Development of business units

Development in the first half of 2021

  • Covid-19 restrictions led to a negative development in demand.
  • Operating profit figures showed better development.

DB Regional

H1

Change

H1 2019

2021

2020

absolute

%

 Punctuality (rail) (%)

95.3

96.0

94.7

Punctuality (bus) (%) 1) 

84.7

83.3

82.1

Passengers (million)

646.1

807.3

–161.2

–20.0

1,259

     thereof rail

452.8

621.5

–168.7

–27.1

977.7

Volume sold (million pkm)

10,277

14,097

–3,820

–27.1

23,661

     thereof rail

8,189

12,115

–3,926

–32.4

20,382

Volume produced (rail) (million train-path km)

215.8

204.6

+11.2

+5.5

226.9

Volume produced (bus) (million bus km)

231.9

221.6

+10,3

+4,6

249.2

Total revenues (€ million)

3,954

3,727

+227

+6.1

4,412

External revenues (€ million)

3,902

3,676

+226

+6.1

4.361

Rail concession fees (€ million)

2,947

2,573

+374

+14.5

2,803

EBITDA adjusted (€ million)

–43

–276

+233

–84.4

512

EBIT adjusted (€ million)

–359

–597

+238

–39.9

186

Gross capital expenditures (€ million)

259

189

+70

+37.0

273

 Employees as of Jun 30 (FTE)

37,350

36,980

+370

+1.0

36,362

1) Value first half of 2020 adjusted as a result of a change in method in 2020.

Punctuality within regional rail passenger transport has declined. In addition to the onset of winter, the main drivers were the renewed increased utilization of the rail network in the first two months of 2021 and the operational impact of the high volume of construction. Punctuality in bus transport has improved.

The performance development in rail and bus transport varied. The number of passengers and volume sold in rail transport developed significantly below the weak level of the first half of 2020, due to the Covid-19 pandemic. The extension of measures to contain the Covid-19 pandemic led to a significant decline, especially at the beginning of the year, as the corresponding months of the previous year were not yet affected by the Covid-19 pandemic. With the increasing easing of measures, demand has also recovered since April 2021.

Effects from the Covid-19 pandemic also had a strong negative impact on demand in bus transport, especially in the first two months of 2021. Overall, however, this increased slightly as a result of higher volume produced.

The economic development of DB Regional improved again in the first half of 2021. Income gains exceeded additional expenses. As a result, operating profit figures improved, but remained under pressure.

The significantly lower number of passengers did not fully impact development. Due to the high proportion of gross contracts, the revenue risk lies primarily with the public transport authorities:

  • The increase in revenues resulted primarily from higher rail transport concession fees, which more than compensated for the decline in ticket revenues, as well as performance gains and higher concession fees in bus transport.
  • The increase in other operating income (+38.3%/€ +59 million) had a supporting effect, mainly due to higher utilization of provisions for impending losses.

On the expense side, there were additional expenses overall, mainly as a result of the higher volume produced due to the temporary reduced rail transport schedule in the first half of 2020 and higher personnel expenses:

  • Cost of materials increased (+6.4%/€ +167 million) mainly as a result of increased volume produced on rail transport. Higher prices for energy and infrastructure utilization and higher maintenance activities also had a negative impact.
  • Personnel expenses (+3.1%/€ +34 million) rose as a result of collective bargaining agreements and the higher number of employees.

The decrease in other expenses compensated for this:

  • Other operating expenses (–29.2%/€ –145 million) declined significantly, mainly due to lower additions to the provision for impending losses.
  • Depreciation (–1.6%/€ –5 million) decreased due, among other things, to vehicles reaching the end of their useful lives. On the other hand, vehicle purchases resulted in an increase in depreciation.

Capital expenditures increased primarily as a result of vehicle purchases and redesign projects resulting from tenders.

As of June 30, 2021, the number of employees increased, primarily in the bus line of business.

