Annual report 2012

Die Alpinisten.

2

Impressum

BLS Cargo AGBollwerk 27

CH-3001 Berne

Fon +41 58 327 28 44

Fax +41 58 327 28 60

freight@bls.ch

www.blscargo.ch

ProductionStefanie Burri, Leitungsstab / Kommunikation BLS Cargo

EditorialKlarkomm AG, Berne

Photographs Christoph Ris, Röbi Bösch, Wilf Seifert, Markus Seeger, Bombardier, Urs Jossi

Designraschle & kranz, Atelier für Kommunikation GmbH, www.raschlekranz.ch

Impressum

3

Contents

Contents

The year in pictures 4

A review of 2012 4

Lean organisation 7

Key figures 8

Balance sheet 10

Profit and loss account 11

Appendix to annual account 12

Auditors report 13

4

Annual report 2012

In 2012 BLS Cargo had to contend with a variety

of challenging situations. Numerous disruptions

to services and line closures on the Simplon

and Gotthard routes had a negative effect on in-

ternational freight traffic movements, leading to

service cancellations. In addition, the continuing

economic downturn in Europe affected results.

However, BLS Cargo demonstrated its ability to

act flexibly and efficiently through its handling of

the exceptional incidents which occurred on the

Simplon and Gotthard. An efficient organisation

with highly-motivated, competent staff working

many extra hours were the main reasons for its

success and enabled BLS Cargo to switch traffic

from one route to the other more quickly and in

greater numbers than its competitors. Through its

Unforeseen line closures, economic downturn in Europe and

growing pressure from competition. BLS Cargo held its own

in difficult circumstances, kept traffic moving and achieved

its financial objectives.

BLS Cargo holds its own in difficult circumstances

commitment to its customers, BLS Cargo gained

a significant advantage over its competitors and

established itself as a reliable, readily available

contact partner.

Line closures and a weak economyIn 2012 BLS Cargo registered a 13% decrease in

transport services, down to 3 313 mill. net tonne

kilometres1. One of the main reasons for this was

the numerous interruptions to services on trunk

lines through Switzerland as well as the weak-

ness of Europe’s economies. Both these factors

affected intermodal traffic in particular, resulting in

a 22% drop in volumes. The absence of alternative

routes during line closures on one or other of the

major transit routes also had a major impact, since

Too big. Only the Lötschberg-Simplon route can accommodate

high-capacity units. As a re-sult, the Rolling Highway had to suspend

services during the Simplon tunnel closure.

The centre of attention during service disruptions:

BLS Cargo’s operations centre.

The year in pictures

4

5

Annual report 2012

the Gotthard route is not able to accommodate

high-capacity intermodal units (4 m height). The

Rolling Highway was similarly affected and had

to suspend all services in the summer during the

Simplon closure due to lack of an alternative route,

resulting in an 8% decrease in business. The over-

all traffic decrease on the Lötschberg route was

10% and 22% on the Gotthard route.

Conventional wagonload traffic suffered an 8%

loss in business, chiefly due to the poor state of

the economy, especially in Italy, as well as service

cancellations caused by closures on the Gotthard

route. However, domestic and import / export traf-

fic saw a massive 62% increase in business due

to the acquisition of a major new client.

Keeping traffic moving over the Gotthard despite acts of natureIn March 2012, a landslide caused the Gotthard

line to be closed to traffic for several days. A rock-

fall in June led to a four-week closure. Both inci-

dents meant that BLS Cargo was involved in addi-

tional work, rescheduling timetables, reorganising

operations and replanning the use of locomotives

and manpower. BLS Cargo was able to adapt rap-

idly to the situation, to adjust its organisation and

to transfer resources to the Lötschberg route, thus

enabling many services to be diverted. Despite

handling the situation well – and this was greatly

appreciated by customers – it also meant that the

company incurred a loss of income. A further rock-

fall in November resulted in the Gotthard having to

be closed yet again and traffic was again diverted

to the Lötschberg route.

Engineering work on the Simplon line Unlike unexpected natural disasters, the three-

week closure of the Simplon line for refurbish-

ment in August 2012 had been

planned for some time. Al-

though BLS Cargo examined

alternative arrangements for its

clients at an early stage, transfer

of traffic to the Gotthard route

proved problematic. Customers

are changing more and more to

large swap bodies and 4m-high

semi-trailers, which cannot use

the Gotthard route due to the lack of 4m capability.

