
 Inter city-operations is easy travelling
 Modern segmentation of customers
 Regional clusters of comuting

11. 1000 1000:- 1000:- 1000:- 1000:-
900:- 800:- 800:- 700:- 600:-
700:- 600:- 500:- 400:- 300:-
500:- 300:- 200:- 100:- 100:-
95:- 100:- 100:- 100:- 100:-
Seatsbooked
Time to departure, 3 months
Excess supply
Excessdemand
Dynamic pricing

12. Dynamic pricing
1000 1000:- 1000:- 1000:- 1000:-
900:- 800:- 800:- 700:- 600:-
700:- 600:- 500:- 400:- 300:-
500:- 300:- 200:- 100:- 100:-
95:- 100:- 100:- 100:- 100:-
Seatsbooked
Time to departure, 3 months

13. Dynamic pricing
Price index train tariffs Inflation
1985-1995 101% 66%
1995-2005 48% 10%
2005-2010 4% 12%

14. Dynamic pricing
2005 – 2012
Price index
train tariffs Inflation
2005 - index 0 0
2006 0 +1
2007 -6 +4
2008 -7 +7
2009 -4 +7
2010 +1 +8
2011 +4 +11
2012 +4 +12

15. Markets
Malmö-Sto Train Air
2001 23% 77%
2011 30% 70%
Gtb-Sto Train Air
2001 49% 51%
2011 69% 31%
Sundsvall-Sto Train Air
2001 30% 70%
2011 66% 34%
Karlstad-Sto Train Air
2001 66% 34%
2011 90% 10%

16. 16
Train vs. flight market
Source: KTH Järnvägsgruppen, Centrum för forskning och utbildning i järnvägsteknik
3h!

18. Deregulation in three steps
Timetable
1. July 2009 – opening of weekend traffic
2. October 2009 – opening of international traffic (cabotage)
3. October 2010 – opening of all markets, general access
The free market argument
 Beneficial for passengers
 Triggers development and increases efficiency
 Also domestic markets should be opened
 Abolish monopolies, avoid concessions/restrictions

19. BLS-visit 2009-07-09
19
Facing full-fledged deregulation
 Customer satisfaction Improved quality of service
 Employee contribution Increased participation
 Sustained profitability Improved productivity
 Expansion New markets
Challenges

20. SJs journey of change
… to SJ specifics
… to SJ is good for
… to SJ & sustainability
From TRAIN generics…
From TRAIN is good for…
From TRAIN & sustainability
… to serving peopleFrom operating TRAINs
… to dialogueFrom information

21. The rolling stock ahead
38 SJ 2000
40 Double deckers
100 RC-locomotives
350 wagons

22. SJ 3000 is our latest new train
• 25-40% is recycled – vehicle can be recycled to 98%
• Sorting stations in each car
• Uses 10% less energy compared to SJ 2000
• Regenerative brakes enables - 12% energy recovery

23. 245 seats

24. Total of 4500 seats

25. Availability

27. SJ 2000 Upgrade
Technology
 An SJ analysis suggested the possibility, from a technical
perspective, of a life extension of X2000 for the coming 15-20 years
27 2013-04-18

28. SJ 2000 Upgrade
 General project instructions:
• The X2 fleet strategy is to keep the trains in service until at least 2035
with high levels of comfort, service and reliability
• The intention is to maintain the position of SJ 2000 as our premium train
service and furthermore enhance their high profile
 Long-term flexibility:
• The train sets must, after the refurbishment, be flexible to adapt to future
requirements and changes
28
The refurbished X2 fleet shall improve the general image of SJ,
e.g. in the direction of higher reliability and quality of service

29. SJ2000 Actions
Two projects; Upgrade och Interior
Refurbishment
 Upgrade
29 2013-04-18
 Interior Refurbishment

30. 30
Very High Speed – next step?

31. 31
B. Westerberg,
31
Objective for SJ High Speed Trains
250 Km/h on existing tracks
 Change the way to travel!
– A new concept that drives travel
– Compare the introduction of the X2000
 Starting requirements
– Vehicles on the existing infrastructure
– Standard rolling stock, 250 km / h and tilting
– Sweden, Norway, Denmark and Germany
– Profitable business case

32. 32
Stockholm-Göteborg
T11 X2: 2:45
Stockholm
Stockholm-Malmö
T11 X2: 4:04
Sundsvall
T11 X2 3:10
Umeå
T11 X55 6:30
Best travel by
direct train
today and with
the X250
0:00
Göteborg-Malmö
T11 X31: 2:30
2:45
3:00
4:40
5:40
2:30
2:45
3:35
4:00
2:00
2:10
4:40
5:40
Journey with X2/X55
Rounded to the even number
of minutes Including normal
additions
Assumption: the infrastructure is adapted to
250 mph in the relevant section of the lines

33. 33Dokumentnamn SJ 2004-04-19
33
SJ main criterias for new rolling stock
Reliable Few errors / delays and cancelled train
Proven solutions to standard vehicle platform
Winter-assured solutions
Reliable
Operation: Medium Sized Train => Usability & many seats
Geography: Scandinavia and Germany
Over time: Service Concept & interior design, secondary market
Flexibility
Premium Product
Change the way to travel!
Design, service & comfort
Image
250km / h speeds important for travel time => tilt
Good performance to make up for delays
Design for short station stop Reduces the risk of delay
Short travel time
Standard solutions, production & delivery of quality
Approved vehicle platform (for EU countries) => lower riskFast delivery

34. 34
Need for an upgraded infrastructure
Technical issues for 250 km / h
 Rail track technology
• Cant deficiency
• Rails, switches, track forces
• Buoyancy in the embankment
• Track Geometry, line optimization
• Track Location
• Line Conversion
• Bridges
• Catenary
• Level crossings
• Signalling system
• Bypass Track
 Traffic Issues
• Tilting
• Station Passages
• Noise
• Passing clearance between trains
• Winter Properties
• Capacity

35. Thank you
elisabeth.lindgren@sj.se