Frankfurt – Amsterdam – Paris – Zurich – Milan – Munich – London – Edinburgh
Strategic Approach of DB Group
Deutsche Bahn AG / DB Mobility Logistics AG CFO Dr. Richard Lutz May 2010 Structure Our key to success: Thinking beyond railway in Germany
DB Group’s fundamental concept
Passenger Transport Transport and Logistics
Rail system in Germany
Infrastructure
Deutsche Bahn AG 2 Road Show Europe 2010 Structure
Organizational structure (since June 2008)
DB Group
Federal Republic of Germany
100%
100% Deutsche Bahn AG DB Mobility Logistics AG DB Services DB Bahn Regional DB Bahn Urban DB Bahn Long-Distance DB Schenker Logistics DB Schenker DB Netze Energy DB Schenker Rail DB Netze Track Stations DB Netze
Deutsche Bahn AG 3 Road Show Europe 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 % Revenues 12,406 42 Revenues 15,347 52 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 4 Road Show Europe 2010 Strategy DB Group will become the worldwide leading mobility and logistics company
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 Set standards regarding quality and customer satisfaction Permanent focus on cost efficiency Sustainably increase profitability
Transport networks
Deutsche Bahn AG 5 Road Show Europe 2010 Strategy Mega trends remain driver of long-term growth in the transport markets
Mega trends in the transport market
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 6 Road Show Europe 2010 Strategy Development and operation of integrated transport networks
Our core competence: development and operation of transport networks
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 7 Road Show Europe 2010 Strategy Strategic framework for DB Bahn
Three key strategic priorities of DB Bahn
Mobility Mobility Development of innovative green products Offer intermodal concepts Marketing offensive Mobility platform
Development of core Internationalization business Growth along target Optimization of cost Offerings corridors position Expansion of international Increase competitiveness sales Defending strong market Market entrance via positions in Germany Development of core Internationalization acquisitions business Organic growth Markets
Deutsche Bahn AG 8 Road Show Europe 2010 Strategy Liberalization of European passenger transport markets offers opportunities
Market opening by European countries Strategic approach
Advanced Market development On Schedule The German market is fully open to competition since 1994, Delayed the situation is different in other European countries Pending departure The European markets are open for cross-border rail Not relevant passenger transport as of 2010, but exceptions possible Consolidation process leads to emergence of international transport companies with strong competitive position Our market position Strong market share in German regional transport (73%), but market share of competitors is increasing Almost 100% market share in German long distance rail transport, but competitors show interest in operating lines International expansion of our business by acquisitions, tenders and cross-border transport is still in an early stage Our challenge Liberalization in the European rail and bus transport units leads to market changes, especially in our home market DB Group needs a sustainable positioning in the European Source: Liberalization Index Rail 2007, EU transport markets
Deutsche Bahn AG 9 Road Show Europe 2010 Strategy Increasing internationalization in long-distance transport business
Long-distance transport network Operational approach
(1) Independent operations
