04PRESENTATION04

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LOOKING TO THE FUTURE

04PRESENTATION04

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EuroMaint 2004 4

Welcome to EuroMaint 5

MD Pether Wallin’s comments 6

EuroMaint’s history 8

This is EuroMaint 9

A changing EuroMaint 12

Train maintenance 16

Refurbishment 20

Spare parts supply 24

Industrial maintenance 25

Traffic safety, quality and environment 26

Risk and sensitivity analysis 28

Personnel in focus 30

Collegues at EuroMaint 32

Three-year summary 34

Board chairman Stig Holm’s comments 35

Board of directors 36

Management 37

Glossary 38

Addresses 39

CONTENTS

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EUROMAINT 2004

FINANCIALS IN BRIEF

Operating profit amounted to MSEK 46 (-103)

Net turnover decreased to MSEK 1,493 (1,653)

Cash flow totalled MSEK 13.8 (–)

2004 has been an eventful, intensive year for EuroMaint.

A great deal has happened, both within the company and on

the market where EuroMaint keeps customers’ rolling stock

moving.

An extensive restructuring process, entailing personnel

cutbacks and closures, has enabled the company to adapt better

to market needs. Productivity and cost-effectiveness have both

been increased considerably by developing a process-oriented

organisation and a focus on releasing potential for improvement.

Quality certification for the operational management system at

the year-end adds another dimension to the customers’ and

market’s confidence in EuroMaint.

During the year, there has been a concerted focus on fulfilling

all obligations with high delivery quality, which has resulted in

stronger customer relations and laid the foundation for import-

ant maintenance and refurbishment contracts. EuroMaint’s

competitive strength is evident in the way that losses have been

turned into profit. The theme for EuroMaint’s 2004 presentation

is therefore – and quite rightly:

Looking to the future.

4

February 30March 28April 7OctoberSeptember

Maintenance agreementwith Linx terminated as SJ AB and NSB decide to wind up the company.

Agreement with SJ AB to refurbish the X2 fleet.

Strategic decision to designate the workshop in Malmö the main work-shop for refurbishment.

A project began to save 10 % of purchase volume,where possible, with asavings target of aroundMSEK 66 by December 2005.

Launch of new wheel and bogie workshopin Örebro with 20–25 % higher productivity, creating new jobs.

KEY FACTS ABOUT EUROMAINT

Headquarters: Solna, Sweden

Workshops: Borlänge, Gothenburg, Gävle,

Hallsberg, Linköping, Luleå, Malmö,

Nässjö, Stockholm, Sundsvall, Vännäs,

Åmål and Örebro in Sweden

No. of employees: 1,360 (April 2005)

Turnover: MSEK 1,493

Owner: AB Swedcarrier

(a state-owned holding company)

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WELCOME TO EUROMAINT

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1November December DecemberSeptemberOctober November

Dialogue for Change – MD’s tour and dialoguewith all co-workers, whichmet with a good response.

Launch of EuroMaint’s new website www.euromaint.se

4-year agreement with SJ AB to maintain the X2 fleet, order worthapprox. MSEK 1,000.

EuroMaint’s operational manage-ment system certifiedto ISO 9001:2000quality standards.

9

EuroMaint is Sweden’s leading supplier of maintenanceand refurbishment of rolling stock. With a market shareof almost 50 per cent the company is an important partof the Swedish railway industry’s infrastructure. Withroots in the Swedish State Railways public enterprise,the company has over 100 years’ advanced experience of vehicle systems and high credibility. Using its broad,in-depth expertise, EuroMaint combines tradition with theability to create innovative new maintenance solutions.

FOUR SERVICE AREAS

A nationwide organisation ensures EuroMaint is always close

to the customer. The company works in four service areas with

the following tasks.

Train maintenance

Keeping rolling stock moving with high availability under safe

traffic conditions.

Refurbishment

Rebuilding, refitting and refurbishing rolling stock to increase

safety, service life, travel comfort and vehicle value while reducing

maintenance costs.

Spare parts supply

Providing the right product at the right place at the right time

to ensure the lowest possible waiting time for spare parts.

Industrial maintenance

Increasing operational reliability and profitability for Sweden’s

staple industry through advanced maintenance services.

Start of ‘Efficient workshop’ training for all workshop personnel.

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MD PETHER WALLIN’S COMMENTS

MARKET

The Swedish market for vehicle maintenance is not growing.

Our prime opportunity to expand is by winning new customers,

such as local public transport operators. Alongside selected

partners we can also expand the market geographically and

tender for maintenance contracts outside of Sweden.

By concentrating our refurbishment operation to Malmö, we

have taken a strategic decision to create a base in Skåne and the

Öresund region, where rail traffic will double by the year 2015.

It is also important for the future that we are close to Germany

and the rest of Northern Europe. The market for refurbishment

fluctuates dramatically and orders often require high input for

a limited period. Therefore it is crucial to adapt our resources

in a flexible manner by establishing our own core expertise as

a foundation for collaboration with partners.

COST EFFICIENCY AND PRODUCTIVITY

Full cost control is necessary in our efforts to continuously

improve our efficiency and productivity. A project began in

the summer to save 10 per cent of our purchase volume where

possible. Current forecasts suggest that the savings target will

be exceeded.

In October we opened the new wheel and bogie workshop

in Örebro, an investment that led to an increase in productivity

of between 20 and 25 per cent. Another stage in the focus on

efficiency and productivity is the ‘Efficient workshop’ training,

which relates to all workshop personnel and will help put our co-

workers’ suggestions for improvement into practice more easily.

ISO 9001:2000 QUALITY CERTIFICATION

At the end of the year our operational management system

was granted quality certification by Lloyd’s Register Quality

Assurance. Not only that – our quality work was referred to

as exemplary in the way we put the theoretical aspects of the

ISO standard into practice. As quality is so important to traffic

safety and vehicle availability, quality certification is of great

value to our customers.

2004 signified a turning point in EuroMaint’s history.The previously decided personnel cutbacks and restruc-turing have now been carried out. We have created acost-effective, customer-focused organisation with quality-certified processes. We have also won new orders worthover two billion Swedish kronor – and managed to turnlosses into profit. This puts us in a strong position forthe future.

I would like to begin by saying a big thank you to all the company’s

co-workers for your tremendous efforts in 2004. When I visited

all the various units last autumn and had a chance to exchange

ideas with you under the theme of ‘Dialogue for Change’, I met

with a good response. Thank you everyone – I have the greatest

confidence in you.

MANY IMPORTANT CONTRACTS

EuroMaint is well-equipped for the future – we won all the main-

tenance contracts we tendered for in 2004. Towards the end of

the year we won the maintenance order from SJ AB for the entire

X2 fleet – one of the biggest contracts since the market for train

maintenance was opened up to competition. Magnus Jonasson,

head of SJ AB’s rolling stock division motivates the decision as

follows: “The crucial aspects of EuroMaint’s offer were the

competitive price and the high quality of current deliveries.”

We also won important refurbishment contracts. The largest

was the agreement with SJ AB to refit the entire X2 fleet – a reference

job in which we have developed a new refurbishment concept

alongside SJ AB. The fact that we have competed successfully

with Swedish and international players reinforces my conviction

that we have attractive propositions – even on a geographically

extended market. It’s enjoyable and interesting – and creates

great opportunities.

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We will continue to strive to be even more cost-effective and

competitive in order to win further orders – and we look forward

to the next few years with confidence. We have achieved a position

and maturity that enable us to look beyond Sweden’s borders,

as we continue to endeavour to realise our vision to be the

leading, innovative partner.

PETHER WALLIN, MD

“Looking to the futurein the lead-up to 2005”

ENVIRONMENTAL CERTIFICATION A GOAL

The rail industry as a whole has a high environmental profile.

Several of our workshops already have ISO 14001 environ-

mental certification, and our aim is for the whole of EuroMaint

to be environmentally certified in 2005.

2004 RESULTS

Thanks to some fine work in 2004, EuroMaint can now report

positive financial results. Turning 2003’s loss of MSEK 103 into

a profit of MSEK 46 in 2004 is a milestone in EuroMaint’s history.

GOALS FOR 2005

The most important goal in 2005 is to deliver all agreed products

and services with high quality – to keep our promises. We will

also continuously improve our productivity and deliver cost

savings.

PROSPECTS FOR 2005

2005 has got off to a flying start. In the first two months alone

we have signed new orders with a combined value in the region

of MSEK 600: An agreement with Citypendeln to supply spare

parts and reprocess components. An exciting contract with

MTAB to maintain the trains on the Iron Ore Line between

Kiruna and Narvik. We also signed a ten-year deal with Arlanda

Express to maintain the X3 trains that runs the Stockholm

Central–Arlanda Airport line.

