Titlis Reports Positive Cash Flow Despite A Historic Year Of Crisis

The outbreak of the corona pandemic with the lockdown and many regulations led to a global collapse in travel activities. The crisis has had a drastic impact on the operating business result of Bergbahnen Engelberg-Trübsee-Titlis AG, which has to report a loss of 19.6 million francs for the 2019/2020 operating year. At 38.2 million francs, the consolidated operating income is 50.8% below that of the previous year. 595,341 guests visited the Titlis area, more than in many years. Year-on-year, the decline in the snow sports customer segment was 21.3%, for individual travelers 39.8% and for group travelers 85.0%. The first entries plummeted by 52.0%. By means of savings measures introduced immediately, A strict cost management and the short-time work allowance could reduce the operating expenses by 30%. The EBITDA amounts to 5.2 million Swiss francs, which corresponds to an operating profit margin of 14%.

The start of the 2019/20 winter season was still positive. Thanks to technical snowmaking, the slopes were in excellent condition despite the little snow. Good weather and the conveniently located holidays led to record numbers over Christmas and New Year, the winter offer of Bergbahnen Engelberg-Trübsee-Titlis AG (BET) became even more attractive with the opening of the new Engstlen chairlift. The lockdown ordered by the Federal Council on March 14 then changed everything. The early end of the winter season resulted in a decrease of 21.3% compared to the previous year. After the reopening on June 6th, the BET was able to welcome mainly domestic visitors - the Swiss excursion guests on the Titlis increased by 50.0% compared to the previous year, on Trübsee the increase was 39.8%. However, this encouraging increase was unable to compensate for the absence of international guests. The ratio of 454,697 guests in winter to 140,654 in summer was very unbalanced in the past financial year.

The number of single travelers was down 39.8% on the previous year. The group business reached the level of the previous year until January and the signals from the overseas markets let the company look positively into the future. Until January 24, 2020, when the Chinese authorities imposed a ban on the sale of package tours due to the pandemic, which amounted to a travel ban. As a result, the international travel market collapsed completely and has not recovered to this day. That is why BET had to record a decline of 85.0% compared to the 2018/2019 financial year in the important customer segment of group travelers.

Compared to the strong previous year, transport revenue fell by 55.7% to CHF 23.4 million. Even the numerous Swiss guests were unable to compensate for this significant drop in revenue - many of them have a half-fare card and often only travel to the Trübsee middle station and start their hike there. This led to lower ticket revenues and correspondingly less added value.

The decline in visitors also had an impact on the restaurants / hotels, whose sales fell by 49.1% year-on-year to CHF 8.0 million. The gastronomy on the Titlis was hardest hit by this, where the lack of international guests left a large gap. In the area of ​​accommodation, there was also a decline in income to CHF 1.7 million, although the renovated 86 rooms in the Hotel Terrace in combination with attractive offers were very well received by guests.

Thanks to strict cost management, operating expenses could be reduced by 30.0% to CHF 33.0 million compared to the previous year. Due to the officially ordered closure, the reduced offer, the dismissal of 13 employees and the early termination of seasonal contracts as well as the use of short-time work compensation, personnel expenses fell by 27.8% to CHF 18.0 million in the past financial year. A total of CHF 14.7 million was invested. , depreciation rose to CHF 24.2 million. The reason for this is the depreciation on the high investments made in recent years, the short depreciation period for project costs and a special depreciation of CHF 4.7 million on the “TITLIS 3020” project. The net loss in the 2019/20 financial year amounts to CHF 19.6 million.

The EBITDA (earnings before interest, taxes, depreciation and amortization) is well below the previous year at CHF 5.2 million - a good figure if you take into account the extraordinary events and circumstances in the past financial year. The EBITDA margin fell to 14.0% due to the slump in sales in all business areas.

As a result of the extraordinary, challenging crisis situation, the BET Board of Directors proposes that the General Meeting waive a dividend payment. This is to ensure the necessary liquidity and sustainable development of the company.

OUTLOOK

The 2020/21 ski season got off to a promising start - in November BET welcomed more snow sports enthusiasts than ever before and recorded an increase of 52.8% compared to the previous year. With the renewed closure of the area for snow sports over the Christmas days, the company is missing the days with the highest turnover of the whole year. The reopening on December 30th, despite the restrictions, is a ray of hope in this extremely difficult time. For months, immense efforts have been made to make the ski season as safe as possible. Operationally, BET will continue to focus on offering its guests a safe skiing experience. Intercontinental travel and the return to globalized tourism will not happen for some time. BET are doing everything to further increase the number of Swiss guests. Despite the crisis year, the traditional Engelberg company is convinced of the strategic direction it has taken and looks confidently into the future.