Interim Results Press Conference 2011 Deutsche Bahn AG DB Mobility Logistics AG Dr. Richard Lutz CFO – The spoken word takes precedence. –
−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−− Berlin, July 28, 2011
Deutsche Bahn AG / DB Mobility Logistics AG 2 / 18 Investor Relations Europaplatz 1, 10557 Berlin Tel.: +49 (0)30 297-64031, E-Mail: [email protected]
Disclaimer This information contains forward-looking statements or trend information based on currently known and available information, beliefs, and forecasts of the management of the Deutsche Bahn Group. This presentation solely serves for informational purposes includes statements which are forward-looking by reason of context, including without limitation, statements referring to risk limitations, operational profitability, financial strength, performance targets, profitable growth opportunities, and risk adequate pricing, as well as the words "may, will, should, expects, plans, intends, anticipates, believes, estimates, predicts, or continue", "potential, future, or further", and similar expressions identify forward-looking statements. These forward-looking statements are subject to certain known and unknown risks and uncertainties that could cause the Company's actual results or performance to be materially different from those expressed or implied by such statements. Many of these risks and uncertainties relate to factors that are beyond Deutsche Bahn AG’s/DB Mobility Logistics AG´s ability to control or estimate precisely, e.g. future market and economic conditions and the behavior of market participants. Deutsche Bahn AG and DB Mobility Logistics AG do not intend or assume any obligation to update these forward-looking statements.
Deutsche Bahn AG / DB Mobility Logistics AG 3 / 18 Investor Relations Europaplatz 1, 10557 Berlin Tel.: +49 (0)30 297-64031, E-Mail: [email protected]
Dear ladies and gentlemen,
I would also like to extend a warm welcome to all of you to our interim
results press conference today.
I would now like to take you through a more detailed presentation of
DB Group’s business development in the first half of 2011.
My presentation consists of three parts:
First, I would like to give you overview an of DB Group’s major
influencing factors and developments noted in the first half of 2011.
The focus here will be on the development of the markets and our
performance.
In the second section we’ll take a closer look at the development of
our key figures of revenues, profits, capital expenditures and debt.
And finally, I will present our current outlook for the full year 2011.
The core message of my presentation is that DB Group continued the
profitable growth it posted in the 2010 financial year into the first half of
2011. Once again Revenues and profits rose notably. DB Group
continues to stand for financial stability and reliability. All three rating
agencies confirmed respectively retained our excellent ratings of
AA/AA/Aa1 in the first half of 2011. The two bonds we issued in the first
half of 2011 show that we are a quality issuer who can tap the capital
market at any time at attractive conditions.
Deutsche Bahn AG / DB Mobility Logistics AG 4 / 18 Investor Relations Europaplatz 1, 10557 Berlin Tel.: +49 (0)30 297-64031, E-Mail: [email protected]
2DB AG / DB ML AG Dr. Richard Lutz
Sustained recovery of global economy (GDP world +3.0%)
In Germany economy stays strong (GDP Q1 +5.2%)
Prevailing insecurities as a result of the Euro-/debt crisis
High cost burdens due to increase in energy, personnel and maintenance expenses
General conditions
H1 2011 – At a Glance
Highlights H1 2011
Passenger transport
Transport and logistics
Infrastructure
Stable development of German rail passenger transport
Development influenced by one-time effects in H1 2010 as well as in current year
Rail freight transport continues its strong growth
Differentiated development in logistics:
Strong increase in European land transport, slightly weaker development in ocean freight, slight decrease in air freight
Greater demand for train-path, especially in freight transport business
Trend towards greater demand by non-Group customers continues
Our business again developed favorably in the first half of 2011.
This was driven by unchanging and strong economic development ‒
especially in Germany ‒ as well as the ongoing favorable progress of
markets that are relevant for our business.
The German rail passenger transport market developed stably in the
first half of 2011, although development was influenced by one-time
effects that took place in the first half of 2010 (especially severe
winter weather, and clouds of volcanic ash), as well as in the current
year (strike, end of compulsory military service, construction
activities). We were especially pleased by the increase in the
number of rail transport passengers, which rose again by almost
2%, or 18 million travelers.
Deutsche Bahn AG / DB Mobility Logistics AG 5 / 18 Investor Relations Europaplatz 1, 10557 Berlin Tel.: +49 (0)30 297-64031, E-Mail: [email protected]
In Transport and Logistics we noted renewed strong growth in rail
freight and the European land transport.