The agreement with Arlanda Express in January is unique.

Firstly, it is our first maintenance agreement with a company

that has international proprietors. Secondly, the length of the

deal gives us opportunities to further develop the maintenance

system in the long term. As Per Thorstenson, President of

Arlanda Express, says: “We are now deepening our collaboration

with EuroMaint and are doing it for the long term. Our aim is

to secure the position of Arlanda Express as the most punctual

railway operator in Sweden.”

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EUROMAINT’S HISTORY

FOUNDATION LAID FOR THE FUTURE

After winning these major contracts, it was essential for

EuroMaint to live up to its customers’ confidence and ensure

their satisfaction while focusing on high delivery reliability.

It was equally important to intensify efforts to raise productivity

and tighten cost controls.

EuroMaint continued to purposefully develop its business

further – both defensively for pure economic survival, and

aggressively with a view to developing expertise, quality and

operations ahead of future services and orders.

By the end of 2003, the foundation had been laid. Losses

had decreased considerably compared with the previous year

and profitability had improved, as had the company’s relations

with its customers. EuroMaint was a company in rapid growth,

facing a far brighter future. It would only be another year before

losses turned to profits, and EuroMaint could look to the future

with a mixture of pride and confidence.

EuroMaint has a history that is both long and short.The company was formed when the Swedish StateRailways public enterprise was converted into companiesat the beginning of 2001, and the Maintenance andEngineering Sector became EuroMaint AB. With rootsthat go back to the 19th century and experience of trainmaintenance which spans the entire century duringwhich Sweden became a leading industrialised nation,EuroMaint is a young, innovative company which basesits fresh approach on broad, in-depth expertise.

THE FIRST TWO CRISIS YEARS

By 2001, having enjoyed a monopoly position with easy customer

relations, EuroMaint faced a deregulated, shrinking market

which was suddenly open to competition. During its first year

of operation, profitability fell considerably. As a result, the

Board of Directors decided in 2002 to restructure the company,

a move that would include a merger between the parent

company EuroMaint and its subsidiaries RPL, TGOJ and

TrainMaint. The fourth subsidiary, TrainTech Engineering,

was sold to UK company Interfleet Technology.

2003 – A REVOLUTIONARY YEAR

The new organisation was introduced on 1 January 2003, when

EuroMaint also gained a new strategic focus. The new strategy

included the introduction of cross-functional working methods

throughout the organisation. The main aims were to create

clear, customer-focused processes and clear allocations of

responsibility internally and towards customers. The new process-

oriented organisation also laid the foundation for quality

certification according to ISO 9001:2000 the following year.

Needless to say, it was also important to urgently enhance

the cost situation, while improving the conditions for continued,

sound cost control. As a result of the restructuring measures,

EuroMaint concentrated its business in larger units in fewer

locations. Due to the reduced workload, 340 members of staff

were made redundant.

Business was concentrated on the domestic market, and in

particular on renewing relations with existing customers Green

Cargo and SJ AB. It was imperative for EuroMaint to be receptive

to its customers’ needs, to create professional relations with

them and offer them attractive, competitive services. Conse-

quently, new strategic contracts for maintenance collaboration

were signed with both Green Cargo and SJ AB, as well as with

Connex, worth approximately SEK 1,600 million in total.

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THIS IS EUROMAINT

Otherwise SJ AB competes with other operators for interregional

and county services.

Freight services, which have long been deregulated, are

primarily run by Green Cargo, in competition with other freight

traffic operators. However, the main competition comes from

road transport.

The rolling stock that runs on the railways is owned by

transport principals or vehicle companies, in some cases also

by operators. EuroMaint’s role is to offer operators and rolling

stock owners maintenance services and system solutions

that result in safe, convenient, punctual, cost-effective and

competitive rail transport.

In this way, EuroMaint helps strengthen the rail industry’s

profitability.

>>>

EuroMaint is a leading player in the Swedish railindustry. The company competes directly with othersuppliers of maintenance and refurbishment of rollingstock. However, there is also indirect competition with other modes of transport. Consequently, in each of itsassignments EuroMaint must strengthen the customer’scompetitiveness, while helping to increase the railindustry’s overall profitability.

EuroMaint’s market is both simple and complex. The simple

part is realising that competition will carry on increasing.

The complex part lies in operating on a market that is not fully

deregulated. Each individual order has to be profitable, both

for EuroMaint and the customer – while at the same time the

overall profitability of the rail industry must be strengthened

in relation to other transport systems.

BUSINESS ENVIRONMENT

Many different players and decision-makers affect the market:

politicians and authorities at various levels, rolling stock

owners and traffic operators and – ultimately – their customers.

The market’s expectations of EuroMaint can be summed up in

the phrases ‘traffic safety’ and ‘profitability’.

Traffic safety

Banverket (Sweden’s National Rail Administration) is the auth-

ority for the railway industry in Sweden, and is also responsible

for the expansion, operation and maintenance of the rail trans-

port infrastructure. The Swedish Rail Agency is the national

supervisory authority for traffic safety issues. EuroMaint’s prime

task in terms of traffic safety is to keep customers’ rolling stock

moving under safe traffic conditions. Traffic safety is always a

priority and comes before anything else.

Profitability

Responsibility for ensuring smooth-running public transport at

county level has been delegated by the state to various transport

principals, which procure the services from competing operators.

Interregional services which are not commercially profitable are

procured by Sweden’s National Public Transport Agency. SJ AB

has sole rights to the commercially profitable services, primarily

on the ‘trunk’ network.

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THIS IS EUROMAINTCONTD.

EuroMaint’s path to achieving its strategic goals in 2004 was

to focus on a number of strategic themes:

To profitably defend agreements that expire shortly and win

contracts for new types of rolling stock – During the year, delivery

quality and customer relations have both improved significantly.

EuroMaint has won all the maintenance contracts it has tendered

for and has also taken home important refurbishment contracts.

Realising internal improvement potential in order to

strengthen the company’s competitive and profitability position

– During the year, EuroMaint has adapted its volume of staff

and workshop resources to market conditions, further developed

the cross-functional process-oriented organisation and initiated

a project for considerably reducing purchasing costs.

Introducing necessary control and support systems – In

addition to further developing the company’s subprocesses,

financial planning and control systems were also implemented.

In December 2004, EuroMaint’s operational management system

received quality certification in accordance with ISO 9001:2000.

Securing success by developing strategic strengths and key

expertise – After the extensive restructuring work in 2004 which

provided a sound base for long-term development, work in this

area will be a priority over the next few years.

VISION

EuroMaint’s vision is to be the leading innovative maintenance

partner. With a market share of almost 50 per cent, the company’s

market-leading position in Sweden is evident. However, being

a leader also entails being a technically leading driving force.

Thanks to over a hundred years of industry experience,

EuroMaint has broad, in-depth core expertise which enables

the company to adopt the latest vehicle technology and develop

new maintenance solutions.

EuroMaint is a skilled, proactive partner which works closely

with customers, understands their needs, develops innovative

solutions and strengthens their profitability. The vision to be

the leading innovative maintenance partner is therefore firmly

anchored in reality. The vision primarily entails being perceived

in this way – on a market that crosses industrial and geographical

boundaries.

BUSINESS CONCEPT

EuroMaint’s business concept is to strengthen the rail industry’s

profitability and its customers’ competitiveness through tailored

maintenance and technical solutions. EuroMaint tailors its

solutions by striving to create total solutions and assume overall

functional responsibility in close co-operation with customers.

EuroMaint creates the greatest possible benefit by allowing the

customers to guide the process, ensuring that each agreement

and contract is tailored to the customer’s needs. The basis for

EuroMaint’s way of working is the company’s diverse expertise,

a nationwide organisation which is close to the customers,

and efficient, quality-certified processes.

STRATEGY AND GOAL ACHIEVEMENT

EuroMaint’s strategy is to continue to be a profitable, market-

leading company on the domestic market while expanding

by offering existing core products internationally. The company’s

strategic strengths are:

• A strong position on the domestic market.

• The ability to develop and deliver total solutions.

• Knowledge of rolling stock and advanced expertise in

maintenance and production engineering, material logistics

and safety control.

• Clear, efficient, standardised processes.

• A high proportion of the value chain is produced under

our own management or by strategic partners.

