Strategy of Deutsche Bahn Group

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Strategy of Deutsche Bahn Group Beijing – Tokyo – Hong Kong – Singapore Strategy of Deutsche Bahn Group Deutsche Bahn AG / DB Mobility Logistics AG CFO Dr. Richard Lutz September 2010 Strategy Thinking beyond railway in Germany as key to success DB Group’s fundamental concept Passenger Transport Transport and Logistics Rail system in Germany Infrastructure Deutsche Bahn AG 2 Road Show Asia 2010 Track record – Operational turnaround after German Rail Reform Balanced Group portfolio helped us through the crisis EBIT adjusted and adjusted EBIT-Margin Productivity – rail (€ bn or %) (thousand ptkm/employee) 1994-2009: € +4.7 bn 1993-2009: +237% Per year: € +310 mn 2.4 2.5 CAGR: +7.9% 2.1 1,247 1.7 388 1,167 1,106 7.6% 7.4% 1,133 1.47.1% 5.7% 1,042 1.0 327 975 0.5 5.4% 299 893 4.0% 863 860 820 -2.2% 1.6% 261 -4.6% 239 720 -5.0% 221 206 -0.4 194 184 191 656 177 -9.8%-0.8 -0.7 533 173 164 171 174 171 -11.1% 603 159 159 161 140 149 153 155 160 151 149 154 154 139 144 145 154 -13.3% 135 -14.6% -1.5 127 468 -1.7 413 -17.5% -2.1 328 -20.3% -2.2 -2.7 EBIT adjusted EBIT-Margin -3.0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Ptkm (bn) Employees - rail (thd, year average) Productivity Figures until 2004 FY according to German GAAP Deutsche Bahn AG 3 Road Show Asia 2010 Track record – Driver of changes in DB Group Track record driven by restructuring programs and portfolio measures Driver of changes in DB Group “Fokus” “Qualify” Restructuring of core business Improve performance Coping Group with the crisis programs … 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 DSB Gods Stinnes RAG Bahn BAX EWS Transfesa PCC NordCargo Joyau Linjegods StarTrans Spain-Tir Chiltern Arriva Romtrans WBN Niesky changes Portfolio Brenntag Deutsche SDS Scandlines Arcor Sale Interfer Eisenbahn- Aurelis Acquisition Mitropa reklame Nuclear Cargo 2001 2003 20062008 2009 Non Rail Non Rail Non Rail Non Rail Non Rail Rail 9% Rail Rail Rail Rail 31% 48% 52% 47% 53% 43% 57% split 91% 69% Revenue Deutsche Bahn AG 4 Road Show Asia 2010 Track record – Capex campaign and deleveraging Despite high capex volume significant reduction of net financial debt Capex and financing (€ bn) Financial debt (as of Dec 31, € bn) €-3.8 bn Capex Financing 20.3 20.0 19.9 0.8 0.3 0.3 18.1 Investment 16.8 16.5 55 1.5 Infra- grants 0.9 structure 1.5 84 Total (71%) Interest-free 14 loans 118 Net: € -4.5 bn 15 DB funds 19.5 19.7 19.6 16.5 15.9 15.0 Other 34 33 DB funds (29%) Other grants 1994 - 2009 2004 2005 2006 2007 2008 2009 Figures until 2004 FY according to German GAAP Deutsche Bahn AG 5 Road Show Asia 2010 Structure Focused Group portfolio with three divisions DB AG and DB ML AG Revenues (€ bn) 29.3 ROCE (%) 5.9 DB Group (2009) act as management holding companies EBIT adjusted (€ bn) 1.7 Gross capex (€ bn) 6.5 Vertically integrated EBITDA adjusted (€ bn) 4.4 Total assets (€ bn) 47.3 Group structure Ratings: Aa1 / AA / AA Net profit (€ bn) 0.8 Employees (as of Dec 31) 239,382 # 2 rail passenger transport # 1 European rail freight transport Longest rail network in Europe in Europe # 1 European land transport 353 railways utilizing German # 2 regional and local public # 2 Global air freight track infrastructure, thereof transport in Europe # 3 Global ocean freight 323 non-Group railways # 1 bus transport in Germany # 5 Global contract logistics 2009 €mn % 2009 €mn % 2009 €mn % Total revenues 12,406 42 Total revenues 15,347 52 Total revenues 7,702 26 EBIT adjusted 1,111 66 EBIT adjusted 10 1 EBIT adjusted 878 52 EBITDA adjusted 2,057 47 EBITDA adjusted 478 11 EBITDA adjusted 1,996 45 Capital expenditures 511 8 Capital expenditures 515 8 Capital expenditures 5,276 82 Employees (as of Dec 31) 52,683 22 Employees (as of Dec 31) 91,279 38 Employees (as of Dec 31) 46,529 19 Excl. DB Services and Other/consolidation Deutsche Bahn AG 6 Road Show Asia 2010 Strategy Vision and strategic directions Our vision: The world’s leading mobility and Long-term objectives and strategic directions logistics company Further improve leading market positions Expand and interlink transport networks worldwide Improve quality and customer satisfaction Permanent focus on cost efficiency Sustainably increase profitability Transport networks Deutsche Bahn AG 7 Road Show Asia 2010 Strategy Mega trends remain driver of long-term growth in our markets Mega trends in the transport markets Climate change and Globalization Liberalization Demography resource shortage Emerging growth Rising customer Further liberalization of Diverging regional markets in Asia and sensitivity for climate rail transport in Europe development Eastern Europe change Growing pressure on Increasing urbanization Increasing level of Transport sector as a public budgets