For the first time in its history, in 2020 the Jungfrau Railway Group suffered a loss. The loss of CHF 9.7 million in the 2020 coronavirus year is in stark contrast to the record profit of CHF 53.3 million in 2019.

The Jungfrau Railway Group is optimally established on global tourism markets but suffered from the immediate halting of international travel following the global spread of the coronavirus in spring 2020. Subsequently, the operation of the tourist facilities had to be suspended for almost three months due to official conditions aimed at combating the pandemic. Following the lifting of lockdown, business with Swiss guests and visitors from surrounding countries developed positively. However, as expected, this was far from being able to compensate for the loss of guests from Asia.

Overall, the Jungfrau Railway Group posted operating income of CHF 125.7 million, which equates to a fall of CHF 97.6 million compared to the record year of 2019. Transport revenue amounted to CHF 75.6 million, which is down CHF 86.2 million against the previous year. With a drop of 65.6%, transport revenue from the most important segment, Jungfraujoch – Top of Europe, was hardest hit. Experience Mountains transport revenue fell by around half, while transport income from winter sports passes declined by only 5.2%.

Thanks to the rapid introduction of savings measures and use of the short-time work option, it was possible to reduce operating expenditure by 14.1% to CHF 103.4 million – despite the fact that additional new business operations were taken on in the reporting year thanks to the takeover of the gastronomy enterprises on the Jungfraujoch and the operational management of the Grindelwald-Männlichen cableway.

In an extremely challenging environment with a historically unprecedented pandemic, which completely destroyed the largest segment of international customers, those from Asia, in addition to imposing a lockdown lasting almost three months, the positive EBITDA of CHF 22.3 million is pleasing. In view of the completion of the V-Cableway – a once-in-a-generation project – and the assumption of new business activities, a positive EBITDA underlines the robust business model of the Jungfrau Railway Group.

Depreciation and amortisation amounted to CHF 33.5 million. Accordingly, EBIT came to CHF –11.2 million and the annual loss was CHF –9.7 million. Cash flow amounted to CHF 22.4 million, while cash flow from operating activities was CHF 30.4 million.

Alongside the operational challenges caused by the pandemic, the completion of the V-Cableway project was the focus in 2020. Through the opening of the most state-of-the-art terminal in the Alps, the new multi-storey car park and the ultra-modern tricable cableway Eiger Express gondola on 5 December 2020, the intergenerational project successfully commenced operations.

The Jungfrau Railway Group’s total investment volume last year was CHF 123.7 million. Of this, CHF 91.3 million was accounted for by the V-Cableway project. In total, the company has invested around CHF 340 million in the once-in-a-generation project to date, which includes the core elements of the Eiger Express, terminal and multi-storey car park, as well as the Wengernalp Railway and Jungfrau Railway rolling stock upgrades that had already been completed. There is still more investment to come. Overall, costs are expected to exceed the original planning by around 10%.

The Jungfrau Railway Group’s second major project is the Lauterbrunnen-Mürren Mountain Railway upgrade, which is being financed directly or indirectly by the Canton of Berne. Costs amounting to a good CHF 50 million are estimated for the overall upgrade of Mürren Railway. In the reporting year, CHF 9.9 million was invested in the expansion of Grütschalp station and garage, as well as in the modernisation of Winteregg station. Three low-floor multiple-unit trains were also ordered at the end of the year, which will be put into operation in 2023.

The station concourse on the Jungfraujoch will be under renovation until spring 2021. CHF 7.1 million was invested in this in the reporting year. For the Harder Railway, the drive and control of the funicular were upgraded in 2020, triggering investments of CHF 1.6 million.

The consolidated balance sheet as of 31 December 2020 shows equity of CHF 597.0 million. This results in a very solid equity ratio of 72.9%. Borrowed capital of CHF 221.7 million includes financial liabilities of CHF 109.3 million. Only CHF 45.0 million of these are in the form of interest-bearing bank liabilities. The remaining CHF 64.3 million relates to non-interest-bearing loans from the public sector for the financing of railway infrastructure, the majority of which is only conditionally repayable.

During the first year of the pandemic, Jungfraujoch – Top of Europe remained the most significant segment of the Jungfrau Railway Group, despite the fact that the negative impacts of the corona pandemic were most serious in this segment. Net sales declined by CHF 80.6 million or 53.8% to CHF 69.2 million. Following a strong start to the year with record visitor numbers in January, demand began to weaken in February. Following the closure ordered by the authorities from 14 March to 5 June 2020, the guest structure through to the end of the year was no longer comparable with the time before the corona pandemic. Group travel fell away completely, and international guests were largely absent. This meant that the number of visitors to the Jungfraujoch fell by 65.6% to 362,800. The results of the gastronomy establishments and Top of Europe shops also suffered from the considerable drop in guest numbers. This segment as a whole saw EBITDA drop to a mere CHF 3.1 million, which equates to a fall of 95.6% in comparison to the previous year.

