2017 Integrated Report – Departure into a new era

Development in the year under review

  • Performance gains in the rail line of business.
  • Delays in vehicle deliveries necessitate replacement concepts.
  • Portfolio adjustments in the bus line of business.
  • Production costs are rising faster than revenues, weighing on profit development.

DB Regional

2017

2016

Change

 


2015

absolute

%

Punctuality (rail) (%)

94.4

94.8

94.2

Punctuality (bus) (%)

90.5

90.6

90.5

Customer satisfaction (rail) (SI)

68

69

71

Customer satisfaction (bus) (SI)

74

75

74

Passengers (million)

2,562

2,512

+50

+2.0

2,537

     thereof long-distance bus

0.8

–0.8

–100

0.7

Volume sold (million pkm)

48,911

48,399

+512

+1.1

50,360

     thereof long-distance bus

237.2

–237.2

–100

193.3

Volume produced (rail) (million train-path km)

459.3

459.3

476.1

Volume produced (bus) (million bus km)

532.0

586.5

–54.5

–9.3

588.0

Total revenues (€ million)

8,734

8,653

+81

+0.9

8,670

External revenues (€ million)

8,629

8,529

+100

+1.2

8,568

Rail concession fees (€ million)

3,879

3,849

+30

+0.8

3,838

EBITDA adjusted (€ million)

1,156

1,272

–116

–9.1

1,316

EBIT adjusted (€ million)

508

636

–128

–20.1

669

Gross capital expenditures (€ million)

674

693

–19

–2.7

881

Employees as of Dec 31 (FTE)

35,651

36,008

–357

–1.0

36,494

Employee satisfaction (SI)

3.5

Employee satisfaction – follow-up workshop implementation rate (%)

100

100

Share of women in Germany as of Dec 31 (%)

16.0

16.1

16.0

Specific final energy consumption (rail) compared to 2006

(based on pkm) (%)

–28.5

–26.3

–26.3

Specific final energy consumption (bus) compared to 2006
(based on bus km) (%)

+4.8

+5.8

+7.2

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

    Customer satisfaction also declined:

    • in the rail sector due to more critical assessments of the S-Bahn (metro) systems and
    • in the bus sector as a result of more critical assessments of information provision in the event of irregularities during journeys and a slightly poorer assessment of punctuality.

    To assess customer satisfaction, 19,000 customers (rail) and 1,500 customers (bus) are asked each year in two waves about their satisfaction.

    Performance development was differentiated.

    • In rail transport, there was an increase in the number of passengers and volume sold, with volume produced at the previous year’s level.
    • The development in bus services was marked by a de­cline in volume sold and volume produced. However, the number of passengers was higher than in the previous year as a result of developments in the region Central. Long-­­distance bus activities were discontinued in fall 2016.

    The economic development of DB Regional is particularly affected by the development of the higher-revenue and higher-performance rail line of business (share of revenues: 87%). 99% of the adjusted EBIT is generated by the rail line of business and 1% by the bus line of business. In the year under review, the disproportionate rise in expenses resulted overall in a decline in the adjusted EBITDA and EBIT figures. In contrast, the discontinuation of the loss-making long-­distance bus activities had a positive effect.

    • Revenues increased slightly. This was primarily driven by an increase in the rail line of business due to pricing and performance factors. Concession fees increased slightly due to payments in connection with settlements with the Berlin-Brandenburg transport association for previous years. The performance-based decline in the development of the bus line of business countered this impact.
    • The nuclear fuel tax refund was offset by lower compensation payments, resulting in a decline in other operating income (– 2.0%).
    • Cost of materials (+ 1.8%) was mainly driven by higher maintenance costs for vehicles, particularly for the Berlin S-Bahn (metro), as well as price-related higher costs
      for use of infrastructure in the rail line of business. In con­­­trast, the decrease in the bus line of business had a positive effect.
    • Personnel expenses (+ 3.6%) rose due to collective bargaining agreements, among other things. A lower num­ber of employees in the bus line of business had a moderating effect.
    • Other operating expenses (+ 4.5%) increased as a result of higher purchased services and higher rental ex­­pens­­­es, especially for replacement vehicles in the Schleswig-­Holstein West network. Expenses for additions to the provision for impending losses also rose.
    • The higher level of depreciation (+ 1.9%) resulted, among other things, from vehicle acquisitions.

    Capital expenditures declined, mainly as a result of vehicle projects being completed in the previous year in the bus line of business. In the rail line of business, in contrast, capital expenditures rose slightly.

    77% of employees are employed in the rail line of business, with 23% in the bus line of business. The number of employees declined slightly, driven, among other things, by portfolio adjustments made in the bus line of business.

    Employee satisfaction is measured every two years. In the year under review, the focus was on follow-up processes. The implementation rate of follow-up workshops within the scope of the employee survey 2016 was at a very satisfactory level. The share of women remained stable in the year under review.

    In the year under review, the specific final energy consumption in traction decreased by 2.9% compared with 2006 to 11.9 kWh/100 pkm. This development was boosted by an increase in volume sold and a slight reduction in traction energy consumption (electricity and diesel). The increased energy demand in the unusually cold January of 2017 had a dampening effect on this development. This effect could not be fully offset by the increased efforts to save energy during journeys. Telematics systems are being installed in diesel vehicles for the timely and accurate recording of fuel consumption. This measure will make it possible to transfer the energy-saving driving methods al­­ready introduced in electric traction to diesel traction and will contribute to a significant reduction in diesel consumption.

    In the bus transport segment, in the year under review we once again recorded a slight decline in specific final energy consumption compared to 2006.