ICE-line Frankfurt-Brussels
(2) Joint ventures
Copenhague (Cologne-Brussels-Paris with SNCB & SNCF) HH B Warsaw Amsterdam Brussels FFM (Paris-Frankfurt/ Munich with SNCF) N S Prague Paris M (3) Joint operations Basel Vienna Zurich Milan With SBB (Frankfurt-Basle and Stuttgart-Zurich) Venice Bologna With ÖBB (Munich-Vienna; Brenner-line Munich-Milan/ Bologna/Venice) With NS (Frankfurt-Amsterdam)
With DSB (Hamburg-Copenhagen)
With PKP (Berlin-Warsaw)
Countries with border-crossing long-distance connections of DB Bahn With CD (Hamburg-Berlin-Prague; Nuremberg-Prague)
Deutsche Bahn AG 10 Road Show Europe 2010 Strategy Planned acquisition of Arriva strengthens our position in the European market
Current status Financial position of Arriva
Recommended cash offer agreed on April 22nd 2010 Key financials (GBP mn) 2005 2006 2007 2008 2009 Acquisition is subject to approval of EU commission and Arriva shareholders (mid June 2010) Revenues 1,540 1,695 2,001 3,042 3,148
Acquisition presumably becomes effective mid August 2010 EBITDA 207 229 249 330 324 Corporate profile of Arriva EBITDA margin 13.4% 13.5% 12.4% 10.8% 10.3% EBIT 109 117 128 172 160
Location: UK, listed on the London Stock Exchange EBIT margin 7.1% 6.9% 6.4% 5.7% 5.1% Three divisions: UK Bus, UK Trains, Mainland Europe Capex 247 167 233 264 288 Geographical diversification with strong position in continental Europe, activities in 12 countries Equity 718 788 Balanced revenue-mix (2009): Net financial debt 967 988 - Bus (64%) and rail activities (36%) - UK (51%) and Mainland Europe (49%) Order book by Italy countries (2009) 2% Scandinavia Competitive position of Arriva: 14% - One of the largest transport operators in the UK Netherlands 14% Iberia - One of the largest private bus operators in Spain and Denmark, 6% TOP 3 in UK bus Germany - The only other two companies with Europe-wide focus on bus/rail 15% are Keolis and Veolia Fleet of 14,800 buses and 587 train-sets; Employees: 42,300 UK Total: GBP 12.2 bn 49%
Deutsche Bahn AG 11 Road Show Europe 2010 Strategy Strong combined European-wide presence in 12 markets after acquisition
Combined European network Strong combined market positions
Scandinavia (DK, SWE) UK Revenues: € 460 mn Revenues: € 2,016 mn Norrköping DK: 2nd in rail and 1st in bus 3rd in bus and rail th th Viborg SWE: 5 in bus and 4 in rail Newcastle Jönköping Wrexham Birmingham London Germany The Netherlands Revenues: € 12,551 mn Revenues: € 230 mn Dresden Breslau 1st in rail and bus 3rd in bus and rail Santiago Milan Eastern Europe Iberia (Portugal, Spain) Oporto Turin Venice Madrid Revenues: € 39 mn Revenues: € 182 mn 4th in bus in CZ; PL, HU, 3rd in bus in Portugal; SL: n.a. Spain: n.a. Italy International activities of DB Bahn (outside of Germany) Arriva bus operation areas Revenues: € 198 mn Arriva rail lines 1st in bus
Deutsche Bahn AG 12 Road Show Europe 2010 Strategy Strategic framework for DB Schenker
Three key strategic priorities of DB Schenker
Expand integrated product offerings Integrated products Key account management Innovative solutions / Green Logistics
Advance core business Strengthen networks Improve productivity and Integrate acquisitions
quality Offerings Connect international Optimize margins and networks costs Extend presence and Increase utilization market shares Standardize products and processes Core business
Markets
Deutsche Bahn AG 13 Road Show Europe 2010 Strategy DB Schenker Rail consequently built up its European network
Rail freight network of DB Schenker Acquisitions (fully consolidated as of Dec 31, 2009)