The pandemic likewise had a significant negative impact on the Experience Mountains segment. Net sales fell by 48.4% to CHF 16.8 million and EBITDA by 69.0% to CHF 5.8 million. All railways – Harder Railway, First Railway and Lauterbrunnen-Mürren Mountain Railway– saw considerable drops in sales. The losses suffered during lockdown could not be compensated for by pleasing visitor numbers due to numerous Swiss guests in the summer months.

The impact was felt least in the winter sports segment. While the number of skier visits for the Jungfrau Ski Region as a whole fell in comparison with the previous year by 16.0% to 898,400 due to the abrupt end to the season on 14 March 2020, the Jungfrau Railway Group’s share of the region's transport revenue fell by only 5.2% to CHF 22.2 million. With net sales of CHF 29.7 million, the winter sports segment achieved an EBITDA of CHF 3.7 million, which equates to an increase of CHF 2.0 million in comparison to the previous year.

The strategic financial targets of the Jungfrau Railway Group reflect the orientation towards long-term goals and the policy of a value-based company (value stock). In the course of the V-Cableway realisation, the financial targets were reviewed and aligned with the time after entering into full operation. The system of targets is clear and simple.

The Jungfrau Railway Group will continue to strive for development and financing based on solid results in the future. Investments should continue to be financed from self-generated funds wherever possible. In the future, interest-bearing debt capital will continue to be raised only in a limited scope and only for operational investments. The Jungfrau Railway Group thus underlines its claim to be solidly financed and to be able to act independently of outside capital providers at all times. In addition, the scope for distributions is expanded.

Prior to the outbreak of the corona pandemic, the Board of Directors had formulated the following financial targets for the period after the inauguration of the V-Cableway:

During the pandemic, the financial targets, which are geared to the long term, are not achievable in their entirety. The duration, severity and consequences of the pandemic cannot be conclusively assessed at present. Accordingly, the financial targets cannot be used to assess corporate performance either for the reporting year or for the financial year 2021. For the duration of the pandemic, the Board of Directors and the Executive Board are focusing on the establishment of a positive EBITDA on the level of the consolidated financial statements. This will guarantee that the Jungfrau Railway Group can ensure its liquidity at all times and that no cash drain will take place.

Following the normalisation of global tourism markets, the financial targets that had been defined can be drawn on again. Should the global markets recover only very slowly after the pandemic, contrary to expectations, it will be necessary to review the financial targets.

Within the framework of the risk management, Jungfrau Railways examines possible events whose occurrence could jeopardise the achievement of its strategic goals and the associated financial objectives. We assess such events in terms of their probability of occurrence and their likely impact on EBIT. Such events may affect the commercial success, partnerships, reputation, organisation (especially personal safety, physical assets, availability, integrity, confidentiality of data and the protection of expertise), finances, governance and compliance. The risk management identifies both opportunities and threats. Strategic risks are regularly discussed as part of the Board of Directors’ so-called SWOT analysis. In the Management Report, we mainly focus on the commercial challenges (see message from the company management/opportunities and risks).

Jungfrau Railways has an internal control system (ICS) that meets the statutory requirements. With this instrument, we firstly check the compliance with processes and the integrity of data in the highly sensitive area of finance and secondly, we ensure reporting accuracy and reliability.

The IT security policy of Jungfrau Railways follows a best-practice approach. The rules are defined in the IT security policy, the IT security guidelines for employees, the IT password guidelines and the user authorisation concept. In addition, special service levels are defined for all business-relevant applications in line with the respective risks, and the change process is monitored by a specialist group. Moreover, an IT audit has been conducted for review and further development purposes. The results have been analysed, and a project has been launched to implement suitable measures. The in-house data protection officer oversees the 60-odd data repositories that include sensitive personal data, advises the data controllers regarding the handling of these data and reports to the Executive Board at least once a year on data protection concerns and the investigation results and conclusions drawn. In this context, Jungfrau Railways takes the strict EU General Data Protection Regulation (GDPR) into consideration, though the Swiss law has moderate regulations.

