2005 Annual Report Deutsche Bahn Agdeutsche Bahn 2005 Annual Report
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db053_e_000_Umschlag 13.06.2006 16:50 Uhr Seite u1 2005 Annual Report Deutsche Bahn AGDeutsche Bahn 2005 Annual Report 16 mm 216 mm db053_e_000_Umschlag 13.06.2006 16:50 Uhr Seite u2 DB AG as management holding company Vertically integrated Group structure 25.1 Excellent ratings: Aa1/AA billion € revenues Successful internal growth Cost structures further improved 1.4 Group portfolio focused on core billion € EBIT business – further growth potential through M&Atransactions # 1 in European rail passenger transport # 1 in European regional and urban transport 11.2 # 1 in bus transport in Germany billion € revenues in Passenger Transport # 1 in European rail freight transport # 1 in European land transport 12.4 # 2 in global air freight billion € revenues in # 3 in global sea freight Transport and Logistics Functioning competition on the rails: more than 320 railways using track 1.1 infrastructure billion € revenues in Largest rail track infrastructure Infrastructure and Services in Europe Efficient services for internal and external customers 200 mm db053_e_000_Umschlag 13.06.2006 16:50 Uhr Seite u3 At a Glance Revenues (€ million) EBIT (€ million) 2005 25,055 2005 1,352 2004 23,962 2004 1,144 0 5,000 10,000 15,000 20,000 25,000 0 250 500 750 1,000 1,250 1,500 2004 to 2005: + 4.6% 2004 to 2005:€ + 208 million ROCE (%) Total assets (€ million) 2005 5.0 2005 47,101 2004 3.8 2004 47,616 0 1 2 3 4 5 0 10,000 20,000 30,000 40,000 50,000 2004 to 2005: +1.2 percentage points 2004 to 2005: –1.1% Key Figures € million 2005 2004 Change Change Revenues 25,055 23,962 1,093 + 4.6% Revenues – comparable 25,055 23,879 1,176 + 4.9% Profit before taxes on income 490 154 336 – Net profit for the year 611 180 431 – EBITDA 4,153 3,866 287 +7.4% EBIT 1,352 1,144 208 +18.2% Non-current assets 42,907 43,200 – 293 – 0.7% Current assets 4,194 4,416 – 222 –5.0% Total assets 47,101 47,616 –515 –1.1% Equity 7,675 7,067 608 + 8.6% Financial debt 19,974 20,276 –302 –1.5% Capital employed 27,013 26,490 523 + 2.0% EBIT adjusted for unusual items 1,350 1,011 339 +33.5% ROCE 5.0% 3.8% – – Gross capital expenditures 6,379 7,238 – 859 –11.9% Net capital expenditures1) 2,360 3,251 – 891 – 27.4% Cash flow from operating activities 2,652 2,736 – 84 –3.1% Employees2) as of Dec 31 216,389 225,632 – 9,243 – 4.1% 1) Gross capital expendi- tures less investment grants from third parties Performance Measures 2005 2004 Change Change 2) Full-time employees, part-time employees Rail passenger transport are accounted for on a pro-rata basis Passengers (million) 1,785.4 1,694.8 90.6 +5.3% Transport performance (million pkm3)) 72,554 70,260 2,294 +3.3% 3) Passenger kilometers: product of number of Train kilometers (million train-path km4)) 711.4 717.7 – 6.3 – 0.9% passengers and mean travel distance Rail freight transport 5) 4) Train-path kilometers: Freight carried (million t) 266.5 283.6 –17.1 – 6.0% driving performance Transport performance (million tkm6)) 83,111 83,982 – 871 –1.0% in km of trains on rail Mean transport distance (km) 311.9 296.1 15.8 +5.3% 5) Please note: all ton figures Train kilometers (million train-path km) 193.7 205.1 –11.4 –5.6% represent metric tons (1,000 kg = 2,200 lbs) Passenger stations7) 5,707 5,697 10 + 0.2% 6) Ton kilometers: product of freight carried and mean transport distance Train kilometers on track infrastructure (million train-path km) 997.7 1,000.7 –3.0 – 0.3% thereof non-Group customers 110.0 88.0 22.0 + 25.0% 7) Thereof in 2005: 5,454 assigned to the Passenger Length of line operated (km) 34,211 34,715 –504 –1.5% Stations business unit 200 mm db053_e_000_Umschlag 13.06.2006 16:50 Uhr Seite u4 Mission Statement DB Group Passenger Transport Transport and Logistics Rail Activities in Germany Infrastructure and Services Key Figures and Mission Statement and Mission Figures Key We optimize services and productivity in German rail transport as the basis of our business. We expand our business portfolio when it is useful to our customers or where our skills and resources suggest to do so. We are evolving into a leading international mobility and logistics service provider. We create value for our customers, employees, and owners, and are a long-term, attractive investment on the international capital markets. Group Structure Supervisory Board Management Board Chairman and CEO Finances and Controlling Economic and Personnel Political Affairs pendi- ment parties Integrated Systems Rail Passenger Transport Infrastructure and Transport and ees, Services Logistics yees r sis Group functions Long-distance Transport Track Infrastructure Schenker eters: er of mean Regional Transport Passenger Stations Railion eters: Service functions Urban Transport Energy Stinnes nce n rail