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1

2

3

4

67

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MARKET SHARE OF RAIL INDUSTRY

GOAL ACHIEVEMENT 2004

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1. EuroMaint, 49 %2. Others, 51 %

1. SJ AB, 46 %2. Green Cargo, 20 %3. Banverket, 4 %4. Citypendeln, 4 %5. Connex, 4 %6. Linx, 3 %7. SweMaint, 3 %8. Others, 16 %

PERCENTAGE OF EUROMAINT’S SALES

• To profitably defend agreements which will expire shortlyand win contracts for new types of rolling stock

• Realising internal improvement potential in order to strengthenthe company’s competitive and profitability position

• Introducing necessary control and support systems

• Securing success by developing strategic strengths and key expertise

✓✓✓

ongoing2005

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A CHANGING EUROMAINT

Spare parts supply

The right spare part, in the right place and at the right time, is

essential for safe, readily available transport. With a strategic

procurement operation and logistics system for procurement,

storage and distribution, EuroMaint fulfils stringent demands

on an advanced, flexible maintenance partner.

Industrial maintenance

EuroMaint offers quality-assured maintenance of drive systems

for Sweden’s staple industry. A crucial quality aspect in our

deliveries is our cutting-edge expertise in electrical power and

DC-powered applications, which have been developed within

the scope of engine maintenance.

EuroMaint was formed when the Swedish StateRailways public enterprise was converted into companiesat the beginning of 2001. The company’s history on acompetitive market is therefore a brief one. However,the experience which forms the basis of the core businesshas a history stretching back to the infancy ofindustrialisation. This experience lays the foundation for a high level of expertise and innovative thinking.

The positive results in 2004 have been achieved thanks to

great dedication by EuroMaint’s co-workers, who have listened

to customers, understood their needs and kept their promises.

The fact that the new orders during the year have been

won in competition both with Swedish and foreign companies,

confirms that the company has internationally competitive

offerings and prices.

OFFERING

EuroMaint operates in four service areas: Train maintenance,

which is the predominant operation. Refurbishment, which is

an important growth area. Spare parts supply, an internal and

external resource. Industrial maintenance, which primarily

focuses on advanced drive systems.

Train maintenance

EuroMaint is a well-established, experienced maintenance

supplier, whose extensive experience and credibility enable it to

develop innovative solutions. EuroMaint’s offering is progressively

developing more towards maintenance agreements based on

a fixed price per vehicle kilometre. This eases planning and

enables high availability for the rolling stock, which ultimately

means the customer can make maximum use of his fleet.

Refurbishment

Refurbishment is an increasingly important part of EuroMaint’s

business. It extends service life, improves traffic safety, increases

availability and raises the value of the customer’s fleet. The

refurbishment concept is based on EuroMaint’s core expertise

in system and vehicle technology, and its experience of managing

large, complex projects. EuroMaint’s own resources are sup-

plemented with strategic alliances and partnerships. The results

are high quality, flexibility and cost-effectiveness.

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PROCESS-ORIENTED ORGANISATION

EuroMaint has developed an organisation with the ability to

combine tradition and renewal, experience and innovation.

The organisation is cross-functional and process-oriented,

all the way from sales through to delivery. As a result, projects

are based on the customer’s needs from the very beginning,

and all the company’s resources can work together to fulfil

those needs. In each assignment, the process is individually

tailored to the customer and supported by the line organisation’s

core expertise in vehicle engineering, maintenance engineering,

component maintenance and material sourcing.

THE IMPORTANCE OF THE PROCESS

The process-oriented work approach and EuroMaint’s quality-

certified operational management system place the organisation’s

expertise and resources at the customer’s disposal in a well-

defined manner. Consequently, in each assignment EuroMaint

can create an individually customised solution, while ensuring

high quality and cost effectiveness. For each contract the customer

has a designated contract manager who is responsible for

ensuring the work runs according to plan, and that all promises

are fulfilled. By also maintaining a continuous dialogue with

the customer, EuroMaint gains an overall perspective, enabling

it to act proactively with new tailored offerings.

HOW THE MARKET AND CUSTOMERS ARE CHANGING

EuroMaint’s existing customers on the Swedish market are not

expected to expand their total production significantly, at least

not in the short term. Moreover, investments in new rolling stock

will result in older vehicles being phased out. Existing customers’

demand for vehicle maintenance is therefore decreasing.

The opportunities lie in winning new business, such as

maintenance contracts for local public transport. The procure-

ment by Swedish Skånetrafiken and the Danish Ministry of

Transport in 2005 and 2006 represents an important potential

order. Deregulation in Norway, especially of the Bergen and

Sörland lines – Norway’s ‘trunk’ network – also opens up new

opportunities, as does the deregulation of the route between

Oslo and Gjövik.

Ongoing refurbishment orders entail large volumes up until

final delivery of the X2 in spring 2007. The market for refurbish-

ment is expected to grow, both in the Nordic region and the rest

of Europe.

>>>

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Further development on the Swedish market

New assignments, new customers, new types of rolling stock:

this is how EuroMaint’s ambitions on the Swedish market can

be summed up. The idea is for EuroMaint to nurture and further

develop the confidence it has built up in existing contracts.

Focus on new geographical markets

There is a lot to indicate that EuroMaint, after a successful 2004

and a positive start to 2005, has achieved a level of maturity and

a position which make it natural to focus on the Nordic and

Northern European markets. The foundation for confidence

outside of Sweden lies in the company’s extensive industry

experience and its ability to think innovatively. A cost-effective,

flexible, innovative, quality-certified operation forms a competi-

tive base for strategic alliances with partners that can supplement

and enhance EuroMaint’s propositions.

A CHANGING EUROMAINTCONTD.

OPPORTUNITIES AND THREATS

The increasing deregulation in the Nordic region and the rest

of Europe presents both an opportunity and a threat. Thanks

to successful work in competition on the Swedish market,

EuroMaint has consolidated its position and gained credibility.

The company now has good opportunities to work both for new

customers on the Swedish market and – together with strategic

partners – on an extended geographical market.

The threats come in the form of increased competition

from foreign companies, which – although they are not

always exposed to competition on their domestic markets

– can compete on other deregulated markets. EuroMaint

has an advantage here in that it has already come through the

difficult initial stages that are necessary to operate successfully

in competition on the Swedish market.

FUTURE PLANS

EuroMaint’s plans include further organisational development,

continuing to take measures to raise efficiency and productivity,

further developing the domestic market, and taking the step

towards an international market.

New organisation

The new organisation to be introduced in 2005 will result in

five divisions: Sourcing & Supply, Refurbishment & Component

Overhaul, Train Maintenance, Planning & Engineering, and

Marketing & Sales. This entails improved support and control

in the main process, including clearer ownership of the sub-

processes. The fact that planning and engineering make up

a separate division demonstrates how important it is that

EuroMaint develops both these areas in each assignment.

The organisation is closely connected to investments in recent

years to further develop EuroMaint’s strategic strengths and

key expertise.

Productivity development

The further development of EuroMaint’s productivity is con-

stantly on the agenda. This takes place in discrete improvement

projects with clear goals – such as the ongoing project to reduce

costs of purchase volumes where possible. It also takes place

within the day-to-day operation, where the goal is to apply

personnel’s suggestions for improvement in the fastest,

simplest way possible.

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SATISFIED CUSTOMER INDEX – EUROMAINT

25.35

35

30

25

20

15

10

5

02004

23.77

2003

24.5

Short-term goal

29

Long-term goal

EUROMAINT’S ORGANISATION

T R A I N M A I N T E N A N C E

R E F U R B I S H M E N T

S P A R E P A R T S S U P P L Y

I N D U S T R I A L M A I N T E N A N C E

C U S T O M E R S

Sourcing & Supply

Refurbishment & Component

Overhaul

TrainMaintenance

MD

Planning &Engineering

Support Support

Marketing & Sales

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TRAIN MAINTENANCE

Rapid troubleshooting

The purpose of preventive maintenance is to minimise down-

time. Nevertheless, should a problem arise during operation,

EuroMaint’s on-call units are ready to assist.

Thanks to a logistics system that facilitates a highly efficient

supply of materials, defective components can swiftly be replaced.

EuroMaint has strategically located stocks of spare parts and

components, which cover a variety of needs and rolling stock types.

Safety-related maintenance

Maintenance for systems and components critical to vehicles’

traffic safety is surrounded by very strict quality demands. This

means that the work is governed by special rules, procedures

and demands on the maintenance personnel’s documented

expertise. EuroMaint fulfils all the necessary demands to carry

out safety-related maintenance.

