Annual Report 2006 - Euromaint

E u r o M a i n t A n n u a l R e p o r t 2 0 0 6
The amendment application for each inspection authority regarding
registration of a new company carrying out the activities has been
dealt with. An application for a permit for inflammable goods for the
Älvsjö depot has also been notified to the local authority.
In spring 2007 the workshops in Älvsjö and Bro will be audited for
certification to ISO 14001:2004 standards.
The operations in Åmål and Örebro require permits. The workshops
require permits due to the large workshop area and the large amount
of chemicals used in connection with vehicle washing and painting,
for example.
EuroMaint Industry does not conduct any activities that require a
permit. It has one operation which requires notification. It relates to
the motor rewinding operation and the use of paints. The environmental
impact of all EuroMaint Industry’s operations is low and the
financial risk is, therefore, low.
Significant risks
The Group’s companies have a customer structure whereby a small
number of customers account for the predominant proportion of
Group turnover. The loss of a major customer or a significant customer
contract would place extensive demands on the companies to adapt
their administrative support functions to the reduced turnover. For a
transitional period the companies’ profitability would be reduced.
As customer relations often encompass several different contract
areas with differing lengths of term, this risk is, however, spread out
over time.
Future development
By developing new types of contract with total solutions, EuroMaint
can take on overall responsibility which includes preventive, corrective,
restorative and improvement maintenance, in the form of periodic
reviews and advanced refurbishment, for example. EuroMaint’s
undertaking therefore encompasses a large part of the value chain.
The maintenance methods and contract structures developed by
EuroMaint have been judged to be transferable to other operations.
This creates scope for expansion into other areas and improves
conditions for EuroMaint to be involved in the consolidation of the
maintenance industry.
In line with EuroMaint’s business plan to streamline and become
more cost effective, projects are in progress in Sweden while at the
same time international establishments are under way and being
planned. The new operation in the Baltic region and the refurbishment
project for the Norwegian State Railways are the first of several steps
into the international market. These establishments assure a significant
new local presence on expansive markets.
Interest in production streamlining has increased. Industry needs
flexible, cost-effective solutions. The trend towards outsourcing enables
EuroMaint to offer a concept of interest to the market. New business
solutions for cost-effective spare parts management for industry,
along with new customised automation solutions, combined with
increased local presence through establishments in new locations,
are all important elements of the business strategy.
Events after the year-end
As part of its remit from the Swedish government in connection
with the conversion of the Swedish State Railways into independent
companies in 2001, EuroMaint’s owner, AB Swedcarrier, has decided
to initiate a sales process for its wholly-owned subsidiaries EuroMaint
and SweMaint.
Turnover and profit
Turnover
Total revenues for the year amounted to SEK 2,037 (1,872) million.
The increase is explained by the acquisition of Euromation AB
(now EuroMaint Industry AB) on 1 July 2005, as well as a general
increase in turnover for EuroMaint Rail AB.
The latter is due to new or extended contracts such as Arlanda
Express, refurbishment of X2 trains for SJ AB, refurbishment of carriages
for the Swedish State Railways public enterprise and new engine
modifications for Green Cargo AB.
Operating profit
Operating profit amounted to SEK 100 (114) million, which gives an
operating margin of 5% (6%).
The decrease in the margin is mainly due to structuring costs and
costs for quality improvement measures in 2006, as well as a positive
one-off item in 2005.
Financial items
Net financial revenues/expense amounted to SEK - (-11) million. This
figure has been affected positively by a lower net provision achieved
through a stronger cash flow.
Cash flow
Cash flow for the year after investments amounted to SEK 45 (-38)
million.
The increase is mainly explained by the fact that the 2005 figure
was affected by the acquisition of Euromation AB.
Proposed treatment of unappropriated earnings
Profit for the year in the parent company amounted to SEK 2,186,532
(117,570).
The Board of Directors proposes that the funds at the AGM’s
disposal, in accordance with the parent company’s balance sheet, be
carried forward:
Earnings carried forward (SEK) 156,878,232
Net profit for the year 2,186,532
TOTaL 159,064,764
The income statement and balance sheet will be presented to the
AGM on 2 March 2007 for adoption.
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