Good afternoon, and a warm welcome to Nurminen Logistics Capital Markets Day 2026. My name is Tiina Ylikahri. I'm the Director of Communications and Sustainability at Nurminen, and I will be your host today. It's great to have you with us today here on site and online via the live webcast. As some of you may not be fully familiar with Nurminen Logistics, we would like to first show you a short video to introducing who we are and what we do.
The footage you're about to see is closely tied to the story of modern logistics. This is also the story of Nurminen, a Finnish logistics company. They have always had one mission: to keep the cargo moving and keep the world on track. Over the decades, Nurminen has transported anything and everything by land, air, and sea, from Europe to all around the globe and back. If anything needed moving, Nurminen made it happen. A lot has changed in 140 years, and Nurminen has changed as well. Adapting, evolving, and surviving global turbulence is something we like to call Nurmislaisuus. It's not easy to translate, but it means grit, resilience, and bravery, and never, ever missing a shipment. In today's world of logistics, efficiency is everything and emissions matter. That's why Nurminen chose rail. Not because it was easy, but because it was right.
Today, Nurminen transports your freight quickly and reliably between the Nordic countries, Europe, and Asia. While our clients focus on their business, we take care of everything else, because that's what we're known for: precision, partnership, and our clients' peace of mind. That's what we've done since 1886. This is logistics. Nurminen Logistics.
This was a short introduction to Nurminen Logistics. Before we move forward today, I will mention that our CEO, Olli Pohjanvirta, is unfortunately unable to join us on site today due to illness, but he will join us via Teams. Now let's take a look at today's agenda. During today's Capital Markets Day, we will walk you through how Nurminen Logistics has transformed from a Nordic rail operator to a growing European rail operator and how we plan to continue expanding across Europe. Our CEO, Olli Pohjanvirta, will start by introducing the company, including an overview of our strategy and the industry. This will be followed by our Vice President, International Rail Operations and Sales, Marjut Linnajärvi, who will take a deeper look at our business and how we create value.
Towards the end of the program, our CFO, Niklas Nordström, will present our financial performance and growth opportunity. At the end of the presentations, we will have a Q&A session where both on-site and online participants have the opportunity to ask questions. Without further ado, let's start with the presentations. It's my pleasure to hand over to our CEO, Olli Pohjanvirta, who is joining us via Teams.
Thank you, Tiina. Warm welcome also on my behalf to Nurminen's first ever Capital Market Day, which is especially held in Stockholm, as Sweden is more and more important for us. Yes, unfortunately, as Tiina said, I got some virus from my overseas traveling, and then the temperature is going up and down. Now thanks to medicine, the temperature is low, but I didn't want to join you physically not to infect anybody. Nurminen, as already shown from the video, we have been in logistics 140 years. We just celebrated our 140 years travel journey in March with our clients, partners, and of course among our own people. 140 years is a long journey, which of course brings us a lot knowhow.
It brings us a special DNA to do things, to find out new possibilities, to change when it's needed. I think we have learned to be quite proactive with our changes, not to wait too long to take advantage of a situation or to wait too long if something really changes and we understand that the market will change so much that the old way of doing business does anymore bring the results we want to have. Our story that we will tell here and what we are looking after, it's about being proactive, very result driven, and to find the solutions for us and for our clients to go forward, to make margins and to grow.
That's why we have chosen to be a railway operator, which means not always that you have to own your own locomotives or rolling stock, which means wagons. You can also have them on board like Uber is having their cars. They don't own the cars or having the drivers in their waybill. They organize the work. They have a client. They own the client. To be a railway operator, it's a quite wide understanding, not only the traditional understanding, which you can see from the state-owned railways that you have a massive locomotive fleet and so on.
We have really chosen the railway as the centric in our business and adding all needed support functions to the railway that is interesting for the clients, new type of clients which has never used railway, and going forward and having growth with this model. Today, we are around 180 professionals directly employed by Nurminen, and of course, a wide range of people and capacity among our subcontractors and partners which are in our, let's say, service network. Last year, just a short summary of our key figures, revenue was on a slight growth to EUR 109 million. Profitability was EUR 18.3 million, EBITDA. Our balance sheet is relatively strong. Despite we have a balance sheet close to EUR 100 million, our net debt to EBITDA is below one.
Very important, I think, to remark is that we have over 1,000 clients. It's quite a remarkable figure in the logistics sector. In, in these 1,000 clients, more than 80% are non-Finnish origin. This also shows that we have been able to convince international clients to use a Finnish origin , originally Finnish company in their logistical needs. This is a very, very important factor for us ourselves that we can go forward. We can convince international clients to come on board and to trust us.
Proven track record. I want to go a little bit back to the history, not of course 140 years, but how we have came here where we are today. Why there are all the reasons to believe that we will really go forward also in the chosen track and to make results to grow. I would say that close to 10, nine, 10 years ago, we really decided to little bit change from the Finnish logistical operator. In those days, we had offices and terminals all over Finland. We had small offices in Riga and Lithuania, plus an office in Saint Petersburg, which were having the railway cars serving the Finnish export industry to Russia, to Ukraine, to Kazakhstan. We understood that that's not enough, that's not growing market.
That's quite asset-heavy model also having the wagons compared the results, and in especially the heavy terminal network which we had in those days. When we looked around and we understand that the Chinese-German plans will really increase the land bridge, which means the railway connection between China and Central Europe through Poland to Germany and everywhere in Europe. We understand that's a growth factor because the competitive edge which the railway gives, if we compare to the sea, ocean freight, it's really the totally different landscape. It's very fast delivery times. You can go many places inland China, not always need to go to the coastal region of China. China, in those days, has had big industrialization plans inland China. Inland is, of course, closer to Europe by rail.
We understood that this can be a very interesting market. We understood that we have already a lot railway experience due to our rail car operations in Russia, in Kazakhstan, in Ukraine. It meant that we have to try this. We put a lot of efforts to have a first train from Finland to China in 2017. We grow with this business from zero to close to EUR 50 million turnover with high margins only less than, let's say, three and a half years. We gained lot of multinational clients. In addition, what we learned, we learned especially how to handle the first mile, the last mile after the rail, before the rail, because we needed to organize in China the trucking, warehousing terminals, custom clearances with subcontractors.
The same in Finland, when we came to our Vuosaari terminal, we were very fast of delivering the goods to clients. We organized the last mile with our partners to Sweden, especially to Norway, even to U.K., Germany, Netherlands. Our service was very well known, especially among the Scandinavian countries, but also in Germany. It got a good attention and interest. Due to this, we really learned a lot about Swedish market because we had a lot Swedish clients in our Chinese trains. We learned what we need, how we must serve them, and this was like one step forward. When we went to the Trans-Caspian route, we had also very a lot Swedish clients, but we learned a lot and we understood what means real multi-modal services when you have a railway in the center of a service.