EuroMaint has a strong position in train maintenanceand can handle virtually all carriage and locomotivetypes on the Swedish market. Through well-planned,well-executed maintenance, EuroMaint helps improvetraffic safety, strengthen customers’ competitivenessand increase their profitability.

Different customers have different needs. For this reason, they

use EuroMaint’s resources differently. On a market with many

operators and rolling stock owners, it is important to be receptive

– to view each customer as an individual, share experiences,

be open to new ideas and provide a total solution that gives

the customer potential for improvement.

SERVICES AND CUSTOMER BENEFIT

Thanks to its comprehensive range of maintenance services

and a nationwide organisation for traffic-related maintenance,

EuroMaint is close to its customers, on hand to help solve their

problems. The maintenance is tailored and planned in close

collaboration with each customer.

The main services are preventive and remedial light mainten-

ance and component maintenance at central workshops.

Bespoke maintenance

Preventive maintenance – i.e. maintenance that can be planned

in advance – is determined partly by the number of vehicle

kilometres, and partly through continuous monitoring of the

condition of important components. EuroMaint’s well-developed

system for control, planning and follow-up means that mainten-

ance can be adapted to vehicle timetables. In practice, this

means that maintenance is carried out so that the rolling stock

is available for service when the customer needs it.

EuroMaint can adapt maintenance to timetables partly

because major maintenance measures can be divided into

several sub-measures, which can be carried out in different

locations in line with the train’s schedule. For instance, part

of the work can be carried out in Malmö and another part in

Gothenburg. Maximum use is therefore made of the train’s

stopping time, making it available when the customer needs it.

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Component maintenance

Defective components are taken to workshops for repair,

primarily to the workshops in Örebro and Åmål. In 2004,

EuroMaint invested in raising productivity at the wheel and

bogie workshop in Örebro by 20–25 per cent. In Åmål, invest-

ments and streamlining measures have been taken with

the aim of reducing average lead times from 10 days to four.

AVAILABILITY CONTRACTS

Business models have changed from selling workshop hours to

offering quality-assured action and well-developed availability

services. Customers are increasingly looking for total solutions,

whereby they pay per available vehicle kilometre. Here EuroMaint

assumes total responsibility for traffic-related maintenance,

overhauls and component maintenance. Other services may

also be included, such as cleaning the trains. The ability to take

total responsibility which optimises vehicle availability is based

on EuroMaint having full control of the maintenance planning, so

that preventive maintenance can be planned without neglecting

transport safety. The prime aim of train maintenance is to keep

the rolling stock moving under safe traffic conditions.

EuroMaint’s way of optimising vehicle availability is based

on extensive, in-depth expertise, finely tuned resources and good

knowledge of the customer’s vehicle fleets and traffic patterns.

Above all, however, it is based on being open and receptive to

various customers’ needs. Thanks to extensive industry ex-

perience, EuroMaint understands the many factors which affect

maintenance requirements, and how they interact, making it

possible to weigh up the relation between availability and

maintenance costs.

>>>

“Open and receptive to different customers’needs”

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18

SJ CHOSE EUROMAINT IN TOUGH COMPETITION

FOR MAINTENANCE OF X2 TRAINS

The four-year maintenance agreement with SJ AB for the

X2 trains is one of the biggest contracts since Swedish State

Railways (SJ) was converted into companies in 2001 and

the maintenance market was opened up to competition.

EuroMaint won the order in competition with Swedish

companies and multinationals.

The agreement is an availability contract, which means

it entails incentives linked to key figures, whereby EuroMaint

assumes total responsibility for all kinds of maintenance, and

ensures the vehicles are available at the times and locations

required by SJ AB. The contract covers the entire fleet of X2

trains, 43 train units in total with approximately 260 carriages.

The order is worth in the region of MSEK 1,000. Work for

the contract will involve EuroMaint’s entire organisation

and around 300 personnel for four years, but will primarily

be carried out at the workshops in Stockholm, Gothenburg ,

Malmö and Sundsvall, and at the component workshops

in Örebro and Åmål.

TRAIN MAINTENANCECONTD.

”“The crucial aspects ofEuroMaint’s offer were the competitive price andthe high quality of currentdeliveries.”

Magnus Jonasson, head of SJ AB’s rolling stock division.

MARKET DEVELOPMENT

On a market characterised by stiff competition and weak profit-

ability, it is increasingly important to show a clear link between

cost-effective maintenance and the availability that generates

income for the customer. EuroMaint’s varied expertise and

resources fit in well with this business pattern, which the company

has been a powerful driving force in developing.

The overall Swedish market for vehicle maintenance is not

growing. As new rolling stock comes into service, the volume

of traffic-related maintenance is decreasing as component

maintenance is increasing. At the same time, the overall main-

tenance requirement per vehicle kilometre is decreasing. This

is an important challenge. EuroMaint’s ability to offer quality-

assured, individually customised maintenance services is a

strategic success factor, which is the foundation of the company’s

opportunities to win new orders in the rail industry and also gain

new customer groups in commuter transport and tram services,

for example.

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19

”“We are now deepening ourcollaboration with EuroMaintand are doing it for the longterm. Our aim is to securethe position of ArlandaExpress as the most punctual railway operator in Sweden.”

Per Thorstenson, President of Arlanda Express.

10-YEAR AGREEMENT WITH ARLANDA EXPRESS

In January 2005, EuroMaint signed a ten-year agreement

with Arlanda Express to maintain the seven X3 trains

that run on the Arlanda Line. This is EuroMaint’s first

maintenance agreement with a company that has inter-

national proprietors. It was won in tough Swedish and

international competition, and extensive preparations took

place in 2004. The unique length of the contract period is

particularly pleasing as it enables further development of

the maintenance system in the long term.

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20

REFURBISHMENT

Increased comfort

An increasingly important competitive factor is improving

comfort and adapting trains more closely in line with demands

on modern passenger environments. A fresh, pleasant environ-

ment is a competitive tool in itself. Moreover, rail travel gives

passengers a better chance of using the travel time than most

alternative means of transport, be it for work or relaxation.

A comfortable seat with good lighting, a power point for a

laptop, functioning mobile telephony and an internet connection,

together with facilities for a good meal, mean a lot. Competition

for passengers also means it is increasingly important to adapt

the vehicle fleet to the image the operator or rolling stock owner

wishes to convey to customers. Refurbishment for increased

comfort makes rail travel more attractive than other means

of transport, leading to higher earnings for the operator, and

thereby strengthening the industry’s overall competitiveness.

EuroMaint’s extensive experience of train maintenanceis the foundation of its broad, in-depth system know-how in the field of rail rolling stock. Thanks to insightinto the technical weaknesses of vehicles, EuroMaintcan build past the problems while at the same timeadapting the on-board environment more in line withmodern passengers’ service demands. Refurbishmentimproves the vehicles’ traffic safety, extends their servicelife, increases their value and reduces costs for futureoperation and maintenance.

Rail-bound vehicles have a service life spanning several decades.

A lot happens during such a long time. For instance, new vehicle

technology may be developed and new demands and require-

ments can arise. After 20 years or so, it is high time to refurbish

and modernise the fleet.

SERVICES AND CUSTOMER BENEFIT

From a technical perspective, a refurbishment could entail

replacing or modifying critical subsystems or vehicle components.

However, it more often involves a comprehensive technical

upgrade and modernisation. This entails making the trains

more comfortable and attractive to passengers, and better

adapted to the requirements of the on-board personnel.

Technical renewal

The aim of technical renewal is to improve the traffic safety of

rolling stock, boost its performance, increase availability and

reduce the maintenance requirement. All these factors can be

reasons for refurbishment. The needs can be purely financial

or driven by traffic safety requirements.

Traffic safety is closely monitored by operators, rolling stock

owners and authorities. Apparent shortcomings in vehicles often

have to be remedied swiftly through some form of refurbishment,

refitting or rebuilding.

The trains’ performance is an important competitive factor

for rail-bound traffic. Here EuroMaint’s insight into operational

and traffic safety plays a crucial role in achieving optimal avail-

ability and a fleet of vehicles that require less maintenance.

Overall, refurbishment gives the rolling stock owner a more

modern vehicle fleet, which generates higher income and costs

less to operate and maintain, thus ultimately strengthening

the customer’s competitiveness and profitability.

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BUSINESS CONCEPT

EuroMaint’s ability to combine technical equipment with internal

and external renewal of trains is a business concept that could be

fully established for the first time in connection with the order

from SJ AB to refit the fleet of X2 trains. The business concept is

based on close collaboration with the customer, both on the

technical side and as regards the design and interior furnishings.

