Rail travel is becoming more and more popular. Deutsche Bahn (DB) saw a considerable increase in its long distance passenger numbers for the fourth time in a row, with some 148 million passengers using DB's long distance trains in 2018. That was a year-on-year increase of 5.7 million or 4% – and a new record. Due in part to this increase, the DB Group's adjusted revenues also rose over the same period, by 3.1% to EUR 44.02 billion. At EUR 2.1 billion, adjusted earnings before interest and taxes (EBIT) remained at roughly the same level as in 2017 (-1.9%).
DB expects the trend towards eco-friendly rail transport to continue. "We will be transporting over 150 million long distance passengers in 2019 for the first time," said Dr. Richard Lutz, the CEO of Deutsche Bahn, at today's press conference on DB's 2018 figures. "Taking the train is a form of active climate protection; rail is the only truly green mode of transport. We are well on our way towards the target of more than 200 million long distance passengers by 2030."
Some 2.6 billion passengers used DB's trains in Europe in 2018, a year-on-year increase of 17 million. Total rail passenger transport volume rose 1.9% year on year, to a total of 97.7 billion passenger kilometers. DB's regional and local transport volume remained stable, while long distance transport saw a major increase of 5.6% to 42.8 billion passenger kilometers.
The total volume produced on DB's rail network also reached record levels, rising 1.2% year on year to some 1.09 billion train-path kilometers. The percentage of non-DB operators using the network continued to rise, from 30.9% in 2017 to 32.2% in 2018.
"It is also important to acknowledge that there are side effects – growing pains, if you will – to the success of rail," said CEO Lutz, citing an "unsatisfactory on-time rate" of 74.9% in long distance transport in 2018. Lutz said that DB was working at top speed to eliminate bottlenecks related to infrastructure, rolling stock and staff, in line with the company's "Agenda for better rail service," which it had recently introduced. "We must increase our capacity if we are to offer more attractive, on-time service," said Lutz.
A large portion of the roughly EUR 5 billion in additional investments and expenditures DB plans to make in the coming years will be used to fund better, more reliable rail service; new, more comfortable trains; and additional staff. In Germany alone, DB hired well over 24,000 new employees in 2018 – more than ever before – to boost growth and quality. In addition to filling vacant positions, the company also added more than 5,500 new positions.
"We are investing a great deal of money to improve our rail service," said DB CFO Alexander Doll. "Together with the German government, we continued to increase gross capital expenditure in 2018, raising it considerably – more than 7% – from an already high level to over EUR 11 billion."
The bulk of capital expenditure in 2018 was used to improve the rail network (62%) and to invest in new trains such as the ICE 4. As of December 31, 2018, DB's net financial debt totaled slightly more than EUR 19.5 billion, a year-on-year increase of EUR 926 million. Doll stressed that DB remained a reliable and stable partner on the capital markets.
International business, logistics and freight transport
The DB Group saw continued success in international business at DB Schenker and DB Arriva. DB Schenker, which runs logistics services, delivered more than EUR 17 billion in revenues for the first time in 2018, an increase of 3.8%. DB Arriva, which runs regional transport in Europe, generated EUR 5.4 billion in revenues, an increase of 1.8%. DB Arriva's operating performance in bus and rail transport remained stable, while DB Schenker saw growth – and in some cases considerable growth – across all its segments.
At DB Cargo on the other hand, transport volume fell by 4.8%. DB is working full speed ahead to rectify this unsatisfactory situation. The company has realigned its rail freight service and is investing in rolling stock and staff with a view to fostering long-term growth.