All this, what we have learned during the journey, it's very important where we are today. We had the possibility to acquire the Estonian Railways company in Finland, which is now called North Rail. The reason how we were also supported by the Finnish state because we knew that we can do the railway as a private operator and then from a private sector. This deal was really needed for everybody, and it brought us to be a full railway operator. We know now how to run own locomotives. At the same time, from Chinese train, we now know how to really operate along cross-border trains by using subcontractors. The subcontractors in most of the cases are much bigger companies than we are. This is very interesting setup that a smaller company uses big companies as their subcontractor.
This means that you have something to offer to the market, but you have something to offer also to these big companies, because they want to be your sub-subcontractor. It means that we have a right setup of know-how, right people, of course, very result-driven thinking, and thinking what the client really needs. Especially when we combine their many other things, we can handle this. We know what is cost efficiency, what it means to organize with different transport means, one supply chain. This is quite unique in the market because many players are always focused only on one way. Shipping lines, they know what is shipping lines. Airlines, they know what is airlines, how to fly. The traditional railway companies, mostly they only know how to drive a train and normally they give somebody else to sell the content to the train.
We have combined this all know-hows, and that means that we can really run and build the services based on our know-how. Due to this, especially what we learned from China train about the Swedish market and from Trans-Caspian route, where we used lot Central European market, Central European railway connections, we have the understanding what Essinge Rail is doing. It's a company which we bought at very end of 2024. Without those previous steps, we wouldn't have, let's say, the courage or understanding to buy something from Sweden and especially what to do with that. It was very important that we had that track record, and we understood that Essinge Rail is a very good fit to our future growth plans. We understand that Swedish market is a strong market. It's a strong economy.
Even in the difficult times, it works quite well. The direct railway connections to Central Europe is a very interesting transport mean, and we really believe that the railway is growing. Essinge Rail gave us a very good platform to have our future growth between Central Europe and especially the southern part of Central Europe and Scandinavia. Already in 2026, means this year's February, we launched and opened the new direct railway connection from Italian Parma to our Frövi terminal in Sweden. Frövi is close to Örebro and Västerås, not far from Stockholm.
Very, very good locations for a railway terminal from where you can really easily ship by trucking the last 150 mi. This direct rail connection, which means that there is one train, so we operate the full train, not single wagons, and it's time scheduled. It starts from one place, and it stops in the last station, which means it has only one stop in Frövi. That's why it's very fast, and it's really competitive. I will come back to that question in the future. Here we can see that we will do more and more this kind of direct lines, timetabled lines for our clients from little bit different destinations. This is really the growth plan.
Of course, in addition, someday we all hope that Russia-Ukrainian war comes to an end, and we can see that the huge demand and need again to have big volumes between China and Europe by rail, it comes very fast back rapidly. Here we are in a totally different position when we were in 2019 or 2021 because in those days we didn't have anything in Sweden in the beginning or in Central Europe. Now we have. We have a lot of routes in Central Europe. We have a lot of clients. We have lot of positions, terminal partners. I think we can really fast scale up the whole China-European connections to much wider geographical phase in Europe, and the client base is huge. Definitely when this will be again possible, we will be very strong here.
We have kept our people offices in Shanghai and Chongqing also, hence of this possibility which comes any day, one day. Of course, we are doing also today profitable business in China for us. The rail traffic between Italy and Sweden accelerates our future growth. It also puts us in the market in a little bit different way, so that the clients can see that we are a serious player with the railway industry, as there are very few similar products on the market today. The product is what the engage, the commit to have a timetabled train connections between Italy and Sweden. What it means to commit, it's just not that you decide to do it one day and tomorrow you will not do it.
It means that you have to commit to the infrastructure owners, to the locomotive owners, for example, for one year period, that you pay. Doesn't matter if you have any clients or not. This is not for very small companies. This is not for companies who don't know how the rail works, because when you cannot buy the service in the right way, and this is not for a company who don't know how to combine all the multimodal services. That's why very few companies are doing this, because actually very few companies outside railway industry knows how the railway works. Again, from a railway industry, very few companies knows how the other parts of logistics works well. This is why we are here, and we can see that this two, three days door-to-door delivery time, it's very fast.
When we come from Italy, Milan region to Frövi, this is 2,500 km. Its distances is for distance to drive it in two and a half days, it's very good result, the trucking cannot compete here. Also, we have other positive things here. The very old rule when the distance is more than 1,000 km, the railway always shall compete or win the race against trucking. When it's less, when the trucking is quite competitive, depending on the goods of course. In our case, when we are focusing on mainly consumer goods, fast-moving consumer goods, but there are also all kind of industrial goods, but goods which can be put in the railway wagon or into container, it means that they are a little bit more high-value goods.
That means that the time reliability and delivery times are very important. This adding all the services, first mile and last mile terminals and et cetera, it means that the service is competitive, and we are also now already exceeding our budgetary plans on this. Of course, the ramp-up phase always cost because we have a lot of front of costs. As already said, you have to commit one year. There is a lot of sales efforts, we have already got more and more clients that we anticipated, and it's only in three months. The outlook for this is what we expected, even a little bit more positive.
Maybe the situation in Gulf region has a little bit helped us because the fuel prices has went up and of course trucking is fully in fuel prices because this kind of 2,000 km, 2,500 km, you can, I would say never drive with the electrical trucks. There will be not enough power or distance for them to drive fastly. The railway will be a very competitive also by the ecological point of view. I think we all know that the European network is fully electrified, it means that the fuel prices will not have any impact here. We look this in a very confident way. We, as said, we really believe of these railway corridors and to have more cargo on rail.
Here we can see the trade between Italy and Sweden, both import, export, or how you want to call it, northbound, southbound, and of also with Sweden. It's a big volume trade going from both ends, and the rail share is very relatively small here. It shows that it's unutilized because the network infrastructure is existing. There has not been service model for companies which traditionally don't use railway. Railway has been normally used mainly for bulk materials like minerals, chemicals, oils, and not so often for consumer goods, ready-made goods. This segment we want to bring into the rail, offer them a service which gives them a lot competitive edge and so that they can really use the service.
There is a service place which they can use, and this has been, in many cases, the situation where there has not been a service that these kind of companies can use because the railway has been traditionally focused mainly for large volumes of single products like minerals. Here we really see the huge potential for railway. We can see in U.S. this has happened a lot. It's large private-owned players in U.S. in railway. Unfortunately, in Europe, still rail remains very state-owned almost everywhere. On the other hand, it brings us possibilities as we think that we are a little bit more flexible. We can find solutions faster and have more of to offer to the market than these state-owned companies. On the other hand, it helps us here.
