Report of the Board of Directors 2015

Summary of the results and development of the NSB Group for 2015

  • Operating profit for 2015 was 2,814 MNOK (2,001 MNOK)
  • Profit before tax was 2,664 MNOK (1,597 MNOK)
  • Return on equity was 23.5 % (19.1 %)
  • Increased traffic volume and operating income from passenger train operations
  • Improved results from bus operations
  • Positive development in freight operations due to efficiency measures
  • Considerable gains from the development and sale of property
  • Punctuality in the passenger train operations marginally lower than target somewhat

Summary of results and development for the business areas

Passenger train operations

Passenger train operations are run by NSB AS and its subsidiaries NSB Gjøvikbanen AS and (in Sweden) Svenska Tågkompaniet AB.

Operating income from passenger train operations was 7,534 MNOK (7,087 MNOK), an increase of 6.3 % compared to the previous year. A significant part of the change stems from an increase in journeys by 5.7 % to 72.4 million. This is primarily due to increased train capacity and expanded services in Eastern Norway.

Operating profit was 1,208 MNOK (659 MNOK), an increase of 549 MNOK, due mainly to increased revenue. Operations in Sweden gave a profit of 9 MNOK (0 MNOK).

An adjusted and improved timetable was introduced in December 2015, building further on the major changes introduced in 2012. All these improvements have given customers in the eastern part of Norway and, from 2014, also around Trondheim and along the south coast, a better train service in terms of more departures, new trains and more seats. These changes have led to a 26 % increase in traffic volume over the last four years.

The procurement of new regional and local trains is going according to plan – 28 regional trains (type 74) and 43 local trains (type 75) are now in service in Eastern Norway. 81 new trains in total will have been delivered by the end of 2016.

Passenger train operations in Norway achieved a punctuality of 88.6 %, somewhat better than in 2014 but below the target of 90 %.

Bus operations

Bus operations are run by the parent company Nettbuss AS, 10 wholly owned subsidiaries and 8 partly owned companies. The Nettbuss Group operates in most counties in southern and mid-Norway. The Swedish operations are located mainly in the south west of Sweden. Both in Norway and in Sweden bus services are mainly on contract to municipal county authorities, but the group also offers express bus routes, tourist services and workshop maintenance.

The operating result was 172 MNOK (120 MNOK). The Nettbuss Group’s operating income for 2015 was 5,583 MNOK (5,907 MNOK), a decrease of 5.5 % from the previous year. The change in operating income was mainly due to a reduced stake in the Danish operations and changes in tender traffic during 2015.

The Scandinavian market for long distance express bus travel is characterized by strong competition from air and train services and from other bus companies. Even though development is fairly stable, there are large regional variations.

The Norwegian market for long distance express bus travel has changed in recent years. To address this, the Group has established and developed Nettbuss Ekspress as a separate brand for the company’s regional routes in Norway and Sweden, and thereby established Scandinavia’s largest express bus network. In 2015 production was adapted extensively to meet competition in this market.

Express bus operations in Sweden are growing and market share is increasing. Profitability is good, and the company is now the market leader for Oslo – Gothenburg – Malmø. In 2015 a new express route was started between Vesterås and Arlanda (Stockholm airport).

The company has taken part in several tenders in 2015. In Norway contracts in Aust-Agder and Elverum were not renewed, and the same will apply in Kvinesdal from 2016. Contracts for Sunnmøre, Glåmdalen, Grenland, Hønefoss – Oslo and Indre Nordmøre were won back while new tenders were won for Dalane and Jæren starting up in 2016.

In Sweden two tenders were won in the VästTrafik (Gothenburg) region, as well as in Østersund, both with start-up in 2016. In addition, operations in Lerum will start from July, delayed due to complaints from other bidders. Operations in Orust will be wound up.

The Nettbuss Group transported 110 (131) million passengers and drove 174 (190) million km in 2015.

Freight operations

Freight operations are run by the CargoNet Group. The largest share of the business is operating shuttle freight trains for containers and other intermodal platforms. CargoNet also operates dedicated customer train services for the transport of fuel and timber.

Container terminal operations are run by wholly owned subsidiaries, Rail Combi AS and Terminaldrift AS.

Operating income was 1,096 MNOK (1,032 MNOK) in 2015, giving an operating result of 89 MNOK (-90 MNOK). The improvement in operating profit came mainly from the positive impact of the restructuring program. This entailed both reductions in staffing, introducing competitive tendering in rolling stock maintenance, as well as sales of fixed assets.