It also builds on strategic alliances with partners in the rail

industry and other sectors of the business community, such

as furniture and interior design companies.

Since a large refurbishment project requires considerable

resources during a limited time, it is essential for a supplier to

have the flexibility to supplement in-house expertise with long-

term partners and external resources for the assignment at

hand. EuroMaint’s work approach is based on the company’s

core expertise as regards managing and administrating vehicle

projects involving many different parties. The result is high

productivity and flexible planning, which minimise train down-

time during the refurbishment process.

>>>

“Refurbishment for increased comfortmakes rail travel attractive”

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REFURBISHMENTCONTD.

REFURBISHMENT OF X2 TRAINS FOR SJ AB

In tough competition with Swedish and foreign companies,

EuroMaint has won SJ AB’s order to modernise and rebuild

the X2 fleet in order to meet market demands for high comfort

and availability. The work, which will take place at the workshop

in Malmö, will extend over two and a half years. The first train

unit in a series of 30 with an option for a further five was delivered

in early 2005.

With extensive experience of refurbishment projects, along

with maintenance of the X2 train since it began operating in 1990,

EuroMaint has been able to provide effective technical solutions

which improve comfort. The refurbishment is eagerly awaited

by passengers and on-board staff alike. It encompasses a com-

pletely new interior environment: new fittings, more comfortable

seats and a new bistro offering a wider range of goods on a self-

service basis. Power points by all seats are a clear advantage for

anyone wishing to connect their computer. New communication

technology ensures contact with the mobile phone networks.

”“The procurement was characterised by great creativity from both sides,and a genuine interest in producing the best solutionfor SJ AB and our customers.”

Magnus Jonasson, head of SJ AB’s rolling stock division.

MARKET DEVELOPMENT

The market for refurbishment is stable in the Nordic region

and the rest of Europe in the long term. In the short term, it is

characterised by strong fluctuations in demand. In 2004,

EuroMaint underwent a major restructuring process to adapt

to the ongoing market changes and falling orders. The important

order from SJ AB to refurbish the X2 trains and the decision to

focus the refurbishment operation to the workshop in Malmö

have reversed the situation.

The refurbishment concept created in partnership with

SJ AB is an important strength for the company’s future.

In light of the continued deregulation of the European rail

market, EuroMaint expects to be able to offer customers in

other countries corresponding refurbishment concepts,

primarily in the Nordic countries and Germany.

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”“EuroMaint has extensive experience of maintaining engines with drive lines fromGeneral Motors.”

Lars-Göran Olsson, product area manager for

Refurbishment at EuroMaint.

REFURBISHMENT OF MZ III ENGINES

EuroMaint has signed an agreement with the UK’s Romic Ltd.

to refit two large type MZ III diesel engines, with an option

for a further four engines. The engines were originally built

by NOHAB in Trollhättan, Sweden, with a drive line from

General Motors – a design with which EuroMaint has a

great deal of experience. The work is being carried out at

the workshop in Örebro. The customer is a sales company

specialising in spare parts for American GM engines. After

the refurbishment, the totally renovated engines will go on

to Spain to be used as work vehicles in railway construction.

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HOW WE WORK AT SPARE PARTS SUPPLY

The services within Spare parts supply are open to the entire rail

industry – to rolling stock owners, operators, maintenance suppliers

and workshops. Through EuroMaint’s buyers and their well-

established relations with component suppliers worldwide, customers

can receive help in procuring materials at favourable prices. Should

a customer also require help delivering components and materials

to the right place at the right time, EuroMaint’s efficient logistics

system and strategically located warehouses are also available.

The service offering also includes dealing with defective com-

ponents, which are replaced in connection with maintenance. Thanks

to fast, efficient repairs in EuroMaint’s modern, well-equipped

reprocessing workshops, components can quickly be returned to

the material flow and used in the customer’s rolling stock. Spare

parts supply helps the customer achieve high maintenance reliability,

while reducing the cost of keeping expensive components in stock.

SPARE PARTS SUPPLY

”“Spare parts supply is an asset for the whole industry.”

Sverker Hoflin, product area manager

for Spare parts supply at EuroMaint.

Spare parts supply entails providing the right product,in the right place, at the right time and at the rightprice. This is how EuroMaint’s workshops can be quicklyand efficiently supplied with spare parts, componentsand materials. This is not only an important internalresource for EuroMaint, but also an asset for the wholerail industry.

With its industry know-how and strategically located warehouses,

EuroMaint can create total solutions in which logistics are spe-

cially adapted to each individual customer. The offering includes

technical support, such as assembly advice, and professional

consultation on spare parts and spare parts supply.

Thanks to close co-operation with leading vehicle manu-

facturers and an extensive network of suppliers worldwide,

EuroMaint can acquire all kinds of items at competitive prices.

Almost anything is possible for a company that combines long

experience with the latest methods for spare parts dimensioning

and component localisation. EuroMaint’s logistics and material

supply are based on an advanced combination of methods and

practical experience.

Spare parts supply involves supplier contacts, material

procurement, warehousing at centrally located workshops

and daily distribution of components, spare parts and materials

for EuroMaint’s various workshops and projects. Other players

in the rail industry can also benefit from this highly efficient

logistical process, which is an asset for the entire industry.

Over a long period of time, EuroMaint has built up an extensive

network of Swedish and international vehicle, component and

material suppliers. This network is a strategic resource

in itself, because good supplier relations mean fast, reliable

deliveries – which in turn make it possible to optimise procure-

ment planning. In this way, warehousing and distribution can

be dimensioned with maximum efficiency and minimum risk

of important components and spare parts not being where

they are needed.

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INDUSTRIAL MAINTENANCE

”“Major undertaking at rolling-mill in Norway.”

Tomas Olin, product area manager for

Industrial maintenance at EuroMaint.

Every hour of downtime is costly, be it for trains orindustrial processes. This insight pervades EuroMaint’sworking approach to industrial maintenance. Thanks toits diverse experience and unique cutting-edge expertise,primarily in DC-powered applications, the company canoffer advanced maintenance services with fast, reliabledeliveries.

Maintenance of security and business-critical drive systems in

industry has many similarities with train maintenance. The goal

in both cases is to minimise downtime by planning and carrying

out maintenance at times when the vehicles are not in actual

service. The background to EuroMaint’s expertise in industrial

maintenance is the experience required to supply the rail

industry swiftly and efficiently with maintenance for heavy

electric, electromechanical and power electronics components.

EuroMaint’s industrial maintenance primarily targets

companies in the Swedish staple industry, in electricity-intensive

sectors such as paper and pulp, engineering, steel and petro-

chemicals. Customers also include electricity producers and

suppliers of reserve power. Services include preventive and

remedial maintenance of electric and diesel engines, transfor-

mers, hydraulics, compressors and power electronics: rewinding,

on-call service, repair and refurbishment.

Together with the customer, EuroMaint creates a refined,

operationally reliable production process which helps develop

the customer’s own workshop. The offering covers everything

from preliminary analysis to control in connection with com-

missioning. Work mainly takes place at EuroMaint’s workshop

in Åmål. Investments and streamlining measures have been

carried out at the Åmål plant in 2004, with the aim of reducing

average lead times from 10 days to four. EuroMaint also offers

extensive on-call service at the customer’s site.

HYDRO ALUMINIUM IN HOLMESTRAND, NORWAY

One important assignment in 2004 was the order from Hydro Alu-

minium rolling-mill in Holmestrand, Norway, to refurbish a 2 MW DC

engine weighing a hefty 22 tonnes. This assignment is one of the

largest to date from an industrial customer outside of Sweden.

The project took the form of a turnkey project. It began with a

technical study at the customer site, after which the engine was dis-

mantled and transported by trailer to EuroMaint’s workshop in Åmål.

There, the engine’s brush rocker was rebuilt, the rotor balanced and

the winding repaired. To verify the results of the rebuild, load tests

were carried out and all operational data logged. After transporting

the engine back to the customer’s workshop, EuroMaint re-assembled

the engine and conducted laser alignment, start-up and evaluation.

The entire assignment was subject to strict time constraints to

ensure it was completed within the scope of a scheduled stoppage.

The project ran for two intensive weeks in the middle of the summer

and involved between six and eight fitters and engineers.

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TRAFFIC SAFETY, QUALITYAND ENVIRONMENT

and maximum availability of rolling stock, thus enhancing

the competitive power of both EuroMaint and its customers.

Similarly, quality certification makes EuroMaint an attractive

business partner on the Swedish and international market.