In the longer run, we hope, of course, that the European rail market will be more and more privatized to bring in overall the railway more to the agenda when the clients are thinking how to transport the goods. You can see here the huge potential, only 3% to 4% are now on rail. We all know that the logistics is very important. It will not vanish anywhere. We all need logistics because the material has to be somehow transported. You cannot do it by AI or other means. It's still quite physical work. At the same time, it's more critical as the supply chains has been challenged. Companies need to think about working capital, where to have it. It's not anymore like that you always trust on last minute delivers.
On the other hand, when you are a trustful service provider, they can lower their working capital because they can understand that you will fulfill your obligation and bring the goods on time. The time-critical supply chains are more and more needed. As said, the 1,000 km rule for railway is very good, and especially when we compare to trucking. Here, maybe in the slides there are small mistake about sea-based solutions because railway and sea-based are not really often competing, only between Asia, China, and Europe. The demand for a reliable logistics, it's naturally growing, and we are one of the players who you can trust. Of course, the regulatory pressure is coming. It's from ecological point of view. Roads are getting worse.
The really big plan for European Union is to bring the rail parts much higher. Now if it's 18%, they want to bring it up to 30%. Of course, it means and needs that the infrastructure is placed, and in Europe now is really going on a lot infrastructure investments, which is very good for the future. We believe that the figure will grow even faster in the good segments which are not today traditionally using railway. Especially fast moving consumer goods and other high value goods. This is the playground where we are and we want to be stronger in Europe. We are not going to the Central European market to transport huge volumes of chemicals here. In that market, we don't have anything special to offer or competitive edge.
With the client base, clients who need to have more complicated solutions and multimodal solutions, here we are the player giving for them value add. Rail as such is of course very unique on its low emissions, and this helps us. We all know that now when the economic times are a little bit tougher, the focus is not only in CO2 issues, but it's still an important factor when companies are choosing the mode of transport, and it will come again in the future to be more and more important. Here rail is, of course, naturally the other means, transport means they can hardly compete with these low emissions what the rail has.
As I already a little bit described, the railway where we want to win, the railway must win is to get really a new type of clients, new type of goods on the rail. Not only the traditional bulk goods, which of course the only way to transport them is rail when you are transporting them on the land. Really to have these new type of clients using more and more rail. Here Nurminen is one of the main players who can offer the needed service for these clients, that they can use rail. Still, unfortunately, many other railway operators are focusing, of course, only to the bulk part. It gives us room, and we are strongly believe that the players like we will win here inside the logistics sector.
The good thing is that we can use and utilize here relatively low CapEx asset light model to make the growth. Some words about the strategy. The strategy I already quite a lot described because it's what we are doing. We cannot every day change the strategy. We can a little bit change the tactics and the focus in the strategy to of course be aligned with the market, with the market's situations and circumstances. The strategy which we in a way defined already starting from nine years back, maybe not in those days, we really maybe didn't understood that it will be our main strategy, but we started it already in those days.
Now we can see that the road we have been going forward has bring us here, the strategy has and is strong or it has its base and foundation why it's still valid. It's of course to drive it day to day in the right way and then choose the right tracks when you go forward it, but you don't need to change the strategy all the way. You have to be enabled to little bit make the focusation inside the strategy. The strategy is that it's the rail centric inter-integrated logistical services.
As already described, it means that you have to know how the railway works, you have to know how the trucking works, you have to know how the terminals work, you have to know, for example, how the customs clearance works. When you are combining all this, when it makes sense, it makes business, and it makes a service which the clients need. Because many and growing part of clients, they don't want to purchase everything separately, or they cannot even purchase this kind of service separately. When we combine these kind of services with good partners, subcontractors. When it works and the client can use it, and it's our work to sell it, to convince the client that it works.
Now we have been doing this, we can show that the clients really are buying our story and the growing number of clients are doing that. It shows that it's the right track. Here, meaning the international rail, this is not the whole group of Nurminen, but the international rail which we are focusing that it will be really the really big part of Nurminen in the future. Here we can see that even in two, three years between Central Europe and Scandinavian railway market, combining of course all the services into that service, we have to double the revenue, hopefully even more. Of course, the market shows, all we know that in Central Europe the GDP growths are not very fast. Unfortunately today they are actually very low.
Inside the logistical sector, when we manage to have more clients in our services and the transfer from road to railway, when we manage to do it of course brings growth. We want to be growing, have good margins, which means that we have to be very results-driven and very efficient to bring everybody good results, also to our subcontractors and partners. It means that in this setup, our strong belief is that we are growing organically faster than our peers. How we will achieve these targets, it's that we will expand our network in Europe. Now we have this Italy-Sweden trains. In the future, we can have other Italy destinations to Scandinavia. Sweden is of course not only Sweden. The train comes to Frövi. We can service Finnish clients.
We have already on board Finnish clients in here going from Sweden down to Europe or backwards. We are also serving Norwegian clients here. Frövi is not very far from Norway. We have built a very good network inside Sweden. When the train comes to Frövi, it's very efficiently the goods are moved to everywhere in Sweden. We are using here a very good partner network by trucks and by rail. When we are adding this into this system which we have in Europe, we have actually in Europe a wide terminal network, thanks to Essinge Rail setup, which were over 10 terminals and locations from where we have wagons to Sweden. We can utilize this system in our future growth.
It means that we want to drive more and more direct full train concept between southern part of Central Europe, means Italy, France, and Spain to Central Europe, to Northern Europe and backwards. This is the center of our current vision in our current geopolitical situation. This is the place where we believe that we can organically grow well to have a good, in the future, good cash flow conversion, still have strengthening balance sheet and to ability to open new routes and lines. The growth is coming from our very good competitive edge of running this kind of service, the wide range of our client base, which is growing every day, and from different industries, which is very important.
We have very, very well-known global brands in our trains today, which means that it's always easier to get others on board and the opportunity is here. We have a building material. We have the reason why it's us. It's a unique know-how and the formula how to combine all these services. Very important factor is, as said already before, is the asset-light scaling model. We can see that in Europe there is enough rolling stock, there is enough, you know, it means wagons and locomotives. There are enough terminals, terminal operators. What we don't need to own or invest into each place, to a terminal or rolling stock. We can have them in place when needed. This means of course also that we have to be very trustful player, that the other parties will commit under us.
We have already shown that this is the case. We have very good well-known partners, subcontractors under us, and we are having the clients. The scaling means that when we get more and more clients, more and more volumes, it's much more easier to add wagons, trains, to add one more weekly connection without having a huge CapEx. It's mainly in the beginning working capital. It's commitments that you have to commit financially to drive the line for six months or one year, which means that not everybody can do it. At the same time, even if somebody had the money, but the big contractor, subcontractor doesn't believe that he can do it, he don't have clients, they will not accept and work with him.