The quality of railway infrastructure has again affected operations during 2015. Several lines have been closed for shorter or longer periods due to floods, landslides and other extreme weather conditions. In total 155 (128) trains had to be cancelled due to unforeseen problems with infrastructure. Operations in Norway have also been affected by increased competition from road haulage and other suppliers of cargo transport by rail.

Punctuality in Norway was 92 % (90 %) measured on delivery within 15 minutes, equalling our goal.

Train maintenance

Train maintenance is operated by Mantena AS, which is the largest supplier of maintenance services to train operators in Norway. The main activity is maintaining locomotives, wagons and passenger trainsets. In addition Mantena runs workshops for the maintenance of parts and components. The company also maintains and repairs equipment used on railway infrastructure in Norway. Mantena runs workshops in Oslo, Trondheim, Drammen, Skien, Bergen, Stavanger, Narvik and Bodø.

Mantena runs maintenance operations in Sweden through Mantena Sverige AB, and is an important partner in the company maintaining the Stockholm underground trains.

Mantena intends to meet future competition through efficient and reliable maintenance operations. The company’s competitiveness is a critical factor and over several years has introduced measures to meet ever increasing demands for efficiency and reliability. During 2015 Mantena won tenders for maintenance of heavy freight locomotives and wagons for CargoNet AS.

Operating income was 1,367 MNOK (1,367 MNOK) resulting in an operating profit of 51 MNOK (47 MNOK).

Real estate

The group strategy for real estate operations is to optimize development of real estate asset value with a view to sale of non-operational property, taking market opportunities and Group finance into account. Real estate operations should also develop and manage real estate properties to strengthen the transport business of the NSB Group. The NSB Group, by means of its real estate operations, aims to be the leading developer of transport hubs for public transport and freight transport by rail.

ROM Eiendom completed and sold an office building at Filipstad in Oslo in the spring of 2015, and a large plot of land has been sold in Bjørvika in Oslo. The Special Purpose companies are highly active and profitable. Real estate operations, which comprise just under 1 000 buildings and a property development potential of about 2 million square meters, achieved an operating profit of 1,307 MNOK (1,246 MNOK) in 2015. This positive result stems mainly from gains on property sales and unrealized gains from investment property.

About the NSB Group

Corporate governance

The Board of Directors has discussed and approved the statement regarding Corporate Governance that is included in the annual report. 


The NSB Group is one of Norway´s largest transportation groups. The parent company NSB AS is owned by the State of Norway, represented by the Ministry of Transport and Communications. The Group´s headquarters is in Oslo, while operations are spread throughout most of Norway, and in  parts of Sweden and Denmark.

The organisation

The Group consists of the following businesses

  • Passenger train: Passenger train operations and common group services
  • Bus: Bus operations
  • Freight: Freight train operations
  • Train maintenance: Maintenance and repair of passenger and cargo trains
  • Real estate operations: Operation and development of real estate

Goals and strategies

The NSB Group core business is passenger traffic by train and bus in the Nordic countries, freight transport by rail within and to/from the Nordic countries, development of transport hubs and ownership of strategic property close to stations and freight terminals. In addition, the NSB Group carries out operations closely connected to the core business.

The NSB Group aims to add value through developing, producing, marketing and selling safe and competitive passenger and freight transport in the Nordic countries and, based on group-owned property, to support urban development facilitating public transport.

The NSB Group shall

  • avoid injuries to people and damage to the environment
  • be the leading land-based transport company in the Nordic region
  • generate profit
  • satisfy customers
  • employ highly qualified and motivated employees
  • maintain financial freedom of action 

Internal control

The NSB Group has adopted a framework for internal control, and has established a control-environment that consists of values, ethical guidelines, organisational structure, authorisation structure and governing documents. The Board of Directors evaluates the Group’s business idea, values, strategies and plans on an annual basis. Risk analysis is performed annually for the business as a whole as well as for each operation. Risk pertaining to financial reporting is evaluated through risk analysis of specific areas and periodic follow-up meetings with the business segments.

The internal control system is revised periodically, resulting in changes and improvements to governing documents, procedures and key controls.

Economic development of the NSB Group and of the parent company NSB AS

The NSB Group had a profit after tax for 2015 of 2,158 MNOK (1,509 MNOK), an improvement of 649 MNOK. The operating profit was 2,814 MNOK (2,001 MNOK), an improvement of 813 MNOK. This improvement accrued from increased volume and income from passenger train operations, gains from the development and sale of real estate, improved operations in all business segments, and one-time effects from changes in pension costs.