NL NS Cargo (2000, DB share: 98%) DK DSB Gods (2001, 50%) IT Strade Ferrate del Mediterraneo (2004, 98%) North DE RBH Logistics (2005, 98%) CH Brunner Railway Services (2007, 98%) North- UK/FR/ES EWS / ECR (2007, 100%) west ES Transfesa (2008, 50%) East PL PCC (2009, 98%) West IT NordCargo (2009/2010, 59%) South- east Participations South South- west BE Cobra (48%) CH BLS Cargo (44%) DK/SE Railion Scandinavia (98%) International Regional IT Rail Traction Company (4%) Network Corridors RU Trans Eurasia Logistics (30%)
Deutsche Bahn AG 14 Road Show Europe 2010 Strategy DB Schenker Logistics operates leading networks in its markets
International presence in more than 130 countries
Land transport: 720 branches in 38 countries Americas APAC Air freight
Europe
GOT LON HAM RTM MSL MIL BUS NYC TYO LAX SHA KEE MIA HKG DXB
SIN
Ocean freight Ocean Americas DB Schenker Logistics land transport terminals DB Schenker Logistics land transport Eurohubs International Hub EMEA APAC (Friedewald, Malmo, Paris, Salzburg) National Gateway
Deutsche Bahn AG 15 Road Show Europe 2010 Strategy European land networks benefit from DB Schenker’s global presence
DB Schenker networks
America Linkage of European land networks (road-rail) - Intermodal transport (containers) - Railports (single wagon transport)
Feeder and follow-up for air and ocean freight by road or rail transport - Seaport hinterland - Road feeder services Asia Increase volumes of inter- European shipments - By generating more business with European customers - Via new business with American and Asian customers
Deutsche Bahn AG 16 Road Show Europe 2010 Strategy High capex level since 1994 for major overhaul of rail system
Gross capital expenditures (€ bn) Structure and source of funds (€ bn)
Since 1994: about € 118 bn Capex Funding 10.0 9.1 8.4 55 Investment 7.8 7.7 Infra- grants 7.1 7.3 7.1 7.1 7.2 structure 6.9 6.8 84 6.4 6.6 6.3 6.5 (71%) Interest-free Total 14 118 loans 15 DB funds
Other 34 33 DB funds (29%) Other grants 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 1994 - 2009
Figures until 2004 FY according to German GAAP Deutsche Bahn AG 17 Road Show Europe 2010 Track record Balanced Group portfolio with strong networks helped us through the crisis
EBIT adjusted and adjusted EBIT-Margin Productivity – rail (€ bn or %) (thousand ptkm/employee)
1994-2009: Ò € +4.7 bn 1993-2009: Ò +237% 2.4 2.5 Per year: Ò € +310 mn CAGR: Ò +7.9% 2.1 1,247 1.7 388 1,167 1,106 7.6% 1,133 1.47.1% 7.4% 5.7% 1.0 1,042 327 975 5.4% 0.5 299 893 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 18 Road Show Europe 2010 Track Record Group-wide countermeasures bundled in reACT program
In total positive EBIT-effects of € 642 mn realized in the framework of reACT in 2009
Effects on EBIT (€ bn) Measures effective in 2009 – Expenses and capex management +2.0 (effect: about € 300 mn) – Increasing productivity in rail Defending of mid-term plan freight transport (effect: about € 70 mn) – Optimization of foreign Seizing of opportunities Group freight railways (effect: about € 70 mn) Seizing of opportunities Group-wide program for further resulting from market improvement of cost position and consolidation and competitiveness weakness of competitors +0.6 – Cutting administrative expenses – Development of network – Improving competitiveness of railway DB Schenker Rail DB Bahn Regional Accelerate expansion of – Enhancing productivity of infrastructure with funds DB Schenker Rail from Economic Stimulus – Enhancing of profit margins of Plan DB Schenker Logistics 2009A 2013E
