Business development

Income development

Transition to the adjusted statement of income

The transition to the adjusted statement of income is a two-step process. The reclassification and adjustment procedure (2020 Integrated Report) has not changed.

The following presentation describes the changes in the key items on the statement of income, adjusted for special items.

Exchange rate effects in the first half of 2021 had a negligible impact on income and expenses overall. Effects resulting from changes in the scope of consolidation were not significant as well. The effects are presented in the above table and are not discussed any further below.

The economic development of DB Group in the first half of 2021 was marked by the impact of the Covid-19 pandemic on passenger transport and the strong development of transport and logistics activities. Operating profit figures improved again. Growth on the income side had a positive effect in this case:

  • The revenue development war vor allem getragen durch die Entwicklung von DB Schenker deutlich positiv. Auch im Systemverbund Bahn war insgesamt wieder ein Umsatzzuwachs zu verzeichnen.
  • Furthermore, other operating income increased significantly. This was mainly due to higher utilization of provisions for impending losses at DB Regional, performance-­related higher train-path price subsidies, subsidization of single wagon transport at DB Cargo for the first time and higher insurance income for damages from previous years at DB Long-Distance.
Transition to the adjusted statement of income (€ million)

H1

Change

H1 2019

2021

Reclassifications

Adjustment of special items

2021
adjusted

2020
adjusted

absolute

thereof due to changes in the scope of consolidationthereof due to exchange rate effects

%

IFRS compounding/discountingNet investment income

PPA 

amortization

 Revenues

21,784

2

21,786

19,423

+2,363

+12

–164

+12.2

22,013

Inventory changes and other internally produced and capitalized assets

1,805

1,805

1,695

+110

+3

–0

+6.5

1,490

Other operating income

1,420

–17

1,403

1,257

+146

–11

+1

+11.6

1,116

Cost of materials

–12,706

24

–12,682

–10,766

–1,916

+1

+129

+17.8

–10,876

Personnel expenses

–9,409

60

–9,349

–9,077

–272

–15

+19

+3.0

–8,902

Other operating expenses

–2,092

12

–2,080

–2,375

+295

+8

–1

–12.4

–2,307

EBITDA/EBITDA adjusted

802

81

883

157

+726

–2

–16

2,534

Depreciation

–1,876

17

1

–1,858

–1,937

+79

–1

+3

–4.1

–1,777

Operating profit/loss (EBIT) | EBIT adjusted

–1,074

17

82

–975

–1,780

+805

–3

–13

–45.2

757

Net interest income | Net operating interest balance

–233

–2

–235

–282

+47

+0

+0

–16.7

–333

Operating income after interest

–1,307

–2

17

82

–1,210

–2,062

+852

–3

–13

–41.3

424

Result from investments accounted for using the equity method | Net investment income

–4

0

–4

–9

+5

+0

–55.6

Other financial result

5

2

0

7

–95

+102

+0

+1

–18

PPA amortization of customer contracts

–17

–17

–26

+9

+0

–34.6

–32

Extraordinary result

–82

–82

–1,477

+1,395

–0

–94.4

–97

Profit/loss before taxes on income

–1,306

–1,306

–3,669

+2,363

–3

–12

–64.4

277

As a result of business development, expenses increased significantly, especially at DB Schenker and DB Cargo, but in relation to income, the increase was lower overall:

  • Cost of materials increased noticeably, primarily due to an increase in purchased transport services and higher freight rates at DB Schenker. In the Integrated Rail System, higher expenses for train-path and station use at ­DB Regional, mostly due to price and performance, higher purchased transport services at DB Cargo due to performance, additional burdens from a harsher winter and higher energy costs had a boosting effect. At DB Arriva, in particular, the cessation of the ARN franchise reduced expenses.
  • Personnel expenses also increased. In addition to wage effects, the higher number of employees also impacted the Integrated Rail System. Additional burdens resulted from the positive development of business operations ­at DB Schenker. The cessation of the ARN franchise at DB Arriva in particular has had a mitigating effect.
  • In contrast, other operating expenses fell noticeably, mainly due to lower additions to provisions for impending losses at DB Regional. In addition, effects from the cessation of the ARN franchise had an expense-reducing effect at DB Arriva. In contrast, expenses for related services rose at DB Schenker as a result of the positive business development.
  • Depreciation also fell, although only slightly. In the Integrated Rail System, higher depreciation due to capital expenditures were more than offset, among other things, by the positive effects of vehicles reaching the end of their useful life. At DB Arriva, the cessation of the ARN franchise had a significant expense-reducing effect.