The risk management is embedded in the company’s general process landscape. The process organisation determines the responsibilities and makes sure that relevant measures are planned and implemented. The risk index (risk catalogue) forms the central basis for the formal risk process. The risks are assessed by financial impact and probability of occurrence and categorised based on their importance for the company (risk profile). The risk catalogue of Jungfrau Railways provides an overview of the operational risks and is revised annually. The Board of Directors discusses and supplements the strategic risks at least once a year and whenever required. The strategic catalogue has always included the possibility of a pandemic, a risk that is currently a major concern. What this means in concrete terms is described by the company management in its  current message in the management report. The external and internal audit activities are closely linked to the risk management. In addition to internal audits, which are used by the Executive Board to check certain areas for risks, Jungfrau Railways is subject to regular external audits by the Swiss Federal Office of Transport, Suva and the certification body for quality management according to ISO 9001/2015. Additionally, the Board of Directors decided to institute an internal audits unit from 1 January 2021. This function will be carried out in the future from the Gfeller & Partner AG, Bern and Langenthal. 

In its recent SWOT analysis, the Board of Directors has explicitly taken the increasing regulatory density and the growing public awareness of compliance issues into consideration. This has resulted in efforts to continuously improve the compliance. While the safety of our employees and our clients remains as before our top priority, the company is also continually faced with additional legal and regulatory requirements in all kinds of areas. It is a challenge for Jungfrau Railways to duly meet all rules and to even set standards in some areas while not allowing the costs to get out of control and not impairing innovation. With these objectives in mind, a compliance management system (CMS) was started to built up in 2019. In February 2020, the new Jungfrau Railways Code of Conduct was adopted by the Board of Directors. Structural measures were taken in the course of the year in view of the comprehensive reorganisation of the entire management as of 1 January 2021. This also includes the creation of an additional position as a compliance officer who will take care of the implementation as well as the further development of the CMS.

In this area too, the current corona crisis is keeping the company management occupied. In the wake of the materialised risk of a pandemic, the consequences have been newly assessed and repositioned in the risk matrix. An in-depth examination of the topic of a demand slump in the field of international tourism has shown that the reasons that lead to this situation should be presented in differentiated way and in the form of two separate risks in the risk matrix. The adjustment of the risk catalogue is under way and will be submitted to the Board of Directors in the current financial year 2021.

The failure of projects continues to be a significant risk position in the catalogue of an inherently investment-driven transport company that must maintain and constantly renew cableways and railways. The large V-Cableway project was successfully inaugurated and commissioned. Until all work is completed (including dismantling of the cableway infrastructure) and the final accounting can take place, systematic project control must continue. Steering Committee meetings continue to take place, though at longer intervals, in order to guide and ensure the conclusion of the project in a timely manner. The company management has adjusted the risk position in order to accommodate future projects beyond the V-Railway project.

Accounting principles

General information

The consolidated financial statements are prepared on the basis of commercial operating values and in accordance with accounting recommendations (Swiss GAAP FER) and the Swiss Stock Corporation Act. They provide a true and fair view of the Group's net assets, financial position and results of operations. Consolidation is based on audited and unified financial statements prepared by the Group companies.

The financial statements of Jungfraubahn Holding AG and the consolidated financial statements of the Jungfraubahn Group were approved by the Board of Directors on 7 April 2021.

Closing date

The uniform closing date for all companies included in the consolidation is 31 December. The associated company Skilift Bumps AG is an exception to this rule (30 June). As in previous years, Skilift Bumps AG due to the lesser importance of the company does not have to prepare interim financial statements as at 31 December.

Scope of consolidation

The consolidated financial statements include the financial statements of Jungfraubahn Holding AG and its holdings. The holdings of the Group can be seen in the comment "0 Scope of consolidation" below. The holdings are broken down as follows:

Group companies
Group companies are companies in which Jungfraubahn Holding AG has a direct or indirect share of more than 50 per cent.

Associated companies
Associated companies are companies in which Jungfraubahn Holding AG holds 20 to 50 per cent.

Non-consolidated holdings
Non-consolidated holdings (up to 20 per cent) are reported under "financial assets".

Consolidation method

Group companies
Assets and liabilities, as well as expenses and income, are 100 per cent accounted for according to the full consolidation method. Capital consolidation is carried out according to the Anglo-Saxon method (purchase method). Goodwill paid in connection with a share acquisition is usually depreciated over 5 years, in justified cases over 20 years. A passive difference (badwill) is credited to the income statement in the financial year.

The minority interests in equity and income are shown separately on the balance sheet and the income statement. Receivables, liabilities as well as deliveries and services between group companies, including resulting profits, are eliminated.