Deutsche Bahn AG 19 Road Show Europe 2010 FrankfurtFrankfurt – Amsterdam– Amsterdam – Paris– Paris – Zurich– Zurich – Milan– Milan – Munich– Munich – London– London – Edinburgh– Edinburgh
Financial Development 2009 and Q1 2010 Capital Market Activities
Deutsche Bahn AG / DB Mobility Logistics AG Group Treasurer, Head of Mergers & Acquisitions Wolfgang Reuter May 2010 2009 Financial Year – At a Glance Highlights 2009 Financial Year
Framework conditions Coping with the crisis Development of business
Financial markets almost Due to financial crisis IPO and Performance and Financing collapsed after Lehman private placement activities of Agreement with the Federal broke down in September 2008 DB ML AG were postponed Government implemented Governments all over the world Due to uncertainties the approval effective Jan 1, 2009 tried to stabilize the banking of the mid-term planning by the Acquisition of PCC Logistics system with huge rescue Supervisory Board was despite stop of M&A activities programs postponed to May 2009 Restrictions in availability of Unprecedented economic crisis As a first reply to the crisis DB ICE fleet and at S-Bahn Berlin hit the economies and companies Group secured cash by cutting due to technical problems worldwide expenses/capital expenditures, Financing agreement signed for Governments reacted with stopping recruiting and putting the largest rail infrastructure economic stimulus packages M&A activities on hold project in Germany for the next Additional capex volume of Implementation of Group-wide years (Stuttgart 21) € 1.3 bn for the German rail countermeasure program reACT infrastructure in February 2009 The only European railway that Third credit rating from Fitch remained in the black in the 2009 since February 2009 financial year was DB Group
Deutsche Bahn AG 21 Road Show Europe 2010 2009 Financial Year – Market development Stable development of German passenger transport market
Passenger transport (based on pkm) Freight transport (based on tkm)
Market share 2009 (%) Market share 2009 (%)
(2008) DB Bahn (rail) (2008) Waterway 9.2% (9.3%) 9.1% (9.6%) Non-Group Pipelines Motorized railways 2.7% (2.3%) individual 0.7% (0.7%) Road 79.1% (79.0%) DB Schenker Air 71.9% Rail (70.7%) 1.3% (1.3%) 12.3% (13.7%) Non-Group Pubilc road railways 9.7% (9.8%) 4.0% (3.7%) Growth rates 2009 (%) Growth rates 2009 (%)
DB Bahn (rail) -1.6% Rail: DB Schenker -20.8% Non-Group -1.2% Rail Rail: railways +4.6% -17.3% Non-Group -4.4% Public road transport -0.5% railways Road -10.2% Motorized individual 0.0% transport Market: Market: Air -3.6% Waterway -16.2% -0.2% -11.7%
Deutsche Bahn AG 22 Road Show Europe 2010 Market Development Significant downturn in European and global transport and logistics markets
European European land transport Ocean freight Air freight rail freight market
tkm-based €-based TEU-based t-based
+4% +0% +15% -2% -2% -3% +3% +11% -4%
-17% -20% -10/-12% -9% -16% -19% -20% 2008 2009 2008 2009 2008 2009 2008 2009 Market DB Schenker Market DB Schenker Market DB Schenker Market DB Schenker Market development Slight improvement in Significant fall in freight rates due Until mid-2009 market Since mid-2009 stabilization of Q4 2009 to excess capacity until autumn contraction of 15% with transport volumes 2009 recovery in Q3 und Q4
Development in key Economic development in Turnover (TEU) at major ports Import and export volume (in t) industries*: Euro-area*: of entry*: of major hubs*:
Steel -30% GDP -4% Rotterdam -9% Frankfurt/Main -10%
Automotive -25% Industry -16% Antwerp -16% Miami -14% Key drivers Chemicals -11% Export / Import -13/-12% Hamburg -28% Hong Kong -12%
* 2009 vs. 2008.
