Income development
The economic development of DB Group in the first half of 2024 was above all characterized by the poor state of the infrastructure and the outstanding additional Government funds affecting profit and loss, in particular for maintenance measures in the infrastructure, single wagon transport at DB Cargo and the repayment of the previous year’s pre-financings (a total of about € 1.3 billion). Burdens also resulted from the implementation of further infrastructure measures, higher personnel costs as a result of collective bargaining agreements and strikes. In DB Group, short- and medium-term countermeasures (including a strict spending monitoring and control program) were introduced to improve profitability, which have already made a positive contribution in the first half of 2024.
Operating profit figures subsequently fell noticeably; adjusted EBIT was negative. In passenger and rail freight transport as well as in the infrastructure, the situation remained under pressure.
- In the Integrated Rail System, higher expenses, especially for personnel (capacity expansion and wage increases) and additional infrastructure measures, were only partially offset by lower energy purchasing expenses (resulting from lower volume and prices) at DB Energy as well as countermeasures. Overall, revenue development was stable.
- Operating profit development at DB Schenker was weaker, driven mainly by the freight rate development in air and ocean freight, but remained well above pre-Covid-19 levels.
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 procedure for reclassifications and adjustments remains unchanged and is explained in the 2023 Integrated Report.
Transition to the adjusted statement of income / € million | H 1 | Change | |||||||
2024 | Reclassifications | Adjustment for special items | 2024 adjusted | 2023 adjusted | absolute | thereof scope of consolidation effects | thereof exchange rate effects | % | |
Revenues | 22,310 | – | – | 22,310 | 23,005 | –695 | –20 | –60 | –3.0 |
Inventory changes and other internally produced and capitalized assets | 2,446 | – | – | 2,446 | 2,133 | +313 | –0 | +1 | +14.7 |
Other operating income | 1,324 | – | –17 | 1,307 | 1,316 | –9 | –5 | –0 | –0.7 |
Cost of materials | –12,400 | – | – | –12,400 | –12,758 | +358 | +12 | +44 | –2.8 |
Personnel expenses | –10,016 | – | 78 | –9,938 | –9,212 | –726 | +11 | +4 | +7.9 |
Other operating expenses | –2,442 | – | 18 | –2,424 | –2,306 | –118 | +5 | +2 | 5.1 |
EBITDA | 1,222 | – | 79 | 1,301 | 2,178 | –877 | +3 | –9 | –40.3 |
Depreciation | –1,985 | 6 | 1 | –1,978 | –1,899 | –79 | +1 | +2 | +4.2 |
Operating profit (EBIT) | EBIT adjusted | –763 | 6 | 80 | –677 | 279 | –956 | +4 | –7 | – |
Net interest income | operating interest balance | –412 | 12 | 4 | –396 | –284 | –112 | +0 | –1 | +39.4 |
Operating income after interest | –1,175 | 18 | 84 | –1,073 | –5 | –1,068 | +4 | –8 | – |
Result from investments accounted for using the equity method | net investment income | 8 | – | – | 8 | 6 | +2 | – | +4 | +33.3 |
Other financial result | 54 | –12 | – | 42 | 7 | +35 | +0 | +2 | – |
PPA amortization of customer contracts | – | –6 | – | –6 | –5 | –1 | – | –0 | +20.0 |
Extraordinary result | – | – | –84 | –84 | 29 | –113 | – | +4 | – |
Net loss/profit before taxes on income | –1,113 | – | – | –1,113 | 32 | –1,145 | +4 | +2 | – |
Income taxes | –92 | – | – | –92 | –144 | +52 | –0 | +2 | –36.1 |
Actual income taxes | –84 | – | – | –84 | –133 | +49 | – | – | –36.8 |
Deferred tax expense (–)/income (+) | –8 | – | – | –8 | –11 | +3 | – | – | –27.3 |
Net loss after income taxes (continuing operations) | –1,205 | – | – | –1,205 | –112 | –1,093 | +4 | +4 | – |
Net loss/profit after income taxes(discontinued operations) | –26 | – | – | –26 | 41 | –67 | +10 | –0 | – |
Net loss after income taxes | –1,231 | – | – | –1,231 | –71 | –1,160 | +14 | +4 | – |
DB AG shareholders | –1,256 | – | – | –1,256 | –97 | –1,159 | – | – | – |
Hybrid capital investors | 13 | – | – | 13 | 13 | – | – | – | – |
Other shareholders (non-controlling interests) | 12 | – | – | 12 | 13 | –1 | – | – | –7.7 |
Values for the first half of 2023 adjusted due to reclassification of DB Arriva.
