2013: a challenging year: Over a million customers a day for the first time, and freight services move into the black.
Press release, 25.03.2014
In a challenging year, Swiss Federal Railways (SBB) carried more than a million customers a day for the first time ever. The increase can be attributed primarily to improved services. For the first time in over 40 years, and thanks to its consistent focus on the strengths of rail freight, SBB Cargo generated a positive net income figure (CHF 14.7 million). However, consolidated net income fell by CHF 184.2 mil-lion to CHF 238.2 million. The bulk of the CHF 332.1 million increase in operating expenses was due to higher train-path costs (CHF 163 million) and additional ex-penses, largely for maintenance of the rail network (CHF 128.6 million). SBB was only able to absorb part of these extra costs. The decline in net income and higher investments increased net interest-bearing debt by CHF 665 million to CHF 7.5 billion. While customer punctuality was a high 87.5% in 2013, it fell just short of the previous year's figure of 88.0%.
2013 was a challenging year for SBB. On the one hand, an excellent performance was delivered in all segments. In particular, passenger numbers reached a new record, the Freight Division generated positive net income, and income from station premises rented by third parties also rose. On the other hand, accidents and the impact of construction and maintenance work adversely affected punctuality and customer satisfaction.
SBB Passenger: more customers, lower segment result
For the first time in its history, SBB transported more than a million customers a day in 2013: 1,002,000, to be exact, or about 3.7% more than in the previous year. The number of passenger-kilometres travelled rose by 1.3% to 17.8 billion. This was largely made possible by improved services in French-speaking Switzerland, where there were 30% more seats and 14 additional trains, and by the twice-hourly service between Zurich and Schaffhausen.
Traffic volumes in the self-financing long-distance passenger business rose by 1.4% to 13.1 billion passenger-kilometres. Volumes on grant-aided regional services increased by a further 1.0% last year to 4.7 billion passenger-kilometres. Demand was up in both areas, mainly at peak hours. Leisure and tourist travel was stable in comparison with the previous year, while commuter and business travel increased once again. Rail accounted for a stable 25.0% (+0.1 procentpoints) market share of traffic in Switzerland.
The fare increases that came into force in December 2012, which averaged 5.2%, generated additional revenues of some CHF 129 million. These rises were sufficient to cover approximately 80% of the increase in train-path costs, which were up by CHF 163 million rise. These higher access charges and the increased expenses incurred by the expanded offering cut the Passenger Division's result drastically to CHF 96.1 million, only just over one third of the 2012 figure of CHF 268.9 million and significantly lower than it had been in earlier years.
SBB Real Estate: the expansion of station sites continues
SBB pressed on last year with its programme of turning station sites into customer service centres. Many stations have been modernised, with new product and service outlets, while the development of the main Lausanne and Geneva stations has begun. There has been no let-up in the demand for properties in central locations with good public transport links. By 2020, Zurich’s new Europaallee district will boast some 2,500 study places and 6,000 jobs, 400 apartments, a hotel, and over 50 new shops and restaurants. Other site developments have also been initiated, such as the centrally-located Rösslimatt in Lucerne.
SBB Real Estate increased its segment result before transfer payments by 9.8% to CHF 211.3 million. CHF 150 million of this is helping to finance spending on infrastructure, while 96.5 million are contributing to the restructuring of the SBB pension fund.
SBB Cargo: net income in positive territory for the first time in over 40 years
In a highly competitive market, SBB Cargo increased its traffic volume by 1.5% to 12.3 billion net tonne-kilometres. The volume in the Swiss business gained slightly on the previous year, rising from 5.0 billion to 5.2 billion net tonne-kilometres. SBB Cargo rejigged its production networks, its fleet and its administration last year, achieving significant improvements in its cost structure. And SBB Cargo succeeded in gaining new customers, even though the number of service points has been reduced. In the intermodal freight sector, two new routes were opened and preliminary work for an additional one began.
By focusing consistently on the strengths of rail, SBB Cargo achieved its ambitious objective of breaking even and posted positive net income for the first time in over 40 years. This represented a major leap forward in its restructuring. At CHF 14.7 million, net income was CHF 65.9 million ahead of the previous year. Freight revenues overall rose by 4.7%. SBB Cargo International managed to maintain its market position, increase production efficiency and achieve financial stability: in the face of stiff competition, net income was CHF 8.2 million up on the previous year, though this still left it CHF 2.8 million in the red. SBB Cargo International broke even in the second half of 2013. The market environment in the freight sector remains challenging both nationally and internationally, and competitive pressure from road transport remains heavy.