Deutsche Bahn AG 23 Road Show Europe 2010 2009 Financial Year – Financial Overview Positive result despite historical economic crisis
Highlights
Revenues: € 29.3 bn EBIT adjusted: € 1.7 bn EBITDA adjusted: € 4.4 bn Net financial debt: € 15.0 bn ROCE: 5.9%
Revenues EBIT adjusted EBITDA adjusted Net financial debt ROCE (€ bn) (€ bn) (€ bn) (as of Dec 31, € bn) (%)
2009 29.3 2009 1.7 2009 4.4 2009 15.0 2009 5.9
-12.3% -32.1% -15.4% -5.8%
2008 33.5 2008 2.5 2008 5.2 2008 15.9 2008 8.9
Deutsche Bahn AG 24 Road Show Europe 2010 2009 Financial Year – Financial Overview Sharp decline in revenues mainly in the Transport and Logistics division
Revenues (€ mn) Remarks
-12.3% Significant volume reduction in the Transport and Logistics business 33,452 -4,336 units lead to decline in revenues -1 +166 +54 29,335 Constraints in operations at DB Bahn Long-Distance and at DB Bahn Urban (S-Bahn Berlin) result in performance slowdown by 1.3 % in the passenger transport business units Increase in revenues in the infrastructure business units as a result of increased non-Group demand and price adjustments for infrastructure usage
Transport Passenger Infra- Other/Con- 2009 2008 and Logistics Transport structure solidation
Deutsche Bahn AG 25 Road Show Europe 2010 2009 Financial Year – Revenue Split Shift in revenue structure in favor of Passenger Transport
Revenue split by divisions 2009 Revenue split by activities 2009 Revenue split by regions 2009
(2008) (2008) (2008)
Ò 51% Ò 68% Ò Ò 57% 21% (58%) Ò (64%) Ò 42% (53%) 43% (23%) (37%) (47%) 5% 1% 6% 1% 5%(6%) (1%) (6%) (<1%) (5%)
DB Bahn DB Netze Rail Non-rail Germany North America
DB Schenker Other Europe Asia/Pazific (excl. Germany) Rest of World
Deutsche Bahn AG 26 Road Show Europe 2010 2009 Financial Year – Profit Development Development of main profit figures
EBITDA adjusted (€ mn) EBIT adjusted (€ mn) Net profit (€ mn)
EBITDA margin: EBIT margin: EPS: 2009: 15.0% 2009: 5.7% 2009: € 1.91 2008: 15.6% 2008: 7.4% 2008: € 3.04
-€ 804 mn
5,206
4,402
-€ 798 mn
-€ 491 mn 2,483
1,685 1,321 830
2008 2009 2008 2009 2008 2009
Deutsche Bahn AG 27 Road Show Europe 2010 2009 Financial Year – Profit Development Special items at € 523 mn are significantly higher than in 2008
EBITin Mrd. and € EBIT adjusted (€ mn)
-32.1% 2,593 -110 -331 2,483 +600 -450 +65 2,208 +639 1,685
Special items in 2009: € 523 mn
EBIT Special EBIT EBIT Stuttgart 21 Ecological Technical Restructuring/ Other EBIT reported items adjusted adjusted burdens risks Adjustment of reported (2008) (2008) (2009) personnel (2009)
Deutsche Bahn AG 28 Road Show Europe 2010 2009 Financial Year – Profit Development Decreasing EBIT adjusted on business unit level
2009 EBIT adjusted (€ mn) 2008 Change by business unit (€ mn) EBIT Margin DB Bahn Long-Distance 141 4.0% 306 -165 (-53.9%)
DB Bahn Regional 870 12.7% 857 +13 (+1.5%)
DB Bahn Urban 100 5.0% 205 -105 (-51.2%)
DB Schenker Rail -189 - 307 -496 (-)
DB Schenker Logistics 199 1.8% 381 -182 (-47.8%)
DB Services 125 10.1% 131 -6 (-4.6%)
DB Netze Track 558 12.8% 670 -112 (-16.7%)
DB Netze Stations 217 21.2% 210 +7 (+3.3%) DB Netze Energy 103 4.5% 74 +29 (+39.2%)
