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Opus: Positive statement by Traffic Committee

logoVery good news for vehicle inspection specialist Opus out this morning. Ahead of the Swedish governments preparation work, the Traffic Committee has stated that Sweden should not adjust the inspection interval according to the minimum requirement in the EU directive.

In October 2015, the Swedish Transport Agency proposed that the current inspection interval for the inspection of passenger cars and light trucks should be changed from 3-2-1 to 4-2-2, which is the
minimum EU level of inspection intervals. Following first media report about this proposal, Opus’s share price dropped from SEK 8,80 to SEK 5,4 and is currently trading at around SEK 4,50. The industry calls the Swedish inspection period for 3-2-1 (initial inspection takes place after three years, the next time after two years, etc.). This proposed change would mean that most vehicles on public roads would go longer before receiving an initial inspection for safety or emissions and, once initially tested, the interval between all subsequent inspections would be doubled from the current interval.

The Traffic Committee has now presented its views on the proposal and emphasizes the importance of having a vehicle inspection system that is effective and efficient. The Traffic Committee believes that the government should only change the rules as to when the vehicle must be inspected in such a way that road safety and the environment are not affected negatively.

The Traffic Committee emphasizes the importance that the government incorporates an inspection package in a way so that Sweden’s high ambitions in terms of road safety and environmental concerns remain. According to the Traffic Committee, there are several reasons why Sweden should not adjust the time between inspections to the minimum required by the EU directive. Periodic vehicle inspections are
important to ensure that the vehicles remain safe and do not cause excessive emissions. The Traffic Committee emphasizes that even relatively new cars are subject to errors in technical inspection. In
addition, frequent inspections are necessary to monitor the actual emissions.

According to a press release today, the Opus Group strongly supports the statement of the Traffic
Committee. For many years, Sweden has been considered the world leader in road safety due, in part, to our Vision Zero goal of zero traffic deaths. From 1991 to 2013, the number of annual road
fatalities in Sweden has decreased by 64% from 745 to 263. Maintaining the inspection interval at the current 3-2-1 frequency and continuing to modernize the inspection process and criteria are
important steps in keeping the Vision Zero goal for Sweden alive. If the Swedish government simply adopts the Transportstyrelsen recommendation as is, it will do significant damage to Sweden’s Vison Zero goal, potentially resulting in an increase in fatality rates as is currently being experienced by the UK. The company states that the Swedish government should lead with policy that spurs innovation and investment in vehicle inspections in order to increase and not decrease traffic safety in Sweden. (The full report 2015/16: TU11 from the Traffic Committee is available on the Swedish Parliaments website:
http://www.riksdagen.se/sv/Dokument-Lagar/Utskottens-dokument/Betankanden/Fordons–och-vagtrafikfragor_H301TU11/).

We believe that Opus’ share price has been beaten far too much following the proposal of Sweden’s transport agency last fall. Opus’ Sweden business does account for some 30% of revenues, the reminder comes from the company’s international operations which are growing above group average. Too much focus has been put on the Swedish business by Swedish investors, in our opinion. Today’s announcement should, logically, ease investors mind.

Nordic Investor

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