This means also that you have to have already a position in the market to do this and to scale it up. The really important thing is that if you look at our CapEx today, it's under 2% of our revenue. That means that cash conversion is good with us, and we can fastly adapt to market. Also, we can quite fastly scale down when needed, but hopefully in those situations we are not very often, mainly scaling up. In the end, already I mentioned these China trains. In the future, when it's again in commercial terms possible, we will be one of the very strongest player here when we really combine the knowhow of different provinces of China.
In 2021 we had trains, I think from seven, eight different provinces, which means that we were very known player among the huge provinces with. Now when we have a setup in Central Europe totally different than we had in 2021, combining this together, it will bring a huge effect. This was my part. Hopefully you enjoyed, I will be also of course present in the Q&A session. Hopefully you have some questions also to me, I will hand over the next part to Marjut. I want to highlight that Marjut has been a really, really key person with me doing the, let's say the journey in last 10 years to do and to make Nurminen what it is today.
Marjut is really in the center of this railway service model, what we have been building. Marjut has really built a good team to do this and scale it up. Please, Marjut, the floor is yours.
Thank you, Olli. Thank you about the good presentation, but also about the nice words. Yeah. I have been working in the company now almost 12 years, and now last 10 years with Railway Operations and Sales. It has been very, like, interesting journey. I am also the team leader of our international sales team and operations team. We have offices and our own employees in China, in Italy, in two locations in Sweden, also in Finland. It's very interesting to work with this, not only with the new projects, but also with our operations in, like, worldwide.
Our company has been working with railway logistics already for decades, and based on that knowledge and experience, we have been actively started to develop our new routes and services together with our customers and also with our suppliers. Railway logistics has become our long-term growth strategy. Railway logistics offers stronger profitability and more stable pricing than other transportation modes and traditional forwarding activities. Nurminen's international rail services are operated through our reliable and wide partner network, so business model is scalable and also asset light. We can see that demand is growing, especially because of the capacity challenges on road freight, but also because of road freight prices have been increasing quite a lot now, especially because of the diesel price increases.
Railway, rail freight pricing is much more stable, and it makes it also easier for our customers to make budgeting and planning when they use railways. We can see also this growth not only from our customers' feedback or how our volumes are increasing on different locations, but we can already now see it from our financial figures that in one year we increased our railway business was increasing from 55% to 71%. It is, like, actually growing now, and we can see that in the future it will be increase more. Nurminen Logistics is not, yes, of course, focusing on international railway logistics, but our company is not only working in international markets.
Our company is also the biggest private-owned railway company with 12 own locomotives, and we are transporting mainly fertilizers and chemicals in Finland with our own locomotives. Company name is North Rail Cargo, our daughter company. We transport 4 million tons of annual cargo, taking into account our locomotive capacity, our transportation operations are the most efficient in Europe. Our customer satisfaction is also on a very high level, our on-time delivery reliability is 96%. 12 locomotives, 4 million tons of cargo, 50 employees. Maybe that already tells that we are running only full trains with full loads, its customers, they don't need to wait to get their raw materials or cargo to the final destination.
Olli already told you about the customer base, we are not only lucky to have more than 1,000 customers. Of course, we have been working actively to reach all these customers not only from one or two industries, also from several different industries. Sometimes when market is changing or our customers are having production problems, that doesn't affect on our business that much. More than 1,000 customers have been using our railway services and also our local operations in Finland and Sweden. We have customers from several different industries, also industry leaders, our international rail logistics is our fastest-growing segment, we're actively, of course, working also on new sales operations, especially in Nordics and Southern Europe.
Our strength as a company is that, and also how we can create the value to our customers, is when we combine our operational expertise and our customer-oriented sales performance. Of course we can success with the new sales. We are now having, yes, 80% of our customers are international customers. It's not that we're not focusing on Finnish customers or local market. We are. Organic growth, we're not getting that growth that easily in Finland. It's when we have international customers, we can offer all our services, not only local operations. Now especially in Italy and Sweden, we have been very active with the new sales. Sweden is Nurminen's gateway to multi-billion Central European rail logistics market.
Total value of European trade is EUR 7 billion-EUR 10 billion, and only less than 5% of this volume is currently transported by rail. Nurminen's Swedish daughter company, Essinge Rail, have been successfully serving its customers by transporting cargo from 12 different railway terminals in Central and Southern Europe already for many years. Now Nurminen's main targets is to support this future growth by increasing operational capacity, especially from Italy and Spain. It means that we have, at the moment, we are active in sales, and we have also more bookings and orders than we have capacity. That's why we are also building up these new solutions to support our customers and growth. In February 2026, we opened a regular block train service from Parma, Italy.
This new lane is from Italy, is the operational backbone of our railway service between Southern Europe and Sweden. Arrival station in Sweden is Frövi, Örebro, our own railway connected terminal or warehouse. This location offers an easy access to all important destinations in Sweden. It doesn't mean that we transport only from Parma to Frövi. We have also from Frövi railway connection to 20 different railway terminals in Sweden in cooperation with Green Cargo. Same in Italy, we have local partner who can transport our containers and wagons by rail all the way to Bari and Napoli. Of course, all pre and on carriage and local truck, local transportations we handle anyway by truck, but we can go by rail all the way from Piteå to Napoli.
Some maybe details regarding of our Parma train. This Italy-Sweden, Sweden connection, it's our own block train service. Block train means that it's full train with the confirmed timetable, weekly frequency, and we can of course add more trains if needed. Transit time is only two and a half days from Italy to Sweden, in 1 week we can have the full round trip journey. This transit time is very fast. You cannot reach that transit time even with a truck, or you need to have two drivers and it still take four days. Price is also lower than road freight, this gives us lot of value to our customers, not only savings with money and time, but also with CO2 emissions. Emissions are almost 90% lower when you go by rail instead of road.
Like we have mentioned many times also that this is, again, one more asset-light model, so we don't own those locomotives. We don't own those railway wagons or not even containers. We have a one year agreement with the railway company, TX Logistik, owned by Italian railways. They arrange wagons and locomotives and drivers for us. Containers are from the leasing company. Yes, we have this commitment and one year agreement with TX Logistik of weekly trains, and it's our responsibility to fulfill that train every week. It's still more flexible system to have that kind of an agreement with termination time than own the big fleet of wagons and locomotives and employees. Routing from Parma to Frövi, these locations are very important for us. We have had already good, very good volumes from Modena, Italy.
Parma is 80 km from Modena to north. We can handle our customers by using the same operations team in Italy. We collect every cargo and pallets from our customers. We can choose which location is better for the customers, where we have the next departure. We have two different service models from Modena with conventional wagons and little bit longer transit time. Price is also cheaper to our customers. Parma train with the very fast transit time and direct connection. Customers can choose which one to use.
