DB CEO Richard Lutz presents figures for first half of 2018 • Profit down • Over EUR 100 million additionally to improve punctuality • Deutsche Bahn to present updated strategy by end of year
(Berlin, July 25, 2018) Rail transport in Germany continues to grow. In the first half of 2018, patronage rose by 3.8% year on year at DB Long-Distance, with a record of 70.9 million passengers using the company's long-distance.
"People are more mobile than ever before," said Deutsche Bahn AG's CEO Dr. Richard Lutz at Deutsche Bahn (DB) Group's interim results press conference for 2018. "For more and more people, rail is becoming the key to an effective climate change and a successful transition to sustainable transport." Lutz said that DB Group has made it a top priority to foster digitalization and launch new services and mobility options for its customers. DB Group is working hard on ideas and solutions to this end and would be presenting an updated Group strategy by the end of the year.
At EUR 21.5 billion, adjusted revenues of DB Group were 2.3% higher in H1 2018 than in H1 2017. On comparable basis (adjusted for exchange rate effects and changes in the scope of consolidation), the increase was a full 3.8%. For 2018 as a whole, DB Group expects to see a comparable increase in revenues to about EUR 44 billion.
DB Group generated earnings before interest and taxes (EBIT) of EUR 974 million in H1 2018, a year-on-year decrease of EUR 205 million, or 17.4%. This decrease was due in particular to burdens resulting from severe weather conditions, a drop in rail freight transport volumes, and higher expenses for punctuality. In 2018 alone, DB Group plans to increase expenses by over EUR 100 million to raise its punctuality. For 2018 as a whole, the DB Management Board expects EBIT to be roughly at the same level as in 2017 (EBIT adjusted 2017: EUR 2.15 billion).
DB Arriva and DB Schenker, DB's international business units, continued to grow. "Our international subsidiaries both play an important role in driving success at DB Group as a whole," said DB CEO Lutz. All of DB Schenker's activities were up in the first half of the year; for instance, air freight volumes saw a year-on-year increase of 5.9%. DB Schenker generated revenues of EUR 8.3 billion in H1 2018, an increase of 2.8%. DB Arriva saw revenue growth of 1.7% to a total of EUR 2.7 billion.
Volume sold in long distance rail passenger transport grew considerably in the first half of 2018, rising 6.0% to 20.6 billion passenger kilometers.
Rail freight transport, on the other hand, saw a 6.7% drop in volume. The first six months of 2018 were not easy for DB Cargo. DB Cargo plans to respond by making lasting changes, which will include addressing problems of its own making.
Infrastructure usage continued to grow, with train kilometers on track infrastructure rising 1.1% to 540 million train-path kilometer. At 31.9% in H1 2018 (up from 30.8% in H1 2017), the percentage of infrastructure usage attributable to non-Group railways rose once again.
Net capital expenditures were up considerably in the first half of 2018, from EUR 1.5 billion to EUR 1.9 billion. This increase of EUR 0.4 billion is part of the largest capital expenditure campaign in the history of DB Group, which continued in the first half of 2018.
DB Group also hired additional employees, recruiting 13,300 people in Germany alone in the first half of the year. DB Group plans to have roughly 19,000 new hires in Germany alone by the end of the year. As of the end of June 2018, DB Group employed some 202,500 people in Germany (compared with some 196,500 at the same time last year) and about 329,600 worldwide (compared with about 319,700 at the same time last year).
"Things are moving in the right direction," said CEO Lutz. "Traffic is shifting to rail. And we on the DB Management Board are confident that the coming years will bring excellent opportunities for DB Group as part of a growing industry and as the most eco-friendly mode of transport by far."