Income development
The economic development of DB Group was characterized by additional burdens, including from the expansion of measures to improve quality and availability, particularly in infrastructure, and cost increases. DB Schenker’s performance was also weaker than in the exceptionally strong first half of 2022, but remained well above pre-Covid-19 levels. The recovery in passenger transport as a result of the declining impact of the Covid-19 pandemic and a price-related improvement in performance at DB Netze Energy and DB Cargo had a positive effect.
The operating profit figures declined noticeably. In passenger and rail freight transport the situation remained under pressure.
- In the Integrated Rail System, higher expenses, particularly for materials (especially infrastructure quality measures) and personnel (capacity expansion), exceeded revenue growth as a result of the ongoing recovery in demand in passenger transport, higher concession fees and new transport services at DB Regional, and price effects at DB Netze Energy and DB Cargo.
- Operating profit development at DB Schenker was weaker, driven mainly by freight rate developments in air and ocean freight, but remained well above pre-Covid-19 levels.
- DB Arriva recorded a significant recovery in adjusted EBIT.
Additional information is available in the section Development of business units.
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 (2022 Integrated Report) has not changed.
Development in the first half of 2023
Overall, income development declined:
- There was a significant decline in revenues.
- Other operating income decreased mainly as a result of the discontinuation of train-path price reimbursements from the Federal Government for partial compensation for damages in connection with the Covid-19 pandemic at DB Long-Distance and the discontinuation of income from the sale of real estate at DB Netze Track. The increase in income from, among other things, compensation for damage in connection with vehicle deliveries had a dampening effect.
Expenses also decreased, mainly driven by the freight rate development at DB Schenker. As a result of significantly higher maintenance expenses, higher energy costs and higher personnel expenses in the Integrated Rail System, however, expenses decreased at a lower rate than income:
- The cost of materials decreased noticeably, primarily due to lower freight rates at DB Schenker. At DB Arriva, the sale of activities in non-core countries reduced expenses. Significantly higher expenses in the Integrated Rail System had a partially offsetting effect. Here, the expansion of measures to improve quality and availability, particularly in infrastructure, and higher purchased transport services at DB Cargo caused expenses to increase. In addition, expenses for energy in passenger transport increased, mainly due to price and performance factors.
- Personnel expenses increased in the Integrated Rail System (mainly as a result of a higher number of employees) and at DB Schenker (mainly as a result of greater complexity of business activities). At DB Arriva, a significantly lower number of employees had the effect of reducing expenses.
- Other operating expenses increased due, among other things, to a higher demand for IT services. In addition, the intensification of travel activities – significantly reduced during the Covid-19 pandemic – and higher rental expenses for buildings, among other things, increased expenses.
- Depreciation increased slightly due to capital expenditures.
Adjusted EBIT and adjusted EBITDA declined noticeably as a result.
- The weaker operating interest balance resulted from the higher interest rate level, which led in particular to increased expenses in connection with financial liabilities and pensions.
The operating income after interest therefore also decreased noticeably.
- Net investment income increased significantly on a low level and was largely driven by GHT Mobility GmbH, which had a negative impact on the development of net investment income in the first half of 2022.
- The significant decrease in other financial result was mainly due to effects from hedging transactions entered into, which resulted in a net expense (in the first half of 2022: income), and negative effects from the compounding and discounting of provisions. This was counteracted by positive exchange rate effects.
- The extraordinary result increased significantly and was slightly positive. Positive effects, including in connection with the electricity price brake, were almost completely offset by negative effects, mainly due to the adjustment of provisions, restructuring measures and transactions with shareholdings.
Extraordinary result / € million | H 1 | |||
2023 | thereof affecting EBIT | 2022 | thereof affecting EBIT | |
DB Long-Distance | 94 | 94 | 0 | 0 |
DB Regional | –4 | –4 | 0 | 0 |
DB Cargo | 21 | 21 | –10 | –10 |
DB Netze Track | –19 | –14 | –5 | –1 |
DB Netze Stations | 12 | 12 | – | ‒ |
DB Netze Energy | – | – | – | – |
Other/consolidation Integrated Rail System | –76 | –76 | –70 | –70 |
Integrated Rail System | 28 | 33 | –85 | –81 |
DB Arriva | –24 | –24 | 0 | 0 |
DB Schenker | 1 | 1 | 0 | 0 |
Consolidation other | 0 | 0 | 0 | 0 |
DB Group | 5 | 10 | –85 | –81 |
thereof electricity price brake | 142 | 142 | ‒ | ‒ |
thereof restructuring measures | ‒68 | ‒68 | ‒71 | ‒71 |
Accordingly, the profit before income taxes also declined significantly.