The air and ocean freight markets posted more modest
development than in the first half of 2010. Both markets experienced
a dynamic catch-up process in the previous year, which led to
weaker growth rates in the first half of 2011. Air freight volumes
even declined slightly.
In the Infrastructure area we again noted greater demand for train-
path, especially from the freight transport business.
The trend towards greater demand by non-Group customers also
continued without interruption in the first half of 2011.
A glance at our key financial figures reveals that we can look back at a
successful first half of 2011:
Deutsche Bahn AG / DB Mobility Logistics AG 6 / 18 Investor Relations Europaplatz 1, 10557 Berlin Tel.: +49 (0)30 297-64031, E-Mail: [email protected]
3DB AG / DB ML AG Dr. Richard Lutz
Selected key figures (€ mn)
EBIT adjusted
Net profit
Net financial debt as of Jun 30, 2011/Dec 31, 2010
Gross capital expenditures
1,133
648
17,290
18,876
17,280
2,689
H1 2011 – At a Glance
Very good development in H1 2011
H1 2011
Revenues
Revenues comparable
H1 2010
846
392
16,939
16,102
16,102
2,502
+33.9
+65.3
+2.1
+17.2
+7.3
+7.5
ROCE 7.2% 5.9% -
abs. %
+/-
+287
+256
+351
+2,774
+1,178
+187
-
We achieved notable gains in revenues of about 17 % in the first
half of 2011.
Changes to the scope of consolidation contributed € 1.5 billion to
revenues, which mainly involved the inclusion of Arriva.
After adjustment for effects stemming from changes to the scope of
consolidation and currency exchange rates, the bottom line increase
in revenues amounted to 7.3 %.
Our adjusted EBIT figure surged by 34 %. This development was
mainly driven by the strong performance turned in by the DB
Schenker business units.
Our net profit even rose by 65 % to € 648 million. We were able to
notably improve our return on capital employed, or ROCE, from
5.9 % to 7.2 %.
Deutsche Bahn AG / DB Mobility Logistics AG 7 / 18 Investor Relations Europaplatz 1, 10557 Berlin Tel.: +49 (0)30 297-64031, E-Mail: [email protected]
The very favorable trend noted for our revenues and profits in 2010
thus also continued in the first half of 2011.
As of June 30, 2011, our net financial debt had risen by about € 350
million from the end of 2010 to € 17.3 billion.
However, when viewing this figure it should be taken into account
that we paid a first-time dividend of € 500 million to our owners in
the first half of 2011.
Furthermore, we increased our capital expenditure activities in the
first half of 2011 by almost € 190 million to about € 2.7 billion.
After adjusting the increase in net financial debt by the dividend we
distributed, it becomes clear that we were also able to finance our
capital expenditures from our own resources in the first half of 2011.
This brings me to the second part of my presentation.
First, our revenues and a glance at the breakdown of revenues by
business unit:
Deutsche Bahn AG / DB Mobility Logistics AG 8 / 18 Investor Relations Europaplatz 1, 10557 Berlin Tel.: +49 (0)30 297-64031, E-Mail: [email protected]
4DB AG / DB ML AG Dr. Richard Lutz
H1 2011 – Development of revenues
Revenue increase mainly at DB Schenker and DB Netze Energy
DB Group
Total revenues (€ mn)H1
2010
16,102 +1,178 +7.3%18,876
H1 2011
-1,535 -61
abs. %
+/- (H1 2011 comp. vs. H1 2010)
17,280
H1 2011comp.
DB Schenker Logistics 6,746 +661 +9.8%7,466 -1 -58 7,407
DB Netze Track 2,198 +71 +3.2%2,269 - -
DB Netze Stations 524 +13 +2.5%537 - -
DB Netze Energy 1,230 +218 +17.7%1,448 - -
DB Bahn Long-Distance 1,828 -8 -0.4%1,825 -5 - 1,820
DB Bahn Regional 4,288 +77 +1.8%4,365 - - 4,365
DB Arriva 87 +15 +17.2%1,632 -1,529 -1 102
DB Services 557 +91 +16.3%648 - -
DB Schenker Rail 2,268 +211 +9.3%2,481 0 -2 2,479
Other/consolidation -3,624 -171 +4.7%-3,795 - -
Cons. eff. FX effects
Adjustments
2,269
537
1,448
648
-3,795
Cons. eff. = Changes in scope of consolidation; FX-effects = Currency effects
The comparable increase at Group level was primarily driven by the
development seen at the two DB Schenker business units, where
comparable revenues were about € 870 million higher than in the first
half of 2010.
