Trains Are a Prerequisite for a Sustainable Sweden

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Trains Are a Prerequisite for a Sustainable Sweden We bring people closer together, every day 2016 Annual and Sustainability Report Contents Significant events in 2016 1 SJ — a sustainable company 2 7 keys to the future of rail 4 CEO’s statement 10 Operating environment and market 12 Stakeholders 16 Business mission and business model 18 Strategy 20 Customer offering 22 Chairman’s statement 24 Annual Report Directors’ Report 26 Responsible management 29 SJ’s scorecard 30 Employees 31 Partnership and Resources 33 Society 34 Customer 36 Process 37 How we generate punctuality 38 Finance 39 Proposed remuneration policies for senior executives 40 Appropriation of profits 40 Multi-year summary 41 Corporate Governance Report 42 Board of Directors 47 Executive Management 48 The Board’s internal control report 49 Financial statements 50 Accounting policies 61 Notes 65 Auditors’ Report 88 Accounting policies — sustainability 91 Auditors’ review 92 Definitions and glossary 93 About the Annual Report and Sustainability Report Disclaimer The Board of Directors and Chief Executive Officer of SJ AB (corporate This is a summary of SJ’s 2016 Annual and Sustainability Report , registration number 556196-1599) hereby present SJ’s annual accounts and comprises selected parts of the Report. While every care has and sustainability report for the 2016 financial year. The statutory been taken in the translation of this Report, readers are reminded annual accounts, including the Directors’ Report, which have been that the original and complete Annual and Sustainability Report subjected to an audit are found on pages 26–41 and 50–87. 2016, signed by the SJ Board, is in Swedish. The Responsible management chapter is audited by an external audit- ing firm; refer to the assurance report on page 92. The sustainability report in accordance with the G4 Guidelines of the Global Reporting Initiative (GRI) is only available in Swedish. Significant events in 2016 X2000 undergoes modernisation SJ turned 160 As a part of modernising Sweden’s fastest train, the X 2000, SJ has tendered At the end of the year, SJ cele- a contract for the creation of an entirely new interior for the X 2000. All X 2000 brated the anniversary of the trains will be modernised and delivered by 2020. Read more on page 23. first passenger train chugging along in Sweden 160 years ago. The first journey was from Gothenburg to Jonsered and passengers were transported at speeds of up to 30 km/h engendering a feeling of hurtling along according to pas- sengers’ later descriptions. Much has hap- pened since. Despite competition from other modes of transport, such as air and road travel, trains continue to be the most comfortable and climate-smart alternative. Sustainability and Ethics Committee established SJ’s Board of Directors has formed a Sustain- ability and Ethics Committee. The Commit- tee is a formalisation of the Board’s working group that has been managing sustainabil- ity and ethics issues for several years. SJ acclaimed for sustainability At the Schibstedt Gala of Sweden’s best companies in 2016, SJ won the first prize under the category of “Benefit to Society”. SJ also finished in eighth of 265 in the customer survey, Sustainable Brand Index™ 2016. SJ won the “Train, bus and taxi” category. During the year, SJ was also nominated as Sweden’s greenest brand, jointly with Coop, according to a survey conducted by Differ. Upward travel trend for SJ Train travel (measured in passenger kilo- metres) continued to increase in 2016. SJ AB and SJ Norrlandståg reported an increase Tendered services comprise a cornerstone of SJ’s business of two percent, in comparison with preced- In June, SJ began operating the Västtågen at Kinnekullebanan (Kinnekulle ing year. In 2016, 82 percent of SJ’s tickets Line), after having secured the contract in 2015. In December SJ also com- were sold through digital channels menced operating Tåg i Bergslagen and several lines in Mälardalen (sj.se, the SJ app and ticket machines). A under contract with MÄLAB. In early 2017, the agreement with the Swed- new sj.se website and app were launched ish Transport Administration on night-train services for upper Norrland was in 2016, after thousands of customers con- extended, which means that SJ will continue to operate trains from 2018 to tributed their opinions during the devel- 2020. opment process. During the year, all ticket In August, SJ’s partly owned Botniatåg discontinued passenger traffic machines were also replaced and seasonal operations on behalf of Norrtåg when the agreement expired. In December, releases were introduced to help custom- SJ’s wholly owned subsidiary, Stockholmståg, also discontinued the opera- ers find cheap tickets. tion of commuter trains in Stockholm County when the agreement expired. Read more about financial events during the year in the Directors’ Report on page 