As a result, many Rolling Highway and intermodal

services had to be cancelled, negatively affecting

the operating profit.

Infrastructure upgrade to provide addi-tional capacityThe lengthy line closures on both the Gotthard

and Lötschberg routes clearly showed the need

for sufficient reserves and backup in order for the

infrastructure for transit traffic to remain opera-

Ready to go the «last mile»: multi-system

locomotive BR 187 with auxiliary diesel engine on

display at Innotrans 2012 in Berlin and, from 2014,

in action for BLS Cargo

European intermodal operators were acutely affected by the

economic downturn.

5

«We reacted swiftly to line closures and demonstrated our ability to overcome unforeseen situations quickly and flexibly» Dirk Stahl, CEO BLS Cargo

6

Annual report 2012

tional in the event of an emergency. Some freight

at least must be able to switch from one transit

route to another and, for this reason, BLS Cargo

endorses an upgrade of the Gotthard line to a 4m

corridor as part of further moves to switch traffic

from road to rail. In addition to the 4m corridor,

further decisions affecting transport were taken

in 2012, including new provisions for the train path

bidding process and the proposal for financing and

expansion of rail infrastructure (FABI).

BLS Cargo ‚breathes’ with Europe The ongoing economic downturn in EU countries,

especially Italy, had a pronounced effect on BLS

Cargo’s business. Large industries such as steel

and automobile manufacture, which are vital to the

railway, reduced their output and in some cases,

went over to short-time working. This directly af-

fected BLS Cargo, resulting in a 13% decrease in

transport services in 2012 and a year-end finan-

cial deficit of 1.8 mill. CHF (-0.5 mill. CHF in the

previous year). By reacting swiftly, variabilizing

fixed costs and introducing measures to cut cost

and improve efficiency, BLS Cargo succeeded in

containing the financial damage sustained in this

difficult year of operation. As a result, the oper-

ating profit before depreciation (EBITDA) was a

positive 5.9 mill. CHF. Given the substantial fixed

costs involved in rail freight operations, BLS Cargo

will continue to ‘breathe’ with Europe as econo-

mies fluctuate and to feel the effects of exchange

rate volatility.

Staying competitiveMany of our competitors are currently having diffi-

culty making full use of their manpower and trac-

tion resources. As a result of this surplus capacity

and the weak euro, there is steadily increasing

pressure from competition and each and every

piece of business is hard fought for. BLS Cargo is

therefore constantly reviewing and optimizing its

business models, based on lean structures, quick

decisions and good, close working relationships

with its customers. In order to become even more

competitive and to save costs, BLS Cargo is inten-

sifying co-operation with its partners with the aim

of increasing productivity through the implemen-

tation of common processes.

Looking aheadForecasts for 2013 indicate that the recession-

ary trend in Europe has not bottomed out. BLS

Cargo has therefore planned cautiously for 2013

in terms of volume levels, basing them on those

which would have been achieved in 2012 if there

had not been any line closures. Measures to in-

crease productivity and efficiency are designed

to allow the company to react more quickly and

flexibly to changes in market demand, to reduce

fixed costs and take advantage of purchasing ser-

vices in the eurozone. BLS Cargo is looking to

break even in 2013.

In addition, 2013 is the 100th anniversary of the

Lötschberg railway and throughout the year vari-

ous events will be taking place, where rail freight

and BLS Cargo will also be featured.

«Every piece of business is keenly contested, which is why BLS Cargo is constantly reviewing and optimising its business models, based on lean structures, rapid decision-making and good working relationships with clients» Dirk Stahl, CEO BLS Cargo

7

Management (as of 01.01.12)

Dr. Dirk StahlCEO

Member of Management BLS AG

Markus ZgraggenHead of Production / Procurement

Dr. Dirk Pfi sterHead of Product

Management / Sales

Marco Guntern Head of Finance

Stefanie Burri Head of Management

Section / Communication

Board of Directors (as of 01.01.12) » Bernard Guillelmon (CH), President

Chairman of the Board BLS AG

» Reto Baumgartner (CH) Vice President Senior Consultant BLS AG

» Josef Küttel (CH) CEO ERMEWA SA Group

» Livio Ambrogio (I) CEO Ambrogio Trasporti Spa

» Otto G. Niederhofer (D) Board Member DB Schenker Rail

Deutschland AG

» Dr. Markus Hunkel (D) CEO DB Schenker Rail Deutschland GmbH

Lean organisation

ShareholdersBLS AG 52 %

DB Schweiz Holding AG 45 %

IMT AG (Ambrogio-Gruppe) 3 %

ShareholdingsBLS Cargo Italia S.r.l 100 %

BLS Cargo Deutschland GmbH 100 %

as of 1. 1. 2013

Lean organisation

Product management / Sales

Production / Procurement Finance

Management / Communications

BD

CEO

8

Key figures

Line closures on both the Gotthard and Lötsch-

berg-Simplon routes as well as the slug-gish Euro-

pean economy resulted in a decline in transport

performance.