The parent company NSB AS showed a profit after tax for the year amounting to 1,723 MNOK (947 MNOK). Group contributions and dividends from subsidiaries of 901 MNOK (720 MNOK) are included in this result. Operating profit for the parent company was 1,084 MNOK (541 MNOK), due mainly to increased volume and income as well as one-time effects from changes in pension costs.

The Group’s net cash flow from operations was 2,233 MNOK (1,338 MNOK). Net cash flow employed in investment was 1,429 MNOK (637 MNOK). This includes 2,148 MNOK (2,302 MNOK) in acquisition of property, plant and equipment as well as investment property, and the sale of assets, including real estate, of 319 MNOK (1,755 MNOK). Investments were directed primarily towards increased capacity and profitability within the Group’s business segments. A dividend of 753 MNOK was paid to the company shareholder in 2015.

After this year’s profit, total equity for the parent company amounted to 6,849 MNOK (5,961 MNOK), an equity ratio of 29.2 % (25 %). Parent company retained earnings were 1,705 MNOK. For the NSB Group, total equity was 9,838 MNOK (8,400 MNOK), giving an equity ratio of 34.1 % (30.2 %).

Group return on equity was 23.5 % (19.2 %).

Group working capital was 4,259 MNOK (2,740), a change of 1,519 MNOK.

The owner, represented by the Ministry of Transport and Communication, normally expects a dividend equal to 50 % of Group profit after tax. The Board proposes the following allocation from parent company (NSB AS) profit:

Dividend 1,074 MNOK
Allocated to retained earnings 649 MNOK
Sum allocated 1,723 MNOK

The accounts have been submitted under the assumption of a going concern, and the board confirms that this is the case.


Financial risk

Group activities expose the Group to a variety of financial risks: market risk (including currency exchange risk, interest rate risk and other price risk), credit risk and liquidity risk. The Group overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on Group financial performance. The Group utilizes derivative financial instruments to reduce some risk exposures. NSB Group financial risk management is described in note 14.

NSB borrows money in the markets in the currency that offers the most favourable terms. Borrowings in foreign currencies are converted to Norwegian currency through currency swap agreements. NSB aims to minimise currency risk in its financial management. NSB has some exposure to currency risks in its daily operations related to bank and cash deposits for business units abroad, but otherwise to a minimal degree as its income and expenses primarily occur in NOK. For agreements entailing a considerable outlay in foreign currency, the currency risk is covered almost 100 % for the course of the agreement.

NSB is exposed to changes in interest rates. The parent company uses financial instruments to reduce interest rate risk and to achieve its desired interest rate structure. Guidelines have been established, regulating what portion of total outstanding debt is to be subjected to interest rate protection during any 12 month period, and for the duration of the loan portfolio.

Surplus liquidity is invested in short-term Norwegian bonds and commercial papers. Changes in interest rates can affect the value of the portfolio, but the papers are normally held until maturity. Limits to exposure within certain sectors and institutions are established based on credit evaluations.

Current guidelines state that funding needs during the next twelve months should be covered through excess liquidity and committed credit facilities. The NSB Group aims to have free liquidity of at least 500 MNOK.

NSB has covered its borrowing needs for 2015 satisfactorily through several short-term loans in the domestic commercial paper market during the year. Unrest in financial markets has lessened somewhat, but there is still uncertainty related to the development of interest rates. At the end of the year there was a general increase in loan margins. NSB has a strong focus on counterparty risk in financial transactions.

Operational risk

Analysis of operational risks is done systematically, for example for traffic safety and the achievement of financial goals. Based on this risk analysis, control activities reduce identified risks through automatic controls, audits and analysis of specific risk areas.

Social responsibility

The Ministry of Transport and Communication through the articles of association has directed the board to ensure that the company remains socially responsible. The company reports on this theme annually to the owner by means of the annual planning document (§ 10-plan).

The NSB Group’s most significant contribution to society is to ensure that transportation needs are covered in an efficient, accessible, safe and environmentally friendly manner. This is to be achieved by planning and implementing measures for increasing the capacity of public transport to/from home and work, developing both public transportation hubs and residential and commercial buildings in close proximity to these hubs, and offering sustainable freight transport by rail.