Operating profit after interest also improved, supported additionally by the development of interest rates.

The net investment income remained at a very low level, and the change was mainly driven by lower losses at GHT Mobility GmbH and Barraqueiro SGPS SA, Lisbon/Portugal.

The increase in the other financial result was mainly due to a net gain from the compounding or discounting of provisions.

Extraordinary charges fell significantly, mainly as a result of the omission of impairments at DB Arriva in the first half of 2020:

Extraordinary result
(€ million)

H 1

2021

thereof affecting
EBIT

2020

thereof
affecting
EBIT

 

DB Long-Distance

1

1

DB Regional

0

0

0

0

DB Cargo

–19

–19

–13

–13

DB Netze Track

–1

–1

–2

–2

DB Netze Stations

3

3

DB Netze Energy

–25

–25

Other/consolidation Integrated Rail System

–38

–38

–70

–70

Integrated Rail System

–83

–83

–81

–81

DB Arriva

0

0

–1,396

–1,396

DB Schenker

0

0

0

0

Consolidation other

1

1

0

0

DB Group

–82

–82

–1,477

–1,477

The extraordinary result in the first half of 2021 consisted primarily of the following special items:

  • Restructuring measures (mainly Other area), and
  • additional energy expenses (DB Netze Energy).

The composition of the extraordinary result in the first half of 2020 is shown in the 2020 Integrated Interim Report.

Excerpt from statement of income (€ million)

H1

Change

H1 2019

2021

2020

absolute

%

 

Profit/loss before taxes on income

–1,306

–3,669

+2,363

–64.4

277

Taxes on income

–122

–80

–42

+52.5

–72

     Actual taxes on income

–135

–80

–55

+68.8

–90

     Deferred tax expenses (–)/ income (+)

13

+13

18

Net profit/loss (after taxes)

–1,428

–3,749

+2,321

–61.9

205

     DB AG shareholder

–1,443

–3,753

+2,310

–61.6

198

     Hybrid capital investors

13

13

     Other shareholders (non-controlling interests)

2

–9

+11

–122.2

7

Both profit before and after income taxes improved significantly. The income tax position declined overall. Actual taxes on income rose due to better results for some foreign Group companies. The partially offsetting deferred tax revenue resulted from additional temporary spreads at foreign Group companies.

EBIT adjusted by business units (€ million)

H1

Change

H1 2019

2021

2020

absolute

%

 

DB Long-Distance

–1,144

–720

–424

+58.9

224

DB Regional

–359

–597

+238

–39.9

186

DB Cargo

–211

–352

+141

–40.1

–132

DB Netze Track

302

170

+132

+77.6

379

DB Netze Stations

–7

53

–60

123

DB Netze Energy

40

16

+24

+150

23

Other/consolidation Integrated Rail System

–194

–471

+277

–58.8

–376

Integrated Rail System

–1,573

–1,901

+328

–17.3

427

DB Arriva

–31

–153

+122

–79.7

101

DB Schenker

627

278

+349

+126

238

Consolidation other

2

–4

+6

–9

DB Group

–975

–1,780

+805

–45.2

757

The development of the adjusted profit figures for the business units was varied:

  • The business units in the Integrated Rail System developed inconsistently. DB Long-Distance recorded a further significant decline due to the continuing Covid-19 restrictions. DB Regional and DB Cargo were able to reduce their losses. Overall, there was a significant improvement in the infrastructure business units due to revenue growth. Only DB Netze Stations recorded negative development as a result of a decline in rental business due to the Covid-19 pandemic.
  • DB Arriva performed significantly better again. However, the profit situation remained negative, primarily due to the effects of the Covid-19 pandemic.
  • DB Schenker saw a positive development, driven mainly by the development in air and ocean freight.
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