VR’s Business Review 1 January–31 March 2025: Profitability improved significantly

VR’s Business Review 1 January–31 March 2025: Profitability improved significantly

VR-Group Plc, interim report, 7 May 2025 at 12:15 EEST

VR's profitability improved clearly in the first quarter. Profitability was boosted by a more favourable business environment than in the previous year and an increase in travel volumes. Profitability was also improved by determined profit improvement measures in line with the strategy.

January–March 2025 (Q1) in brief:

• The Group’s net sales increased by 3.9% to EUR 302.1 (290.9) million. Net sales excluding completed corporate acquisitions, increased by 6.9% and amounted to EUR 293.7 (274.7) million.
• Comparable operating result (EBIT) was EUR 21.9 (-17.1) million or 7.2% (-5.9%) of net sales.
• Operating result (EBIT) was EUR 23.9 (-15.0) million, or 7.9% (-5.2%) of net sales.
• Cash flow from operating activities was EUR 56.5 (35.1) million.
• The number of journeys on long-distance trains in Finland increased by 7.7%, to 3.8 (3.5) million journeys.
• Railway transport volumes in freight traffic increased by 46.9% and amounted to 6.9 (4.7) million tonnes.

Key figures	1-3/2025	1-3/2024	1-12/2024
Net sales, M€	302.1	290.9	1,294.7
Comparable EBITDA, MEUR*	64.0	29.6	271.6
% of net sales	21.2	10.2	21.0
Operating result (EBIT), MEUR	23.9	-15.0	76.1
% of net sales	7.9	-5.2	5.9
Comparable operating result (EBIT), MEUR*	21.9	-17.1	84.6
% of net sales	7.2	-5.9	6.5
Net profit/loss for the period, MEUR	17.1	-14.6	48.6
Cash flow from operating activities, MEUR	56.5	35.1	226.9
Investments, MEUR	38.1	53.7	234.1
Capital invested at the end of the period, MEUR	1,825.0	1,803.3	1,817.9
Comparable return on capital employed (ROCE), %*	5.9	-3.3	5.2
Comparable return on equity (ROE), %	4.7	-5.3	4.7
Net interest-bearing debt at the end of the period, MEUR	387.8	350.7	443.4
Gearing, %	30.4	27.9	35.1
Employees on average, FTE	7,325	8,184	7,919
* VR Group presents comparable EBITDA and operating result (EBIT) as an alternative performance indicators. The aim of comparable performance indicator is to improve comparability between reporting periods.
The calculation formulas for the figures are disclosed in VR Group’s Annual Report for 2024.
*Segment-specific comparable return on capital employed (ROCE) % is calculated using comparable operating result as the numerator. The segment-specific key figure differs from the group's key figures because VR does not report financial items on a segment basis
This report is unaudited.
The comparative figures in brackets refer to the corresponding time period in the previous year, unless otherwise stated.

CEO Elisa Markula:

"In the first quarter of 2025, we continued to successfully implement our strategy, and our profitability improved in all businesses. Our net sales grew by 3.9%. Excluding the impact of acquisitions, comparable net sales grew by 6.9%. The Group's comparable operating result improved clearly and was EUR 21.9 (-17.1) million. In the previous year, the business environment in the beginning of the year was particularly challenging. Severe winter conditions and exceptional track damage caused significant additional costs, and political labour disputes had a negative impact of almost EUR 20 million on the result at that time. The operating environment was favourable this year supporting our performance.

In the first quarter, domestic long-distance train travel continued to grow, especially in terms of leisure travel. The customer experience measured by the Net Promoter Score (NPS) was at an all-time high of 62 (32). Passengers have assessed the new train WiFi as an improvement and it is at a good level of 3.6/5. Due to the mild winter, there were exceptionally few traffic disruptions in the quarter. This supported the punctuality of long-distance trains, which was at an excellent level. In long-distance train traffic in Sweden, the track work that has begun on the Stockholm−Gothenburg route has a negative impact on VR Snabbtåg's travel volumes.

VR City traffic's net sales decreased clearly as a result of the expired contract-based public transport agreements. City Traffic’s result remained unprofitable due to the weak profitability of old, long-term contracts. VR actively participates in regional tenders in the city traffic market, several of which are still ongoing this year, especially in Sweden. New contracts won last year will start in Sweden at the end of this year.

VR Logistics improved its result clearly compared to the previous year. In the comparison period, logistics volumes and results were significantly negatively affected by political strikes and difficult winter conditions. Improving operations also enhanced the profitability of logistics. VR sold its road logistics business at the turn of the year and is focusing on rail transport.

We are focusing increasingly on our core businesses, passenger and freight transport. At the same time, we are actively supporting the goals of the government programme to increase competition. One of the most concrete measures is to establish a rolling stock company for publicly supported and competitive contract-based public traffic, which will transfer VR’s current contract-based public traffic’s fleet to this rolling stock company, which is 100% owned by the state. VR has also put additional rolling stock up for sale to other industry players.

Thank you to all our employees for your excellent work – this is a good sign that we can continue on our common journey towards a sustainable future-proof VR! We would also like to thank our customers for their trust to our services.”

Outlook for 2025

VR estimates that the Group's net sales in 2025 will decrease slightly compared to the previous year due to the sale of the road logistics business and the expired contract-based public traffic contracts in Sweden. The new contract-based public traffic contracts won in Sweden will not start until the end of 2025. 

The Group's comparable operating result is estimated to improve compared to 2024. The outlook is subject to uncertainties in the business environment due to the general economic development.

VR-Group Plc