26. A selection of 2016 news items for our customers and passengers is presented on pages 22–23. SJ’S 2016 ANNUAL AND SUSTAINABILITY REPORT 1 SJ — a sustainable company SJ is a Swedish travel partner that offers sustainable train travel, both independently and in collaboration with others. At year-end, the Group had 4,500 employees and is expected to have sales of approximately SEK 7.5 billion in 20171. As the market-leading train operating company, SJ links Sweden together, and opens the doors to Scandinavia’s capitals. Every day, 130,000 people choose to travel on one of the 1,100 departures from 275 stations. SJ is owned by the Swedish state and is tasked with operating profitable passenger rail services. Vision: SJ — to rely on and look forward to. Narvik Mission: We bring people closer together, SJ shall offer the market’s most every day customer-oriented and sustain- able travel, both independently From Narvik in the North to Copenhagen in the South, and in collaboration with others. This from Stockholm in the East to Oslo in the West — SJ can means that we are to be the leaders be found in many locations. This creates opportunities when it comes to fulfilling the customer for people to live and work or study in different places needs — while ensuring that social, and to travel in a simple and sustainable manner. Train environmental and economic travel is by far the most climate-smart transport alterna- responsibility are all reflected in tive. These are some of the reasons that so many people our entire organisation. choose to travel with us. The presentation below is a selection of the lines that we operate independently and under contract with regional and national government agencies. Core Umeå values: Stockholm–Umeå–Luleå–Narvik Reliable, Simple, Caring SJ operates high-speed trains to and Joyful Sundsvall and Umeå and night-train services to Umeå/Luleå/Narvik. Tåg i Bergslagen Stockholm–Oslo Several improvements have been Increasing numbers of people wish to implemented since we took over the rail travel on the high-speed train between services in December 2016. These include the two capital cities. Consequently, in shorter waiting times when switching December 2016, we increased services between TiB trains and SJ trains, to five daily departures. and lower average prices on tickets. Oslo Stockholm–Gothenburg Gothenburg–Malmö– With Sweden’s fastest train, the X 2000, travelling between Stockholm and Copenhagen Stockholm Gothenburg becomes a climate-smart The introduction of high- and viable alternative for studies, work speed train connections with and leisure. the X 2000 and SJ 3000 on the Gothenburg–Malmö line has brought west coast residents Stockholm–Uppsala closer to the Öresund region. Gothenburg The trip with SJ between Stockholm and Uppsala is fast, comfortable and reliable. Västtågen In 2015, confidence in SJ to Regional trains i Mälardalen continue operating Västtågen SJ is operating certain lines under contract was renewed. In 2016, there with MÄLAB. Together with the train ser- was an improvement in both vices that we provide independently, pas- Copenhagen punctuality and the share of sengers have many departures to choose satisfied passengers. Malmö from using the same monthly pass. 1) See expected future developments on page 26. 2 SJ’S 2016 ANNUAL AND SUSTAINABILITY REPORT Our employees Absence due to illness Leadership index SJ AB Performance index SJ AB 6.6% 68 75 (6.5) (68) (75) Our customers and passengers Traffic-safety index Punctuality for SJ AB, SJ Norrlandståg SJ AB’s long- Punctuality for and SJ Götalandståg distance trains SJ AB’s regional trains 96.3 83% 90% (96.4) (82) (89) Customer satisfaction Customer satisfaction Passenger satisfaction index SJ AB index Stockholmståg index SJ Götalandståg 70 68 94 (66) (66) (92) Our environmental efforts A journey for a single person by the X 2000 between Stock- holm and Gothenburg generates carbon emissions Environmental index corresponding to discharges from half a millilitre of petrol 76 1/2 millilitre (73) Comparative figures in parenthesis pertain to the full year 2015. SEK 390 million SEK 188 million 4,427 invested by SJ in 2016, primarily distributed by SJ to the owner in 2016 employees in the SJ Group in trains and IT systems at 31 December 2016 Key figures Net sales and operating profit, SEK million 2012 2013 2014 2015 2016 10,00010000 1,0001000 Net sales, SEK million 8,504 9,023 9,065 9,052 9,336 757,50000 750750 Operating profit, SEK million 467 298 568 625 837 Operating margin, % 5.4 3.3 6.2 6.9 8.9 5,0005000 500500 Profit/loss for the year, SEK million 471 220 460 471 650 Return on operating capital, % 8.6 5.7 11.5 13.2 20.0 2,5002500 200250 Net debt/equity ratio 0.14 0.04 –0.07 0.19 0.0 00 00 Investments in tangible and intangible assets, 2012 2013 2014 2015 2016 SEK million 1,116 448 828 525 390 Net sales Operating profit For definitions, refer to pages 99–100.
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