Assessment of business risks and uncertainties

The VR Group is carrying out the most ambitious investment programme in rolling stock in its entire history. This requires greater profitability and better cash flow than before from its business activities. VR Group's cost structure is largely fixed, which makes it difficult to implement rapid changes.­
 
In 2013 VR Group announced a target of annual savings of about M€ 40 in personnel costs, or about 8 per cent, by 2016. The savings will be achieved by improving working efficiency and through wide-scale future retirement. Achieving this efficiency target is vital for the Group's finances and its future.­
 
The most significant risks affecting logistics are the structural changes occurring in the forest industry and their impact on production volumes in Finland, as well as competition in Russian traffic after the contract for combined transport ends. In addition, any delays in implementing planned investments by the mining industry, or the cancellation of these, will affect future prospects.
Opening up commuter traffic to competition will change business models and require efficiency improvements. Preparing for competition is a key part of the strategy for passenger services.
 
The key risks in infrastructure engineering focus on increased competition in construction and maintenance, as well as dependence on one large customer. Tougher competition is reflected in contract pricing, and to maintain competitiveness, the pressure on the cost structure is considerable.
 
Safety is at the core of VR's operations. VR Group seeks to minimize the risk of accidents in cooperation with the Finnish Transport Agency and business customers, and by creating a proactive, preventive safety culture. There have been no major rail accidents since the end of the 1990s.
 
Finance risks are limited at the moment, apart from the securities market risks relating to VR’s pension fund, which has major investment assets. The company has protected itself against normal accident risks with insurance cover.