Cargo we are transporting from Italy, of course, it's mainly wine and pasta, but we have also different kind of raw materials, energy, waste, some components, and we're, of course, exporting timber, paper, pulp, like I think all logistics companies in Sweden are doing. What is happening next, or what we are planning now, it's of course to also add more trains from Italy. We're not satisfied if we have only one train every week from Parma and some wagons from Modena. We are planning to add second train from Italy after summer holiday period. Still in this year or early next year, we are planning to establish our own railway connection from Spain, from Valencia or from Barcelona or from both stations.
I already mentioned our reliable partners. We have been working, for example, with Kazakhstan Railways for many, many years. They also supported us when we established our China train connections. Our company was also the first railway operator who started to run trains through Caspian route when war started in Ukraine. It's always easy to make those promises to the customers and plan some new routes when we have this kind of partners who are not only selling services to us, but they are really also supporting us and working together with us. In Sweden, of course, everybody knows Green Cargo, the railway company in Sweden. With them, yes, we are on some lanes, we could be also the competitors, but We have now very good service from Frövi.
Green Cargo can offer service by rail to 20 different terminals in Sweden and also Alnabru terminal in Oslo. This is something to really helps our customers to use rail all the way to final destination. GTS is a railway operator in Italy, operating five times per week from Parma to Napoli to Catania in Sicily and also to Bari. South Italy is also now on our route map and service map. Lanzi Trasporti is the company name, is our terminal operator in Italy. This company is established 70 years ago, they have a very good reputation and very good and stable operations in Parma, it's also helping us quite a lot when we go to the new market area and we start operations.
Of course, customers are maybe not suspicious, but first they really want to see that everything is working well. When you have this kind of partners in your network who are really supporting us and also promoting and selling our services, it's much easier to build up something new. TX Logistik is our railway operator from Italy to Sweden. This is like short update about the operations and future plans regarding of operations. Now my colleague, Niklas Nordström, our CFO, will make his presentation about the financials.
Thanks.
Here are some of our financial performance highlights from last year. As you can see, we produced a strong year in terms of numbers and continued to strengthen our balance sheet. What matters here is that growth and profitability are moving together. We're not buying growth at the expense of margins. We're scaling in a way that strengthens our earnings quality. To better understand the future, it's good to understand a little more of the past. The journey in the past five years leading up to where we are now has been full of major swings, affecting the entire industry. As a result, we've been subject to significant geopolitical turmoil that started with the Russian-Ukrainian War, which led to the abrupt loss of approximately EUR 40 million of annual revenue through the closure of the China train traffic.
This was followed by the emerging crisis in the Middle East, and specifically in the Red Sea, as well as the tariff wars, leading to a diversion of raw material flows for us and a further loss of approximately EUR 40 million in the Baltics from 2023 to 2025. However, at the same time, we have been able to transform the company significantly through repositioning our strategy and making supportive acquisitions, and focusing on the multibillion euro Central European logistics market. To really give you a good understanding of what the repositioning means, I prepared a more granular picture of our financial development across our main streams. Here you can see how our revenue has developed per our main business stream, including the China train.
As you can see, the China train route came down dramatically after Russia invaded Ukraine in the beginning of 2022. Geopolitical tensions in the Red Sea area, as well as the U.S. tariff changes quickly followed, and our Baltic operations lost significant volumes starting in 2023 as a result. At the same time, our core strategy was repositioned, and we put our focus on the European logistics market, and traction was established. As you can see, the rail business surpassed our other business streams in 2024 and has since taken on the lead position in terms of revenue generation as well as profitability. In 2025, the rail business was already the clear driver for both. We have also set ourselves on building a very lean operation, and its effectiveness can be measured in having one of the world's leading reliability track records.
Also it has established a solid baseline for profitability of the rail operations. Baltics operation volatility has continued all the way until 2025, but if we look at things on the group level, we have been able to compensate for that volatility. The volatility still you can see it, but we have still produced consistently high profits for a number of years in a row despite the turmoil. Let's look a bit what the foundation for our profitability profile is. The theme is that of a balanced risk profile and a diverse offering, as Marjut described. The first thing you'll notice from this slide is that we operate with a very diverse portfolio of cash-generating units, but also customers as well as industrial segments.
This further balances our risk profile, and it can be said that our profitability is not standing on one support leg. The second thing to highlight and going back to what I said about running a lean operation is that require from all of our business leaders that portfolio businesses carry their own weight, so they have to be profitable standing alone. We take proactive measures and constantly fine-tune the operation to meet those targets. Finally, in all of our segments, we are not in the business of competing for the lowest price just to gather volumes. We provide specialist service based on extensive know-how and a complete offering, as well as a focused strategy. This also differentiates us from the majority of our competitors.
Since we are on the topic of finances, let's see how we compare against our peers. As mentioned, 2024 and 2025 have been full of external shocks to which none of the logistics market operators have been immune to. In terms of relative profitability, this sets Nurminen apart from the international competition, and certainly our domestic peer group as well. This is important not only from a value creation perspective, but also from a strategy execution perspective. We can put our focus on building instead of cutting. Solid and consecutive yearly performance can also be seen from the balance sheet side. Nurminen has made two strategically important acquisitions during the last five-year period, and still our net gearing and interest-bearing debt have melted effectively while our liquidity position has strengthened.
Our net debt to EBITDA ratio is now, as Olli mentioned, below one, which can be considered a relatively strong ratio. As Nurminen is essentially a service company without capital-intensive fixed asset components, the conservative leverage reduces our risk profile further, making it possible to accelerate our strategy execution also through inorganic growth options if an appropriate opportunity presents itself. More importantly, it enables us to proceed with our growth strategy into new markets. The conservative leverage and solid liquidity position also enable us to return some of the value created to our shareholders through distributions without compromising the ability to invest in growth. In my mind, it helps to create an overall attractive investment case for Nurminen as a company.
Our asset-light business model means that we don't need to tie up significant liquidity in capital expenditure. This allows us to direct capital towards profitable growth while maintaining a disciplined risk profile. At the same time, strong cash generation and healthy balance sheet gives us the flexibility to invest selectively, also consider those complementary inorganic growth opportunities when they create value. Overall, this capital allocation approach creates resilience, supports growth, as well as long-term shareholder value creation. Our dividend track record reflects the same capital allocation framework outlined on the previous slide. Because the business is asset light and not capital intensive, we can fund growth first, preserve the balance sheet strength, still return cash to shareholders in a balanced way.
