Railcare Group AB (publ)

Hi! This morning we released our report for the fourth quarter. We are delivering a stable report with continued growth. Before I go into the business itself, I would like to start by telling you that we have changed and adapted our training. This applies to our contracts on some of our rents at Lok, where we have adapted training from hiring capacity to training it as leasing. This means that the movement result is affected positively at the same time as the finance net has been negatively affected. In the balance sheet, we have booked both the access and the debt based on this leasing. We will now present this from the entry of these contracts. This means that we make this change retroactive so that the comparison periods that we report in the report are now calculated. I'm going to start by giving you a short overview of our business. Railcare is mainly operated in three different business areas. We do entrepreneurship, transport, as well as machinery and technology. Through entrepreneurship, we use our self-developed vacuum machines, where we effectively perform, for example, ballast change, cable reduction and snow removal along the railway. In addition to this, we also carry out the renovation of concrete and stone trusses on both roads and railways. In the transport business, we carry out, among other things, transport of iron ore and iron ore concentrate for LKAB's and County Cyanon's calculation. We also carry out what we call entrepreneurial transports, which is an assignment where we transport materials in connection with the track section, for example pallets, slabs and rails. Vi har även ett beredskapsdrag för Trafikverket där vi tillhandahåller lok och lokförare för öjning av fordon på spåret i händelser av olyckor eller där av annan anledning blivit stopp på spåret. I vår maskinverkstad bygger vi egenutvecklade maskiner och utför underhåll på vagnar och andra maskiner. In recent years, we have focused on the development of our battery-driven maintenance machines that we will use in our own business, while we have now increased the focus on the sale of machines to external customers. At Lokverkstan in Långsele, we carry out greater work in terms of lifetime extension of Lok, but also running service maintenance, as well as installation of, for example, table equipment. At Kaunis Iron's recharging station in Pitkejärvi, we have a simpler locomotive workshop where we carry out maintenance on the locomotives we use for the Kaunis Iron and LKAB missions. Our market on the railway looks very interesting. The debt on Swedish railways is very large and the need for a well-functioning and sustainable railway infrastructure is crucial for Swedish industry's competitiveness. Transport on railways is expected at the same time to increase by 50% by 2040. This means that maintenance needs to be more efficient to minimize the impact on rail traffic. The membership to NATO also places increased demands on the railways' robustness and reliability. The railways are therefore focused on simple and natural explanations. In mid-October, we signed a five-year contract with LKAB Malmstransport for the transportation of their goods. The new contract applies during the period 2025-2029, with an option of another three years. This is a quota on which delivery security is prioritized by customers, where the logistics chain is of decisive importance for profitability. To do this, we have signed a long agreement with the Trafikverket for snow mining. This is a six-year contract that includes two option years. The value of this contract goes up to approximately 350 million. The snow contract is very important to have deposits during the winter and spring. This is a prerequisite for the entrepreneurial business to be profitable throughout the year. These contracts lead to long-term growth and a good reason for continued growth in order to achieve our financial goals for 2027 with 1 billion in revenue and 13% in margin. We also see an increased demand from the farm industry for the background of the change that is happening in the industry. This applies to the new ERTMS signal system. As a part of this, we are now looking at the possibilities for long-term development of the plant, and Railcar therefore has agreed to sign a contract to acquire the company that owns the property where the plant is located. We are currently analyzing the need and scope of a possible future investment in the plant. Right now, we are working on creating a detailed plan, and this work is expected to take place throughout 2025. The net turnover during the fourth quarter of 2024 increased by 5% to 157 million compared to the corresponding quarter last year. Entrepreneurship Sweden is a segment that contributes positively to the increase through more carried out maintenance work, where the mild introduction in winter has meant that work has been able to be carried out far into the fourth quarter. Den något lägre marginalen är en följd av att vi anpassar och utökar organisationer för att möjliggöra fortsatt tillväxt. Vi har bland annat rekryterat