Other/consolidation -439 - -658 +219 (-33.3%)
DB Group 1,685 5.7% 2,483 -798 (-32.1%)
Deutsche Bahn AG 29 Road Show Europe 2010 2009 Financial Year – Balance Sheet Almost € 1 bn reduction in net financial debt
Gross capex (€ mn) Financial debt (€ mn) Balance sheet structure (as of Dec 31, 2009)
Equity and -€ 0.3 bn -€ 0.3 bn Assets liabilities
6,765 6,462 16,853 16,510 Non-current Equity assets 27.6% (25.2%) 87.3% (87.9%) Pension prov. Net: 3.7% (3.4%) Other Net: provisions -€ 0.9 bn 13.6% (13.6%) -€ 0.8 bn 15,943 Financial debt 15,011 34.9% (35.0%) 2,599 Other 1,813 Current assets 20.2% (22.8%) 12.7% (12.1%)
2008 2009 Dec 31, 2008 Dec 31, 2009 Total € 47.3 bn Total €47.3 bn
Deutsche Bahn AG 30 Road Show Europe 2010 2009 Financial Year – Value Management Weaker ROCE and redemption coverage, improvement in gearing
ROCE (%) Gearing (%) Redemption coverage (%)
Target (30 %) Target (10.0 %) 256 8.9 Cost of capital 8.7 (8.9 %) 213 22.5 7.5 21.1 18.6 19.4 5.9 151 14.7 5.0 131 115 Target (100 %)
2005 2006 2007 2008 2009 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009
EBIT adjusted Net financial debt Operating cash flow Capital employed Equity Adjusted net financial debt
Deutsche Bahn AG 31 Road Show Europe 2010 Capital Market Activities Rating and financing activities
Ratings Major refinancing activities
Very good ratings: Total volume in 2009: € 2.100 mn (as of Dec 31, 2009) Moody’s: Aa1/stable € 1,000 mn bond with a 4.875% coupon issued in March S&P: AA/stable € 600 mn bond with a 4.375% coupon issued in September Fitch: AA/stable € 500 mn bond with a 3.625% coupon issued in October Ratings confirmed in 2010
Interest-bearing debt Maturity profile of financial debt Currency structure (%) (as of Dec 31, 2009; € bn; incl. underlying swaps) MTN-program
€ 13.2 bn Bonds Bank Federal loans Leasing Eurofima EIB (as of Dec 31, 2009) (as of Dec 31, 2009) 2.0 1.9 1.9 MTN 1.7 68% 1.7 EUR 1.4 HKD 79% 1.3 1.3 1.3 1% 1.1 JPY 0.8 6% Other 0.6 USD bonds 11% CHF 8% 0.2 Other EUROFIMA 3% 10% Bank 7% 7% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Deutsche Bahn AG 32 Road Show Europe 2010 Capital Market Activities Focus on credit quality
Ratings: Moody’s (Aa1) / S&P (AA) / Fitch (AA) Very good ratings Profitable business development even in 2009 Stable financial profile despite crisis, sound financing structure and conservative funding strategy Federal obligations resulting from Art. 87e German Constitution - „Infrastructure obligations“: High share in funding of infrastructure capex, Obligations amounting to around € 2.5 bn p.a. (replacement capex) of the Federal Republic - „Public interest obligations“: Federal states receive funds for ordering local passenger transport of Germany services, amounting to around € 6.7 bn p.a. (increasing by 1.5% p.a. until 2014) - Privatization threshold: Up to 49.9% of shares to be privatized due to constitutionally mandated Federal majority shareholding („ownership clause“)
Significant DB guarantees overall mobility in Germany and is Europe‘s largest company providing integrated responsibility mobility, transport and logistics services.