0

500

1000

1500

2000

2500

3000

3500

4000

32553368

3699

2981

3362

+15%+3% +13%

–19%

+10%+14%

3826

2006 2007 2008 2009 2010 2011 2012

-13%

3313

The decrease was noticeable in all sectors, espe-

cially intermodal traffic. This sector suffers particu-

larly from the lack of alternative routings for large

loads when the Lötschberg-Simplon line is closed.

Growth (in million ntkm)

Traffic performance in Mill. Ntkm Jan. – Dec. 2011

Jan. – Dec. 2012

Change

Lötschberg / Simplon Transit 2142 1930 -10 %

UCT Transit Lötschberg 898 796 -11 %

WLT Transit Lötschberg 489 437 -11 %

Rolling Highway 756 697 -8 %

Gotthard Transit 1602 1248 -22 %

UCT Gotthard 1061 733 -31 %

WLT Gotthard 542 515 -5 %

Switzerland 82 135 65 %

Block trains Switzerland 82 135 65%

Total 3826 3313 -13%

Entwicklung Wagenladungsverkehr (Mio. Ntkm)

2006 2007 2008 2009 2010 2011 20120

100

200

300

400

500

600

Development of Wagonload traffic (in million ntkm)

2012 key figures

Turnover: 37 Mio. CHF (0%)

Transport performance (in Mio. Ntkm):

Lötschberg-Simplon: 437 (-11%)

Gotthard: 515 (-5%)

Domestic, import / export: 120 (+62 %)

Number of trains: 7376 (-5%)

WLT Lötschberg / Simplon

WLT Gotthard

WLT Binnen, Import / Export

Transport performance (in million ntkm)

Key figures at a glance

9

The numerous disruptions and line closures had a

negative effect on the marketshares.

Lötschberg-Simplon

Gotthard

Transalpine transport totally

Market share in transalpine transport (percentages, based on gross tonnes)

2011 2012 Change

Total no. of employees 125 123 - 2 %

BLS Cargo AG, Berne 81 79 -2%

BLS Cargo Italia 18 18 0%

BLS Cargo Deutschland 8 8 0%

Service centres (Chiasso, Berne) 18 18 0%

BLS staff employed indirectly* 270 270 0%

* drivers, Spiez workshop

BLS Cargo relies on a lean organisation and close

cooperation with BLS AG to buy in services such

as drivers and workshop facilities.

2008 2009 20100

20

40

60

80

2011 2012

43%

28%

66%

58%

28%

41%

60%

31%

43%

59%

29%

43%

62%

23%

39%

2012 key figures intermodal traffic

Turnover: 119 Mio. CHF (+3 % )

Transport performance (in Mio. Ntkm):

Lötschberg-Simplon: 1 493 (-10 %)

of which Rolling Highway: 697 (-8 %)

Gotthard: 733 (-31 %)

Domestic, import/export: 15 (+89%)

Number of trains: 13 629 (-11%)

UCT Lötschberg / Simplon

UCT Gotthard

Rolling Highway Lötschberg / Simplon

Development of intermodal traffic (in million ntkm)