The NSB Group reports on social responsibility in accordance with Norwegian accounting law (§ 3-3 a and c) by publishing a social responsibility report as part of the annual report. This CSR report covers information i.e. on the working environment, absence due to illness, on equality and discrimination, the impact on external environment and how corruption is prevented.

Future challenges

Railway reform will bring about major changes in the NSB Group in years to come. Competitive tendering will be introduced for passenger train traffic, grouped in bid packages. Group passenger train rolling stock, real estate operations, maintenance operations and ticketing systems will be transferred to a separate state-owned body to promote competition. The Ministry of Transport and Communications published on February 4th two competitive tenders for passenger rail services as part of the Norwegian rail reform, scheduled traffic starting from December 2018. Tender number 1 consists of the railway routes that serve the southern coast of Norway (Sørlandet Line, Jær Line and Arendal Line). Tender number 2 consists of the Dovre Line, Røros Line, Nordland Line, Rauma Line and Meråker line. This constitutes about 25 % of the revenue of the Norwegian passenger train operations.

To meet the railway reform the NSB Group has initiated a change program that will help build a strong and viable NSB group with competitiveness and high competence. For the passenger train operations four different projects have been started to adapt to the viable NSB Group, both competitive and highly competent reform and to ensure a competitive future: to customize operations to new parameters, the sale of rolling stock, retail solutions and the customization of staff and support functions

The Board is committed to helping implement railway reform and has in the annual § 10 plan provided input to the government’s work with this. The Board emphasizes among other things that customers are dependent on a public transport system with sufficient capacity and quality. Timetables for the longer term and all organizational changes must be clarified before initiating tendering processes, and NSB should be given the opportunity to compete on equal terms with other companies.

The Paris Agreement on climate change was adopted on 12 December 2015, and the Norwegian government has set a target for Norway to cut greenhouse gas emissions by at least 40 percent by 2030 compared with 1990. The transportation sector in Norway accounted for 26 percent of emissions in 2013 and thus is a key to reducing total emissions. The NSB Group with its rail, bus and real estate business plays important role in facilitating a shift towards public transport and thereby reduced emissions.

NSB’s expanded services for passenger train transport, especially in Eastern Norway, launched in December 2012, have created high growth in both customer volume and revenue. A further expansion of the route network was brought in in December 2014 with both a ten-minute frequency between Norway’s seven largest stations, more departures between Oslo and Stavanger and also around Trondheim. Investment in and delivery of new passenger trains continues. Altogether 81 new trainsets will have been delivered by 2016. Stabekk, Høvik and Blommenholm stations to the west of Oslo were renovated and reopened in December 2015 enabling a new timetable and 4 departures per hour.

In the real estate business, we are developing major projects close to public transport hubs. 2016 will see a lot of activity in and around station areas and on the company’s most attractive and central development sites. Examples include Hamar, Drammen, Bergen and Trondheim stations and further development of our own properties adjacent to the office buildings Schweigaards gate 21 and 23. At Grefsen in Oslo a large number of homes are being developed in cooperation with local partners.

Most of the bus industry, except express buses, is based on tenders. In 2015, Nettbuss won many contracts securing continued operation in these areas for another 8-10 years. In 2016 only Sogn (west Norway) and some other minor areas of our existing bus network will be put out to tender. The company works continually to streamline its operations, improving competitiveness so that the company can be a long-term player in the market. Current restructuring of Nettbuss companies in Norway will significantly reduce administrative costs. Nettbuss aims to retain market share in Norway and somewhat strengthen its position in Sweden.

Freight operations are affected by increased competition on both road and rail, as well as new customer-induced structures and strategies. Restructuring our freight operations is a first step towards becoming a profitable and sustainable participant in the rail freight market and we continue to look for further improvement in order to achieve this goal.

To make train transport a more attractive and competitive alternative for customers, the standard and quality of rail transport services must be improved, increasing capacity where relevant. Currently, supply quality is not good enough and a substantial share of train delays and cancellations is due to infrastructure deficiencies.

Infrastructure investment and maintenance is therefore essential, including the need for rapid and extensive development of railway capacity. To succeed in this endeavor requires improved cooperation in the railway sector. Ensuring effective collaboration is central to continued implementation of the railway reform.

2015 has in sum been a good year for the NSB Group, with underlying operations improving in all business areas. The Board would like to thank the NSB Group´s employees for their efforts in 2015, and encourage them to take part in a collective effort to develop the NSB Group to meet forthcoming challenges and opportunities, also where related to railway reform.