Stable cash flow due to long-term service contracts with Federal states (2009 revenue share: 15%) – order book of € 28 bn, Arriva: GBP 12 bn, aggregated amount: about € 42 bn Operating Vertical integration as a major factor for business success performance Productivity improved by 237% (workforce reduction in rail business by approx. 240,000 since 1994, EBIT increased by € 4.7 bn (€ 310 mn p.a.), EBITDA increased by € 6.4 bn (€ 430 mn p.a.) and total capex of € 118 bn since the 1994 German Rail Reform
Deutsche Bahn AG 33 Road Show Europe 2010 Debt and Financing Expected development of net financial debt / financial requirement in 2010
Development of net financial debt (€ bn) Development of net liquidity (€ bn)
Position €bn +2.8 17.5 Net liquidity (as of Jan 1, 2010) +1.0 15.0 -4.0 +2.4 14.7
+1.3 Repayments (2010) -1.7
Enterprise Value Purchase Price Arriva -1.8 (Purchase Price: thereof change €1.8 bn Net capex -2.4 in working Debt: capital and € 1.0 bn) provisions: Operating cash flow +4.0 € 0.5 bn
Other -0.5 Actual Operating Other Net capex Outlook Acquisition Outlook Jan 1, cash flow Dec 31, Arriva Dec 31, (as of Dec 31, 2010; 2010 2010 2010 Net liquidity -1.4 (excl. Arriva) (incl. Arriva) before capital market activities)
Deutsche Bahn AG 34 Road Show Europe 2010 Debt and Financing
Mid-term capex program and financing (excluding Arriva)
Capex and financing 2010-14 (€ bn) Remarks
41.1 -26.5 Other - Funding needs other than capital expenditures (e.g. repayment of Federal Loans): €2.4 bn - Other internal financial sources (e.g. change in working capital): -22.2 14.6 +2.2 €1.1 bn - Other financial needs: € -1.3 bn Cash flow -5.4 - EBT: € 8.4 bn - Depreciation: € 14.8 bn - Change in pension liabilities: €0.3 bn Gross Investment Net capital Other Cash Change in - Taxes: € -1.3 bn capital grants expenditures flow net financial expenditures debt
Deutsche Bahn AG 35 Road Show Europe 2010 2010 Financial Year – Outlook Positive development in Q1 2010 and expected for 2010 financial year
Revenues EBIT adjusted EBITDA adjusted Net financial debt ROCE (€ bn) (€ bn) (€ bn) (as of Mar 31, € bn) (%)
Q1/10 7.7 Q1/10 0.30 Q1/10 0.97 Q1/10 15.0 Q1/10 4.2
+7.9% +8.7% +3.1% -4.3%
Q1/09 7.2 Q1/09 0.28 Q1/09 0.95 Q1/09 15.6 Q1/09 4.0
Outlook* (€ mn) 2009 2010 Remarks
Revenues - comparable 29,335 Ò Increase expected due to recovery of economy and volumes
Disproportionate increase of expenses compared to EBIT adjusted 1,685 Ò revenues expected
ROCE 5.9% Ò Improvement expected due to increase in adjusted EBIT
Net financial debt 15,011 Ô Decrease expected based on favorable business development
Gross capital expenditures 6,462 Ò Modernization process should continue on a higher level
*as of March 2010, excluding Arriva Deutsche Bahn AG 36 Road Show Europe 2010 Appendix Disclaimer
NOT FOR DISTRIBUTION INTO THE UNITED STATES, CANADA OR AUSTRALIA This document is not an offer of securities for sale in the United States and securities may not be offered or sold in the United States absent registration under the United States Securities Act of 1933, as amended, or an exemption from such registration. Any public offering of securities to be made in the United States will be made by means of a prospectus. The Company does not intend to make any such public offering. Disclaimer This information contains forward-looking statements or trend information that are based on current beliefs and estimates of Deutsche Bahn AG’s/DB Mobility Logistics AG´s management and involves known and unknown risks and uncertainties. They are not guarantees of future performance. In addition to statements which are forward-looking by reason of context, including without limitation, statements referring to risk limitations, operational profitability, financial strength, performance targets, profitable growth opportunities, and risk adequate pricing, as well as the words "may, will, should, expects, plans, intends, anticipates, believes, estimates, predicts, or continue", "potential, future, or further", and similar expressions identify forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause the Company's actual results or performance to be materially different from those expressed or implied by such statements. Many of these risks and uncertainties relate to factors that are beyond Deutsche Bahn AG’s/DB Mobility Logistics AG´s ability to control or estimate precisely, e.g. future market and economic conditions and the behavior of market participants. Deutsche Bahn AG and DB Mobility Logistics AG do not intend or assume any obligation to update these forward-looking statements. This document represents the Company‘s judgment as on the date of this presentation.
Deutsche Bahn AG 37 Road Show Europe 2010