  • Overall, demand is declining due to the Covid-19 pandemic – no longer any Covid-19-related restrictions on volume produced.
  • Income growth due to higher concession fees.
  • Development of profits continues to be adversely affected by the Covid-19 pandemic.
Rail line of business

H1

Change

H1 2019

2021

2020

absolute

%

 Passengers (million)

469.3

633.2

–163.9

–25.9

998.3

     thereof rail

452.8

621.5

–168.7

–27.1

977.7

Volume sold (million pkm)

8.445

12.296

–3,851

–31.3

20,691

     thereof rail

8,189

12,115

–3,926

–32.4

20,382

Volume produced (million train-path km)

215.8

204.6

+11.2

+5.5

226.9

Total revenues (€ million)

3,489

3,266

+223

+6.8

3,853

External revenues (€ million)

3,439

3,219

+220

+6.8

3,805

Rail concession fees (€ million)

2,947

2,574

+373

+14.5

2,803

EBITDA adjusted (€ million)

15

–82

+97

490

EBIT adjusted (€ million)

–265

–370

+105

–28.4

196

Gross capital expenditures (€ million)

200

174

+26

+14.9

249

 Employees as of Jun 30 (FTE)

28,332

28,212

+120

+0.4

27,721

The development of transport performance in the rail line of business was weak overall. In addition to increased weather-­related restrictions, declines related to the Covid-19 pandemic at the beginning of 2021 in particular had an impact, as the corresponding months of the previous year were not yet affected by the Covid-19 pandemic in the first quarter of 2020. As a result, the number of passengers and volume sold declined significantly. An improvement has been recorded since April 2021. Volume produced increased as a result of the temporarily reduced schedule in the first half of 2020 due to lockdown measures.

Overall income climbed more significantly than expenses. As a result, operating profit figures improved again. However, the weak performance development had a dampening effect:

  • Revenues increased despite lower ticket revenues due to the Covid-19 pandemic, driven by higher concession fees. In addition to general increases by public transport authorities, a change in the contract for the Munich S-Bahn (metro) and the loss of a negative one-off Covid-19 effect in the first half of 2020 also had an impact.
  • The other operating income also increased, mainly as a result of increased utilization of provisions for impending losses.

On the expense side, additional negative effects resulted mainly from the higher volume produced and price effects:

  • Cost of materials increased as a result of the higher volume produced. This was particularly noticeable with higher expenses for the use of train paths and stations, as well as for energy. Price effects and more intensive maintenance also had a negative impact on development.
  • Personnel expenses rose slightly in the wake of a greater number of employees and as a result of collective bargaining agreements.

The decrease in other expenses compensated for this:

  • Other operating expenses declined significantly, mainly as a result of lower additions to provisions for impending losses.
  • Depreciation also fell slightly. In addition to adjusting the useful life of vehicles to the contract term for the Rhine-Ruhr S-Bahn (metro), vehicles reaching the end of their useful lives also had an impact.

Capital expenditure activity increased within the framework of transport contracts won.

The number of employees was slightly above the level of June 30, 2020.

  • Volume produced was back to the pre-Covid-19 level from March 2021.
  • Revenue losses related to the Covid-19 pandemic also dominated the first half of 2021.
  • Implementation of measures was delayed due to the Covid-19 pandemic.

Bus line of business

H1

Change

H1 2019

2021

2020

absolute

%

 Passengers (million)

176.7

174.1

+2.6

+1.5

260.5

Volume sold (million pkm)

1,832

1,801

+31

+1.7

2,970

Volume produced (million bus km)

214.8

208.3

+6.5

+3.1

236.0

Total revenues (€ million)

492

489

+3

+0.6

580

External revenues (€ million)

463

458

+5

+1.1

556

EBITDA adjusted (€ million)

–58

–194

+136

–70.,1

23

EBIT adjusted (€ million)

–94

–227

+133

–58.6

–9

Gross capital expenditures (€ million)

59

15

+44

25

 Employees as of Jun 30 (FTE)

9,018

8,768

+250

+2.9

8,641

The performance development in the bus line of business was slightly positive. Declines related to the Covid-19 pandemic in the first few months of the year, which, in the previous year had not yet been affected by the Covid-19 pandemic, were offset by performance gains.

The economic development improved: significant declines in expenses led to improved operating profit figures, with slight gains in income.

  • Revenues increased slightly for performance-related reasons. Price effects supported the development.
  • Other operating income increased significantly, mainly due to the utilization of provisions for impending losses.

On the expense side, there was significant relief driven by other operating expenses:

  • Other operating expenses decreased as a result of lower additions to provisions for impending losses.
  • Cost of materials fell, mainly as a result of reduced purchasing of transport services. In contrast, the procurement of personal protective equipment (PPE) and other protective equipment related to the pandemic had a negative impact on the first half of 2020.
  • In contrast, personnel expenses rose as more services were performed independently, which increased the number of employees. Collective bargaining agreements also contributed to the increase in expenses.
  • Depreciation also increased due to capital expenditures.

Capital expenditure activities increased, particularly in connection with transport contracts won.

The number of employees increased, mainly as a result of recruitment for the start of operations in the second half of 2020 and additional transport services in the first half of 2021.

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