Business model

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As an operator of networks and provider of services in passenger transport, freight transport and logistics, as well as track infrastructure, our economic success is influenced by the general economic environment and the specific devel­opment of the various relevant markets:

• Demand for passenger transport is driven first and foremost by the growth of major cities, the size of the population, the number of people in employment, and real disposable incomes. The competitive situation relative to the car is markedly influenced by the trend in fuel prices.
• Our freight transport and logistics operations depend largely on economic developments. Due to our global networks we monitor the development not only of global gross domestic product (GDP) and world trade, but also of economic growth in the regions, countries, and trade relations in which we have a high market share or in which high growth rates in the exchange of goods can be expected. The customary early-warning indicators of the business climate and of the expectations of purchasing managers are an integral part of our monitoring system.
• The market environment of DB Cargo is particularly in­fluenced by the manufacturing industry’s production output and the development of the iron, coal and steel, and chemical industries. Furthermore, the cross-border movement of goods within Europe is growing in importance.
• The services of the Infrastructure business units cover im­­­portant elements of their customers’ value-added chains. In this respect, the development of demand is a factor that is largely determined by upstream passenger and freight transport markets. The area of marketing in DB Netze Stations is also important. Consumer trends in the general public are an important factor here, much as they are in general retail in Germany.

The development of the economic and early-warning indicators, as presented above, influences how we manage our market activities and resources. Opportunities and risks can therefore be recognized early on, and, as a result, the Group’s short-term controlling activities and long-term positioning can be focused accordingly. At the same time we work systematically on optimizing our operating value drivers.

Operating transport networks often necessitates a high level of capital commitment, long investment cycles and distinct fixed cost structures. In this respect, achieving optimal capacity utilization of the networks and systematically devel­oping, integrating and cost-effectively operating these networks with the efficient use of resources are important to DB Group’s economic development. Ensuring and improving ser­­­vice quality for our customers is at the center of our ac­­­tiv­­i­­­ties. By expanding what we offer our customers, particularly digital services and customer loyalty programs, and integrating new forms of mobility and intelligently linking with other modes of transport, we intend to gain additional customers in order to realize increasing volumes and economies of scale.

We generally use operating performance data to measure capacity utilization in our networks and our market shares. In order to determine a relative return, we calculate ratios com­­paring performance data with the generated revenues (specific revenues).

With our national and international subsidiaries, we ope­­r­­­ate as DB Group in all segments of the transport market. Our com­­prehensive service portfolio enables us to offer our customers services combined from a single source.

In most of our business units, incoming orders are not a relevant control variable. The situation is different for DB Regional and DB Arriva. In these business units, the order book in the form of long-term transport contracts entered into with the public transport authorities of Germany’s Federal states and franchisers in other European countries constitutes a key performance metric for business development. There are also long-term contractual relationships with customers in DB Schenker’s contract logistics line of business.

There are five key success factors in the development of DB Group, which are a central component of our business model.

• Corporate social responsibility: As a Government-owned provider of mobility and logistics solutions, DB Group has a major responsibility for the future of Germany. As the backbone of the green and networked mobility of the future, rail plays a key role for Germany: it helps to achieve climate targets, it promotes integration and quality of life, and it strengthens the business location, as well as empowering Europe’s people and economy. Society as a whole benefits from strong rail transport. We con­sistently focus our business operations on achieving Strong Rail and prioritize our activities along the value-added chain to that effect.
• Entrepreneurial approach to business: In the course of the German rail reform, DB Group has established itself as a commercial enterprise. This includes, in particular, the establishment of a modern and efficient organiza­­­tion and the establishment of value-oriented corporate manage­ment.
• Integrated Group: As a system integrator in Germany, we are optimizing the integrated rail system as a whole. In doing so, we are fulfilling our important role as a techno­lo­gical pioneer. The integrated Group structure enables us to achieve positive synergies and align our infrastructure to support efficiency, market orientation and profitability. The digitalization of rail can only be successfully developed and implemented in the integrated rail system. Our customers also benefit from the integrated Group. Thanks to the economically, environmentally and technologically intelligent links between different modes of transport, we offer our customers door-to-door mobility and logistics solutions from a single source.
• Europe as the field of action: Strong Rail reaches beyond Germany. As the geographical and economic heart of Europe, Germany has a special responsibility for the future of the continent. Given the importance of Strong Rail for Europe, Europe will continue as our main field of action in future. In order to take into account the customers’ need for cross-border solutions, we continue to position ourselves at European level with our passenger transport activities. Thanks to the European and worldwide orientation of our freight transport and logistics activities, we offer our customers the access they need to global networks.
• Digitalization: We use the technologies and methods of digitalization to offer customers an attractive range of products. This means, on the one hand, that we are incor­porating new transport offers into our product portfolio, such as on-demand mobility, and establishing new platforms for our customer interfaces. On the other hand, we support our internal processes with technologies such as artificial intelligence (AI), so that we can continue to offer customers a reasonable price level with efficient processes.