Overall statement of the Management Board regarding the
With our new Strong Rail strategy we have redefined the strategic framework of our business operations and are focusing on our contribution to the transport and climate policy objectives of the Federal Government. Significant capital expenditures are required to implement it, particularly in the track infrastructure. The Federal Government’s financial support for this has never been as high as it is currently. The expansion of the track infrastructure, which is necessary for the shift in the mode of transport, is underpinned by significant financing contributions from the Federal Government, particularly in the form of contractually agreed higher investment grants in the period up to 2030. We at DB Group are also making a significant contribution to capital expenditures and operational measures to improve service and quality, as well as to expand digitalization.
We will therefore see a significant increase in capital expenditure in the next few years, starting in 2020. Additional burdens will be added on the expenses side for additional measures and more employees. However, the positive effects of this will not be reflected immediately, but will develop over time. The measures planned over the next few years as part of the Strong Rail strategy are the key to growth, shifting traffic and improving the quality of our operations. Only high product quality and satisfied customers can increase revenues and profits in the long term.
Business development in 2020 is expected to be significantly influenced by the negative effects of coronavirus, which cannot yet be finally quantified. The Management Board of DB AG assumes that more extensive financing measures will be necessary in the 2020 financial year and that the income development will decline significantly.
Our activities are subject to various risks, as described in the Opportunity and risk report. For the 2020 financial year, we see considerable risks from the effects of the coronavirus, the length and intensity of which cannot be predicted at present. There are also risks, particularly in the areas of law and contracts as well as production and technology.