Both DB Schenker Rail, where revenues rose on a comparable basis by
more than 9 %, as well as DB Schenker Logistics, with a gain of nearly
10 %, were able to record notable increases.
DB Schenker Logistics saw its European land transport business
develop very favorably due to sharp rises in performance. However,
the air and ocean freight as well as the contract logistics business
also recorded substantial gains.
In contrast, the increase in revenues noted for our passenger
transport business (excluding Arriva) was more muted and
amounted to € 84 million. Increase revenues were mainly noted at
Deutsche Bahn AG / DB Mobility Logistics AG 9 / 18 Investor Relations Europaplatz 1, 10557 Berlin Tel.: +49 (0)30 297-64031, E-Mail: [email protected]
DB Bahn Regional, while revenues remained nearly at the previous
year's level at DB Bahn Long-Distance. It should be noted, however,
that the previous year's performance was positively influenced by
favorable one-time effects such as the severe winter and the
volcanic ash clouds.
Business units in the Infrastructure division posted a slightly
stronger increase in revenues of about € 300 million.
The change was due, particularly, to development noted for the
DB Netze Energy business unit where revenues rose notably.
This increase was influenced by factors including volume and
pricing effects in the traction energy segment (traction current,
diesel fuel) as well as higher revenues generated by energy
services.
The DB Netze Track business unit again recorded greater demand
for train-path, especially from rail freight transport. Train-path
kilometers rose by 2.5 % which was the major driver behind the
3.2 % increase in revenues.
The trend of growing demand for train-path on the part of non-Group
railways, which we have noted for years, continued again as
non-Group railways’ share of total demand for train-path rose
by two percentage points from 19 to 21 % in the first half of 2011.
I would now like to move on to present details on profit development.
The following chart shows the “bridge” that you have seen previously
that presents the change between the EBIT and adjusted EBIT figures
(EBIT adjusted for special items), which we use as the metric to steer
the performance of our operations.
Deutsche Bahn AG / DB Mobility Logistics AG 10 / 18 Investor Relations Europaplatz 1, 10557 Berlin Tel.: +49 (0)30 297-64031, E-Mail: [email protected]
5DB AG / DB ML AG Dr. Richard Lutz
1,0761,133
846875
-57
+29
H1 2011 – Profit development
Adjusted EBIT improves by 34 percent
in Mrd. €EBIT and EBIT adjusted (€ mn)
EBIT Special items EBIT adjusted
H1 2010 H1 2011
+23.0%
+33.9% +287
EBIT Special itemsEBIT adjusted
The adjusted EBIT figure rose by € 287 million in the first half of 2011
to € 1,133 million; € 77 million of the increase was due to the inclusion
of Arriva.
Hardly major special items were recorded in either the first half of 2010
or the first half of 2011.
A deeper look at the development of profits by business unit reveals the
following:
Deutsche Bahn AG / DB Mobility Logistics AG 11 / 18 Investor Relations Europaplatz 1, 10557 Berlin Tel.: +49 (0)30 297-64031, E-Mail: [email protected]
6DB AG / DB ML AG Dr. Richard Lutz
Change by business unit (€ mn)EBIT adjusted (€ mn)
H1 2011 – Profit development
Overall positive EBIT development on business unit level
H1 2010H1 2011
-3446 80 -42.5%
+28477 449 +6.2%
+7758 -19 -
+60170 110 +54.5%
+680 74 +8.1%
+25262 237 +10.5%
124 123 +1 +0.8%
-1624 40 -40.0%
+66-179 -245 -26.9%
+2871,133 846 +33.9%
+7471 -3 -
DB Group
DB Schenker Logistics
DB Netze Track
DB Netze Stations
DB Netze Energy
DB Bahn Long-Distance
DB Bahn Regional
DB Arriva
DB Services
DB Schenker Rail
Other/consolidation
The overall development of profits was also favorable at the business
unit level.
DB Bahn Long Distance posted lower profits compared to the
previous yearʼs figure, while revenues, as earlier mentioned, were
close to the level of the first half of 2010. This means that profits
were primarily driven by expenses where all major cost categories
increased. This applies to energy costs, maintenance costs and
personnel expenses. The latter were impacted by a higher number
of employees and increased wages.