Rollende Autobahn

UKV Gotthard

UKV Lötschberg

2006 2007 2008 2009 20100

200

400

600

800

1000

1200

1400

2011 2012

Key figures

Number of employees

Balance

Balance sheet 2012

Assets 31. 12. 2012in kCHF

31. 12. 2011in kCHF

Liquid assets 12 704 19 125

Accounts receivable for supplies and services

vis-à-vis third parties 10 082 10 799

vis-à-vis associates 14 445 18 506

Other outstanding debits

vis-à-vis third parties 1 234 1 204

vis-à-vis associates 418 1 351

Accrued income 4 353 14 223

Total current assets 43 236 65 208

Fixed assets 112 049 119 052

Financial assets

Shares 159 159

Loans affiliated companies 121 122

Other financial assets 6 8

Intangible assets 0 411

Total investments 112 335 119 752

Total assets 155 571 184 960

Balance sheet

Liabilities 31. 12. 2012in kCHF

31. 12. 2011in kCHF

Short-term financial liabilities 0 5 000

Accounts payable for supplies and services

vis-à-vis third parties 13 771 9 921

vis-à-vis associates 17 706 17 843

Other short-term liabilities

vis-à-vis third parties 2 208 2 559

vis-à-vis associates 35 0

Deferred income 16 877 21 360

Total short-term borrowed capital 50 597 56 683

Long-term financial liabilities 10 000 32 000

Long-term reserves 6 047 5 503

Total long-term borrowed capital 16 047 37 503

Total borrowed capital 66 644 94 186

Share capital 60 000 60 000

Statutory reserves 2 563 2 563

Voluntary reserves 34 800 34 800

Net profit/loss:

Brought forward -6 589 -6 106

Loss for the financial year -1 847 -483

Total equity 88 927 90 774

Total liabilities 155 571 184 960

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11

Profit and loss account

Profit and loss account 2012

31.12. 2012in kCHF

31.12. 2011in kCHF

Revenue from supplies and services 156 784 153 232

Other operating income 12 697 26 170

Total operating income 169 481 179 402

Personnel costs -10 452 -11 228

Costs for use of infrastructure -47 985 -51 702

Third-party services -43 605 -42 141

Production costs -39 632 -40 651

Other operating costs -21 862 -21 503

Total operating costs -163 536 -167 225

Operating profit before interest + depreciation (EBITDA) 5 945 12 177

Depreciation -7 854 -7 977

Operating profit before interest + tax (EBIT) -1 909 4 200

Financial income 97 82

Financial expenditure -1 797 -3 646

Extraordinary income 2 003 5 552

Extraordinary expenditure -113 -6 453

Operating profit before tax (EBT) -1 719 -265

Taxes -128 -218

Loss for the financial year -1 847 -483

Profit and loss account

12

Appendix

Fire Insuarance for Fixec Assets

All fixed assets are comprehensively insured against third-party damage plus damage to property and machines. Insurance covers all companies

within the BLS group. The amount of cover is fixed at maximum 100 mill. CHF per incident, no matter what the cause of damage is (third-party,

interruption of services, accident, etc). Also included in this are claims arising from fire damage. Rolling stock is indemnified based on its current

value (cost of buying new less depreciation to date).

In the absence of any insurable values for fire damage in the policy, the cost of replacement is shown below and can act as a reference for new

acquisitions for the relevant asset group.

Appendix to annual Account as per 31st December 2012

31.12.2012in kCHF

31.12.2011in kCHF

Locomotives incl. spare parts 183 033 182 593

Shareholdings percentage in kCHF

BLS AG 52,0 % in kCHF 31 200 31 200

DB Schweiz Holding AG 45,0 % in kCHF 27 000 27 000

IMT AG 3,0 % in kCHF 1 800 1 800

share capital in kCHF 60 000 60 000

Joint liability arising from group taxation of VAT p.m. p.m.

Joint Liability

Explanation of financial expenditure

BLS Cargo participates pro-rata in the costs of repaying the costs and interest arising from the loan by the Symova pension fund, which BLS

AG took out in order to cover liabilities in connection with the company pension scheme. Annuity owed by BLS Cargo totalling CHF 1 081 457

(CHF 1 067 181 the previous year) was recorded under financial expenditure.

Provided the Federal Government and the Canton of Berne agree to take over all BLS AG’s liabilities in this respect, BLS Cargo AG’s share will

also cease to apply. Exchange rate differences totalling CHF -301 000 are included in the results.

nominal share capital percentage

BLS Cargo Italia S.r.l. 50 000 100 %

BLS Cargo Deutschland GmbH 50 000 100 %

Shareholding in subsidairy companies

Assessment of risk by the Boards of Directors

At its meeting on 20.09.2012 the Board discussed the company’s risk profile and agreed appropriate measures to deal with significant risks.

Pension fund Liabilities

Pension fund liabilities per 31.12.2012 amounted to CHF 105’ 000 in respect of December 2012 contributions and were settled on 07.01.2013.