personal för det nya uppdraget med röjningslok i transportverksamheten, men vi stärker och utökar nu även ledningsfunktioner för att vara rätt rustade för framtiden. For the entire year of 2024, the net turnover increased by 12.6% to 635 million compared to the previous year. Entrepreneurship Sweden and Transport Scandinavia increased the turnover, while the segments of entrepreneurs abroad and machinery and technology provided a lower turnover compared to the previous year. And the turnover results for the entire year of 2024 increased to 66 million. The movement margin was 10.4% compared to 12.5% in the previous year and the lower movement margin can largely be explained by increased costs to increase the increased demand for the company's services. The number of employees at the beginning of the year increased to 187 and the board will now also propose to the council to decide on a division of 70, which is the same level as in the previous year. Tittar vi på rullande fyra kvartal och utvecklingen där så är tillväxten fortsatt stabil. Utvecklingen går stegvis och just nu är vi i en fas där organisationer byggs för vår resa de kommande åren. Att vi bygger för framtiden märks även på rörelsemarginalen som är något lägre än i början av året. Men där ser vi att de ökade kostnaderna främst beror på att verksamheten anpassas för nya uppdrag, exempelvis Ragnarsloken, och för att möjliggöra fortsatt tillväxt. The new and long contract of Seende Ragnerslok will start successively over the coming year. Under 2025, the turnover will increase by about 40 million SEK. And then when all missions are in effect during 2026, the annual turnover increase will increase to 80 million SEK. The net turnover in the segment entrepreneurial Sweden rose in the fourth quarter to 72 million, the corresponding increase of over 20% compared to the corresponding period the previous year. The turnover increase in the fourth quarter is mainly due to the fact that more entrepreneurs are working thanks to the more favourable relationship, which is largely due to the mild conditions in the winter. The turnover also increased compared to the previous year, up to 9.4 million. The volume of work in the lining business has been lower than before, compared to the previous year, despite the mild introduction in the winter. This is partly explained by lower demand from customers, but also that it is sometimes difficult to plan a job in the beginning of the winter. The net turnover in the segment and entrepreneurship abroad rose to 5 million, which is almost 40% compared to the corresponding quarter last year. The turnover was also lower than the previous quarter and rose to minus 2.7 million. Precisely as in Sweden, the maintenance demand is large in England, but disposed materials are lower and they are not used as efficiently either. Unfortunately, we have seen lower volumes for us suppliers such as Fyde. The net turnover in the transport segment in Scandinavia decreased by 2% during the fourth quarter of 2024 compared to the corresponding quarter last year and rose to about 90 million. The turnover was 5.8, which was lower than the previous year. This is partly explained by the lower volume of entrepreneurial reports during the quarter, partly by the fact that we now have higher costs due to the fact that we are now preparing for the new projects and to enable continued growth in the coming years. The cost increase we see is primarily personnel costs and related to the machine park. The net turnover of segment machinery and technology decreased during the fourth quarter compared to the previous year, up to 14.5 million. The operating cost was slightly higher and was minus 0.1 million SEK. The focus of the company in Släftehamn is to now finish building the third underground machine with electricity and battery power. This is the new machine with a power supply that allows both power and battery charging. When we talk about the segment, I also want to inform you that there will be a change in the segment reporting by the beginning of 2025. Entreprenad Sverige and Entreprenad Utland will be reported together within the Entreprenad segment. Transport Scandinavian will be reported under the Transport segment. And Lokverkstaden i Långsö, which has previously been in the Transport segment, will be reported in the Machine and Technology segment starting in 2025. Looking forward, we can state that these new contracts with both extension of LKAB and snow mining projects for Trafikverket gives us a very good reason for continued growth. We will also now during the year, as we have mentioned, roll out the new mining boats, a total of six in the coming year, where all six are in operation from January 1, 2026. Vi har också ökat fokus på vår maskinförsäljning, dels för att sälja våra egenutvecklade vakenmaskiner, men även genom det värde vi har byggt upp i form av erfarenheter och kompetens kopplat till batteriteknik. Med det så vill jag tacka för intresset av denna presentation. Vill ni läsa hela presentationen så finns den att läsa på vår hemsida www.railcare.se. Tack så mycket!