Development in the first half of 2020
Performance and profit developments continue to decline due to the economic climate in industries predisposed to rail transport (coal, steel and automotive).
Global impact of the Covid-19 pandemic on supply chains.
Rail Freight Transport Campaign with a positive contribution.
DB Cargo | H1 | Change | |||
2020 | 2019 | absolute | % | ||
| Punctuality (%) | 79.1 | 73.8 | – | – |
| Freight carried (million t) | 103.0 | 122.4 | – 19.4 | – 15.8 | |
| Volume sold (million tkm) | 38,190 | 43,738 | – 5,548 | – 12.7 | |
| Volume produced (million train-path km) | 75.3 | 82.9 | – 7.6 | – 9.2 | |
| Capacity utilization (t per train) | 507.5 | 527.8 | – 20.3 | – 3.8 | |
| Total revenues (€ million) | 1,968 | 2,270 | – 302 | – 13.3 | |
| External revenues (€ million) | 1,845 | 2,141 | – 296 | – 13.8 | |
EBITDA adjusted (€ million) | – 176 | 20 | – 196 | – | |
EBIT adjusted (€ million) | – 352 | – 132 | – 220 | + 167 | |
EBIT margin (adjusted) (%) | – 17.9 | – 5.8 | – | – | |
| Gross capital expenditures (€ million) | 136 | 163 | – 27 | – 16.6 | |
| Employees as of Jun 30 (FTE) | 29,874 | 29,198 | + 676 | + 2.3 |
The punctuality of arrivals at DB Cargo improved significantly. This was considerably influenced by DB Cargo Germany. The manufacturing companies in Central Europe, along with companies in Eastern Europe, are also seeing significant positive developments. This is primarily due to increased availability of resources, which has a positive effect on the stability of the production system.
Performance development continued to drop, driven by developments in Central Europe. All key performance indicators saw a decline, mainly as a result of the effects of Covid-19 and an economic downturn in industries predisposed to rail transport.
The economic development remains strained. The reduction in income could not be offset by declining expenses, resulting in a significant decrease in operating profit figures.
- 80% of revenues were generated in Central Europe, 13% in Western Europe and 7% in Eastern Europe. Revenues fell noticeably. The effects of improved performance on Europe-Asia routes were completely offset by performance decreases in the logistics sector and reduced volume sold.
- Other operating income (+0.5%/€ +1 million) remained practically unchanged, while increased income from property sales and tax reimbursements were offset by lower performance-related price subsidies.
On the expenses side there was a decrease, driven by material expenses and other operating expenses. Personnel expenses and depreciation developed in the opposite direction:
- Cost of materials (–6.9%/€ –89 million) decreased mainly due to lower expenses for train paths, energy and purchased transport services, as a result of Covid-19-related volume decreases. Increased maintenance expenses had the opposite effect.
- Personnel expenses (+2.9%/€ +25 million) increased as a result of collective bargaining and the increase in personnel at Central Europe.
- Other operating expenses (–12.0%/€ –37 million) decreased mainly as a result of a performance-related reduction in vehicle rentals and savings with respect to administrative expenses.
- The significant increase in depreciation (+15.8%/€ +24 million) was related to capital expenditures.
Gross capital expenditures declined as a result of delayed procurement of freight cars in Central Europe.
As of June 30, 2020 a total of 67% of employees are employed in Central Europe, 14% in Western Europe and 13% in Eastern Europe. Employee numbers rose, in particular in Central Europe. Conversely, the number of employees in Western Europe was reduced due to fluctuations and performance.
Central Europe region
Operating profit development under pressure as a result of the Covid-19 pandemic.
Addition of operational personnel.
| Central Europe region | H1 | Change | |||
2020 | 2019 | absolute | % | ||
| Freight carried (million t) | 104.0 | 116.1 | – 12.1 | – 10.4 |
| Volume sold (million tkm) | 31,208 | 35,052 | – 3,844 | – 11.0 | |
| Volume produced (million train-path km) | 60.9 | 64.8 | – 3.9 | – 6.0 | |
| Total revenues (€ million) | 2,212 | 2,489 | – 277 | – 11.1 | |
| External revenues (€ million) | 1,482 | 1,736 | – 254 | – 14.6 | |
EBITDA adjusted (€ million) | – 152 | 26 | – 178 | – | |
EBIT adjusted (€ million) | – 278 | – 80 | – 198 | – | |
| Gross capital expenditures (€ million) | 103 | 147 | – 44 | – 29.9 | |
| Employees as of Jun 30 (FTE) | 20,032 | 19,343 | + 689 | + 3.6 |
Performance development in Central Europe declined due to the impact of the Covid-19 pandemic on the steel and automotive industries and on combined transport. Capacity utilization (tons per train) also decreased accordingly.
The economic development continues challengingly. The reduction in expenses could not offset the decline in income, resulting in a significant deterioration of operating profit figures.
- Revenues fell considerably as a result of a Covid-19-related decrease in performance.
- Other operating income decreased mainly as a result of reduced Federal grants in connection with train-path price support.
