Revenues - Deutsche Bahn AG

June 2004: Frankfurt Amsterdam Paris Madrid Milan Zurich London Edinburgh

Deutsche Bahn Group: 

2003 Highlights and Strategy 

Diethelm Sack 

Chief Financial Officer

DB Group 

Group portfolio overview 

DB Group 

DB AG acts as 

management holding 

Vertically integrated 

Group structure 

Rating: Aa1 / AA 

Revenues 

(€ mn) 

Op. Income aft. 

Interest (€ mn) 

EBITDA (€ mn) 

Gross Capex 

(€ mn) 

Total Assets 

(€ mn) 

Employees 

(Dec 31, 2003) 

28,228 

-172 

3,092 

9,121 

47,647 

242,759 

Passenger Transport Transport & Logistics 

# 1 in European rail 

passenger transport 

# 1 in European 

public urban transp. 

# 1 in German bus 

transport 


(€ mn) 




Gross Capex 

(€ mn) 

ICE-Fleet ICE fleet 

Locomotives 

11,157 

# 1 in European rail 

freight transport 

# 1 in European land 

transport 

# 3 in sea freight 

# 5 in airfreight 


(€ mn) 




Gross Capex 

(€ mn) 

Freight cars 

Locomotives 

Deutsche Bahn Group Road Show Europe 2004 

-34 

997 

1,304 

215 

2,400 

10,804 

288 

694 

537 

109,000 

3,200 

Infrastructure Services 

Largest rail track 

infrastructure in 

Europe 


(€ mn) 




Gross Capex 

(€ mn) 

Length of lines 

operated (km) 

Passenger 

Stations 

522 

-269 

921 

6,884 

35,593 

5,665 

Supporting service 

functions 


(€ mn) 




Gross Capex 

(€ mn) 

259 

119 

384 

245 

Data as of Financial Year 2003 

3

DB Group 

2003 highlights 

Operational Improvements vs. 2002 

Productivity: +3.5% 

Revenues (comparable): +2.0% 

Revenues: +51.1% 

EBITDA before special burden 

compensation: € +1,071 mn 

Operating income 

after interest: € +282 mn 

Successful integration of Stinnes 

Continued high-level capital 

expenditure activities 

Roll-out of traveler information 

system started 

Launch of RhineNeckar S-Bahn (metro) 

and Rodgau S-Bahn (metro) 

First - 

rate 

railway 


Market and Competition 

Passenger transport 

Market share gains in shrinking market 

Transport performance below previous year (-0.4%) 

Logistics (Schenker): 

further growth 

Rail freight • Wachstumschancen transport (Railion) durch 

Slight market 

Geschäftsausweitung 

share gains 

Focus on 

Transport 

insbesondere 

performance 

im 

increase 

Personen- 

(+2.4%) 

value 

generation 

verkehr sowie Logistik 

Further portfolio consolidation 

(sale of Brenntag, Stinnes-Interfer) 

Refocusing of real estate activities (sale 

of major real estate portfolio to Aurelis) 

Reorganization of Group Passenger Transport 

division and new Group divisions Transport and 

Logistics and Services 

Major Events Group Portfolio 

4

DB Group 

Progress since start of German Rail Reform 

EBITDA before compensation payments 

(€ million) 

2003 vs. 2002: € +1.1 bn 

since 1994: € +5.1 bn 

Gross capital expenditures (€ million) 

35 

427 

1,264 

1,433 

- 445 

- 910 

-1,520 

-2,014 

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 

2003 vs. 2002: -8.7% 

7,128 

7,329 

7,771 

7,136 

7,660 

8,372 

6,892 

7,110 

2,021 

9,994 

3,092 

9,121 

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 


Productivity - rail (thousand ptkm per employee) 

2003 vs. 2002: +3.5% 

since 1993: +163% 

328 

413 468 533 603 656 699 

Transport 

and Logistics 

4% 

Passenger 

Transport 

19% 

Passenger 

Stations 

5% 

Other 

9% 

798 

840 833 862 

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 

Capital expenditure structure 1994 - 2003 (%) 

since 1994: 

approx. € 79 bn 

Track 

Infrastructure 

63% 

5

DB Group 

Strategic goals and value management 

Strategic Goals 

„DB Campaign“ 

Restructuring 

Performance 

Growth 

+ 

Intensive capex and modernization 

programs in FY 2001-03 

Completion of German Rail Reform 

in FY 2004 

Readiness for IPO 

Operating loss due to 

modernization program in 

FY 2001-03 

Return to positive figures in FY 

2004 

Operating income after interest: 


Profitability Value Management 

232 247 327 

273 

171 

-87 

199 

-204 

-454 

-172 

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005ff 

Value management system (ROCE) 

and target ratios implemented in FY 

1999 

Low ROCE in FYs 2001-03 

Mid-term goal: 10% 

1.6% 1.5% 

0.4% 0.1% 

WACC (9%) 

Target rate (10%) 

10% 

2000 2001 2002 2003 2004 Midterm 

6

DB Group 

Internationalization strategy driven by business characteristics 

Current position of Group divisions (GD) 

