2017 Integrated Report – Departure into a new era

#Punctuality

The foremost basis for satisfied customers is the reliability of our promise to perform. Punctuality is our main focus in this respect.

Management approach - punctuality

Die Pünktlichkeit ist der zentrale Indikator für die Produktqualität auf Konzernebene und ein wesentlicher Faktor bei der Ermittlung der Höhe der variablen Vergütung der Führungskräfte im DB-Konzern.

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Implementation of strategy DB2020+

In the first phase, in 2016, we were able to eliminate major annoyances in the integrated rail system for our customers and significantly improve the quality of our services within the Railway of the Future program. This applies, among other things, to punctuality, passenger information and to the cleanliness of stations. In the second phase, since the year under review, the focus has been on stabilization through the creation of suitable general structural framework and technological innovations. This is how we intend to convince our customers of our services in the long term. Following the weak development in the year under review, a special focus in 2018 will be on improving punctuality

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Further implementation of Railway of the Future

Much has been achieved in the year under review, for example WiFi availability and passenger information, but particularly in the case of punctuality we have not met our targets. In this respect, the progress made by Railway of the Future also did not meet our expectations.

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Restrictions in rail operations

The year under review was marked by an exceptional degree of operating difficulties, which also negatively affected punctuality.

Storm Paul in June as well as Xavier and Herwart in October were three periods of severe weather resulting in widespread operational shutdowns and extensive route closures, often lasting several days. For example, storm Xavier caused several hundred trains to be non-operational at DB Cargo. Due to the serious disruption to routes and the costly clean-up, it took a week to return to normal operations.

The aftermath of storm Paul was intensified by the attacks on the railway infrastructure in the run-up to the G20 summit, which all occurred in the same period. In Berlin, Hamburg, Cologne, Dortmund, Leipzig and Bad Bevensen, bomb and fire attacks were carried out on cable ducts and electronic signal boxes. The disruption to the LST had an impact throughout Germany. The ICE derailment at Dortmund main station in May also adversely affected punctuality, especially in long-distance transport. The costly repairs to points and tracks lasted three weeks and required extensive diversions.

Due to track settlement as a result of water inrush during tunnel work, the busy section between Rastatt and BadenBaden also had to be closed for seven weeks from August 12. This had considerable implications for passenger and freight transport. Up to 30,000 passengers per day were transported with buses during the closure. Furthermore, diversions had to be put in place for the 200 freight trains that travel every day on the Rhine valley route. DB Cargo usually schedules about 80 trains on the Rhine valley railway every day. In order that as many trains as possible could use the diversion route, DB Cargo deployed additional diesel and electric locomotives and 70 train drivers throughout the period. All additional drivers had to be trained in knowledge of the line or the particular type of locomotive, as well as language skills for transport in France. As a result, between 50% and 60% of the trains were able to run and there were no bottlenecks in essential supplies of goods.

The timetable change in December was also accompanied by operating difficulties due to the onset of winter in many parts of Germany. This was compounded by the start-up problems during the commissioning of the highspeed line Berlin‒Munich.

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Punctuality declined

Punctuality (%)

2017

2016

2015

_

DB Group (rail) in Germany

93.9

94.3

93.6

     DB rail passenger transport in Germany

94.1

94.4

93.7

          DB Long-Distance

78.5

78.9

74.4

          DB Regional

94.4

94.8

94.2

    DB Cargo (Germany)

73.4

76.2

72.9

DB Arriva (rail:  Great Britain, Denmark, Sweden, the Netherlands and Poland) 1)

92.3

91.0

90.6

DB Regional (bus)

90.5

90.6

90.5

DB Cargo (Europe)

72.7

75.6

73.9

1) Change in method starting from 2016, figures for 2015 retroactively adjusted.

To measure punctuality, we compare the target time to the actual time for every train trip. We summarize the arrival of punctual trains and trains with a delay of up to a specified time period in the degree of punctuality.

In the year under review, the average figure for punctuality at DB Group (rail) in Germany is slightly below the previous year’s level, as figures for both passenger and freight transport fell below the previous year’s figures. Punctuality performance suffered from a number of Erestrictions in rail operations. As a result, the measures developed and implemented in the course of Railway of the Future were not able to achieve their full effect.

Punctuality performance is therefore below our forecast from the 2016 Integrated report.

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Development of business units

DB Long-Distance - Development in the year under review

Punctuality fell slightly compared to the previous year’s level. At the beginning of the year under review, punctuality was well above 81% for several months. The reason for the slight decline in punctuality for the full-year was the development in the second half of 2017. Due to restrcitions in rail operatins and several technical issues and difficulties when the timetable changed in December, punctuality from October to December was well below the annual average.

As a result of the decrease in punctuality, the rate of people successfully making long-distance transport connections also declined slightly.

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DB Regional - Development in the year under review

Punctuality in rail transport was unsatisfactory in the year under review. The positive effects of the Railway of the Future were offset by the restricitions in rail operations. The punctuality of bus transport was close to the previous year’s level.

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DB Arriva - Development in the year under review

Punctuality in rail transport increased. This was mainly due to the continued implementation of programs to improve quality and the full-year inclusion of Arriva Rail North and Arriva Rail London contracts.

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DB Cargo - Development in the year under review

Punctuality fell in the year under review. This was driven in particular by the trend in Germany, where start-up difficulties in the introduction of a new production system and operating restrictions imposed burdens.

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DB Netze Track- Development in the year under review

Punctuality of DB rail transport has declined slightly. The positive effects of Railway of the Future  were weakened by the operating restrictions gedämpft.

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Management assessment of the risk situation

The current risk situation is assessed on the basis of our RMS. The system is based on the requirements of the KonTraG and is continually evolving. During the year under review, there were no major methodological changes to that system.

On December 31, 2017, DB Group’s main risks were in the area of production and technology. In comparison to the previous year, the total risk position based on the forecast for the following year increased slightly in the year under review (€ +0.3 billion). This was due, among other things, to uncertainties relating to energy price development and additional measures to improve punctuality and quality.

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Future direction of DB Group

Future business policy

We want to assert our market positions in the 2018 financial year and stimulate further organic growth in our business units. We have defined the strategic directions for the coming years in our strategy DB2020+ , which we consistently pursue. In the 2018 financial year, we will continue implementing the second phase of Railway of the Future. In addition to the weak development in the year under review, our focus in this process is in particular on punctuality.

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Development of DB Group

Profitable quality leader

In 2018, our focus is on improving punctuality. At DB Long-Distance we intend to significantly improve punctuality by consistently continuing and expanding our measures within the framework of the Railway of the Future program and by increasingly using new ICE 4 trains.

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