SBB makes good progress in 2014: More passengers and goods transported – higher profits from the sale of re-al estate.

In 2014 SBB carried 3.7 percent more customers and 17.6 percent more goods. Each day, 1.18 million passengers rode its trains. Customer satisfaction and punctuality increased slightly; SBB remains the most punctual rail network in Eu-rope. Net income increased by CHF 135 million to CHF 373 million; the increase was attributable primarily to real estate sales. SBB Cargo once again boosted the company’s consolidated result; SBB Cargo International was profitable for the first time. In long-distance services, however, profits decreased significantly. Debt continued to increase, but less so than in the previous year. The debt coverage ratio improved. In view of the increasingly difficult economic environment due to, among other factors, the strong Swiss franc, SBB intends to further increase its efficiency with the goal of avoiding increases in public transport prices in 2015.

SBB made good progress in 2014, with improvements in punctuality, safety and cleanliness, as reflected in the slight increase in customer satisfaction. In the past year, the company reached milestones with the launch of the first phase of the cross-city line in Zurich and the opening of the newly modernized Genève Cornavin train station. The Léman 2030 project signalled the start of the largest railway project of the next decade. Major rolling stock procurements for the East-West and North-South axis have been relaunched. The simultaneous operation, maintenance and upgrading of the railway infrastructure while maintaining high punctuality remains a challenge.

SBB Passenger Traffic serves more customers, SBB Cargo transports more goods

The demand for passenger travel in 2014 continued to rise. SBB transported 1.18 million customers per day, 3.7 percent more than in the previous year (2013: 1.14 million customers; retroactively adjusted according to the new calculation method, which better accounts for short-distance travel time). Passenger kilometres increased by 2.6 percent to 18.2 billion kilometres.

Traffic growth in 2014 was spread evenly over major and minor traffic times.

SBB Cargo did well in the still highly competitive freight market and was able to increase traffic performance thanks to acquisition of new traffic and additional services for existing traffic by 17.6 percent with 14.5 billion net ton-kilometres.

Customer punctuality and satisfaction slightly improved in highly loaded network

Customer punctuality – the proportion of travellers arriving on time or with a delay of less than three minutes – rose 0.2 percentage points to 87.7 percent, despite increased maintenance and expansion work on the network. Meeting of scheduled connections fell by 0.2 percent to 97.1 percent. In a European comparison, SBB has been the top performer in terms of punctuality for years.

Customer satisfaction in passenger traffic increased by 0.3 points to 75.9. Factors that saw higher ratings included cleanliness, available space, value for the money and customer notification in the event of a disruption. The biggest jump, by 1.8 to 60.8 points, was in the perceived value for the money; this area still scored comparatively low, however: ticket counter staff, for example, were rated about 82. Customer satisfaction in stations increased slightly (76.5 versus 76.3 points). Freight customers, on the other hand, were much more satisfied than in the previous year (74.4 versus 66.4).

Contributing to this satisfaction was the outfitting of all 1,018 long distance coaches with signal amplifiers and high-quality mobile phone service reception. To equip regional coaches, a financing agreement was negotiated with mobile phone service providers and orderers. Efforts to outfit rail stations with free internet access continued in 2014 with all larger stations expected to be fully equipped by the end of 2015.

In 2014 SBB expanded its supersaver ticket offerings and launched an Evening GA travelcard. Customer information was also improved. For example, seating can now be reserved online and the “My Station” app helps customers in Zurich Main Station find the right connection.

Higher group profit and improved earnings for all divisions

The consolidated result increased by CHF 135 million to CHF 373 million (2013: CHF 238 million). The increase was primarily due to the sale of real estate properties, such as SBB headquarters in Berne Wankdorf, as well as slightly higher earnings in passenger traffic and SBB Cargo. On the other hand, additional maintenance on the track network totalling CHF 95 million, which SBB financed itself, had a diminishing effect on profit.

Passenger traffic profit increased by 8.1 percent to CHF 104 million (2013: CHF 96 million), driven primarily by higher income in regional transport and the end of restructuring contributions to the pension fund. In long-distance traffic, profit decreased to CHF 71 million (2013: CHF 93 million), in part because of stagnating operating income, increased vehicle costs and higher depreciation.

SBB Real Estate increased its pre-compensation profit over the previous year by 55 percent to CHF 395 million, CHF 150 million of which will go to infrastructure financing and the rest to the SBB Pension Fund.

SBB Cargo outperformed its positive result in 2013 with a profit of CHF 33 million. Contributing to this effect was SBB Cargo International, which was profitable last year for the first time with CHF 1 million in net income.

SBB Infrastructure recorded a deficit of CHF -66 million (2013: CHF -72 million) as a result of higher maintenance payments. Nevertheless, the backlog in infrastructure maintenance grants in 2014 increased to CHF 2.5 billion (2013: CHF 2.3 billion) due to the lack of sufficient stabilization funds.