- Cost of materials (–2.8 %/€ –358 million): The decline was driven primarily by a further normalization of freight rates at DB Schenker. In the Integrated Rail System, however, the cost of materials rose slightly. In particular, expenses for the implementation of measures to improve quality and availability of the infrastructure once again increased significantly from an already high level in the first half of 2024. The Federal Government had still not paid out compensation payments in the first half of 2024 for the measures pre-financed in the previous year. Lower energy purchasing expenses at DB Energy, which resulted from lower volume and prices, had a largely compensatory effect.
Additional information is available in the section Development of business units.
Adjusted EBIT and adjusted EBITDA declined noticeably as a result.
- Operating interest balance (+39.4 %/€ –112 million): Negative development resulted from the higher interest rate level and higher average financial debt.
Operating income after interest also fell noticeably.
- Net investment income (+33.3 %/€ +2 million): Increase at a low level.
- Other financial result (€ +35 million): Significant increase at a low level, mainly due to exchange rate effects and positive effects from closed hedging transactions, which on balance resulted in a lower expense than in the first half of 2023. Conversely, negative effects from the compounding and discounting of provisions, which resulted in an expense on balance (in the first half of 2023: income), as well as impairments on subsidiaries had a partially offsetting effect.
- Extraordinary result (€ –113 million): Decreased significantly and was negative, primarily due to the omission of positive effects in connection with the electricity price brake in the first half of 2024 as well as higher restructuring costs at DB Schenker. Positive effects resulted from adjustments to provisions at DB Cargo.
Development in the first half of 2024
Overall, income development was negative:
- Revenues (–3.0 %/€ –695 million): Slight decline in revenues driven by DB Schenker.
- Other operating income (–0.7 %/€ –9 million): Approximately at the level of the first half of 2023. Lower Government grants at DB Cargo (in particular funding for single wagon transport and train-path price support) were almost completely compensated for by an increase in services for third parties, among others at DB Long-Distance.
On the expense side, there were additional burdens as a result of higher personnel costs and the implementation of further infrastructure measures:
- Personnel expenses (+7.9 %/€ +726 million): Significant increase, driven by wage increases and a higher average number of employees in the Integrated Rail System. Productivity increases at DB Schenker had a dampening effect to some extent.
- Other operating expenses (+5.1 %/€ +118 million): Increase, among other things, due to higher expenses for compensations for damage, IT services and leases in the Integrated Rail System.
- Depreciation (+4.2 %/€ +79 million): Increase due to capital expenditures.
Conversely, the cost of materials declined, driven by the development of freight rates at DB Schenker, which had a compensating effect:
Extraordinary result / € million | H 1 | |||
2024 | thereof affecting EBIT | 2023 | thereof affecting EBIT | |
DB Long-Distance | – | ‒ | 94 | 94 |
DB Regional | 0 | 0 | –4 | ‒4 |
DB Cargo | 15 | 15 | 21 | 21 |
DB InfraGO | –5 | ‒ | –7 | ‒2 |
DB Energy | – | – | – | ‒ |
Other/consolidationIntegrated Rail System | –76 | ‒78 | –76 | ‒76 |
Integrated Rail System | –66 | ‒63 | 28 | 33 |
DB Schenker | –17 | –17 | 1 | 1 |
Consolidation other | – | ‒ | 0 | 0 |
DB Group 1) | –84 | ‒80 | 29 | 34 |
thereof electricity price brake | ‒ | ‒ | 142 | 142 |
thereof restructuring measures | ‒63 | ‒63 | ‒66 | ‒66 |
1) Value for the first half of 2023 adjusted due to reclassification of DB Arriva.
Accordingly, the loss before income taxes also increased significantly.
Although the development of the income tax position (‒36.1%/€ +52 million) was significantly better, it nevertheless had a negative impact on development:
- Actual income taxes were decisive for the development and decreased due to declining results at some foreign Group companies (especially at DB Schenker).
- Deferred taxes continued to decline at low levels.
As a result, net loss after income taxes from continuing operations increased somewhat less significantly but remained noticeably negative. Net loss after income taxes from discontinued operations also worsened (first half of 2023: net profit). This was mainly due to the loss on disposal in connection with the deconsolidation of DB Arriva, which was largely offset by positive depreciation effects in connection with IFRS 5 accounting and the profit development of DB Arriva up to the deconsolidation date.