Chairman’s letter

Dear readers,

The year 2023 marks a turning point for the railway in Germany: together with the Federal Government, we have approved a clear roadmap for the largest and most comprehensive infrastructure program in DB Group’s history. We are no longer wearing down the rail infrastructure; we are modernizing it from the ground up. The Federal Government will be making much greater funds available to us. This will create the conditions for better quality, more stability and further growth in climate-friendly rail transport.

The operational situation last year made something painfully clear to us and to our customers: the infrastructure is too utilized, too old and therefore very susceptible to disruption. At 64 percent, punctuality in long-distance transport in the previous year was far behind our aspiration. One reason for this is the high level of construction activity: on average during the year, almost every second long-distance train traveled through at least one construction site. We have replaced more concrete ties than ever before.

There is no alternative to construction at a record level if we want to prevent the infrastructure from further deterioration. For this reason we did not hesitate in 2023 and, in consultation with the Federal Government, we made massive pre-financing and constructed, improved and repaired. In addition to higher energy and personnel costs, the operating loss in our core business is largely due to this additional spending on the infrastructure. Our EBIT was minus one billion euros last year.

At the same time, demand is continuing unabated: in 2023, for the first time in long-distance transport, we were above pre-Covid-19 levels in terms of volume sold. With the timetable change, we have offered more new connections than in the last 20 years. In regional transport, we recorded an increase of 9 percent in the volume sold, thanks mainly to the Germany-Ticket. In total, more than 1.8 billion passengers were traveling by rail with us in 2023 – an increase of over 5 percent compared to 2022.

More than four years ago, we set up our strategy for a strong rail system in Germany with the aim of achieving the Federal Government’s climate and transport policy objectives. We also made progress in terms of implementation in 2023.

Our long-distance transport fleet is now larger and more modern than ever before. 2023 was an absolute record year: on average, we put three new ICE trains into operation for our customers every month. With the introduction of a new sales IT system, DB Navigator has also received many new functions. We built the most modern ICE depot in Cottbus in record time and opened it at the beginning of January 2024.

Our green transformation is also progressing, for example with the use of the biofuel HVO, which is produced from biological residues and waste in a climate-friendly way. In 2023, it was just under 14 million liters, which is 11 million liters more than in the previous year. Our goal is clear: climate neutrality by 2040. We are committed to sustainable and responsible corporate management and the principles of the UN Global Compact.

We began 2024 with substantial momentum. Together with the Federal Government and in collaboration with the railway sector and the construction industry, we are working to achieve a better rail system. On January 1, 2024, together with the Federal Government, we launched DB InfraGO AG, a company for infrastructure focused on the common good. We have thus created the ideal structure within the integrated DB Group for comprehensively modernizing the infrastructure.

We have set ourselves an ambitious target: the general modernization of a total of about 40 sections of line in the highly utilized network by 2030. We are starting with the Riedbahn, the line between Frankfurt am Main and Mannheim. From mid-July 2024, we will bring a previously unseen construction volume to the track within five months and turn a piece of infrastructure that is notoriously susceptible to disruption into an anchor of stability for the rail system in Germany. Preparatory work in January 2024 has shown that the concept works.

We are continuing to push ahead with the transformation of our rail freight business unit. We are making DB Cargo competitive to get more freight onto rail and secure its future and thus jobs in the long term. We are modernizing and digitalizing DB Group, dismantling double structures and making DB Group more robust. In order to achieve our ambitious growth targets, we will need to become more efficient in the future in view of the shortage of skilled labor.

One thing is clear: rail is vital for a sustainable transformation of Germany. Our employees are working every day to make the track infrastructure fit for the future. We wish to express our respect and gratitude for this. After all, this is a marathon and not a sprint.

The railway is about more than mobility and logistics services from A to B. It is inseparable from social development – prosperity and progress. Germany is in the midst of a shift to become a more modern, more digital and more sustainable country. At Deutsche Bahn, we take our social mission seriously: together with business and politics, we intend to make a contribution to making our country fit for the future – with courage and confidence.

Germany needs a strong rail system: For the climate. For people. For the economy. For Europe.

Sincerely

Dr. Richard Lutz
CEO and Chairman of the Management Board of Deutsche Bahn AG