Debt coverage ratio improved – staff motivation significantly higher

Free cash flow after public-sector funding was CHF -205 million (2013: CHF -653 million). The negative free cash flow is due to the fact that investments in rolling stock and real estate cannot be financed by operating activities. Debt continued to increase in 2014, but less so than in the previous year. Interest-bearing net indebtedness rose to CHF 7,720 million (2013: CHF 7,507 million). The debt coverage ratio, i.e. the amount of net interest-bearing debt in relation to EBIT, improved from 19 to 15, but is still too high.

Public-sector funding for infrastructure was higher in 2014 (+ CHF 80 million to CHF 1,637 million), primarily due to greater depreciation. In regional traffic, public funding totalled CHF 587 million (2013: CHF 591 million.) and CHF 25 million in freight traffic (2013: CHF 24 million).

The 2014 staff survey yielded positive results. The satisfaction of the company’s approximately 33,000 employees has increased significantly since 2012 (from 62 to 66 points) and is as high as ever. Staff motivation has also improved.

Concrete measures to counteract the strong franc

A strong Swiss franc represents a major burden for SBB. Further efficiency improvements and structural adjustments are necessary in the areas most highly impacted by the currency’s strength. To lower the impact on its customers, SBB will avoid raising public transport prices this year. The introduction of the SwissPass in August 2015 will allow the company to boost marketing of tourist destinations. SBB is in talks with its social service partners to develop further measures to stabilize the pension fund, a challenging proposition given the strength of the franc and negative interest. In freight traffic, the North-South axis and import/export transport have been hard hit by the strong Swiss franc.

Milestones over the coming years – shaping the future of travel

A full-scale timetable change is scheduled for the end of 2015. The launch of the second stage of the cross-city line in Zurich will increase capacity and enable faster east-west connections. In 2016, the focus will be on north-south connections with the opening of the new Gotthard tunnel. In 2017, the new long-distance double-deck trains will travel the east-west axis.

Making life easier for its customers is a top priority for SBB. Together with the public transport sector, SBB will introduce the SwissPass in the period August 2015 to January 2017. This is the first step towards more customer-friendly access to public transport and bringing GA convenience to all. In 2015, the entire industry and the tariff associations involved must work to simplify the terms of use and the zone systems. The gradual installation of 1,000 ticket machines of the latest generation will be completed by the end of June 2015. Customer information will be further improved: the SBB Mobile app will be enhanced in the first half of the year with additional features such as real-time information on train formation, service disruptions and alternatives.

After Swiss voters approved the FABI initiative to finance and expand the country’s railway infrastructure, as of 2016 the company will have access to additional funds for maintenance and expansion, with maintenance work taking priority as the basis of the rail network. From 2030 onward, the major development efforts will focus on long-term customer needs. Expansion plans with a time horizon of 2100 must take changes in travel behaviour into account.

Work and travel patterns will continue to change dramatically as a result of electronic communications and virtual meeting places. New conveyance options will also begin to emerge: long-distance buses are signs of things to come as self-driving vehicles become a reality, leading to a convergence of rail and road. SBB wants to help shape the future of travel. The biggest opportunity lies in the ability to offer public transport from door to door.

SBB Group in figures

Consolidated income statement (in million Swiss francs)

 

2014

2013

Change (in %)

Operating income

8,542

8,319

+2.7%

Operating expenses

-8,228

-8,010

-2.7%

Operating result/EBIT

314

309

+1.6%

Financial result

-133

-145

+8.7%

Non-operating result

190*

81

+135.0%

Pre-tax earnings

372

245

+51.8%

Taxes and minority interests

1

-7

 

Group profit

373

238

+56.5%

* Mainly real estate sales

Segment results (in million Swiss francs)

 

2014

2013

Change (in %)

Passenger Traffic

104

96

+8.1%

Real Estate*

395

254

+55.2%

Freight Traffic

33

15

+124.3%

Infrastructure

-66

-72

+9.0%

* before compensation payments

Volumes and services

  2014 2013 Change (in %)
Passenger Traffic

Passengers per day (in millions)

Passenger kilometres (in billions)

 

1,18

18,2

 

1,14

17,8

 

+3,7%

+2,6%

Real Estate

Rental income from third parties (in CHF million)

 

417

 

394

 

+5,7%

Freight Traffic

Net ton-kilometres (in billions)

 

14,5

 

12,3

 

+17,6%

Infrastructure

Train-path kilometres (in millions)

 

173

 

170

 

+1,9%

The full 2014 SBB Annual Report can be downloaded free of charge at
www.sbb.ch/geschaeftsbericht
(German version).

Further content