Preparations for EuroMaint’s quality certification have been

extensive, and have involved everyone in the company. The key

issue now is to maintain and continuously improve quality

management on a day-to-day basis. The main challenge is not

to develop and fine-tune the operational management system,

procedures and rules, but rather to adhere to the rules with good

judgement and to focus long-term on continuous improvement.

The operational management system supports the good

organisation so essential to high quality, cost effectiveness,

reliable deliveries and strong customer relations, where no one

need doubt what has been promised and what has been done.

Traffic safety, quality and environment are importantaspects of EuroMaint’s operation. The ultimate aim of maintenance is to keep customers’ rolling stockmoving under safe traffic conditions. Quality is a basicprerequisite for ensuring this aim is fulfilled, while atthe same time maximising availability of the rollingstock for scheduled services. By strengthening the railindustry’s competitiveness, EuroMaint contributes to a sustainable environment.

Traffic safety and environmental consideration are two of

EuroMaint’s four core values. The other two are customer

orientation and being a safe, attractive workplace. All the

core values are linked to quality – the quality brought about

by knowledgeable personnel who take a professional pride

in their work, and achieved by supporting their work with

a quality-certified operational management system.

TRAFFIC SAFETY

Traffic safety comes before everything else – it is absolutely

pivotal to the rail industry and is carefully monitored by the

relevant authorities. Generally speaking, traffic safety places

stringent quality demands on the maintenance work. In addition,

work on safety-related systems and components requires special

procedures, rules and quality controls.

The traffic safety work is based on personnel who are well-

trained for their jobs, are experienced, risk and quality conscious,

and surrounded by an organisation where rules and practical

measures support high-quality results. The quality certification

means that EuroMaint has been the subject of an independent

inspection, which helps strengthen the rail industry’s confidence

in the company’s ability to assure high traffic safety.

QUALITY

Quality certification of EuroMaint’s operational management

system was a key event in the company’s history. A certified

quality process increases existing and potential customers’

confidence in EuroMaint’s ability to combine high traffic safety

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THE ENVIRONMENT

Most people would probably agree that rail-bound traffic is

more environmentally friendly than competing alternatives

such as air and road traffic. Well-managed, well-maintained

trains are more attractive to travellers and freight transporters

alike. EuroMaint’s operation thereby contributes to a better

environment.

Obviously there are some operations within the company

that have potential for improvement from an environmental

perspective. Several of the company’s workshops and factories

already have ISO 14001 environmental certification.

Our aim is for the whole of EuroMaint to be environmentally

certified in 2005. Quality certification was an important milestone

towards this goal, as the regulations are closely related. ”“Exemplary in putting ISO theory into practice.”

Lloyd’s Register Quality Assurance.

The decision to develop an in-house operational management

system and have it certified for quality was taken in 2003.

Since then, the management’s commitment has permeated

the entire project and paved the way for a successful result.

Work to chart and document all processes and procedures

has been carried out by project groups at central level, and at all

the workshops across Sweden.

Half way through the process, the project management con-

ducted a tour of all the groups in order to monitor the project’s

status. Afterwards, all personnel underwent training in what quality

entails and how the operational management system’s processes,

procedures and IT support work.

The run-up to certification began with a preliminary review

and documentation inspection. The certification was carried out

by Lloyd’s Register Quality Assurance, which was very positive

about EuroMaint.

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Phase 4, Follow-up

The process of change and the preventive measures are followed

up continuously, partly to ensure they are having the intended

effect and also to identify and deal with any risks that may arise.

In the final report, measures and risk management are checked

off against any remaining risks.

MENTAL ACUITY AND RESPONSE READINESS

However, risk and sensitivity analyses are not only about changes

instigated by EuroMaint: they also involve changes that the out-

side world imposes on the company.

In an increasingly complex world, risk and sensitivity analyses

bring the company a high level of mental acuity and response

readiness in the face of different scenarios.

FINANCIAL RISK MANAGEMENT

Through its business, EuroMaint is exposed to financial risks,

including the effects of changes in prices on the credit and capital

markets, and fluctuations in exchange rates and interest rates.

The company’s overall risk management focuses on the unpredict-

ability of the financial markets, and strives to minimise potential

unfavourable effects on the company’s financial results. Risk

management is dealt with by the company’s finance department.

RISK AND SENSITIVITY ANALYSIS

Which traffic safety, quality, working environment and environmental factors are affected by a plannedchange? What will the financial effects be? What arethe risks and how can they be eliminated? These arequestions EuroMaint regularly has to ask before anychange, as a company that has a major impact on the rail industry’s traffic safety, is quality certified to ISO 9001:2000 and plans to be environmentally certified in line with ISO 14001.

In an operational field exposed to competition, continuous

improvement is a must to be commercially successful. It is

equally important to analyse planned changes from a risk and

sensitivity perspective. What risks could arise for the company,

customers and the surrounding environment? How can the

risks be eliminated or prevented?

PROCEDURES FOR RISK AND SENSITIVITY ANALYSIS

Traffic safety comes first in the rail industry and is regularly

included in EuroMaint’s risk and sensitivity analyses. The

company’s procedures for risk and sensitivity analysis regarding

traffic safety, quality, the environment and working environment

encompass four phases, which are outlined below.

Phase 1, Identification

Identifying risks calls for active participation from the people

whose operation will be affected. The process can be based on

situational questions, interviews with key people at different levels

in the operation, or through workshops focusing specifically on

risk identification.

Phase 2, Analysis/classification

In the event of changes in the operation, a qualitative analysis

is conducted prior to risk classification in order to identify

trends or patterns that may affect the assessment of damage

and probability ratio.

Phase 3, Preventive measures

Preventive measures are taken to reduce the probability of

identified risks occurring. Activities include establishing

the preventive measures, appointing someone to ensure

the measures are implemented, scheduling the measures

and documenting them in an action plan.

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EXCHANGE RATE RISKS

EuroMaint is exposed to some extent to exchange rate risks

due to its relatively large purchase volumes in foreign currencies

and low customer invoicing in corresponding currencies.

Purchases in foreign currencies for large projects are hedged

or agreed with variable foreign exchange clauses during the

tendering/contract formulation stage. In 2004, procedures for

exchange rate and risk management have also been introduced

for ongoing payment flows.

INTEREST RATE RISKS

EuroMaint is affected by general interest rate adjustments as

its entire loan portfolio has variable interest rates. In 2005,

alternative fixed interest periods will be evaluated with the aim

of limiting the risks associated with major interest rate increases

over various planning horizons.

CREDIT RISK

EuroMaint has procedures for minimising ongoing customer

credit risks in the business. These procedures include credit

checks, advance payment and guarantee management, and

ongoing credit monitoring. Financial credit risks are low because

counterparties are limited to financial institutions with high

creditworthiness.

LIQUIDITY AND REFINANCING RISK

EuroMaint’s policy is always to have liquid funds and secured

refinancing available to the extent required for the operation.

On 31 December 2004, the company had credit facilities of

MSEK 300 with the Swedish National Debt Office. The company

has credit facilities with FöreningsSparbanken amounting to

MSEK 325. EuroMaint also has a bank overdraft facility with

FöreningsSparbanken amounting to MSEK 125. The company’s

total credit facility amounts to MSEK 750.

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PERSONNEL IN FOCUS

Prioritised areas

Information is one of the prioritised areas for development.

Another is awareness of the company’s goals, which shows

a slightly positive trend but a low proportion of positive

answers. Increased participation in business planning will

also be a recurring theme in this area. One fundamentally

important area to prioritise is leadership, which is showing

a slightly negative trend from an already low level. The positive

aspect here is that opinions of personnel appraisals are

showing a positive trend.

STRATEGIC COMPETENCE DEVELOPMENT

With the right person in the right place in a quality-certified

organisation, the investment in further developing key

competence is on a solid foundation. The process of drawing

up competence profiles and charting areas of expertise began

in 2004. In 2005, personnel appraisals will be crucial to the

continued work on competence development.

*) ESI is measured on a scale of 0 to 4.

After a major process of adjustment resulting from the restructuring in 2004, EuroMaint has laid a stablefoundation for long-term development. The strategictheme which will now be prioritised is to secure successthrough strategic development of the company’s core expertise. Creating a EuroMaint spirit in the geographically widespread organisation is another important challenge.

The year has largely been characterised by the organisational and

individual challenges resulting from an extensive process of

change with large reductions in the workforce. At the same time,

efforts to continue further developing the process-oriented

organisation and prepare for quality certification have proceeded

with high intensity. Similarly, continuous work is in progress to

ensure that personnel have the necessary training to perform

their work tasks.

