Lenzerheide Bergbahnen AG Back On Course
The 17th General Assembly of Lenzerheide Bergbahnen AG took place on September 30, 2022 in the Lenzerheide multi-purpose hall. Around 265 shareholders followed the statements by the Chairman of the Board of Directors Felix Frei and CEO Thomas Küng on the 2021/22 financial year and the upcoming investment projects. The focus was on the subject of energy.
It was again a familiar picture that presented itself to those present on Friday afternoon in the Lenzerheide multi-purpose hall: with around 265 people, a similar number of shareholders gathered for the 17th ordinary general meeting of Lenzerheide Bergbahnen AG (LBB AG) as before the Covid-19 Pandemic. Right from the start, Government Councilor Dr. Mario Cavigelli gave an official greeting from the Graubünden government to the shareholders present and emphasized his close ties to the region and the successful development of the destination in recent years.
In terms of content, joy at the successful past few months, uncertainty about the upcoming winter season and motivation for the upcoming strategy projects alternated. In his welcome speech, Chairman of the Board of Directors Felix Frei emphasized that LBB AG is back on an investment course after many years of consolidation and debt reduction. “We now have rock solid financing and can once again afford strategic investments. Particularly noteworthy are the first important projects such as the expansion of the Rothorn valley station and Z-Bar including staff housing, the replacement of the Täli chairlift and various snowmaking and water projects".
A successful financial year 2021/22
LBB AG closed the 2021/22 financial year with the best result since the merger of the mountain railway companies in Lenzerheide in 2005. Total sales increased by 18.4% over the previous year to CHF 37.3 million (previous year: CHF 31.5 million). The EBITDA increased by 46.7% to CHF 13.9 million (previous year: CHF 9.5 million), which after deduction of depreciation resulted in a profit of CHF 2'250'733 (previous year: CHF -53'761). With more than 1.4 million first-time entries in winter 2021/22, there were more guests in the Arosa Lenzerheide ski area than ever since the opening of the ski area connection in winter 2013/14.
LBB AG was able to take this positive boost into the current 2022 summer season. As of the end of September 2022, Lenzerheide recorded slightly more guests and an increase in sales of 8% compared to the previous year. This means that LBB AG can almost build on the record summer of 2020. "The good results of the last financial year and of the summer are pleasing, but cannot completely smooth the worry lines with regard to the coming winter season," says CEO Thomas Küng, understandably reticent due to the multiple uncertainties.
Additional energy costs of around CHF 1 million
In addition to the challenges related to the keywords euro exchange rate, shortage of skilled workers, drought, inflation, interest rate hikes or delivery bottlenecks, Thomas Küng placed a clear focus on the topic of energy in his speech. The sometimes massively rising energy prices and availability have become everyday issues for those responsible at LBB AG. With regard to the currently ongoing discussions about the necessity of snowmaking, Thomas Küng emphasizes that winter sports are not an unnecessary leisure activity, but the livelihood of entire regions. «For mountain regions, ski areas are clearly 'too big to fail' and technical snowmaking is to be regarded as the basis for winter business in the same way as production machines in other sectors of the economy. We're not even discussing whether, for example, the production of chocolate should be banned just because chocolate is not essential to life," says Thomas Küng. Skiing has a wide range of entitlements, it is enjoyment, attitude to life and sport all rolled into one.
Thomas Küng estimates the additional energy costs for the 2022/23 winter season to be around CHF 1 million, regardless of the discussion about energy distribution. “That will have a significant impact on EBITDA. Nevertheless, we have not decided on a short-term price increase for the 2022/23 winter season," emphasizes the CEO of LBB AG and adds: "We are making all our preparations as for a regular and again successful winter season. We will save as much as possible and primarily in such a way that the guest does not notice anything or only little of it."
Sustainable use of electricity and water
In the 2022 summer season, LBB AG again tackled or implemented various energy-related projects. After the photovoltaic system was installed on the roof of the Lavoz mountain restaurant last summer, LBB AG's fifth and largest solar system to date is currently being built at the valley station of the Pedra Grossa chairlift. The mountain railway company now produces around 160,000 kWh of solar energy annually, which corresponds to an average annual requirement of over 50 single-family homes.
As for every mountain railway company, the availability of water is another key issue for LBB AG. Due to the prolonged drought, the spring discharges will be lower this year, which according to Thomas Küng - should the autumn not be excessively wet - could lead to delays in snowmaking and the opening of the slopes. Despite the many uncertainties, the CEO of LBB AG is positive about the upcoming winter and the future: "The euro crisis and the Covid-19 pandemic have shown that you can grow with a motivated team and face challenges and be successful despite the circumstances."