On the expenses side there was a decrease, driven by the cost of materials:
- Cost of materials was reduced mainly due to lower performance. This resulted in a decline in purchased transport services, along with lower train-path and energy expenses.
- Personnel expenses increased as a result of collective bargaining and the addition of operational personnel.
- The decrease in other operating expenses was primarily due to performance-related reduced vehicle rental expenses.
- As a result of capital expenditures, depreciation increased significantly.
Gross capital expenditures decreased primarily due to fewer vehicle purchases at DB Cargo Germany.
The number of employees rose, mainly as a result of appointments in the German operational business area and of business expansion in Belgium and Switzerland.
Western Europe region
Covid-19-related decline in demand.
Overall challenging business performance.
| Western Europe region | H1 | Change | |||
2020 | 2019 | absolute | % | ||
| Freight carried (million t) | 19.8 | 24.7 | – 4.9 | – 19.8 |
| Volume sold (million tkm) | 4,885 | 6,308 | – 1,423 | – 22.6 | |
| Volume produced (million train-path km) | 10.9 | 14.2 | – 3.3 | – 23.2 | |
| Total revenues (€ million) | 295 | 358 | – 63 | – 17.6 | |
| External revenues (€ million) | 231 | 288 | – 57 | – 19.8 | |
EBITDA adjusted (€ million) | 6 | 32 | – 26 | – 81.3 | |
EBIT adjusted (€ million) | – 33 | – 4 | – 29 | – | |
| Gross capital expenditures (€ million) | – 13 | 11 | – 24 | – | |
| Employees as of Jun 30 (FTE) | 4,313 | 4,335 | – 22 | – 0.5 |
Performance development in Western Europe declined overall. Volume produced and volume sold both declined, primarily due to the effects of the Covid-19 pandemic and of delayed infrastructure projects in France. Capacity utilization (tons per train) increased slightly.
Economic development took a noticeable turn for the worse: as a result of Covid-19, operating profit figures deteriorated considerably:
- Revenues declined significantly due to performance.
- Other operating income increased slightly as a result of proceeds from land transactions in the UK.
On the expenses side, there was a disproportionate decline:
- Cost of materials decreased, mainly due to lower volumes resulting from the Covid-19 pandemic.
- Personnel expenses decreased slightly due to a lower average number of employees. Consequences of collective bargaining had a counteractive effect.
- Other operating expenses declined as a result of reduced expenses for services.
- Depreciation increased due to the first-time inclusion of the Sociedad de Estudios y Explotacion de Material Auxiliar de Transportes, S.A. (“SEMAT”), Madrid/Spain, which was formerly included in the consolidated financial statements at-equity as well as capital expenditure/leasing activities.
Capital expenditures decreased considerably, in particular due to adjustments made in the UK in connection with the first-time application of IFRS 16 the previous year.
The number of employees declined slightly, primarily due to fluctuations and performance.
Eastern Europe region
Overall noticeable positive revenue development, in particular as a result of Europe-Asia traffic.
Increased cost of materials as a result of positive business development.
Covid-19-related disruptions to supply chains.
| Eastern Europe region | H1 | Change | |||
2020 | 2019 | absolute | % | ||
| Freight carried (million t) | 6.9 | 7.5 | – 0.6 | – 8.0 |
| Volume sold (million tkm) | 2,096 | 2,377 | – 281 | – 11.8 | |
| Volume produced (million train-path km) | 3.4 | 3.9 | – 0.5 | – 12.8 | |
| Total revenues (€ million) | 219 | 176 | + 43 | + 24.4 | |
| External revenues (€ million) | 131 | 116 | + 15 | + 12.9 | |
EBITDA adjusted (€ million) | 11 | 13 | – 2 | – 15.4 | |
EBIT adjusted (€ million) | – 1 | 3 | – 4 | – | |
| Gross capital expenditures (€ million) | 15 | 4 | + 11 | – | |
| Employees as of Jun 30 (FTE) | 3,937 | 3,893 | + 44 | + 1.1 |
A decline in rail transport by DB Cargo Polska, primarily due to Covid-19, resulted in a negative performance development.
Economic development remains challenging: revenue increases were offset by higher expenses. Operating profit figures have declined.
- Revenues increased significantly due to the positive business development of China transports. This was bolstered by an increase in revenues outside of rail transport services (siding businesses) at DB Cargo Polska and additional transports in Romania. The reduction in transport services as a result of the Covid-19 pandemic has had a counteractive effect.
- Other operating income remained essentially the same.
The expenses side experienced an increase, driven by positive business development in the Eurasian corridor:
- Cost of materials rose significantly, primarily due to increased purchased transport services for China transports and higher maintenance expenses.
- Personnel expenses rose, due mainly to collective bargaining at DB Cargo Polska and DB Cargo Romania, accompanied by a slight increase in the number of employees at companies in the Eurasian corridor.
- Depreciation increased slightly due to capital expenditures.
Capital expenditures have increased significantly, mainly as a result of the acquisition of previously leased locomotives in Romania.
The number of employees rose, in particular as a result of positive business development in the Eurasian corridor, as well as in Poland and Romania. Optimization measures in Hungary and Bulgaria had a counteractive effect.