Services on figures tons 00 lbs) product and distance : 5,454 assenger s unit 216 mm 16 mm Contents Chairman’s Letter 2 The Management Board 6 Financial Communication 8 11 Rating /Deutsche Bahn Bond Issues 12 Value Management 13 Corporate Governance Further Improvements in 2005 15 Report of the Management Board 48 50 Group Profile 62 Group Management Report 118 Employees 124 Environmental Protection Rolling Stock and Stations 128 Consolidated Financial Statements 134 137 Auditor’s Report 139 Consolidated Statement of Income 140 Consolidated Balance Sheet 142 Consolidated Statement of Cash Flows 143 Consolidated Statement of Changes in Equity 144 Notes 201 Major Subsidiaries 204 The Boards of Deutsche Bahn AG Additional Information 208 208 Major Activity Relationships Within the DB Group 209 Explanation of Grant Types Report of the Supervisory Board 212 BahnBeirat (DB Advisory Board) 217 Glossary 218 Imprint 220 1 Chairman’s Letter Deutsche Bahn Group | 2005 Annual Report Ladies and Gentlemen, I am reporting to you on a successful financial year. In 2005, we continued to win new customers by delivering superior service quality, and we strengthened our market position and succeeded in increasing revenues and profit substantially. We are all the more pleased that this was achieved against the backdrop of a challenging environment, ever-fiercer competition, and additional cost pressures resulting from a sharp increase in energy prices. In the year under review, we exceeded the financial targets we had set ourselves. Year-on-year, revenues improved by 4.9 percent to 25.1billion euros, driven by strong growth in the Schenker and Long-distance Transport business units. The Regional and Urban Transport business units continued to make substantial revenue contributions. EBIT rose to well over 1.3 billion euros, with ROCE up to 5.0 percent. This means that our efforts to prepare for a future initial public offering are on target. The positive profit trend reflects not only revenue increases but also the progress made in implementing our efficiency programs. In that respect, I should like to highlight our “Qualify”pro- gram. This will help us achieve further efficiency gains and cost reductions, providing the basis for further hard work on improving quality of service and tapping our growth potential. Let me briefly discuss developments in selected business units. The Long-distance Transport business unit has received special attention over the past few years. Attractive offerings have helped us win a large number of new customers and considerably increase our transport performance and market share. After posting strong revenue and profit growth, this business unit is back on track, with a faster-than-expected recovery and a promising future ahead. In a market that remains characterized by intense tender- related competition, the Regional and Urban Transport business units again managed to increase their transport performance. This success was essentially attributable to the constant high quality of our services. In summary, our Passenger Transport division is well positioned as a strong provider of mobility in major cities, conurbations, and across regions. In the context of future growth potential, the Schenker business unit plays a very strong role. Thanks to its global market presence, Schenker is already participating in the positive economic trends of major growth regions in Asia and America and of world trade in general. According to forecasts, trade flows – and, hence, the market potential for transport and logistics services – are set to grow faster than gross domestic product. The interdependence of national economies will continue to increase, as the process of globalization and European integration advances further. Therefore, it is crucial to establish a strong presence in all countries of relevance to our customers. In addition Hartmut Mehdorn to organic growth, we further strengthened our portfolio by acquiring BAX Global CEO and Chairman of the in January 2006. We now have an excellent global position in transport and logistics, Management Board of Deutsche Bahn AG with Schenker and Railion operating in Europe, BAX in America, and Schenker and BAX joining forces in Asia. The combination of Schenker and BAX makes us a market 3 leader in global sea and air freight markets. So we are not only the largest rail company in Europe, but also – beyond our traditional rail business – a leading player in global logistics. This leading position in logistics is a crucial prerequisite for providing our customers with efficient and competitive services. At the same time, our rail freight transport operations, which have built up their presence on the European market in several steps since 1999, are now benefiting from their integration with larger networks and logistics operations.