VR in brief Annual net turnover

EUR 1,139.9 million Personnel 14,400 Total freight carryings 49 million

tonnes Passenger journeys 73 million Track construction and

maintenance EUR 231.8 million

The incorporation of VR 1st of July, 1995

Fundamental question: the separation of infrastructure management and operative business dealings

Lessons learned: the model works!

Business environment

VR Group

Personnel vs. transport volumes

Market shares in passenger services

Market shares in public transport

Market shares in freight services

The Finnish rail network Length of rail network

5,850 kilometres For passenger and freight

transport 3,976 kilometres For freight transport

1,873 kilometres Electrified line 2,400 kilometres Remote-controlled line

2,200 kilometres Rail transport operations

in 371 locations

VR’s development goals In passenger service

– Reduce long-distance journey times

– Broaden commuter services in greater Helsinki

– Purchase rapid electric train units and new commuter trains

In freight service– Strengthen role as main

freight carrier for Finnish industry

– Strengthen role as carrier to the East

– Develop total logistical solutions

VR Passenger Services Safe, environmentally

responsible public transport carrier

Approx. 60 % of Finland’s public transport (journeys more than 75 km long)

260 long-distance and 850 commuter train services daily

VALI 2012 – National Passenger Transport System

VR Cargo’s international transportation Approx. 42,6 % of total freight

carried Only EU country to share same

track width as Russia and CIS countries

Long experience of working with Russian railways and authorities

Volumes of freight (million tonnes)

1999 2000 2001 2002 2003

Domestic 23,2 24,0 24,0 24,7 25,0

East 12,9 12,7 12,7 12,6 14,4

Transit 2,8 2,7 4,0 3,5 3,2

West 1,0 1,1 1,0 0,9 1,0

TOTAL 40,0 40,5 41,7 41,7 43,5

Consolidated Profit and Loss Account

(1 000 €) 2002 2001Net turnover 1 139 936 1 150 873Change in stocks of finished goods and work in progress -2 016 -1 351Production for own use 33 084 28 738Profits from associated companies 184 223Other operating income 8 814 11 783Materials and services 310 481 314 223Personnel expenses 581 801 569 833Depreciation 114 419 109 526Other operating expenses 146 520 147 636Expenses, total 1 153 221 1 141 219Operating profit 26 781 49 047Financial income and expenses 10 602 12 258Profit before extraordinary items and taxes 37 383 61 306Extraordinary expenses -2 510 0Income taxes -10 994 -17 685Minority intrest -2 223 -1 647Profit for the year 21 656 41 974

EU Railway Rules (I)

Former railways separated into infrastructure management and transport business

Allows marginal pricing on networks Therefore

– optimised network output (higher volumes)– but subject to budget money and political network

decisions Opening up the network for competition

– now freight, but passenger services?

EU Railway Rules (II)

Finland has– a different track gauge and– an isolated geographical position to other EU

countries– well-operated railway link to the CIS Network

In the EU policy the benefits of technical harmonisation are limited and the Finnish rail transport market is an enclave