Back on track with the S3 restructuring program

The crises of recent years have left clear marks in respect of achieving our Strong Rail targets, particularly in the areas of the shift in the mode of transport, customer and profitability. This is why in 2024 we are a long way from what we set out to achieve with the Strong Rail strategy in 2019. A key driver of this is the fact that the infrastructure is “too old, too prone to failure and too full.” The resulting poor operational quality increasingly jeopardizes the implementation of transport and climate policy goals and reduces the economic viability of DB Group. We have therefore supplemented the Strong Rail strategy with the S3 restructuring program, with which we want to improve the infrastructure, operations and profitability by 2027. The goals are:

• restore the performance capability of the rail mode of transport,
• significantly improve the customer experience, and
• ensure the financial viability of DB Group.

In brief: DB Group is to become more punctual, reliable and profitable again.

We want to improve DB Group in three key dimensions by the end of 2027:

• Infrastructure pillar: We are focusing on the rapid modernization of the existing network. This includes the general modernization of all communicated corridors by 2027 as well as other extensive measures such as the replacement of fault-prone systems across the infrastructure, the replacement of old, fault-prone interlockings or the modernization of stations.
• Operations pillar: During operations, stabilizing the schedule has the highest priority. To this end, the entire construction and maintenance system will be transferred to a so-called synchronized system, which should reduce the trains affected by construction. One aspect also focuses on the selective relief of the five most important hubs (Berlin, Hamburg, Cologne, Frankfurt and Munich). In addition, availability and quality of the vehicles are to be improved.
• Profitability pillar: In view of the economic situation, a series of measures are intended to help make DB Group more efficient again. The personnel expense ratio is to be reduced. Priority will be given to reducing staff requirements in the areas of administration, sales and indirect operational functions. This is aimed at reducing the workforce by more than 10,000 employees by 2027.There are no plans for redundancies for operational reasons, and regulations on guaranteeing employment will continue to apply. In that respect, we want to ensure that the necessary personnel are available for the operating rail business. For this reason, we have set ourselves the goal of continuing recruitment unchanged in many operational functions. As further measures to improve profitability, we want to reduce the ramp-ups of capital expenditures, particularly in the transport businesses, compared to ­previous plans and significantly increase profitability.

DB Group has agreed with the Federal Government to regularly report on the progress of the restructuring program. In the future, we will regularly send a set of key figures to the Supervisory Board and the Federal Ministry for Digital and Transport to document progress or identify areas where there is a need for countermeasures.