We initiated dividend payments in 2022, while the Operail, and later named North Rail, acquisition temporarily halted payments in 2023, and then we maintained it through a period of elevated growth investments, underscoring that shareholder returns remain a part of a balanced capital allocation approach at Nurminen. The 2026 proposal signals confidence in continued cash generation and continued commitment to shareholder value creation also through returns while supporting our growth objectives. Building on the capital allocation principles just discussed, these long-term financial targets turn that discipline into clear and measurable guardrails for management decision-making. In the overall picture, achievement has been good. Profitability remains strong, with EBITDA above target and the balance sheet has continued to strengthen. Both the equity ratio and gearing are comfortably within target levels, which underlines the resilience of the business, while leverage remains low.
The area where we still see work to do is growth. Revenue growth is currently below our long-term ambition. The priority is to accelerate growth, but without compromising financial strength. In that context, the proposed dividend is aligned with our approach to capital allocation. It supports predictable shareholder returns while preserving the flexibility to invest in the business. We can still improve versus our target to grow the dividend amount as well. We discussed our current strategic focus of expanding in Europe. Next, let's look at some accelerated growth opportunities that are interesting on their own, but especially in the context of the Europe strategy. Against the backdrop we've discussed today, geopolitical changes can certainly create obstacles, but also create growth possibilities for Nurminen. We're not changing the core playbook and just hoping them to go forward.
Rather, these opportunities should be viewed as upside possibilities. They are not our base case assumptions. The Baltic volumes reduced rapidly, they can also swing in the other direction quickly. A EUR 20 million recovery is reasonably possible in the medium term. The big one, of course, is the return of the China train, for which we have maintained the operative capabilities and the ability to relaunch it quickly. If the Russia-Ukraine war does end at some point, and the railway corridor reopens, there is a significant demand for this route, especially now as the Middle East is in turmoil. What makes this time different for the China train, however, is the ongoing Europe expansion strategy.
In combination with the European network that we are building and have acquired, from Southern Europe to Sweden, the potential opening of the China route creates a compounding opportunity for Nurminen, as we will be able to service a significantly larger market than we could address back in 2022. If the China route becomes possible again, trains could once more run directly to Finland as they did before the war. The greater opportunity is to run traffic from China to Poland and leverage the European network that has now been built, allowing shipments from China to be carried across Europe all the way to the southern tip of Italy and later to Spain. This makes the potential significantly larger, in line with the euro value shown in the red circle.
Our European terminal network also enables less than truckload or parcel style shipments from China to all of Europe. As we're building the network, we're constantly looking for components that would increase our footprint in the European logistics value chain, and therefore we see that this is where we can look at inorganic elements that would complement our organic growth strategy. Let's look at our M&A framework next. How do we think about M&A within the broader capital allocation framework and growth strategy? We have a strong balance sheet, and that gives us the ability to pursue inorganic growth selectively. We are not pursuing it as a growth strategy in itself. Our focus is on asset-light targets and value chain adjacencies that would strengthen or increase the footprint of our network that we already have in place.
A potential target must be a strategic fit, which will either increase our share in the customer value chain or create synergies through joining together more framework lines. In practice, this means opportunities connected to our current platform with particular interest in Central and Southern Europe, as well as the Gothenburg hub area. I think just as important is what we will not do in the M&A front. We're not looking at non-core asset-heavy businesses such as trucking or businesses that sit outside of our existing framework or turnaround situations with poor structural profitability. The key message is that M&A, which is supportive of our strategy, is an option because of our financial position, but it's not something that we are looking to do just to buy growth.
At this point, I would like to give the mic back to our CEO, Olli Pohjanvirta, who will sum things up and also open the floor for some questions you might have. Olli.
Thank you, Niklas. Little bit to summarize the key investment highlights, why Nurminen is an interesting company, why it's at least worth to follow up, and to little bit look how it performs, and hopefully you will find it an interesting and worthy investment target. When we try to put it together to summarize today's message, why Nurminen can create value, why it's interesting, why it's going forward. I want you to remember after this that Nurminen is, and Nurminen's product service offering in the growing railway market is very unique.
We are bringing more value-added goods into the railway system network, with a very wide range of clients, customer base, which means that the combination of the services which we are selling, offering to the clients and they are buying, purchasing from us, means that we have also quite strong pricing position, which means little bit higher margins than the other players who are mainly delivering bulk services or more simplified services, simple services. This is the key factor that we have a strong power of pricing and that means that we have to have a competitive edge why to have a strong pricing policy.
This comes with the very high know-how level, high level of know-how, very engaged people who know what to do, how to combine these services, how to manage the whole chain of different services to make them as a one product. The client sees only one product. They only see the Nurminen. It's one product. They want to have goods from point A to point B, where we are then combining the different transport means as one product. This is the competitive edge what we are doing, and that we can do it in a profitable, very effective ways. It's only possible when you know how these all different parts has to work, what is the cost base. For this, we also need our own railway operations in Finland so that we know what it takes to run locomotives.
It means that we also have to know how the terminals must work, how to stuff a container. Here we have a very unique know-how in our Finnish harbor terminals, and when the cross-border railway operations combining trucking, even ocean freight. This is what we have in-house. The growing market that we see is front of us with the combined railway services for the clients' best. We have all this together, and the model is scalable with relatively small CapEx needed, and it needs a wide range of clients. This we have the financial profile, we have interesting already today, and the right people and the mindset, which is really result-driven DNA, what we have in the company.
As a possible future, you can say joker cards, of course, is the China train coming back, which of course changes the landscape totally to the much bigger playground. To remember us, we have a competitive edge what we are doing. We are good on that what we are doing. We are very engaged on what we are doing. And we are very result-driven and proactive, and we react fast when it's needed to be done when the circumstances, landscape is changing. This is my message you to remember that we are here to do business and results. Now I think I need to give the floor again back to Tiina, and Tiina will run with you the Q&A session, and we all, me, Marjut, and Niklas, are for you to answer the questions you hopefully have plenty of them. Thank you.
Thank you. Thank you, Olli, and thank you for all the presentations. We will now open the floor for questions. We will take questions both from the room and online. Let's take the first question from the room. Yes, please.
Hi. Aapeli Pursimo from Inderes. Thank you for your presentations. Maybe starting about the customers. You mentioned that you have over 1,000 customers, but, can you give some color how concentrated the sales are as the largest customer was around 12% last year? How concentrated is the customer base?
Who would like to take this question?
I can answer first. If you look, railway operations in Finland, it's quite concentrated. There are some quite big clients, but after that, the client base is relatively, let's say really based of many medium size clients. I mean medium size from our revenue point of view. Of course, the clients can be huge multinationals, but from our revenue sub point of view. The most part of the businesses are coming from really different sources, different industrial players or industrial, I mean segments and trading and consumer segments.
In that sense, it's a strong base which is not, let's say, so much dependent on some changes in the market if some good segments are going up or down. It's well, let's say structured and built. This part is growing much faster than the more, let's say, Finnish railway related business which is where you have fewer bigger clients. This business part where we have more and more clients, it's growing much faster, so in the group figures in the future. That part of the business is growing much faster than the other parts.
