Chairman's letter

Dear readers,

2023 represents a year of transformation for Deutsche Bahn. We are forging ahead with the necessary changes in a resolute and consistent way, focusing on our program for a common good-oriented infrastructure, which we are introducing together with the Federal Government, and as DB Group we have made advance payments.

The demand in regional and long-distance transport has also developed positively this year. The GermanyTicket has been a fast seller and helped to spur on local public transport: the first two sales months saw 11 million tickets sold across the sectors. Volume sold in long-distance transport reached a record high in the first half of the year. People are now traveling increasingly further by rail.

DB Schenker achieved a good first half-year and, despite the normalizing freight rates, once again made an encouragingly high, positive contribution to consolidated profit. Compared to fuel, considerably increased electricity prices and a still low market dynamic have created a challenging competitive environment in rail freight transport. This has had an impact on the DB Cargo result.

In the first half of the year, we continued on our capital expenditure and growth course of the past four years, bringing on board more than 13,500 new colleagues. In one of the largest procurement projects in our history, in May we placed an order totalling about € 2 billion to purchase 73 additional ICE trains, 17 ICE 3neo, and 56 ICE L trains, which will be joining our fleet from 2026. A total of 90 ICE 3neo and 79 ICE L trains will strengthen our fleet. Our passengers are already benefiting from a broader range of vehicles. Trains are traveling between 11 major cities every half-hour.

Yet, despite the positive examples, we should not lose sight of the fact that operations of the first half of 2023 did not run satisfactorily. The main reason being the poor condition of the rail network. Therefore, the decisions that we have made this spring together with the Federal Government are incredibly important for our passengers.

In its resolution regarding the 2024 Federal budget, the Federal Government also backed the decision made by the coalition committee at the end of March to ease the investment backlog in the German rail network and invest up to € 45 billion in additional funds in rail by 2027. Of this figure, € 15 billion will be provided within the next two years. This is an important signal that supports the necessary development of construction and planning capacities in the railway industry.

It is a paradigm shift and a key requirement for a successful transition to more sustainable mobility that the majority of the additional income from truck tolls will in future flow straight into rail. The rail network of tomorrow is based on three central building blocks. Firstly, the sustained modernization of the existing network and stations with the associated evident improvement in quality for passengers and the loading industry. The path to achieve this includes a gradual general modernization of highly utilized corridors.

Secondly, the digitalization of the rail network so as to significantly expand the capacity of the existing network. And, thirdly, the development and construction as well as the further electrification of the rail network. In this way, we can generate additional capacities and implement Germany in sync.

One thing is sure: the foundation for ensuring growth and a shift in the mode of rail transport is a strong infrastructure. And we will continue to work toward this with all our might this year.

The preparations for the general modernization of the first corridor – the Riedbahn between Frankfurt am Main and Mannheim – are currently underway at full speed. These preparations include the planning of replacement transport and detours as well as the upgrading of the associated lines so that the work can start on time in July 2024.

Once the general modernization is complete and the Riedbahn is put into operation at the end of 2024, the improvements will be very noticeable. The effects will be enhanced as each further corridor is improved. Not least, this will also enhance operational processes for our colleagues. I would like to take this opportunity to express my sincere thanks to them for their passionate dedication. Together we will make the tracks strong and the railway better!

Sincerely

Dr. Richard Lutz
CEO and Chairman of the Management Board of
Deutsche Bahn AG