SBB Infrastructure: more funds for maintenance
SBB's infrastructure network was once again subjected to still more intensive use in 2013: the number of track-kilometres travelled rose by 2.7% to 170.0 million. In its 2012 report on the condition of the network, SBB already highlighted some unanswered questions about the state of the permanent way. In the first few months of the year under review, the volume of track maintenance work exceeded the amount originally forecast by CHF 128.6 million. Deployment of a new diagnostics vehicle was instrumental in pinpointing the new maintenance requirements, as were the results of an inquiry into a broken rail incident at Schwerzenbach.
The safety and quality of the rail network continue to enjoy top priority. SBB is in talks with its owner regarding the funding of the additional maintenance work.
Favourable production conditions (above-average water flows) enabled the Energy area to achieve a good result (CHF 56.3 million, down from CHF 81.5 million in 2012). The overall segment result at the Infrastructure Division was negative, at CHF -72.3 million (previous year: CHF 37.1 million).
Consolidated net income down in 2013
SBB's consolidated net income fell by CHF 184.2 million to CHF 238.2 million in 2013 (2012: CHF 422.5 million). The bulk of the higher operating expenses of CHF 332.1 million was due to higher train-path costs (CHF 163 million) and additional expenses, largely for maintenance of the rail network (CHF 128.6 million). SBB was only able to absorb part of these extra costs.
Free cash flow after public-sector funding was CHF -652.9 million (2012: CHF +905.8 million). This decline was due to several factors: the lower net income, heavy investment totalling CHF 3,562.2 million (2012: 3,206.6 million), notably in rolling stock and real estate, and the disappearance of the previous year’s extraordinary effects (sale of mortgages totalling CHF 604 million with the railway employees' building society (Eisenbahner-Baugenossenschaften, EBG) to the SBB pension fund).
The decline in net income and higher investments increased net interest-bearing debt by CHF 665 million to CHF 7.5 billion. Public-sector grants for infrastructure were substantially lower than in the previous year, decreasing by CHF 145.6 million to CHF 1,557.2 million. Grants for regional services amounted to CHF 591.3 million (CHF -4.9 million), grants for freight services to CHF 23.5 million (CHF +1.2 million).
Customer punctuality and customer satisfaction slightly down, but at a high level
Customer punctuality – the proportion of travellers who reach their destinations on time or with less than three minutes' delay – was at a high level in 2013, though at 87.5% it narrowly failed to equal the previous year's figure of 88.0%. In particular, delays on the S-Bahn network in the Greater Zurich area were mainly due to work on the major cross-city link project, to the simultaneous automation of signalling systems and to unscheduled track maintenance work being carried out without any cutbacks to customer services. In terms of meeting scheduled connections, SBB achieved a punctuality rate of 97.3% (2012: 97.4%), the second-best result since measurements began in 2008. Since December 2013 the figures for customer punctuality have again exceeded targets. On an international comparison, SBB has been the top performer in terms of punctuality for years.
Overall customer satisfaction fell slightly last year to 75.7 points, a drop of 0.3 points. Satisfaction with passenger information fell by 0.3 points to 80.0 points. SBB has work to do in this area, especially on customer information in the event of service disruptions. Corrective measures have been initiated.
Consistent progress towards a more customer-friendly railway
Owing to criticism of the rigid enforcement of the "buy before you board" rule and of ticket machine usability, SBB is striving to make public transport facilities more customer-friendly and easier to use. For example, it has introduced a "platform ticket" which, together with less rigid rules, has helped to defuse the criticism. As a result, negative customer feedback has declined. Jointly with the rest of the public transport sector, SBB has also initiated further measures such as simplifying the instructions for using ticket machines. Last year, together with the rest of the sector, SBB unveiled the new SwissPass. From mid-2015 this card will be able to incorporate GA and Half-Fare travelcards, followed in stages by regional travelcards and other services.