Profits grew slightly at DB Bahn Regional, where costs also rose in
comparison to the same year-ago period. However, costs were
more than offset by increased volume and price-related effects in
the area of concession fees as well as farebox revenues.
Deutsche Bahn AG / DB Mobility Logistics AG 12 / 18 Investor Relations Europaplatz 1, 10557 Berlin Tel.: +49 (0)30 297-64031, E-Mail: [email protected]
The most significant increase in profits was posted by the
DB Schenker Rail business unit (+ € 77 million). The additional
revenues posted here ‒ about € 210 million ‒ had a particularly
strong effect on the bottom line due to the heavy weighting of fixed
costs in the business unit’s cost structure. This also reflected that
the recovery process following the economic crisis remained intact.
The fact that in the interim all regions within this business unit are
generating profits was particularly pleasing.
The DB Schenker Logistics business unit also posted notably higher
profits (+ € 60 million). With a gross profit margin that increased
slightly to 29.6 %. The adjusted EBIT margin also rose from 1.6 to
2.3 %.
Within the Infrastructure division the DB Netze Track business unit
was able to raise its adjusted EBIT figure, despite higher expenses
for maintenance and personnel, due mainly to the higher revenues
generated by an increased demand for train-path.
Before I review our debt situation I would first like to take a brief look at
the development of capital expenditures by business unit.
Deutsche Bahn AG / DB Mobility Logistics AG 13 / 18 Investor Relations Europaplatz 1, 10557 Berlin Tel.: +49 (0)30 297-64031, E-Mail: [email protected]
7DB AG / DB ML AG Dr. Richard Lutz
H1 2011 – Capital expenditures
Noticeable increase of net capital expenditures
By business unit H1 2010Gross capital expenditures (€ mn)
H1 2011 abs. %
+/-
H1 2010 H1 2011
2,502
2,689
8651,049
Net:
+21.3%
+7.5%
2,689
135
97
1,872
190
40
116
39
89
72
2,502
147
51
1,921
136
13
128
32
61
9
39 4
+187
-12
+46
-49
+54
+27
-12
+7
+28
+63
+35
+7.5
-8.2
+90.2
-2.6
+39.7
-
-9.4
+21.9
+45.9
-
-
DB Group
DB Schenker Logistics
DB Netze Track
DB Netze Stations
DB Netze Energy
DB Bahn Long-Distance
DB Bahn Regional
DB Arriva
DB Services
DB Schenker Rail
Other/consolidation
We also continued our capital expenditures at a high level in the first half
of 2011 as we made outlays of € 2.7 billion.
The infrastructure remained the main focus of our capital expenditures
and absorbed nearly 80 % of the total.
Gross capital expenditures made in the Infrastructure business units
amounted to € 2.1 billion and were slightly higher than the previous
yearʼs figure. As investment grants increased slightly, net capital
expenditures in the infrastructure remained at about the previous
year's level.
The € 187 million increase in gross capital expenditures and the
corresponding € 184 million rise in net capital expenditures are
mainly due to the first-time inclusion of Arriva as well as higher
capital expenditures made in the DB Bahn Long-Distance,
DB Schenker Logistics and the DB Services business units.
Deutsche Bahn AG / DB Mobility Logistics AG 14 / 18 Investor Relations Europaplatz 1, 10557 Berlin Tel.: +49 (0)30 297-64031, E-Mail: [email protected]
The level of capital expenditures made in the DB Bahn Regional
business unit stagnated at the previous year's low level. This was
due to delayed deliveries of new vehicles because of the absence of
certification documents from the Federal Railway Authority, defects
that hindered acceptance of vehicles and delays in deliveries of
vehicles caused by the manufacturers. We hope that the long
overdue vehicle deliveries will finally take place in the second half of
the year. However, in view of the experiences we have had in the
past months and years we shall have to wait and see just how
reliable the manufacturers’ statements really are.
This brings me to the development of net financial debt.
