Outlook (DB AG)
Expected development of DB AG
Anticipated results of operations
Our forecasts for the development of DB Group and the Group companies in the 2024 financial year are based on DB Group’s expectations of developments in the market, competition and environment, and the implementation success of the planned measures.
In the 2024 financial year, it is likely that DB AG’s profit development will largely be characterized by the development of the subsidiaries and thus the level of the net investment income. Overall, however, a significantly better development in net investment income result is expected for 2024. We therefore also expect a noticeable overall improvement in DB AG’s net profit for the year.
In 2024, the business development of DB Group and the Group companies will continue to be characterized by burdens from the high energy, procurement and personnel costs. In addition, measures to improve quality have an impact on the development of DB Group, particularly in relation to the rail infrastructure. The objective is to minimize the operational impact by the general modernization of the Riedbahn in the second half of 2024. However, short-term restrictions on operational quality in the restructuring phase are expected. The weak economic development in Germany and Europe is also expected to dampen development in 2024. Countermeasures will partially compensate for this.
A key aspect of the profit development in 2024 is the compensation of prefinancing for track infrastructure maintenance measures from 2023. In addition, significant improvement in profits is expected due to non-recurring special items in connection with the planned sale of DB Arriva.
Extensive strike action has already taken place in January 2024. If there are further extensive GDL strike measures during the course of the year, this is expected to have a significant impact on the development of DB Group business units in the Integrated Rail System, which are not included in the current forecast.
Anticipated financial position
Efficient liquidity management is once again a top priority for DB Group in 2024. It is focusing on continually forecasting the cash flow from operating activities, as this is the main source of cash and cash equivalents. In 2024, DB Group must redeem maturing financial liabilities (excluding current bank liabilities) at about the same level as in 2023. Funding needs for this are met by issuing public and non-public bonds. Road shows are planned in Europe and Asia in conjunction with the bond issues. DB Group is also expected to take out further bank loans in 2024. DB Group continues to have adequate scope for financing its capital market activities. The guaranteed credit facilities serve as a fallback in the event of disruption to capital market access. Our short- and medium-term liquidity supply therefore continues to be secure in 2024. The majority of DB Group’s gross capital expenditures in 2024 will again be covered by investment grants. In addition, an additional Government equity measure is planned. The net capital expenditures to be financed by DB Group will likely not be fully covered by internal sources in 2024. Depending on the assumed higher Governemnt support measures for infrastructure measures, the expected profit improvements and the sale of DB Arriva, DB Group’s net financial debt as of December 31, 2024, should be at the same level as at the end of the previous year, with an expected significant increase in net capital expenditures. However, the forecast is subject to increased uncertainty regarding the lack of legal and regulatory requirements for higher Government funding.