- Although the development of the income tax item was better, it still weighed on performance:
- Actual income taxes declined due to lower results for some foreign Group companies (primarily at DB Schenker).
- The somewhat weaker deferred tax revenue resulted from lower temporary differences at foreign Group companies.
As a result, the decline in net profit/loss for the period was slightly lower.
Transition to the adjusted statement of income / € million | H 1 | Change | H 1 | |||||||
2023 | Reclassifications | Adjust ment for special items | 2023 adjusted | 2022 adjusted | absolute | thereof scope of consolidation effects | thereof exchange rate effects | % | 2019 adjusted | |
Revenues | 24,972 | – | 1 | 24,973 | 27,969 | –2,996 | –167 | –197 | –10.7 | 22,013 |
Inventory changes and other internally produced and capitalized assets | 2,141 | – | – | 2,141 | 1,923 | +218 | –0 | –0 | +11.3 | 1,490 |
Other operating income | 1,513 | – | –29 | 1,484 | 1,709 | –225 | –15 | –7 | –13.2 | 1,116 |
Cost of materials | –13,342 | – | –142 | –13,484 | –16,502 | +3,018 | +85 | +119 | –18.3 | –10,876 |
Personnel expenses | –10,244 | – | 69 | –10,175 | –9,958 | –217 | +67 | +45 | +2.2 | –8,902 |
Other operating expenses | –2,644 | – | 80 | –2,564 | –2,337 | –227 | +2 | +28 | +9.7 | –2,307 |
EBITDA | 2,396 | – | –21 | 2,375 | 2,804 | –429 | –28 | –12 | –15.3 | 2,534 |
Depreciation | –2,072 | 17 | 11 | –2,044 | –1,928 | –116 | –29 | +8 | +6.0 | –1,777 |
Operating profit (EBIT) | EBIT adjusted | 324 | 17 | –10 | 331 | 876 | –545 | –57 | –4 | –62.2 | 757 |
Net interest income | operating interest balance | –269 | –16 | 5 | –280 | –239 | –41 | –4 | +2 | +17.2 | –333 |
Operating income after interest | 55 | 1 | –5 | 51 | 637 | –586 | –61 | –2 | –92.0 | 424 |
Result from investments accounted for using the equity method | net investment income | 6 | – | – | 6 | –2 | +8 | +2 | –0 | – | ‒ |
Other financial result | –10 | 16 | – | 6 | 146 | –140 | +2 | +32 | –95.9 | ‒18 |
PPA amortization customer contracts | – | –17 | – | –17 | –14 | –3 | – | –0 | +21.4 | ‒32 |
Extraordinary result | – | – | 5 | 5 | –85 | +90 | – | +0 | – | ‒97 |
Net profit before taxes on income | 51 | – | – | 51 | 682 | –631 | –58 | +32 | –92.5 | 277 |
Taxes on income | –122 | – | – | –122 | –258 | +136 | +14 | –0 | –52.7 | ‒72 |
Actual taxes on income | –126 | – | – | –126 | –262 | +136 | – | – | –51.9 | ‒90 |
Deferred tax expenditure (–)/income (+) | 4 | – | – | 4 | 4 | – | – | – | – | 18 |
Net profit/loss for the period | –71 | – | – | –71 | 424 | –495 | –44 | +32 | – | 205 |
DB AG shareholders | –97 | – | – | –97 | 400 | –497 | – | – | – | 198 |
Hybrid capital investors | 13 | – | – | 13 | 13 | – | – | – | – | – |
Other shareholders (non-controlling interests) | 13 | – | – | 13 | 11 | +2 | – | – | +18.2 | 7 |