It means that the client base will be more wider also from the point of view revenues where they are coming.
Maybe I can continue also from here. Still five, 10 years ago, we had our top 10 or top 20 customers, they were mainly from paper and wood industry. Now it has changed a lot. We have our top 20, top 30 customers. We handle from fresh fruits to steel plates and to chemicals. We have customers from many different industries, and we have also now quite a lot of new customers, international customers, also Italian customers already in our top 10 customers. It has been changing quite fast, and it's very good for us because then we don't have customers only from one segment.
Okay. That's clear. Maybe then the midterm ambition is to double revenue in the international rail services. What is the base level, and what is the implied organic versus inorganic growth?
Maybe I can take that.
Currently the base level, we divide our segments into two, International Rail and Baltics. Out of that International Rail is approximately. Now I don't want to answer because I don't have that figure accurate in my head. For the growth expectations, it is definitely going to be organic growth. You have to remember that each railway line that we open contains approximately capacity to generate revenues in excess of EUR 10 million. There the organic growth rate that can be achieved through a successful opening of a route is quite big actually.
Okay. Regarding the organic growth, Spain is described as next. What's the target launch date?
Marjut, I guess this is for you.
At the moment, we have a serious backlog with the orders. If we look from the volumes point of view, we could start on next week. We already have volumes to fill one train every week. Of course, when we're planning to open, like, a new lane and track European track in Spain, it is not ready yet. If we want to go all the way from Valencia and Barcelona up to Sweden, we need to wait until the end of this year or early next year. At the moment, we're transporting all our Spanish volumes by truck to Perpignan, from Perpignan to Sweden, we are now looking for some alternative solutions to start earlier than on next year. Soon.
Thank you, Marjut.
Okay. Maybe about the strategic rationale between the different international rail services you offer. How they supplement each other?
I don't know if I understood the question.
Because you have, like, the old Essinge Rail-
you have the block train. How they supplement each other?
it's anyway-
Yeah
Olli, if you Yeah, Olli can say first.
Yeah. They supplement actually very well. As already explained before also, hopefully when the China train is added here, we really have a good fit together. If we just look the Essinge Rail platform, which we bought in 2025 or beginning of 2025, which means that we are running wagons, wagon groups from Central Europe, from Benelux states, from Germany, from Austria, Italy, and France up to Sweden. They are around from different 10 different locations, railway terminals in Central Europe, and most of them are coming to our Frövi terminal in Sweden.
When we add our direct, we can call them block train service, which means that there is a full train length, and the full train is only for us, for our clients. It's planned by us, sold by us, and in a way operated by us, agreed the timetables and everything. And when you look how they supplement, how they work together, so it gives us really a competitive position in the market. The client can choose, of course, not from Benelux going down from Italy, but especially the really competitive market for railway as the distance is longer to Sweden from Southern Europe than from Benelux.
[Foreign language]
Sorry, sorry. It brings for our clients the possibility to choose. He wants to have a single wagon delivery from these separate terminals, it takes a little bit longer time, it's a little bit cheaper, it's still, like, ecologically very friendly. He chooses the direct fast train where the ticket price is a little bit higher, but the delivery time is of course super fast. The client, existing client can choose whatever he needs and fits to its needs. In this way, it gives us much better possibility to offer services to even to existing clients and to sell for new clients a whole package. The fit is even better than I originally thought.
That old Essinge system, it was very stable volumes from these 2012 terminals. Nurminen has been working mainly with containers and container trains. Essinge was working with conventional wagons. These are two totally different kind of solutions. Now when we are able to bring our solutions to Essinge customers, they can choose ocean freight, we can arrange, we can do it with conventional wagons, we can do it with our Parma train, or we can offer trucking.
Yeah, that's clear.
Yeah.
maybe about the Baltics. the volumes has come down in the recent years. what kind of plans do you have for the business? Is the business model itself under structural pressure or it's just a geopolitical situation?
The business model is not under any pressure or structural pressure. The business model is fit. It has its place in the market, so there is no need to look it to rethink it or to make any bigger changes. It works well. It's efficient model as you have seen that it always makes good margins even if margins are lower. The model itself works very well and it's more related to geopolitics sometimes related to changes in the global metal prices because commodities which are transported through Baltics, especially through Latvia, they are really mainly minerals and metals. We are always depending on global markets as the big global players who are running the metal markets globally.
They are sometimes changing their purchasing channels, but the model itself is working very well. The volumes are as we have seen in the beginning of the years, they have quite more or less stabilized and we can see a small growth there. Here we have also very scalable models. When the volumes are growing, even if they are growing really rapidly, we can meet the demand, we can organize it, and when we are coming down, our cost level is also coming down. It's a scalable model, asset light model, which always make profit. I don't see that business as a Let's say there is no risk.
It's more volatile than our other businesses, but it's the model works very well.
Thank you. One last question about the capital allocation. How do you currently prioritize between organic growth, M&A, debt reduction, and profit distribution?
Maybe I can answer that. We have not publicized the allocation percentages, but you can see the AGM proposal for the dividend. That's one public metric. Our business is CapEx light, we don't see the need to invest heavily in CapEx items. I would say that our CapExes are scheduled maintenances that require certain spare parts, IT infrastructure type investments. The level, the euro level will be on an annual basis under EUR 2 million. I think the biggest focus of investment is now the new routes, the Europe strategy, that does require quite substantial net working capital buffers. A particular route can be made profitable in approximately six months, after which we will start making profit.
Before that, since we're operating, with partners and take or pay type of contracts, we have to still move the train all the time, and that the start is capital intensive. Right now we're putting our focus on building the new routes, getting them started, and then bringing them to profitability. At the same time maintaining a certain ability to maneuver in case we, are in a situation where we find an opportunity for the inorganic growth options that we mentioned.
Okay. Thank you. That's all from me.
Yeah, I can add here for a good answer which Niklas gave. So really the organic growth is now the main potential we see because we have something to offer to the market, and there are not really similar products now on the market. So there is not much to buy, purchase. We can see that we need to first grow in the market we have chosen before we can make serious M&A steps. That's the reason is that we need to be a stronger player. We need to know the market better.
We have been or the markets must know us better. That means that when we can have, let's say, find much better matches and the risk level of making wrong M&As comes much lower when we really know what we are looking after. Today, at least if we look the short period, we see that the much better potential and use of capital is organic growth. As Niklas said, it also requires quite substantial, let's say cash, as we are also not activating those services or the building up phases into our assets. We are, you know, putting them direct to our profit and loss accounts, so it's not seen as investment.