Increasing mobility in outsourcing key driver of CO2 Continued outsourcing of career and private life Growing global flow of emissions public responsibilities Aging population goods in the long run Increasing prices for fossil fuels Deutsche Bahn AG 8 Road Show Asia 2010 Strategy Our core competence: development and operation of integrated networks We operate six different transport networks with a German, European or global reach Long-distance Long-distance transport transport Dense polycentric network allows fast, interconnected Aarhus and comfortable passenger transport Copenhagen London Amsterdam Szczecin Air / ocean Poznan Regional and Warsaw Brussels Wroclaw Regional and urban transport Paris Prague freight Krakow urban transport Basel Vienna Budapest Lyon Zurich Klagen- Regional and urban transport networks offer attractive Marseille furt Italy Zagreb Belgrade OSL STO AMS MOW LHR alternatives to car travel FRA WRO ORD CDG ICN VIE TOL MIL MAD LAX NRT DFW ATL JFK PVG DXB MIA HKG Rail freight SIN SAO MEL Network ensures integrated cross-border rail freight JNB services Rail infrastructure The biggest, most significant and challenging rail infrastructure in Europe Land transport The most comprehensive hub network in Europe enables fast and reliable regular pan-European delivery Land Rail freight Air / ocean freight transport Global network enables one-stop shop logistics solutions Rail infrastructure Deutsche Bahn AG 9 Road Show Asia 2010 Strategy Passenger Transport – strategic directions DB Bahnʼs strategic approach Offering mobility solutions Attracting new customers with innovative services and Strategic rationale of products acquisition deepened Marketing travel chains in the following Further developing core Advancing business internationalization Safeguarding and Products / Services Expanding cross-border expanding today's core long-distance services business Developing new Increasing punctuality, international markets in quality and service regional transport Core Business Markets Deutsche Bahn AG 10 Road Show Asia 2010 Strategy DB Bahn: great chances abroad, but small European footprint (prior to Arriva) Market opening by European countries Revenues in regional transport outside of the respective home market (2009, € bn) Advanced On Schedule (1) 69% 5.8 Delayed Pending departure (2) 3.3 Not relevant (3) 100% 1.8 93% (4) 1.5 DB Bahn after (5) 55% 1.1 acquisition of Arriva: (6) 100% 0.9 ~3.4 #2 (7) 0.3 (8) 0.2 Source: Liberalization Index Rail 2007, EU Europe (excl. domestic) APAC America Other Deutsche Bahn AG 11 Road Show Asia 2010 Strategy Arriva and DB – a “merger for growth” to utilize opportunities in Europe Current status Strong combined market positions June 17, 2010: General meeting of Arriva agreed cash offer with Scandinavia (DK, SWE) UK 90.4% of votes August 11, 2010: European Commission granted phase I clearence Revenues: € 0.5 bn Revenues: € 2.0 bn August 27, 2010: Completion date and delisting DK: 2nd in rail / 1st in bus 3rd in bus and rail Commitment of DB to divest German business SWE: 5th in bus / 4th in rail Corporate profile of Arriva Germany The Netherlands Revenues: € 8.6 bn Revenues: € 0.3 bn Three divisions: UK Bus, UK Trains, Mainland Europe st rd Geographical diversification with strong position in continental 1 in rail and bus 3 in bus and rail Europe, activities in 12 countries Balanced revenue-mix (2009): Bus (64%) and rail activities (36%); Eastern Europe Iberia (Portugal, Spain) UK (51%) and Mainland Europe (49%) Fleet of 14,800 buses and 587 train-sets; Employees: 42,300 Revenues: € 0.1 bn Revenues: € 0.2 bn Order book of GBP 12.2 bn (as of Dec 31, 2009) 4th in bus in CZ; PL, HU, 3rd in bus in Portugal; Key financials (GBP mn) 2005 2006 2007 2008 2009 SL: n.a. Spain: n.a. Revenues 1,540 1,695 2,001 3,042 3,148 Italy EBITDA 207 229 249 330 324 EBIT 109 117 128 172 160 Revenues: € 0.2 bn Capex 247 167 233 264 288 1st in bus Net financial debt 967 988 Deutsche Bahn AG 12 Road Show Asia 2010 Investment highlights DB Group combines stability with a good position for future growth Key investment highlights Strong track record since 1994 Passed “stress test” in 2009 Unique geographic position in the heart of Europe Leading market positions in all relevant markets Core competence in managing transport networks Mega trends support our future growth potential Balanced business mix of growth and value Solid financial position, sustainable profit growth Deutsche Bahn AG 13 Road Show Asia 2010 FrankfurtBeijing – AmsterdamTokyo – Hong – ParisKong – – Zurich Singapore – Milan – Munich – London – Edinburgh Financial Development 2009 and H1 2010 Capital Market Activities Deutsche Bahn AG / DB Mobility Logistics AG Group Treasurer, Head of Mergers & Acquisitions
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