Zermatt Bergbahnen AG is investing in the future
The lockdown due to the coronavirus pandemic is causing a great deal of uncertainty and reduced sales for almost every industry in Switzerland. Instead of falling into a state of shock, the Zermatt Bergbahnen AG (ZBAG) concentrates on the time “when this is all over”. Despite the difficult starting position, the Board of Directors has decided to make the major investments of around 60 million Swiss francs over the next two years as planned. The additional financing provided by the banks also contributes to this decision. As soon as the weather conditions allow and no further official decisions relating to the coronavirus prevent construction work from taking place, ZBAG will commence the task of building the new Kumme gondola lift and continue work on the Matterhorn glacier ride II 3S cableway project.
The premature closure of the ski areas, restaurants and shops and the restrictions on international travel due to the official regulations to contain the coronavirus have hit the tourist industry hard. However, ZBAG is aware that every crisis has an end and is investing in the future accordingly. Despite the difficult situation, it is sticking to the Kumme gondola lift and Matterhorn glacier ride II construction projects with an investment volume of around 60 million Swiss francs over the next two years. CEO Markus Hasler had this to say about the decision: “With our investments and the resumption of construction work we mean to underscore our leading role in and around the Zermatt-Matterhorn resort and demonstrate that we can meet even this challenge head on together. We want to indicate to our service partners and visitors and to the local economy that we believe in the future and despite the difficult conditions remain willing to invest in modern facilities and services.” In other words, ZBAG is looking ahead with optimism to the time after the crisis and the preparations for a possible resumption of summer operations are already in full swing.
Optimistic mood among lenders too
The effects of the Corona crisis will also lead to a drop in sales at ZBAG in the coming months and will affect profitability, which is one of the very best in the industry. For this reason, ZBAG's current and future investment plans have been re-analysed with the banks. It quickly became clear that the banks are convinced of ZBAG's strategy and successful future and are therefore sticking to the planned investment amounts and projects. They are also making additional funds available for the two major projects.
Dario Gentinetta, head of Upper Valais Corporate Clients at Credit Suisse, expressed his confidence in the future: “We are aware that the corona pandemic is putting a new perspective on many existing forecasts and budget plans. As a bank for companies and small businesses we are there to support our customers over the long term. The most important factor in our bank’s decision-making is a stable business model. As one of the leading lift operators, Zermatt Bergbahnen AG has a clear strategy and the best credentials to enjoy success again quickly after the crisis.” And François Schnyder, head of Valais and Freiburg Corporate Clients at Credit Suisse, is also upbeat about the future: “We want our credit approval to be a signal that there will be life after the crisis and that Credit Suisse believes in the adaptability and innovative strength of businesses in Valais.”
“UBS is very positive about the timely completion of these projects as Zermatt Bergbahnen AG is a very healthy and well-run company. In the present situation, effecting these investments as planned instead of postponing them lays down an extremely important and positive marker for the Valais tourist industry and for businesses in Upper Valais in particular,” says Iwan Willisch, Valais regional director of UBS. “With its support for such projects, UBS is showing that it stands alongside its customers and making its contribution to overcoming the current crisis,” he stressed.
Karlheinz Fux, chairman of the board of the Raiffeisenbank at Mischabel-Matterhorn, commented that: “Zermatt Bergbahnen AG is setting a superb example by implementing its planned investments. They are proving that they believe in tourism and in our region. This attitude is shared by the Raiffeisenbank at Mischabel-Matterhorn. Tourism is our heart, our lifeblood. In these difficult times, the approach shown by Zermatt Bergbahnen AG is helping to safeguard the future of the region’s economy. This commitment will save jobs. We too wish to make a contribution. Out of love for our region.”
Mario Kalbermatter, Head of the Valais Cantonal Bank of Upper Valais: “As a long-standing financing partner, the Valais Cantonal Bank contributes to the investment plans of Zermatt Bergbahnen AG. Thanks to its prudent and proactive investment strategy, ZBAG has achieved sustainable top results for years and has thus created the foundation for acting anti-cyclically even in difficult phases and for sticking to its expansion plans. We are convinced that Zermatt Bergbahnen AG will further enhance the already very successful tourist region of Zermatt with the implementation of the new sustainable cable car facilities".
