Special events newsletter No. 2/2017 Transport & Logistic Contents: Foreign Sales up Almost 21% | Plans Ahead for 2017 | Effective Day-to-Day Assistance to Keep Your Stock on Track | Ptuj Centre Boosts Maintenance Capacities Modernisation of Workshop Capacities at Dobova Centre | SŽ – VIT Now Certified to Knorr-Bremse Brake Maintenance | SŽ – VIT at InnoTrans | Customer Satisfaction Measurement | New Projects 2015-2017 2 CEO’s Foreword Dear Visitor! Two years have gone by in his is a unique occasion to have a a flash, and I am happy to pleasant chat with you amidst the bustling of the fair to exchange have another opportunity of T information and talk about your wishes and introducing our company at expectations, as well as any issues that might this high-profile transport and have come up in your day-to-day business. logistics event. Together with the If you are new to SŽ - VIT, let us discuss the freight operator SŽ Cargo, we options for teaming up and how you could benefit from our services. After all, this is also always look forward to coming a venue where corporate meets personal. back to Munich so we can meet Dušan Žičkar, CEO our partners in person and build Understanding what you need, we grow and develop with you, creating partnerships that new partnerships. last. From VPI- and ECM-compliant wheel-set renewal and freight wagon maintenance to servicing of diesel and electric locomotives – we work hard to deliver on our promises, steadily spreading our good name across Europe. Starting with Austria, we have since won the trust of rail carriers and keepers in Germany, Switzerland, France, Italy and the Netherlands. Because we value the trust you place in us, we strive to improve our know-how at every step through quick response, flexibility, continuous training, certificates and production updates, and have our results to show for it − almost a fifth of our revenues from maintenance are presently generated from services to foreign customers, with even greater goals set ahead. No matter the time and place, one thing is sure - a satisfied customer is a job well done. I hope you have a great time at the fair, and also want to wish much success to all the exhibitors. 3 Bussiness Result 2016 Foreign Sales up Almost 21% The previous operating period hroughout the year under review, we successfully provided the ended on the positive note for required levels of rail vehicle availability and supplied traction T and technical services to our biggest partners in the SŽ Group, SŽ - VIT – the company reported SŽ Cargo and SŽ Passenger. We supplied rail maintenance services to an operating result of €307 companies in the SŽ Group, as well as to non-SŽ customers. In 2016, thousand, with operating foreign sales broke the €10m mark – most were generated by wheel- set services, with freight wagon maintenance coming in second – and revenues and expenses accounted for almost 20% of the sales generated from maintenance totalling €113.8m and €113.4m, services, or almost 10% of total sales. respectively. Revenues from The 2016 witnessed our breakthrough in locomotive maintenance sales in 2016 show a year-on- supplied to foreign keepers for units operating on the Slovenian year increase of 8.7%, in which network. To make sure locomotives leased-out to carriers are fit to run in real time, access to local workshops is as crucial as low vehicle foreign sales accounted for more downtime and quality maintenance when it comes to selecting the right than a fifth, or 20.9%. maintenance supplier. Through a full-service approach and custom- made solutions, we have demonstrated our ability to respond to foreign keepers’ servicing needs and successfully established our status as a reliable and trust-worthy partner in this field of rail maintenance. Good results were also reported in sales of technical services to rail carriers throughout the Slovenian network and at border points, largely owing to our 24-hour technical assistance. The projects completed in the past year showed that customers were satisfied with our service, and are the proof of our growing competitiveness and positioning on the European market. 4 Looking Ahead Plans Ahead for 2017 This year started off with work in he main portion of our portfolio is dedicated to providing a full swing and production almost complete support to Slovenske železnice (SŽ) when it comes to T maintenance of rolling stock and their components. In addition, at capacity. Regular customers we continue to offer tailor-made maintenance solutions and supply that have been with us for long services on request to our customers outside SŽ Group, such as VPI- years have chosen to continue compliant overhauls of freight wagons and wheel-sets, which filled the capacities in both Dobova and Ptuj Centre. their support in 2017, deepening Our biggest potential currently lies in increasing control checks and our existing