13

Report of the statutory auditor

Report of the statutory auditor

Ernst & Young AG Belpstrasse 23 Postfach CH-3001 Bern

Telefon +41 58 286 61 11 Fax +41 58 286 68 18 www.ey.com/ch

Mitglied der Treuhand-Kammer

An die Generalversammlung der

BLS Cargo AG, Bern

Bern, 27. Februar 2013

Bericht der Revisionsstelle zur Jahresrechnung Als Revisionsstelle haben wir die beiliegende Jahresrechnung der BLS Cargo AG, bestehend aus Bilanz, Erfolgsrechnung und Anhang / Seiten 10 bis 12, für das am 31. Dezember 2012 abgeschlossene Geschäftsjahr geprüft. Verantwortung des Verwaltungsrates Der Verwaltungsrat ist für die Aufstellung der Jahresrechnung in Übereinstimmung mit den gesetzlichen Vorschriften und den Statuten verantwortlich. Diese Verantwortung beinhaltet die Ausgestaltung, Implementierung und Aufrechterhaltung eines internen Kontrollsystems mit Bezug auf die Aufstellung einer Jahresrechnung, die frei von wesentlichen falschen An-gaben als Folge von Verstössen oder Irrtümern ist. Darüber hinaus ist der Verwaltungsrat für die Auswahl und die Anwendung sachgemässer Rechnungslegungsmethoden sowie die Vor-nahme angemessener Schätzungen verantwortlich. Verantwortung der Revisionsstelle Unsere Verantwortung ist es, aufgrund unserer Prüfung ein Prüfungsurteil über die Jahres-rechnung abzugeben. Wir haben unsere Prüfung in Übereinstimmung mit dem schweizeri-schen Gesetz und den Schweizer Prüfungsstandards vorgenommen. Nach diesen Standards haben wir die Prüfung so zu planen und durchzuführen, dass wir hinreichende Sicherheit ge-winnen, ob die Jahresrechnung frei von wesentlichen falschen Angaben ist. Eine Prüfung beinhaltet die Durchführung von Prüfungshandlungen zur Erlangung von Prü-fungsnachweisen für die in der Jahresrechnung enthaltenen Wertansätze und sonstigen An-gaben. Die Auswahl der Prüfungshandlungen liegt im pflichtgemässen Ermessen des Prüfers. Dies schliesst eine Beurteilung der Risiken wesentlicher falscher Angaben in der Jahresrech-nung als Folge von Verstössen oder Irrtümern ein. Bei der Beurteilung dieser Risiken berück-sichtigt der Prüfer das interne Kontrollsystem, soweit es für die Aufstellung der Jahresrech-nung von Bedeutung ist, um die den Umständen entsprechenden Prüfungshandlungen fest-zulegen, nicht aber um ein Prüfungsurteil über die Wirksamkeit des internen Kontrollsystems abzugeben. Die Prüfung umfasst zudem die Beurteilung der Angemessenheit der angewand-ten Rechnungslegungsmethoden, der Plausibilität der vorgenommenen Schätzungen sowie eine Würdigung der Gesamtdarstellung der Jahresrechnung. Wir sind der Auffassung, dass

Report of the statutory auditor

14

2

die von uns erlangten Prüfungsnachweise eine ausreichende und angemessene Grundlage für unser Prüfungsurteil bilden. Prüfungsurteil Nach unserer Beurteilung entspricht die Jahresrechnung für das am 31. Dezember 2012 ab-geschlossene Geschäftsjahr dem schweizerischen Gesetz und den Statuten.

Berichterstattung aufgrund weiterer gesetzlicher Vorschriften Wir bestätigen, dass wir die gesetzlichen Anforderungen an die Zulassung gemäss Revisions-aufsichtsgesetz (RAG) und die Unabhängigkeit (Art. 728 OR) erfüllen und keine mit unserer Unabhängigkeit nicht vereinbare Sachverhalte vorliegen. In Übereinstimmung mit Art. 728a Abs. 1 Ziff. 3 OR und dem Schweizer Prüfungsstandard 890 bestätigen wir, dass ein gemäss den Vorgaben des Verwaltungsrates ausgestaltetes in-ternes Kontrollsystem für die Aufstellung der Jahresrechnung existiert. Wir empfehlen, die vorliegende Jahresrechnung zu genehmigen. Ernst & Young AG

Roland Ruprecht Andreas Oester Zugelassener Revisionsexperte (Leitender Revisor)

Zugelassener Revisionsexperte