The Cantonal Bank of Zurich is another supporting banking institution. Like the other banks, it is sticking to its investment plans and is showing its confidence in the cable car company.
The first fully automatic gondola lift in Switzerland
Together with the resumption of construction work on the Matterhorn glacier ride II between Testa Grigia and the Klein Matterhorn, plans for the summer also include starting work on the new Kumme gondola lift. Along with cable car manufacturers Doppelmayr/Garaventa and the construction firms SULAG Hoch- & Tiefbau AG and E. Lauber & Sohn Hoch- u. Tiefbau AG, ZBAG has put together a forward-looking project: the new Kumme cableway will be the first gondola lift anywhere in Switzerland to carry passengers without the presence of an attendant at the station.
Arno Inauen, CEO of Garaventa AG, says: “We're looking forward to implementing this innovative project together with Zermatt Bergbahnen.”
If the work on the gondola lift proceeds as planned, it will go into operation at the beginning of the 2020/21 winter season, with 56 ten-seater cabins carrying 1500 passengers an hour along the 3.2-kilometre route from Tufternkehr to the Unterrothorn via an intermediary station at Wyss Gufer. Waiting times around the Unterrothorn will be a thing of the past, and with the new lift and the installation of snow machines Zermatt Bergbahnen AG is promising a massive upgrade for the whole winter sports resort in terms of the quality of its transport and slopes.
Construction companies pleased with orders
The building firms are also happy about ZBAG’s decision to proceed with its investments. Manfred Schmid, CEO of E. Lauber & Sohn Hoch- und Tiefbau AG expressed his confidence: “In Japan, the word crisis is composed of two characters. One means danger and the other opportunity. The opportunity Zermatt Bergbahnen AG is giving us to work on a project as unique as the Kumme gondola lift means we can look to the future with optimism. Zermatt Bergbahnen AG is taking a courageous step and we are grateful to be able to benefit directly from these investments in the future.”
SULAG Hoch- und Tiefbau AG is also involved in the project. The owner of the company, Benjamin Schaller, takes the view that the need for investment is greater than ever now while everything is at a standstill, and appeals for a positive attitude: “If everyone succumbs to lethargy, the economy will stall and it will be difficult to emerge from the recession. As managers we have to send out positive signals to our customers, to our employees, to our families.”
The construction work on the Matterhorn glacier ride II is also being resumed according to plan. The ARGE Cervino consortium, which consists of Ulrich Imboden AG and Cogeis S.p.A. is responsible for building the two cableway stations. Managing director Olivier Imboden is aware that the construction sector is of paramount importance to Valais, a canton which relies on industry and tourism. “At this difficult time, the construction business is a cornerstone of society and the economy. Thanks to investments such as those made by Zermatt Bergbahnen AG, we are willing and able to accept this responsibility and play our part in support of the whole of Upper Valais.”
For the two construction projects to be successfully concluded or continued, safety measures are just as essential as an optimistic outlook. ZBAG and the building companies involved are doing everything possible to ensure that the government’s distancing rules and hygiene measures are observed on the construction sites. “We have already imposed these rules on other building sites and even taken some further measures. Crew transport is spread across several vehicles travelling at staggered times, and the 5-person rule with safe distancing is applied consistently. On site, shared surfaces and areas like door handles, recreation rooms and containers are cleaned and disinfected every day, and toilets twice a day,” says Olivier Imboden by way of assurance.
Franz Julen, Chairman of the Board of Directors of ZBAG, also looks to the future with confidence: "We have calculated various scenarios for the next four years. The effects of the Corona crisis will not leave ZBAG unaffected. However, the rock-solid financial basis built up over the years - together with the additional funds provided by our principal banks - will allow us to implement these major projects as quickly as possible without taking irresponsible financial risks. We owe this determined, far-sighted action to our shareholders and the next generation. We are also aware of our corporate and social responsibility towards our employees and within the destination. We are convinced that counter-cyclical investments in the time "when this is all over" will help us to get through this extraordinary situation well and will provide added value in the future for our loyal Swiss and international guests, who will hopefully be able to return to Zermatt soon".