Deutsche Bahn AG / DB Mobility Logistics AG 15 / 18 Investor Relations Europaplatz 1, 10557 Berlin Tel.: +49 (0)30 297-64031, E-Mail: [email protected]
8DB AG / DB ML AG Dr. Richard Lutz
Dec 31, 2010 Jun 30, 2011
2,110
-1,049
-912
-500
Reconciliation of finance requirements (€ mn)
Cash flowafter taxes
Net capitalexpenditures
Financerequirements
Financial debt (€ mn)
Changes inworking
capital/Other
Dividend
16,93917,290
1,614 1,711
18,553 19,001
Net:
+2.4 %
+€ 351 mn
Cash and cash equivalents and receivables form financing
H1 2011 – Financial debt DB Group
Slight increase in net financial debt
-351
Our net financial debt increased during the first half of 2011 from
€ 16.9 billion to € 17.3 billion.
Cash flow amounted to € 2.1 billion or 20 % more than the previous
yearʼs figure of € 1.7 billion. This cash flow enabled us to finance the
higher net capital expenditures as well as other capital binding measures
in working capital, and other balance sheet items.
This surplus was, however, not enough to fully cover the first-time
dividend of € 500 million we paid to our owner.
This resulted in total funding requirements of € 351 million, which in turn
led to a corresponding increase in net financial debt.
Deutsche Bahn AG / DB Mobility Logistics AG 16 / 18 Investor Relations Europaplatz 1, 10557 Berlin Tel.: +49 (0)30 297-64031, E-Mail: [email protected]
I would like to end my presentation by briefly reviewing our slightly
adjusted outlook for the 2011 financial year:
9DB AG / DB ML AG Dr. Richard Lutz
(€ mn) 20112010
ROCE
Revenues
EBIT adjusted
Outlook 2011 financial year(as of July 2011)
6.0%
34,410
1,866
2011 financial year – Outlook
Further positive development in 2011 financial year expected
Continuing economic recoveryFurther performance growthFull-year inclusion of Arriva
Positive development of revenuesContinued cost management
Lower increase in capital employed compared to adjusted EBIT
Net financial debt as of Dec. 31
16,939 Increase in cash flowNoticeable increase in net capital expenditures First-time dividend distribution
Gross capex 6,891 Continued modernization courseRealization of capital expenditures initiative
Our outlook for the 2011 financial year has not changed and still remains
favorable. This outlook anticipates that the trends noted in the economy
and the markets remain intact on an overall basis, despite weakening in
the second half of 2011. This primarily is based on the assumption that
the current events in the financial markets (e.g. euro sovereign debt
crisis) do not have a sustained effect on the real economy and our
markets.
Based on these prerequisites, we are cautiously optimistic about our
markets and therefore the future development of our revenues and
profits.
Deutsche Bahn AG / DB Mobility Logistics AG 17 / 18 Investor Relations Europaplatz 1, 10557 Berlin Tel.: +49 (0)30 297-64031, E-Mail: [email protected]
We currently anticipate that full-year revenues for 2011 will rise by about
€ 4 billion to notably more than € 38 billion. Revenue growth will be
driven organically and by the fact that Arriva will be fully included in our
financial statements for the first time in 2011, following just four months
of inclusion in the 2010.
As far as profits are concerned, we expect our adjusted EBIT figure to
rise significantly higher than € 2 billion.
This means that our current expectations for revenues and profits are
higher than the forecast made at the end of March during the Annual
Results Press Conference.
Our outlook for the remaining key figures ‒ ROCE, gross capital
expenditures and debt ‒ remains unchanged.
Ladies and gentlemen, I would like to end my presentation with this
favorable outlook for the 2011 financial year.
We appreciate your attention. The entire Management Board would be
pleased to answer your questions at this time.
Deutsche Bahn AG / DB Mobility Logistics AG 18 / 18 Investor Relations Europaplatz 1, 10557 Berlin Tel.: +49 (0)30 297-64031, E-Mail: [email protected]
We appreciate your attention
Speech given by Dr. Richard Lutz, CFO of Deutsche Bahn AG and DB Mobility Logistics AG, on the occasion of the Interim Results Press Conference held on July 28, 2011 in Berlin.
The spoken word takes precedence.
Contact: Deutsche Bahn AG/ DB Mobility Logistics AG Corporate Communications Investor Relations Potsdamer Platz 2 Europaplatz 1 10785 Berlin 10557 Berlin Tel.: +49 (0)30 297-61131 Tel.: +49 (0)30 297-64031 Fax: +49 (0)30 297-61919 Fax: +49 (0)30 297-64036 E-Mail: [email protected] E-Mail: [email protected]