6 Current Issue of cable car companies in CH

Question 1

Problem of small and medium sized companies

Answer 1

Lack of attractively: technological development & increasing quality expectation, level of comfort and variety

Economic viability: increasing cost-factors, melting margins, tough competition (pressure on prices), resources for re-investment

Question 2

what does it need to prosper?

Answer 2

size - strategy

positioning - resources

small, regional and semi-professional vs. big, international, integrated business model

seasonality, all target groups, follower vs. 4 season, segmentation, business fields, innovation

public funding or new money from (new) shareholders vs, cash flow, capital ration, dividends

Question 3

3 types of financial situation

Answer 3

increase in value: sustainable free cash flow, profitable, yearly divide

self-sustaining: enough cash-flow for re-investment, sustainable operation to cover costs, no dividend payout, many private shareholders with emotional motives, relatively easy to get additional money

Subsidized company: not enough cash flow, subsidized from public authority, community main shareholder, many private shareholders with emotional motives, difficult to finance investment

Question 4

what about the future?

Answer 4

small is beautiful but we will see Bigger companies.

we have to expect that only 1’% of swiss cable car companies will have possibilities to finance re-investments, with “own” money (financed from cash flows)

–> if we can’t finance the re-investment: what does it mean?

• wealthy people invest in saving the ski resorts
• municipalities pay in to finance the operation of ski resorts (short term strategy with no future)

Question 5

financial situation of Cable car companies

Answer 5

2/3 of cable car companies in CH are supported by public authority or private investors without any yield expectation

1/3 are financed market oriented. they generate enough revenue to finance investments by themselves

26% is financed by public authority

68% by banks (mostly cantonal)

Question 6

situation in Austria

Financing

Answer 6

Leading companies are well financed, but many companies have too many debts and the time of amortization is too long.

CH: EK quote 43% in average

Amortization and EK quote: hotel and gastronomy AUT: few companies are good but the majority are bad.

Question 7

Trends

Answer 7

skiing days decreasing (-10%)

costs increased (more technical snow)

competitors: shopping center, sun and beach holiday

climate change

Question 8

Important elements for ski resorts / cable car company

Answer 8

size

clear strategy

resources