Fitting all long-distance carriages with signal amplifiers, which significantly improve reception quality for mobile phones and data transmission, had become a customer requirement. All 1,018 long-distance carriages will have therefore been fitted with signal amplifiers by the end of 2014. SBB is also keen to install signal amplifiers in its regional fleet, and is discussing funding possibilities with mobile-phone providers and purchasers as a matter of urgency. SBB is also offering customers more services of this nature at stations: the SBB FREE WiFi service, which gives customers internet access free of charge, was launched last year. By the end of 2015 the service will be available at the 100 busiest stations in Switzerland.
SBB broke new ground in 2013 by developing a masterplan for an entire region, the first time this had been done in Switzerland. Drawn up in collaboration with the cantons of Basel-Landschaft and Basel-Stadt, the Basel masterplan sets out how the customer rail offering, railway installations and railway property are to be developed in the coming two decades.
Motivated staff and an attractive employer
Despite the adverse effect of accidents and public criticism, satisfaction among the 31,000 or so SBB employees remained stable. In fact, this parameter gratifyingly gained one point over the previous year’s figure to reach 73 points. SBB remains one of Switzerland’s most attractive employers. According to the top-100 ranking produced by the consulting firm Universum, SBB is one of the three most attractive employers in Switzerland in several categories.
Important milestones in the current year
SBB will complete the tender process for the procurement of 29 new trains for the North-South corridor in the spring, and the result will be announced in May 2014. As in previous years, approximately one billion francs will be invested annually in new and modernised rolling stock for several years to come. The first phase of the Zurich cross-city link and the new underground through station at Löwenstrasse will both come into service in mid-June 2014: Switzerland's largest city-centre construction project will thus have been completed on schedule. Customers will benefit from faster and more frequent S-Bahn services. In autumn 2014 ground will be broken for the major “Léman 2030” project, which will significantly expand rail services in French-speaking Switzerland. SBB will double seating capacity between Lausanne and Geneva. The opening of Geneva's reconstructed, redesigned Cornavin station in the autumn will mark the successful completion of another major project in the French-speaking part of the country.
FABI: a vote of confidence in SBB and public transport, and also an obligation
The clear acceptance of the FABI rail infrastructure financing fund by the Swiss electorate in February 2014 ensures the long-term, transparent funding of the rail infrastructure. The vote in favour of FABI is also a vote of confidence in SBB, and at the same time it puts SBB under an obligation to deliver high-quality services to customers every day, now and in the future, and to keep future price increases within reasonable bounds. After FABI comes into force in 2016, more funds will be available for the maintenance and expansion of the network. This will enable SBB to successively meet the challenges it has highlighted, namely the maintenance backlog for railway installations (2009 network audit) and the follow-on costs of major construction projects. The first expansion phase, scheduled to be completed by 2025, consists of projects with a total volume of CHF 6.4 billion.
Ongoing improvements for enhanced safety
Problems in 2013 included a number of incidents on the rail network. An SBB train driver lost his life in a collision between two regional trains at Granges-Marnand (Vaud) last July, and at the beginning of the year two regional trains collided at Neuhausen (Schaffhausen). Passengers were injured in both these accidents, which SBB deeply regrets. In addition, the first half of 2013 saw a series of apparently unconnected minor collisions and derailments. SBB took emergency measures and initiated in-depth investigations, as a result of which various measures have been taken to improve safety. Work to fit 1,700 signals with speed-monitoring systems, already under way, was accelerated, and the two-person rule was reintroduced at a number of stations. SBB is currently considering whether the planned introduction of continuous speed monitoring in conformity with the ETCS Level 2 European standard can be expedited.
After the collision in Neuhausen, SBB commissioned two external reports examining train protection and the working environment of train drivers. Both reports confirmed that SBB has a highly developed safety culture, and has taken appropriate measures to bring safety to a still higher level. Despite the increasing use of the rail network, the overall trend in the number of incidents is down.
SBB Group: key figures
Consolidated income statement (CHF millions)
|2013||2012||Change (in %)|
|Operating income||8 319.1||8 168.5||+1.8|
|Operating expenses||-8 009.8||-7 677.7||-4.3|
|Taxes and minority interests||-6.6||-11.9||+44.4|
|Consolidated net income||238.2||422.5||-43.6|
Segment results (CHF millions)
* before annual transfer payments
Passengers per day
1 002 000
Third-party rental income (CHF millions)
Net tonne-kilometres (millions)
|12 317||12 132||1.5|
Train-path kilometres (millions)
The complete 2013 SBB Annual Report may be downloaded free of charge from www.sbb.ch/en/annual_report.