Group management report
++ Positive effects from the world economy’s noticeable recovery during the 2010 financial year ++ Rail freight transport and worldwide logistics post significant rates of increase ++ Favorable forecast for the 2011 financial year ++
|Selected key figures|
|Passengers rail and bus (million)*||2,734||2,708||+ 26||+ 1.0|
|Volume sold rail passenger transport (million pkm)*|
|Volume sold rail freight transport (million tkm)|
|Train kilometers on track infrastructure (million train-path km)|
|Shipments in European land transport (thousand)|
|Air freight volume (export) (thousand t)||1,225||1,032||+ 193||+ 18.7|
|Ocean freight volume (export) (thousand TEU)|
|Revenues||34,410||29,335||+ 5,075||+ 17.3|
|Revenues comparable||32,456||29,335||+ 3,121||+ 10.6|
|EBIT adjusted||1,866||1,685||+ 181||+ 10.7|
|EBITDA adjusted||4,651||4,402||+ 249||+ 5.7|
|Net profit for the year||1,058||830||+ 228||+ 27.5|
|ROCE||6.0 %||5.9 %||-||-|
|Net financial debt as of Dec 31||16,939||15,011||+ 1,928||+ 12.8|
|Net financial debt as of Dec 31 (excluding DB Arriva)|
|Gross capital expenditures||6,891||6,462||+ 429||+ 6.6|
* Excluding DB Arriva.
During the year under review, Deutsche Bahn Group (DB Group) was once again able to achieve significant volume increases in all of the relevant markets, which allowed it to continue the growth trend that was interrupted in the previous year due to the economic and financial crisis.
In particular, this applies to rail freight transport as well as to our worldwide transport and logistics activities, which incurred significant losses in some areas during the previous year. In the area of global ocean freight as well as in European land freight, the volumes for the year under review were once again higher than the pre-crisis level in 2008. Worldwide air freight nearly reached its pre-crisis level after a sharp decline in 2009. The main driver of this development was the significant improvement of the macroeconomic environment [see Related topics], particularly in Asia and in our home market of Germany.
The performance of our business units for passenger transport [see Related topics], which during the previous year was affected only slightly by the negative environmental conditions, was also favorable. Increases were recorded in both long-distance and regional transport. Higher demand for train-path, particularly in rail freight transport, had a positive effect in the infrastructure area.
The volume increases are reflected in a corresponding revenue increase [see Related topics] across all business units.
Significant effects on the profit, financial and asset situation during the year under review also result from the change in the scope of consolidation [see Related topics]. Here, the acquisition of the British passenger transport company Arriva, concluded at the end of August 2010, played a decisive role with a revenue contribution of about € 1 billion. After this acquisition, there were also changes made to the organizational structure [see Related topics] of DB Group that will take effect starting in the 2011 financial year.
The development of profits [see Related topics] was positive overall in the year under review, though somewhat lessened by the restricted vehicle availability, the unusual weather conditions and the significantly higher maintenance costs for vehicles and infrastructure.
Our Group-wide reACT program, initiated during the previous year, moved into the implementation phase during the year under review after the completion of the conceptual work. The results from the further implementation of the project were as positive as expected for the year under review, and the targets were met.
Detailed information about the performance of the individual business units may be found in the chapter “Business units” [see Related topics].
In contrast to the previous year, DB Group’s overall development was hardly influenced by special items [see Related topics] during the year under review. The adjusted profit measures and the adjusted profit and loss statement [see Related topics] do not include the special items for the year under review and the previous year.
Despite the significantly lower number of special items, the development of net profit for the year [see Related topics] was clearly positive for the year under review.
The development of our ROCE value management key figure [see Related topics] was hampered in the year under review by the complete inclusion of Arriva’s capital employed, together with adjusted EBIT contributions that were accounted for only proportionally. Excluding the Arriva acquisition, the ROCE figure rose to 6.4 %.
As of December 31, 2010, net financial debt [see Related topics] was significantly higher than the same year-ago figure due to the Arriva acquisition. The acquisition also affected the development of the value management key figures of redemption coverage and gearing [see Related topics]. Excluding the acquisition, we were once again able to reduce our net financial debt significantly, by about € 1 billion.
DB Group also had very smoothly functioning access to capital markets during the year under review and was able to obtain outside capital for refinancing expiring debts and for acquiring Arriva, at attractive conditions.
Our capital expenditure activities [see Related topics] were also at a high level in the year under review. Gross capital expenditures increased noticeably in the year under review. In the area of rail infrastructure, the additional resources from the economic stimulus packages [see Related topics] were also felt.
ASSESSMENT OF THE ECONOMIC SITUATION BY THE MANAGEMENT BOARD
On the basis of the development in the year under review, the Management Board of Deutsche Bahn AG (DB AG) considers the economic situation of DB Group to be positive.
During the year under review, DB Group once again reported increases in revenues, operating earnings and ROCE, both on a comparable basis and after taking changes in the scope of consolidation into account.
Using a comparable basis, the development of DB Group in the year under review – with the exception of revenue development – corresponds to the forecast made in our 2009 annual report for the 2010 financial year. The area of revenue development reflected the development of the economic conditions, which was much more favorable than we projected and led to greater revenue growth than expected.
Our strategic approach proved to be solid during the crisis, and during the year under review it made a significant contribution towards our substantial recovery. Following the notable effects of the financial and economic crisis in the previous year, DB Group was able to resume the growth trend that was established in the years up to 2008.
Our analyses show that the long-term megatrends in our markets (globalization, climate change and resource scarcity, liberalization and deregulation as well as demographic change) will continue to define the basis of our strategy, and should have a positive effect on our business development. The strategic objectives [see Related topics] of DB Group will therefore remain unchanged.
Business development of DB Group was favorable at the beginning of the 2011 financial year allowing the Management Board to confirm its expected forecast at the time of preparing the 2010 annual report. Based on the current perspective, the Management Board assumes that the revenues and adjusted EBIT will continue to develop and improve according to the statements made in the outlook [see Related topics].
Last modified: 27.06.2011