ADJUSTMENTS IN 2004

EuroMaint has collaborated with the trade unions, the industrial

health service Previa and outplacement organisation TRR

Trygghetsrådet to mitigate the consequences at locations

affected by closures and personnel cutbacks. Internal support

groups, activities and meetings have been important tools in

this process, as has personal consultation in everything from

private economy to planning a new future. Despite the difficult

transitional process, it is worth highlighting the fine efforts that

have been made.

PERSONNEL SURVEY

A personnel survey carried out in 2004 shows only a marginal

decrease in the employee satisfaction index (ESI*), compared

with the survey conducted two years ago. ESI only fell from

2.76 to 2.73, even though the survey was carried out during

the ongoing restructuring.

Best and worst

The most positive answers were linked to participation and

relations, which had a high proportion of very positive responses.

The least positive were the answers relating to information.

However, here too there was a positive trend, primarily regarding

information provided on EuroMaint’s intranet.

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One natural part of EuroMaint’s ongoing competence develop-

ment is the necessary training to carry out safety-related work

on rolling stock and components. Moreover, by the end of 2004

all production managers had undergone training in leadership.

As EuroMaint now looks to the future, the supply of leaders will

be an important success factor.

WORKING ENVIRONMENT

The rail industry traditionally has a high level of ambition in

terms of safety. The working environment is no exception.

Consideration for a safe working environment is expressed in

rules and procedures, but is mainly apparent in day-to-day work.

Being a safe, attractive workplace where personnel feel secure,

involved and committed is a fundamental success factor for

EuroMaint. Satisfied personnel lead to satisfied customers

– and vice versa. The overall process is a virtuous circle.

THE EUROMAINT SPIRIT

EuroMaint has an organisation spread across the whole of

Sweden, and the vision is to be one company with one corporate

culture – a vision that requires patient long-term effort on many

fronts. The cross-functional, process-oriented work approach

is an important stage in this development as it is based on

all personnel, wherever they are geographically or in the line

organisation, working together to give customers the greatest

possible value.

The investment in leadership development is an important

step in creating a single, shared corporate culture, as are improved

information and increased participation in business planning.

The major personnel meetings which will begin in Gothenburg

in April 2005 are intended to strengthen the EuroMaint spirit.

>>>

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”””

“My job gives me business responsibility for EuroMaint’s entireturnover. The goal is clear: we shall be competitive and profitable by customising our propositions, improving our deliveries, developing new business areas and driving change towards a process-led working method.

In recent years we have proved that we have come a long way in becoming a successful, profitable, business-focused company.We are continuing to improve our deliveries and hone our offerings.We are now looking at interesting new business projects such asStockholm’s commuter train services, the Öresund region, theNorwegian market and new EU Member States. The idea is toexpand internationally with existing core products: we already have confirmation that our propositions stand up to internationalcompetition. My job is challenging, with a good mix of operativeand strategic issues. My co-workers are upbeat and positive aboutchange. We have fun, a lot of fun.”

Jonas Samuelson, Head of Marketing & Sales

“I am responsible for contract negotiations in the product areasbrake shoes, brake discs and electrical items – a purchasing volumeof over SEK 70 million a year. My job entails daily contact with many suppliers. To ensure a strong bargaining position we always endeavour to have several supplier options. We are also seeking new contacts and supplier markets in Eastern Europe and Asia.

My work includes multilingual communication and a lot ofplanning for new projects, contracts and activities. Visits toSwedish and international trade fairs bring fresh experiences andnew contacts. To be prepared when negotiating new customeragreements – and rationalisations in existing contracts – it isessential that we try to understand how the railway industry is developing. What will requirements and rolling stock be like in the future? My job is enriching and enables me to develop – eachday presents me with fresh challenges, which I relish.”

Katerina Liptakova, buyer

“I work with strategic purchases. This means I draw up strategiesfor finding good suppliers, thus ensuring long-term access toimportant product portfolios. My job also entails seeking outpotential savings for various product groups and even within the scope of our customer contracts. Essentially our purchasingstrategies are guided by customers’ demands on traffic safety, quality and vehicle availability.

We have tough cost-cutting plans, but it’s not just about reducing costs. All the important factors have to be considered in strategic purchasing. The entire purchasing process has to bestreamlined and customised, and logistics plays a big part in this.There are many aspects to my job, it enables me to develop and is varied, with plenty of internal and external contacts. I’ve workedin purchasing for 15 years.”

Thomas Johansson, buyer

COLLEAGUES AT EUROMAINT

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”””

“I’m the overall production manager for the refurbishment of X2trains. It was a great pleasure to get down to work when the firsttrains came rolling in. Last year was quite an unsettling time: firstwe were going to close, then we were staying open. However, thingshave felt better and better every day since the summer. I think thepositive development will continue.

It’s nice to have a big project like this for a couple of years intothe future. We’re always working against the clock, so it can getstressful at times. That’s when it’s particularly important to talk to people, show appreciation and provide information so everyoneknows what’s going on and feels involved. When the first refurbishedtrains rolled out it was a big relief. It’s nice that passengers and on-board staff appreciate the results of our work.”

Michael Nilsson, production manager

“I’m responsible for ensuring all the materials are there when they’reneeded – I act as a subproject manager for the refurbishment of the X2 trains, and make sure the whole flow runs smoothly. If there’sa problem with a delivery, everyone needs to be informed in plentyof time. Much of my work involves maintaining continuous contactwith the buyers in Örebro, having an overview of everything happen-ing here in Malmö and reporting back to various parts of the company.Everyone needs to know the situation as regards material stocks. Thisis a great job and the atmosphere is brilliant – it’s fun going to workevery day. Last year was full of ups and downs. First of all the work-shop here was going to close down and we were given notice. Butwe kept our spirits up, focused on the tasks at hand and kept to allour delivery times. And then all of a sudden we were going to stayopen, operating at full capacity with a tremendous amount of work.Obviously we’re delighted. We have a wonderful unit here, with greatpeople and working premises. They were built in the age of thesteam engine, but also work excellently for today’s modern trains.”

Charlotte Görman, sourcing and supply manager

“I’m the controller for the Refurbishment & Component Overhauldivision. We have sites in Örebro, Hallsberg, Åmål and Malmö. I personally work in operational control in Malmö. I started in April2005, but have worked in control at EuroMaint for a couple of years,and my new work tasks suit me perfectly. My most important job atthe moment is to monitor our use of resources and the profitabilityof the division as a whole, and specifically in the major project ofequipping the X2 trains, train by train and carriage by carriage.

The X2s are in fact already 15 years old. They travel around400,000 km a year so it’s time for a general refit and modernisation,both internally and externally. It’s a massive undertaking with 30 trainunits and some interesting financial parameters to keep an eye on.

The new interiors are grey and light wood – the passengers willprovide the splashes of colour. The bistro carriages will have redleather sofas to contrast with the more subtle passenger carriages.

I find it fascinating to be involved in the project and see it allcome together.”

Örjan Cederberg, controller

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THREE-YEAR SUMMARY

PROFORMA PROFORMA

Income statement, SEK M 2004 2003 2002

Net turnover 1.493.0 1.653.0 1.879.0

Operating profit/loss 46.4 -103.0 -188.0

Net financial items -10.0 -11.0 -26.0

Profit/loss after tax 50.4 -106.0 -164.0

Cash flow, SEK M 2004 2003 2002

Cash flow from:

Ongoing activities 47.8 -40.4 -55.5

Investment activities -34.0 10.4 -20.5

Financing activities – 30.0 76.0

Change in liquid assets 13.8 – –

Balance sheet, SEK M 2004-12-31 2003-12-31 2002-12-31

Fixed assets 147.0 113.0 140.0

Receivables and finished goods inventories 563.0 690.0 722.0

Liquid assets 13.8 – –

Total assets 723.8 803.0 862.0

Equity 68.6 18.0 110.0

Deferred tax – – 13.0

Other provisions 46.2 54.0 75.0

Long-term liabilities 250.0 250.0 240.0

Operating liabilities 359.0 481.0 424.0

Total equity and liabilities 723.8 803.0 862.0

1

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COSTS 2004, SEK THOUSANDS

1. Premises, 139.4682. Maintenance, 82.8453. Travel, 15.2964. Admin, 17.1905. IT and consultancy, 30.9496. Other, 28.268

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COSTS OF PERSONNEL 2004, SEK THOUSANDS

1. Salaries, 418.1492. Pensions, 53.4963. Social security charges etc., 169.0474. Other, 22.061

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BOARD CHAIRMANSTIG HOLM’S COMMENTS

In 2004, EuroMaint has fulfilled its goals and met theBoard of Directors’ expectations. Work to defend existingagreements and win new ones has been successful.Similarly, the internal process of improvement has contributed to improved competitiveness and higherprofitability. Another important event was the qualitycertification of the operational management system inaccordance with ISO 9001:2000.