Associated companies
These companies are included in the consolidated financial statements using the equity method less value adjustments necessary for economic reasons.

Non-consolidated holdings
The non-consolidated participations reported in the "financial investments" are valued at the acquisition cost less value adjustments necessary for economic reasons.

Valuation principles

Balance sheet items are valued according to uniform guidelines. The valuation is based on the acquisition or production costs (principle of historical costs). The most important rules for the various items are set out below:

Foreign currencies
The conversion of positions in foreign currencies is carried out according to the closing rate method. The effects from foreign currency adjustments are recorded in the period result.

Receivables
Receivables are stated at the nominal value less value adjustments necessary for economic reasons.

Inventories
In particular, articles sold in souvenir shops and inventories of restaurants  are included in this item. The valuation is carried out at acquisition cost or - if this is lower - at the realisable disposal value. Any discounts are recorded as a reduction in acquisition costs. Consumables and operating materials are reported as "deferred accruals" in the sense of prepaid expenses.

Tangible assets
Property, plant and equipment and spare parts are recognised at acquisition or production values and amortised using the straight-line method over the estimated period of their use (spare parts corresponding to the period of the related property, plant and equipment). Land is not amortised. The planned useful lives for:

Impairment
On each balance sheet date, an assessment is made as to whether there are any signs of impairment of the book values of the Jungfraubahn Group's assets. If there are any signs, the recoverable value of the assets is determined. An impairment loss is recognised in profit or loss.

Financial assets
Financial assets are stated at acquisition costs, less value adjustments necessary for economic reasons.

Intangible assets
Intangible assets (software, concessions and rights as well as goodwill) are recognised at cost and depreciated over the estimated or contractually determined useful lives. The planned useful lives for:

Liabilities
Liabilities are stated at their nominal value.

Provisions
Provisions are probable obligations that are based on events in the past, the amount and / or maturity of which is uncertain but can be estimated. The valuation is based on uniform business management criteria.

Sales realisation

The revenues of the Jungfraubahn Group stem mainly from the sale of travel tickets (transport income), other important sources of income are the compensation received from government and energy sales. Transport income is realised with the completion of the sales transaction in the sales system and posted in the corresponding period. Proceeds from long-term travel tickets are deferred on a monthly basis and are settled over the entire duration of the travel tickets.

Taxes

Current taxes on profits are deferred on the basis of the business results reported in the reporting year according to the principle of current-year measurement.

For deferred taxes, all differences between tax rates and group values are measured at full tax rates and reported in the balance sheet (comprehensive liability method). The currently applicable tax rate for each company is used for the calculation of the deferred tax burden. Deferred tax assets on tax-deductible losses carried forward are not capitalised but shown in the Notes.

Employee pension funds

The employees of the Jungfrau Railway Group except for Jungfrau Gastronomie AG and part of Grindelwald Grund Infrastruktur AG are insured with the legally independent staff pension foundation of Jungfrau Railways. The employees of Jungfrau Gastronomie AG are connected to the GastroSocial Pension Fund, and part of the employees of Grindelwald Grund Infrastruktur AG with the Nest Joint Foundation. The purpose of all three funds is to insure the employees against the economic consequences of age, death and disability. Employees aged 17 and above are insured.

The assets of the foundations are not included in the consolidated financial statements. In the statement of income, the contributions demarcated for the period are presented as personnel expenses. The balance sheet includes the corresponding deferred tax assets or liabilities as well as liabilities arising from contractual, regulatory or legal principles. It is assessed annually whether there is an economic benefit or an economic obligation from the organisation's perspective. The annual accounts of the pension funds, which are prepared in Switzerland in accordance with Swiss GAAP FER 26, and other calculations which represent the financial situation, the existing excess cover or shortfall under the actual circumstances, serve as a basis.

Transactions with related parties

In the reporting period, no significant transactions were executed with related parties.

Segment information

Comments

0 Scope of consolidation

There were no changes in the scope of consolidation in the reporting year.

The following companies are included in the scope of consolidation as of 31 December 2020:

The uncovered costs of the transport service ordered by the public authorities (Federation and Canton of Bern) on the routes Lauterbrunnen–Mürren and Lauterbrunnen–Wengen are paid by the purchaser. The corresponding compensation must be negotiated in advance.

The compensation paid to the Management booked under personnel expenses is shown in the remuneration report of Jungfraubahn Holding AG.

Management insurance is maintained for members of management and extended management. Expenses for the companies amounted to kCHF 224 in 2020 and kCHF 248 in 2019.

