Private capital injection for SBB Cargo
The Swiss Federal railway company sold 35% stakes to SwissCombi, a joint venture made of its clients Planzer, Camion Transport, Galliker, Bertschi
Swiss Combi AG, a joint venture formed of four private road transport and logistics companies - Planzer Holding AG (40%), Camion Transport AG (40%), Galliker Holding (10%) and Bertschi AG (10%) - bought (for an undisclosed sum) a 35% stake in SBB Cargo AG, where SBB AG retains 65%.
The transaction is subject to approval by the Swiss competition authorities, but the partners – which aim to improve SBB Cargo’s competitive performance thanks to better load factors for wagonload and intermodal transport - expect the deal to be signed in the first quarter of 2020. SBB’s international freight business is excluded from the deal, remaining under SBB Cargo AG direct control.
The partial sale represents the final step of a long process designed to improve the performance of SBB Cargo, with the latest announcement less than one year ago anticipating the deal; plans to seek a strategic partner were unveiled by the Swiss Federal Council in December 2018 as part of its 2019-2022 strategic objectives for SBB.
The Swiss company was established as an independent business unit run on private sector principles in 1999 until a change in the law in 2015 enabled it to become fully independent; a second change in 2017 allowed minority shareholdings by partner companies. Meanwhile, annual subsidies have been reduced progressively from SFr25m in 2011, 2019 being first year when SBB Cargo has had no state funding.
SBB Cargo will have a 7-member board of management, with up to 4 members appointed by SBB. SBB Chief Executive Andreas Meyer will initially serve as Chairman, although he will step down next year after heading the national railway since 2007.
SBB Chief Financial Officer Christoph Hammer will serve as a second board member until the next AGM in the second quarter of 2020. Swiss Combi has appointed Nils Planzer and Josef Jäger to the board, and rail expert and consultant Eric Grob, a former partner at consultancy McKinseym has been nominated as an independent member.
Reliability and efficiency are expected to improve with no job to be cut.
SBB carries more than a quarter of overall freight volumes in Switzerland, with 16% attributable to SBB Cargo which handles 30 million tonnes of domestic freight a year.
The latter became profitable for the first time in 2013 after several years of losses; however there was a loss of SFr37m in 2017, with a profit of SFr13m attained in 2018. It broke even in the first six months of this year, but the financial situation remains challenging as the volume of wagonload traffic falls.
SBB Cargo’s fleet comprises 313 main line locomotives, 76 shunting locomotives and 5324 wagons.
Headquartered in Olten, SBB Cargo employed 2,275 staff at the end of 2018.