DB CEO Grube presents six months results for first time: massive declines posted in transport and logistics segments / Passenger transport defies crisis / reACT 09, savings and growth package aims to keep Deutsche Bahn competitive.
The global economic and financial crisis has impacted heavily on Deutsche Bahn and stopped the company’s years of growth. Revenues fell sharply in the transport and logistics segment in the first half of 2009, while passenger transport figures remained stable, and the total number of passengers even increased. During the presentation of the first six months results in Frankfurt, the CEO and Chairman of the Management Board of Deutsche Bahn AG, Dr. Rüdiger Grube, stated: “It will take several years before we return to the volume levels we posted in the record-breaking years of 2007/2008. For this reason we will have to cut our structural costs, optimize processes and develop new areas of business.” DB has already launched massive internal countermeasures via its reACT09 program, which aims to achieve savings in addition to introducing measures to enhance the company’s future viability and competitiveness. In this context Dr. Grube clearly stated that: “Customers can be sure that we will not save when it comes to service, and definitely not cut costs wherever safety is involved.”
As a further result of the crisis, the DB CEO announced the start of a consolidation phase. Following the expansion seen in past years, the time has come to sustainably restructure the diverse acquisitions that were made. This kind of consolidation phase is the prerequisite to return to growth in the future. Dr. Grube noted that current negotiations with train manufacturers was another central task. The manufacturers have to finally resolve the problems that have arisen. It is unacceptable that DB is held solely responsible for the costs and consequences of dysfunctional products.
DB AG’s revenues fell by 14 percent in the first half of 2009 in comparison to the same year-ago period from € 16.6 billion to € 14.3 billion. Adjusted earnings before interest and taxes (adjusted EBIT) decreased from € 1.4 billion to € 671 million (minus 52.6 percent).
The number of persons employed by Deutsche Bahn AG on June 30, 2009 was nearly 237,000, or about 4,000 less than a year ago. In comparison to the figure for the first six months of 2008, net debt was reduced by an additional € 622 million to € 15.3 billion. CFO Diethelm Sack: “Currently it is still not clear if the economy has hit bottom and when it will be able to sustainably move upwards again. Detailed forecasts regarding the future course of business cannot be made in this kind of unique situation.
Higher numbers noted for passenger transport
Despite the partially reduced long-distance offers due to ICE axle problems, the passenger transport segment once again posted higher numbers of passengers in the first half of 2009: more persons than ever before traveled by DB trains as the number rose to 958 million. In comparison to the same year-ago period, this figure represents 16.8 million more passengers, or an increase of 1.8 percent. Volumes sold remained practically unchanged with 37.3 billion passenger kilometers. However, a slight decline of 1.5 percent was noted in the number of passengers posted by the bus transport segment. During the first half of 2009, DB buses transported 392 million passengers, or 5.8 million less than in the same year-ago period. Volumes sold fell by 59 million passenger kilometers, or 1.3 percent in comparison to the same year-ago period, to 4.6 billion passenger kilometers.
Crisis hits transport and logistics
The volume of freight transported by rail in the freight transport sector fell by 51.5 million tons from the comparable same year-ago figure to 145 million tons, or 26.2 percent less than in the first six month of 2008. Volumes sold fell in the same period by 25.3 percent, for a decrease of about 15 billion ton kilometers to 44.3 billion ton kilometers. The freight forwarding and logistics segment also posted lower performance as the number of shipments in European land transport fell from 37.3 million to 34.4 million, or 7.9 percent less. The volume of air freight shipments contracted by 173,000 tons to 456,300 tons, or 27.5 less. During the same period the volume of ocean freight shipments fell by 70.000 TEU to 650,100 TEU, or 9.8 percent lower.
Development of business units
Development posted by the business units varied widely in the first half of 2009. While the biggest decreases in revenues were noted for DB Schenker Rail (minus 26.3 percent) and DB Schenker Logistics (minus 24.8 percent), four business units recorded gains: DB Netze Energy (a gain of 12.4 percent), DB Netze Stations (a gain of 9.1 percent), DB Bahn Urban (a gain of 4.9 percent) and DB Bahn Regional (a gain of 1.3 percent).