Oslo, 24. February 2016


Board members


From left: Kjerstin Fyllingen, Åsne Havnelid, Wenche Teigland, Bjarne Borgersen, Audun Sør-Reimø, Jan Audun Strand, Rolf Jørgensen og Kai Henriksen

Kjerstin Fyllingen

Kjerstin Fyllingen is chief director for Haraldsplass Diakonale Sykehus AS (private hospital). She has a Master’s degree in management from BI (Norwegian Business School). She was previously executive vice president of Tryg and was part of the Group management team with different responsibilities. Before that, she was Vice Precident of Vital (DnB Life insurance), she has also worked as general manager of Infodoc International and has been responsible for economy -IT at DnB.

Åsne Havnelid

Havnelid is a graduate of the Academy of Commerce (now BI). She is the secretary general of the Norwegian Read Cross. She was previously World Championship manager for the Ski World Championships in Oslo in 2011 and prior to that Vice President Cabin Operations in SAS Braathens and Director of Development in Braathens. She has been assistant top director of sports for Olympiatoppen (Norwegian Olympic Organisation) and deputy for the Norwegian OL-Olympic team in five Olympics, general manager at Toppidrettssenteret (Elite Sports Centre) and principal at the Toppidrettsgymnas (The Norwegian College of Elite Sport). She is a board member for Det Norske Teater (Norwegian theatre) and deputy chairman for Rådet for Forsvarets Høyskole (Council for the National Defence College).

Wenche Teigland

Wenche Teigland is a Group Director for Energi at BKK (Energy Company in Bergen). She has graduated as an engineer and has previously worked for Gasnor, ABB Offshore Systems, Aker Engi­neering and Solbos AS. Teigland is a board member for Agua Imara and Chairman of the Board for BKK Varme and Vesta­vind Offshore.

Bjarne Borgersen

Borgersen is a partner in the law firm Borgersen and Partners. He is a lawyer from the University in Oslo, and has amongst other things been the CEO of Tromsbanken AS and later in Fokus Bank. He has also been the chief for Norsk Lotteritilsyn ASA (Norwegian Lottery authority). He has several board positions and has also been on the board of the Norwegian Banking Association, with two years as chairman (1994–1999), and a member of the board for Eksportfi­nans AS (1991–1999).

Audun Sør-Reime

Audun Sør-Reimø started as a conductor trainee in NSB in 1976, and was the head of Kristiansand Konduktørforening (Conductor Association) from 1991 to 1997. He was the secretary for the Konduktørenes Landsråd (Conductors national council) in 1997, and the leader from 2000 to 1st September 2015. Member of NJFs (Norwegian Railway Associations) board since 2000, and national secretary for the Norwegian Railway Association from the 1st September 2015. Board member for NSB from 2008. President in the European Transport Federation (ETF) advisory group for on board staff since 2012.

Jan Audun Strand

Jan Audun Strand joined NSB Biltrafikk (Nettbuss) in 1992. Previously worked as a sales representative for Mills DA. He has been a representative for NNN (Norwegian Food and Allied Workers Union) and NJF (Norwegian Railway Association) since 1982. Head of the Bilpersonalets Landsråd (National Association for Car staff) for NJF (Norwegian Railway Association) since 2007.  Board member for NJF (Norwegian Railway Association) and NSB from 2008. Deputy for the Nettbuss Board during the same period. Head of the Europeisk samarbeidsutvalg (ESU) (European Works Council (EWC)) for Nettbuss. Elected as the main union representative for Nettbuss AS from 1st January 2016.

Rolf Jørgensen

Rolf Jørgensen has been the head of the Norsk Lokomotivmannsforbund (Norwegian Train driver Association) since 2011. Jørgensen is educated as an electrician and an engine driver and has worked for the NSB Group for over 30 years. Jørgensen is also a board member for the Jernbanepersonalets Bank og Forsikring (The bank and insurance company for the employees of the railway).

Kai Henriksen

Henriksen is educated cand. polit. from the University in Oslo and Master of Business administration from Harvard University. He is the CEO of Vinmonopolet AS (Wine monopoly), and has previously been CEO of the law firm DLA Nordic, CEO of Storebrand Bank, director of Marketing for Avanse Forvaltning and project leader for McKinsey. In addition to being Chairman of the Board for NSB he is chairman of the corporate assembly in Sporveien Oslo and board member for the The Employers’ Association Spekter.