This means that three of the four strategic themes in the business

plan have been well focused and successfully cultivated during

the year. The fourth theme, which entails securing continued

success through further development of EuroMaint’s strategic

core expertise, will be a priority over the next few years.

The extensive restructuring work in 2004 has laid a very

solid foundation for the company’s long-term development.

Today, EuroMaint is a well-consolidated company which can

look to the future with confidence – and also look into markets

and opportunities outside of Sweden.

In terms of trains, Sweden has a limited volume. However,

the oil situation Europe and the rest of the world will be facing

within the next few years makes it crucial for Sweden to create

an efficient maintenance and service company. The challenge

for the future lies in the company’s strategic role in connection

with new investments in engines and carriages, and in the link

to a Europe with deregulated, integrated transport systems.

The task ahead of us entails securing future technical expertise

for the company.

Since we were appointed in 2004, the other Board members

and I have actively followed and supported the development

which has turned losses into profit for EuroMaint during the year.

I can therefore express my and the Board’s full confidence in the

fine work and results achieved by EuroMaint and the company’s

management.

STIG HOLM, CHAIRMAN OF THE BOARD

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BOARD OF DIRECTORS

LENNART ANDRÉN1941. BScEmployee representative.Board member since 2001.

BERTIL HALLÉN1954. Employee representative.Board member since 2001.

JOHNNY STRÖM1945. Employee representative.Board member since 2004.

ANNIKA NORDIN1954. MSc economics. Deputy MD Category Management SCA.Board member since 2004.

ELISABETH NILSSON1953. MSc mining engineering.Unit Manager SSAB Oxelösund.Board member since 2004.

STIG HOLM1951. MSc engineering. MD Tekniska Verken i Linköping AB.Chairman.Board member since 2004.

BERTIL PERSSON1961. MSc economics. MD and Group President Beijer Alma AB.Board member since 2001.

EVA HALVARSSON1962. MSc economics. Head of the Division for State Enterprises,Ministry of Industry.Board member since 2004.

RICHARD REINIUS1967. MSc economics. Senior Investment Manager Ministry of Industry,Division for State Enterprises.Board member since 2004.

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MANAGEMENT

The current management took up their duties on 1 February 2005.

NICKLAS FALK1973. Mechanical engineer. Head of Planning &Technical Services.

TORSTEN NEDERMAN1964. MSc engineering. Head of Refurbishment &Component Overhaul.

JONAS SAMUELSON1960. MSc engineering. Head of Marketing & Sales.

STEVEN DAVIDSSON1956. Mechanical engineer. Head of Sourcing & Supply.

HANS-ÅKE ELFWING1962. Mechanics engineer. Head of Train Maintenance.

BJÖRN SUNDÉN1944. BScBusiness Development,deputy MD.

ÅKE FINN1959. CFO, deputy MD.

PETHER WALLIN1956. MSc engineering. MD.

KRISTINA NYHOLM1943. BScHuman Resources Director.

THOMAS ANDERSSON1953. MSc engineering. Head of Quality Assurance.

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VEHICLE/ROLLING STOCKRail-bound vehicles such as engines, carriages/wagons, engine coaches and vehicles used for track work.

OWNER (OF ROLLING STOCK)A company that owns and uses rolling stock or leases it out to an operator.

INDUSTRIAL MAINTENANCEMaintenance of machinery and equipment for the industry.

COMPONENT MAINTENANCEPreventive and remedial maintenance of components.

CONTRACT MANAGERThe person responsible for ensuring that contracts with customers are conducted and fulfilled in line with terms andconditions, and to the customer’s specifications.

ACCOUNT MANAGERResponsible for EuroMaint’s customers by ensuring that cus-tomers’ views, wishes and requirements are known in EuroMaint’sorganisation. The account manager is also in charge of ongoingcontacts, and ensures that customer-oriented activities are co-ordinated in a way that results in the best possible service.

REGIONAL TRANSPORT COMPANYA company owned by one or more transport principals/authorities, with a remit to procure transport services.

SOURCING & SUPPLYProcurement, warehousing, distribution and delivery of materials.

SERVICE CO-ORDINATIONThe co-ordination of transport services by operators/customers.

REFURBISHMENTRebuilding and renovation of rolling stock and components,vehicle modification and alteration of a component’s statusand performance.

OPERATORA company that provides rail services in agreement with transport purchasers.

HEAVY MAINTENANCEPreventive heavy maintenance and repairs.

RAIL INDUSTRYCompanies and organisations with operations related to rail-bound passenger or freight transport.

AVAILABILITY CONTRACTA tailored full-service contract based on a fixed price per vehiclekilometre. Such contracts entail incentives and penalties linkedto key targets agreed in advance with each customer.

TRANSPORT PRINCIPAL/AUTHORITYResponsible at regional level for local and regional scheduledservices, with a remit including planning and procurement ofpassenger transport services.

LIGHT MAINTENANCEPreventive and remedial light maintenance.

TRAIN MAINTENANCETraffic related maintenance of rolling stock and related components, expendables and replacement items.

Below are definitions of the terms used by EuroMaint.

GLOSSARY

DESIGN AND PRODUCTION: Collaboration between EuroMaint AB and Care Of, Västerås, Sweden.

PHOTOGRAPHY: Lasse Fredriksson, Anders Roth, Kasper Bonnevier Dudzik, Getty Images and archive photos from EuroMaint AB.

REPRO: Turbin, Västerås, Sweden. PRINTING: Arkpressen, Västerås, Sweden.

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ADDRESSES

HEADQUARTERS:

SOLNAEuroMaint AB(headquarters)Box 1555SE-171 29 Solna, SwedenVisiting address:Svetsarvägen 10

EuroMaint AB (branch)Knutpunkten 14SE-252 78 Helsingborg,SwedenVisiting address:Järnvägsgatan 10

FACTORIES AND

WORKSHOPS:

GÄVLEEuroMaint ABLötängsgatanSE-801 31 Gävle, SwedenVisiting address:Lötängsgatan

EuroMaint ABBangårdsgatan 8SE-781 71 Borlänge,SwedenVisiting address :Bangårdsgatan 8

GÖTEBORGEuroMaint ABBox 36 136SE-400 13 Göteborg,SwedenVisiting address:Partihandelsgatan

EuroMaint ABBox 37SE-571 21 Nässjö, SwedenVisiting address: Gölgatan

LULEÅEuroMaint ABKontorsgatan 37SE-993 42 Luleå, SwedenVisiting address:Kontorsgatan 37

EuroMaint ABLokstallsvägen 2SE-972 45 Luleå, SwedenVisiting address:Lokstallsvägen 2

EuroMaint ABParkgatan 5SE-852 29 Sundsvall,SwedenVisiting address:Parkgatan 5

EuroMaint ABVästra Järnvägsgatan 8SE-911 34 Vännäs, SwedenVisiting address: Västra Järnvägsgatan 8

MALMÖ EuroMaint ABBox 124SE-201 21 Malmö, SwedenVisiting address:Carlsgatan, infart 6

EuroMaint ABBox 3503SE-200 22 Malmö, SwedenVisiting address:Södra Bulltoftavägen 51

EuroMaint ABSödra Oscarsgatan 2SE-582 73 Linköping,SwedenVisiting address:Södra Oscarsgatan 2

STOCKHOLMEuroMaint ABVäxlarevägen 29SE-171 63 Solna, SwedenVisiting address:Växlarevägen 29

ÅMÅLEuroMaint ABBox 302SE-662 27 Åmål, SwedenVisiting address:Västra Bangatan 2

ÖREBRO EuroMaint ABBox 1502SE-701 15 Örebro, SwedenVisiting address:Södra Grev Rosengatan 1

EuroMaint ABBox 1403SE-701 14 Örebro, SwedenVisiting address: Södra Grev Rosengatan 1

EuroMaint ABLokvägen 2SE-694 35 Hallsberg,SwedenVisiting address: Lokvägen 2

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EuroMaint AB P.O. Box 1555, SE-171 29 Solna, Sweden

Phone: +46 (0)8-762 51 00 Fax: +46 (0)8-762 32 05 E-mail: info@euromaint.se www.euromaint.se

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