      Rail line of business

      • Performance gains from awarded transport contracts.
      • Personnel expenses increased as a result of collective bargaining agreements.
      • Delays in vehicle deliveries necessitate replacement concepts.

      Rail line of business

      Selected key figures(€ million)

      2017

      2016

      Change

      absolute

      %

      Passengers (million)

      1,977

      1,933

      +44

      +2.3

           thereof rail

      1,930

      1,879

      +51

      +2.7

      Volume sold (million pkm)

      42,588

      41,622

      +966

      +2.3

           thereof rail

      41,876

      40,809

      +1,067

      +2.6

      Volume produced (million train-path km)

      459.3

      459.3

      Total revenues

      7,785

      7,735

      +50

      +0.6

      External revenues

      7,508

      7,352

      +156

      +2.1

      Rail concession fees

      3,879

      3,849

      +30

      +0.8

      EBITDA adjusted

      1,099

      1,180

      –81

      –6.9

      EBIT adjusted

      501

      591

      –90

      –15.2

      Gross capital expenditures

      596

      594

      +2

      +0.3

      Employees as of Dec 31 (FTE)

      27,304

      26,958

      +346

      +1.3

      Performance development in the rail line of business was mainly positive. The increase in the number of passengers and volume sold resulted from awarded tenders, in particular the Schleswig-Holstein West network, which more than compensated for the effects of lost transport contracts. Volume produced developed at the previous year’s level.

      Overall, the increased income was not able to compensate for the charges, resulting particularly from higher maintenance and personnel expenses, and the adjusted EBITDA and EBIT therefore fell.

      • Revenue development was slightly better due to price and performance effects. Concession fees increased slightly due, among other things, to payments in connection with settlements with the transport association Berlin-Brandenburg for previous years.
      • Other operating income (+ 6.0%) increased due to the reimbursement of the nuclear fuel tax and higher income from the reimbursement of vehicle retrofitting for the Berlin S-Bahn (metro).
      • Cost of materials (+ 1.2%) was mainly driven by higher maintenance costs for vehicles, particularly for the Berlin S-Bahn (metro), as well as price-related higher costs for use of infrastructure. This was offset by lower levels of purchased services and lower energy expenses due to price and volume factors.
      • Personnel expenses (+ 4.6) rose in the wake of a greater number of employees and as a result of collective bargaining agreements.
      • Other operating expenses (+ 5.5%) increased as a result of higher purchased services and higher rental expens­­­es, especially for replacement vehicles in the Schleswig-­Holstein West network.
      • Depreciation (+ 1.2%) rose slightly. Effects from vehicle additions were largely offset by some vehicles reaching the end of their useful life for accounting purposes.

      Capital expenditures increased due to vehicle purchases, REDESIGN of vehicles and the construction and conversion of workshops. The significantly lower investment grants for vehicles, particularly in connection with the Stuttgart and Nuremberg S-Bahn (metro) transport contracts, resulted in higher net capital expenditures.

      The number of employees increased as a result of the individual option to choose working hours agreed with the trade unions.

      Bus line of buisness

      • Portfolio adjustments lead to performance losses.
      • Production costs are rising faster than revenues, weighing on profit development.

      Bus line of business

      Selected key figures (€ million)

      2017

      2016

      Change

      absolute

      %

      Passengers (million)

      584.2

      579.0

      +5.2

      +0.9

           thereof long-distance bus

      0.8

      –0.8

      –100

      Volume sold (million pkm)

      6,323

      6,777

      –454

      –6.7

           thereof long-distance bus

      237.2

      –237.2

      –100

      Volume produced (million bus km)

      503.7

      557.5

      –53.8

      –9.7

           thereof long-distance bus

      20.5

      –20.5

      –100

      Total revenues

      1,224

      1,280

      –56

      –4.4

      External revenues

      1,122

      1,176

      –54

      –4.6

      EBITDA adjusted

      57

      91

      –34

      –37.4

      EBIT adjusted

      7

      45

      –38

      –84.4

      Gross capital expenditures

      77

      99

      –22

      –22.2

      Employees as of Dec 31 (FTE)

      8,347

      9,050

      –703

      –7.8

      Development in the bus line of business was marked by a de­­­cline in volume sold and volume produced as a result of the discontinuation of the long-distance bus business in the fall of 2016, of portfolio adjustments in the region East and of transport contracts not being extended in Hesse. The number of passengers was higher than in the previous year in the region Central as a result of the positive development.

      The lower volume of expenses only partly offset the de­­cline in income. As a result, adjusted EBITDA and adjusted EBIT decreased. In contrast, the discontinuation of the long-­distance bus activities had a positive effect.

      • Revenue development was impacted by performance development and portfolio adjustments.
      • Other operating income (– 1.9%) decreased, mainly as a result of reduced income from compensation for damages and refunds of expenses.
      • Cost of materials (– 6.2%) fell, essentially due to portfolio adjustments, the cessation of long-distance bus activities and lower levels of purchased contractor services as a result of performance losses.
      • Personnel expenses (2.1%) also fell as a result of portfolio adjustments. Offsetting effects from the growth in fares and newly won transport services had a boosting effect.
      • Other operating expenses (+26.8%) increased as a result of additions to the provision for impending losses and the initial transfer of central expenses to the bus companies. This was offset by the discontinuation of long-­distance bus activities.
      • Higher depreciation (+ 8.7%) essentially resulted from higher bus capital expenditures in the previous year.

      Capital expenditure activities declined due to the extensive vehicle acquisitions for new services won in the previous year.

      The number of employees as of December 31, 2017 fell as a result of portfolio adjustments.