Integrated Interim Report 2019 – Germany needs a strong rail system


New Strong Rail strategy

Germany can only achieve its self-imposed climate targets if it manages to shift large portions of transport to rail over the next decade. Furthermore, Germany will only continue to be an economically successful country if people and goods are less frequently stuck in traffic. In short, Germany needs a strong rail system. As part of our new Strong Rail umbrella strategy, we are concentrating on this endeavor: For the climate. For people. For the economy. For Europe.

Within the scope of our Agenda for a Better Railway, we started to implement measures in 2019 with the aim of creating additional capacity, improving product quality and increasing customer satisfaction. The development during the first half of 2019 shows that these measures are working and that we are on the right path: The number of longdistance passengers, for example, has continued to increase. The higher numbers of DB Navigator users and customers show that we are also improving our customers’ travel experience through digital innovations, such as the integration of composite tickets.

The modernization of high-speed lines is a crucial measure to provide our customers with a better product. We expect above-average punctuality figures on international and tourist routes, especially due to the use of new vehicles.

We plan to continue this positive trend in the long term through the implementation of our new strategy. Three areas of development have been identified: more robust, more powerful and more modern.

  • We want to become more robust and aim towards growth in passenger and freight transport within the scope of our new strategy. The required extensive expansion of our capacity is a key element in this strategy. Among other things, we are therefore investing billions into our infrastructure and new trains and are set to hire 100,000 new employees over the next few years. More trains, more train-paths and more employees will enable us to transport significantly more passengers and freight while also providing higher quality
  • We will also implement structural changes, in particular to achieve a high and sustainable level of performance. We will become more powerful by simplifying our organization. This will make us more customer-focused and help us to work more efficiently with our employees. We also plan to simplify processes and create clear responsibilities.
  • Last but not least, we are becoming more modern by increasing the pace of innovation for our customers – including the introduction of Germany in sync (Deutschland-Takt), stronger networking and smarter services. By 2030, we will provide direct connections between about 30 large German cities which will run twice an hour. Using digital technologies, we will make it easy to switch between modes of transport and increase the attractiveness of our products. With the expansion of our activities in the area of new mobility (for example ioki, CleverShuttle and Mobimeo) we offer services, that extend rail services basically to the front door of our customers and complement public transport connections in a useful way.

We have identified five key topics for each of the three areas of development. These are our building blocks. The central criterion for the selection of the building blocks is their significance across all business units to achieve our goal of a strong rail system. In total, this results in 15 building blocks relevant to DB Group. Within the scope of the strategy, they are supplemented by building blocks specific to each business unit.

Everything we do as DB Group will be measured in terms of its contribution to a strong rail system. This will also affect our subsidiaries. Subsidiaries of strategic importance for a strong rail system, such as DB Schenker, will be continued as financial investment. Joint operational initiatives will focus on achieving synergies within the integrated network. Subsidiaries with no strategic relevance to a strong rail system will be reviewed.

New target system

Three targets are in the foreground for the sector in Germany:

  • Doubling of passenger numbers in rail passenger transport,
  • a market share of 25% of rail in freight transport, and
  • to generate 100% of traction current from renewable energies by 2038.

We have therefore set ourselves the following goals in Germany:

  • Doubling of passenger numbers in passenger transport. This corresponds to 260 million long-distance passengers and one billion more passengers in local transport.
  • Increase in volume sold in rail freight transport by 70%.
  • Increase in capacity on the rail network by 30%.
  • Increase of customer satisfaction: >80 SI for DB LongDistance, > 75 SI for DB Regional and > 70 SI for DB Cargo.
  • Improvement of punctuality: >85% for DB Long-Distance, >95% for DB Regional and >77% for DB Cargo.
  • Increase of employee satisfaction: >3.8 SI.
  • Increase of share of renewable energies in the DB traction current mix: 100% by 2038.
  • Generation of an adequate return on capital employed (ROCE of ≥7%). At the same time, it is important to ensure the necessary financial stability (redemption coverage ≥20%).

Anchoring the strategy

One of our main tasks is strategy implementation. Two topics are of central importance for this:

  • Focus on the harmonization of business unit strategies and portfolios.
  • Anchoring the building blocks in mid-term planning with the corresponding adjustment of the target system.

We are adjusting our portfolio within the scope of the strategy implementation. We are transferring the programs of the Agenda for a Better Railway into the building blocks of the new strategy. DB Group will be managed in accordance with the strategic building blocks in the future. This aligns DB Group with the above-mentioned key goals.

Mobilization of employees

The mobilization of employees is a crucial factor in the success of the new strategy. We will only be able to achieve our targets with motivated employees and executives. In order for the mobilization to succeed, it is particularly important for us to successfully implement the strategic building blocks with the help of the bulding block “Fifteen building blocks of employees.” This is a participatory concept that uses the knowledge and experience of our employees. DB em - ployees will work on 15 of their own building blocks in em - ployee forums and formats which will assist with the successful implementation of the new strategy. We will also rely on internal and external communication as a mobilization amplifier.