collaboration and minor repairs of freight wagons and electric locomotives, as well as bringing the partnership to the on-site train repairs. We have started boosting our market presence next level. Despite things being and brand recognition in these fields to bring them on par with our as busy as ever, this does not presence in wheel-set and freight wagon maintenance. stop us from being active on the As we further enhance our cooperation with both foreign customers and SŽ, we recognise the need for continuous improvement in the sense European market, where we are of optimising work processes, ensuring investment in machinery and always on the search for new equipment, and staff training. To this aim, several investment projects business opportunities. were carried out in the previous year to improve the conditions of work and secure the assets necessary to supply one-stop-shop solutions at the highest quality possible, and we intend on continuing this trend in 2017, as well. Having purchased a floor mounted bogie rotator for Class 541 locomotives, we are now able to supply this type of maintenance at our own workshop. Moreover, Ptuj Centre has recently been upgraded to offer wheel-set shrink-fitting for Pendolino trains, and is one of the few workshops in Europe with the facilities, skills and equipment necessary to handle un/mounting of compact tapered roller bearing units (CTBU). The shop has also received an additional wheel-set sandblasting booth and a designated zone with rails where incoming wheel-sets are deposited to, and has a maintenance hall and testing device for drive units in the works due for completion this year to boost our overhaul services. Upgrades were also made at Dobova Centre, which opened a new entrance-exit hall with an illuminated passageway, a new wagon sandblasting booth, and a new slack adjuster maintenance hall with a certified crew of technicians on the job. These improvements will help us offer a more complete service at higher quality, in turn enhancing our presence on the greater European market. Much like the year before, we will work hard to complete our orders, honour our contract obligations and meet customer's needs in maintenance. In particular, we will do our best to again demonstrate we are a partner you can count on, offering services as reliable as they are quality. Almost every day, we host visits from our customers and independent certification authorities for annual certification, showing we're on the right track, and must keep up the efforts to further improve. 5 VIT keeps your railway vehicles FIT Effective Day-to-Day Assistance to Keep Your Stock on Track The policy of opening up the rail market has become widespread in Slovenia some years ago, and the number of companies involved in rail freight on the Slovenian network has been growing steadily since, now typically including not only rail carriers but also loco- motive and wagon keepers who rent their vehicles out to operators without their own rolling stock or with a need for additional stock to meet market demands. To maintain rail safety and ensure low journey times from departure to arrival, vehicles making up a train need to be in top shape, which calls for quality in-house routine maintenance along with minor repairs on-site. This need for day-to-day technical assistance has turned into a market opportunity for SŽ - VIT that was first recognised in freight wagon maintenance, and recently also in diesel and electric locomotive servicing. 6 reventive and corrective maintenance at SŽ - VIT is supplied from several places across Slovenia in Pa way which covers the entire rail network, with priority given to the busiest lines. Freight wagons are serviced at Koper, Divača, Zalog, Dobova, Ptuj and Tezno, while Maribor and Ljubljana as well as Divača SERVICES ON-SITE COMPRISE take care of diesel and electric locomotives. Small THE FOLLOWING: repairs on wagons are done on-site without breaking the train consist, while major repairs and overhauls are • Technical wagon inspections at performed at a specialised workshop in Dobova. designated facilities, Workshop servicing is provided according to the wagon type, age, load, and the manner of un/loading and • On-request technical inspections and shunting. It typically includes various brake repairs, call-out servicing outside designated replacement of brake blocks, as well as repairs of axles, steps, walls, valves, etc. Each wagon is handled facilities, on a case-by-case basis; after inspecting the vehicle condition, we consult with the customer to decide on • Minor repairs on wagons without the final scope of repairs. breaking the train consist, Services supplied on-site include inspections of wagons’ • Securing of loads without detachment mechanical condition and accessories to ensure fitness to run and maintain both safety and quality of from the consist, transport.