General expenses mainly include administrative costs, fees and duties as well as various sponsorship and cost contributions. The compensation paid to Board members as a general expense is disclosed in the remuneration report of Jungfraubahn Holding AG.

The Group's average income tax rate is based on the weighted average tax rate resulting from the profit or loss before tax as well as the tax rate of each individual company.

With the companies Wengernalpbahn AG, Bergbahn Lauterbrunnen-Mürren AG, Grindelwald Grund Infrastruktur AG, Jungfrau Gastronomie AG as well as Jungfrau Shopping AG there are tax-deductible losses carried forward totalling kCHF 12,835 (previous year kCHF 5,669). The resulting non-capitalised deferred tax claim is kCHF 2,832 (previous year kCHF 1,267).

24 Equity

Share capital
The share capital of Jungfraubahn Holding AG is fully paid up, amounting to CHF 8,752,500 at 31 December 2020 and is divided into 5,835,000 registered shares with a nominal value of CHF 1.50. Rights and restrictions related to the shares are explained in Section 6 of the Corporate Governance report.

Treasury shares
At 31 December 2020, the company held 4,159 registered treasury shares with a nominal value of CHF 1.50 each (previous year 1,085 registered treasury shares). In the reporting year, 25,000 (previous year: 20,052) of the Company's registered treasury shares were purchased at an average price of CHF 126.08 (previous year: CHF 131.54) and 21,926 (previous year 21,985) registered treasury shares were sold at an average price of CHF 116.08 (previous year CHF 154.12).

Since 2005, the employees of the Jungfrau Railway Group as well as the administrative boards of Jungfraubahn Holding AG have been given the option of voluntarily purchasing a limited number of registered shares of Jungfraubahn Holding AG at a preferential price. In the reporting year, this price was CHF 43.00 per registered share (previous year CHF 45.00). The difference between the preferential price and the exchange rate, determined according to circular no. 37 of the Federal Tax Administration, was recognised in the income statement under personnel expenses. In this way 21,651 registered treasury shares were sold in the reporting year (previous year 21,685).

The share ownership of the Board members and management is shown in the annexe to the financial statements of Jungfraubahn Holding AG.

Reserves
The non-distributable, statutory or legal reserves amounted to kCHF 32,621 at 31 December 2020 (previous year kCHF 28,636).

26 Continuation and effects of the corona pandemic

On 11 March 2020, the World Health Organisation (WHO) classified the global spread of COVID-19 (the so-called coronavirus) as a pandemic. To curb the pandemic, lockdowns and extensive travel restrictions have been imposed around the globe. This has resulted in an unprecedented decline in international tourism. Moreover, the pandemic and the reactions to the pandemic have impaired the economic performance around the globe. The Jungfrau Railway Group has been affected severely by the corona crisis and especially by the international travel restrictions. Since the outbreak of the pandemic, group travel – especially from Asia – has stopped, and individual tourism is limited to Switzerland and neighbouring countries.

The Board of Directors and the Executive Board monitor the situation carefully and continually take necessary steps. Various measures have already been taken in order to ensure the going concern. Moreover, the valuation of the assets has been reviewed. The conclusion reached is that there is no need for impairment. Despite the ongoing uncertainty as to how demand will develop in the coming months, the Board of Directors and the Executive Board of the Jungfrau Railway Group are of the opinion that the company is soundly financed, and the required liquidity is secured.

As of the date of approval of these consolidated financial statements, it is not possible to reliably estimate the effects of the pandemic and the resulting financing consequences. In particular, it is difficult to predict the scope and duration of international travel restrictions and to assess the impact of any government-imposed restrictions on the Jungfrau Railway Group. Unless potential serious effects of the said factors last for several years, the going concern of the Jungfrau Railway Group is currently not deemed to be in danger.

27 Events after the balance sheet date

Since the balance sheet date 31 December 2020, no events have occurred that would impair the relevance of the consolidated financial statements.

The object of the official annual report of Jungfraubahn Holding AG is the management report (with segment reporting) and the financial report, which contains the consolidated financial statements for 2020 and the financial statements for 2020 of the holding company. The auditor's reports are also included in this part of the annual report. The printout of the annual report in German, available at the registered offices of the company during the invitation period to the General Meeting of Jungfraubahn Holding AG, is binding and has been audited. Thus no audit reports were drawn up in English. You can download a PDF document with the same content from the online annual report Download Centre. The accompanying report and the download file also contain the 2020 remuneration report and corporate governance information.