We don't want to build our balance sheet with expectation what will happen in the future because we are in a service business, so it goes through the profit and loss, but it requires really upfront cash to be put on the table to make it possible. That's also an important factor to understand that also means that we're entering into the, into this game, it's not easy to other players because they need to know what to do, and at the same time you cannot do this without funding. Our priority is to go forward now with organic growth, which we can see it's really possible for us.
Thank you very much. Now let's take some questions from online. I think the first question goes to Marjut. In the future, when Europe's rail network reaches Spain, what will that mean for your business?
This is almost the same than Aapeli already asked that, how is it with Spain? Yeah, it's in Europe, in Spain and Portugal, there is a different track width than in Europe. When this European track will be built all the way to Barcelona on October and then on January it should be ready in Valencia, it gives us the opportunity to start our own block train connection from Spain, no need to arrange truck transportation to France first. Of course this is something now to already negotiate with the partners and with the customers because we see those volumes coming by road freight every day crossing the border.
This is very big opportunity for us to be the first ones who will start this traffic.
Very interesting. Thank you, Marjut. Next question. Do you feel that the stock market and investors understand and appreciate everything you have accomplished in past years? This CMD was excellent. What other IR activities you are planning in the future? Maybe you all can comment on this.
Thank you. Always, I think the management always everywhere thinks that the market is not understanding fully what the company is doing. That's, you know, we always say the market is always right. We try to be much more, you know, to give information, try to explain what we are doing. We fully understand that our business model in logistics is variating little bit from our peers. Unfortunately, very many of our peers, especially in the railway sector, they are not listed. They are owned by the states or they are owned by some industrial groups which the railway operator is only helping the group level functions or they are very local small players, familiar players.
We understand that this makes little bit complex to understand what is happening on rail from investor point of view, and especially in Finland where the railway has always been mainly owned by the state. It's of course our responsibility try to open more and more how this works and why it's interesting and why it has future and mean and why it creates value. Of course one reason for this capital market day was really to open our story what we are doing now, not only in Finland, but especially between Central Europe and Scandinavia and Sweden.
Hopefully this opens a little bit how we work, what we do inside the railway sector and how we combine the railway sector into the whole logistics chain for clients who traditionally have never used railway or they don't have a railway in their backyards. Hopefully this opens a little bit our thinking and the focus and the core targets where we are targeting and why it's possible for Nurminen.
Thank you. Olli, maybe you can take the next question too. Do you see AI can offer opportunities, for example, through better logistics or warehouse optimization? Have you some experiences so far worth mentioning?
First of all, of course, railway, as such is really linked to the infrastructure and the rules what the infrastructure and the rulings what the authorities are giving, how the trains are moving. In that sense, most probably from a railway operator's point of view, there is not much place for AI, at least in the nearest future. Maybe from the, let's say the authorities who are planning the whole railway networks in Europe, how they have can work better, you know, how to combine the huge volumes which are coming from different countries and the passenger trains and all this traffic. AI will be a good add-on here and make efficient much better. In this aspect, I think AI will bring a lot for the whole railway industry.
As for one operator, so far not so much. It's more to really keep the good working, keep the equipment in a good shape and understand that you have to fulfill your, stuff your containers in time that the train can leave. On the terminal businesses, of course, AI will bring a lot efficiency inside the terminal work where we are already, of course, using as others also, you know, a lot software and lot of automatization and planning. Here I think AI will bring also a lot add-on in the nearest future.
Thank you, Olli. Soon we will have to wrap up, but I think we can take one more question. Capital allocation. Your dividend policy is to pay increasing euro-nominated dividend to shareholders. You have strong balance sheet, had solid free cash flow in 2025, but you still maintained the dividend flat. Does this imply you may have some larger acquisitions on the pipeline, or did you just decide to be cautious because of the uncertain market outlook? Okay. Olli, this is for you also.
Yes. Yes, I think the last remark is important that of course we are cautious. We want to have a strong cash position and to be able to open new routes. These kind of businesses are normally not really bankable because you build a service, you don't build buildings, or you don't buy locomotives. You don't build something, you don't buy something which goes to the balance sheet. It needs funds. That's first of all, that we need funds. We want to be a little bit cautious because we have seen that around us has been a lot geopolitical changes and that's why to be sure that we can go on with the businesses and really develop us in the future.
Of course we believe that we can generate much more value than, let's say, 4% or 5% dividend because we are in a growing phase. We are not start-up, but we are in a growing phase. We see that we have a potential to grow much faster when GDP or the market as such. Of course that needs Normally when you are growing it needs, first of all, working capital. It needs that you have to open new offices, hire people, which of course needs upfront cash.
All these together, we have been keeping this dividend quite flat due to these reasons that we really are sure that we can bring much more value by our doing and securing the good organic processes what we are having.
Thank you. I already said this is the last question, but looks like we have still one good question in the, in the room. Aapeli , you have still one question regarding profit distribution.
Yeah, regarding the profit distribution, have you considered share buybacks as an option?
Yes. Yes, we, the AGM, which we had on 28th of April this year, it's approved the board's proposition to have share buybacks, if I remember in an amount of EUR 800,000 approximately or depending of course the stock value, but I think it was, like, closer to 1% of our free float or stock number of our stocks. Yes, this is in our playbook and definitely an important instrument.
Thank you.
Thank you, Olli. That's all we have time for today, so, we will wrap up the Q&A here. We will follow up on the remaining online questions by email after the session. This concludes our Capital Markets Day. I will now hand over to Olli for a few closing remarks.
Yes. Thank you, Tiina, and of course thank you for all of you joining us today. Just shortly I think that I wish you enjoyed today, so you didn't spoil your day or lose the other things you have to do today. I hope you will remember our message and how we want to generate growth and value. Having the business which is railways in centric and we put together to the rail the first and last mile with all services and added value services. We bring more clients on rail. We bring the new type of clients who has never used rail because our service offering makes it possible. That's why as we have quite unique service offering due to our expertise in railways, in terminals, in forwarding works.
Putting all this expertise together makes us having competitive edge compared to most of our peers. That's why I want you to remember that the service offering in a huge Central European Scandinavian market, especially compared to our current size, brings a good and huge potential for us to grow profitability and to move forward and then again find new options and possibilities in the market. As it's scalable, it's also scalable We need it also scalable downwards, but of course we are scaling it up, up, up, upwards more than downwards. It also means that the risk levels with our balance sheet and how we allocate funds, it's also our risk level in the business point of view is relatively, let's say, small, especially when we look our current stock price.
Last but not least, we really as already here was asked that we really try to make our business model more well known and understandable than maybe it has today been or until today.
Once more, thank you for joining us. Hopefully you enjoyed and I know that you will have now some small bites and coffee and whatever you will have there. Of course, possibility to have discussions with Nurminen people who are in place today. Once more, thank you and really follow us in the future in our own websites, in social medias, platforms and in news. Thank you and see you next time.