Global / international 

business 

GD Transport and Logistics 

Schenker 

Freight Logistics 

Intermodal 

Railion 

Mainly domestic business GD Passenger Transport 

Long-Distance 

Regional 

Urban 

Domestic business GD Passenger Stations 

GD Track Infrastructure 

GD Services 


Further potential for internationalization 

Focus: further strengthening of network and 

logistics competence 

Selective additions in core business 

segments (mainly acquisitions) 

JV Railion as open platform for additional 

partners; further supplements through 

international cooperations 

Focus: business optimization + defending 

our dominant domestic market position 

Selective internationalization in longdistance, 

regional and urban transport 

Focus: optimization of domestic business 

Increasing attractiveness of stations 

Elimination of bottlenecks and 

modernization of command and control 

technology 

Cost reductions in GD Services 

7

Group Passenger Transport Division 

Overview 

#1 in European rail passenger 

transport (2003 / most recent, € bn) 

DB Group 

SNCF (F) 

FS (I)* 

SBB (CH) 

NS Group (NL) 

Highlights 

1.6 

1.2 

2.0 

11.2 

10.9 

*as of FY 2000 


Air 

Rail 

Public 

transp. 

Car 

1% 

8% 

9% 

82% 

DB 

97 % 

=70 bn 

pkm 

Other 3% 

Dominant position in domestic rail passenger market - major player in Europe 

Full-range services with 3 business units: 

Market share, domestic 

(2003, %, pkm) 

long-distance transport 

regional transport 

urban transport 

Market share growth from 7.1% to 8.1% since 1993 

Defending our dominant market position in long-distance / regional transport, 

growth opportunities in urban transport sector 

Growth of transport market in 

Germany since 1993 (%, pkm) 

Air 

Rail (DB) 

Car 

Public 

transp. 

-6% 

-5% 

€ 11,157 million 

Regional + 

Urban 

73% 

+11% 

+38% 

Market: -4.1% 

Revenue structure 2003 (%) 

Long-distance 

27% 

8


Long-distance transport unit 

Key characteristics 

Mainly domestic business - cross-border services through cooperations; 

dominant market position in Germany (intramodal >95%) 

Targets: organic growth + defending our market position 

FY 2003: net loss due to weak economy and tough competition from market 

entries of low-cost airlines 

Integration into mobility chains; special value-added services, such as lounges 

and CityTicket 

Improved services, yield management / selective price adjustments 



Programs / Measures to improve profitability Value drivers 

New pricing system („EconomyPrices“, „BahnCard“) + programs, e.g. 

“Surf&Rail“ 

Optimization of marketing / distribution system 

Ongoing efficiency improvements and overhead optimization 


ICE 

50% 

Transport performance, 

specific revenues 

Transport performance, 

utilization rate 

Cost of operations 

IC/EC/IR/D 

27% 

Other 

23% 

Multiple ways to access ticketing, 

cost of distribution systems 

9


Regional transport unit 


Mainly domestic business - #1 in Europe (revenues, pkm) 

Dominant position in domestic market (intramodal >90%) 

Target: maintain intra- / intermodal market position 

Protecting market position by long-term ordered-services agreements (federal 

states with “Public interest obligations”) and superior quality of services 

Stable revenue base through ordered-service agreements 

Further fleet modernization 

Programs / Measures to improve profitability 

Optimization of service offerings and yield management 

Modernization and standardization of fleet 

Gaining of new long-term ordered-services agreements 

Ongoing efficiency improvements + further overhead optimization 




Orderedservice 

agreements 

66% 

Value drivers 

Passenger fares 

34% 

Passenger fare level, transport 

performance, utilization rate 


Reliability of capex decisions, 

optimization of production 

Cost of operations, 

personnel expenses 

10


Urban transport unit 


Mainly domestic business - Business unit established in Jan 2004 (bus 

companies + Berlin/Hamburg metro systems) 

# 1 position in regional bus and metro transport; market share of approx. 12% 

in highly fragmented (bus) market 

Target: gaining further market share during market consolidation phase 

Service offerings complementary to long-distance / regional transport services 


Further organic growth 

Optimization of local services (independent / with other local companies) 

Acquisitions to strengthen business portfolio 


Revenue structure (%) 


Orderedservice 

agreements 

17% 

Bus 

62% 

Value drivers 

Revenues, utilization rate 


Passenger 

fares metro 

21% 

11

Group Transport and Logistics Division 

Overview 

#1 in European land 

transport 

Schenker 

DHL 

Geodis 

DSV/DFDS 

Dachser 

Highlights 

1.1% 

1.0% 

1.0% 

2.3% 

2.1% 

(revenues, 

%, 2003) 

#1 in European rail 

freight transport 

Railion 

SNCF (F) 

PKP (PL) 

FS (I) 

ÖBB (A) 


17 

23 

46 

50 

80 

(2002 / 2001, 

tkm bn) 

Integrated provider of transport and logistics services with global network 

Market-focused organizational structure with 4 business units: 

Schenker 

Freight Logistics 

Intermodal 

Railion 

Process optimization / further development of product portfolio / systematic 

expansion of networks / further strengthening of logistics operations 

#3 in global sea transport #5 in global air freight 

K&N 

DPWN 

Schenker 

Panalpina 

Exel 

1.9% 

2.7% 

2.6% 

3.7% 

4.7% 

(TEU, 

%, 2003) 

€ 10.8 bn 

Schenker 

63% 

DPWN 

Panalpina 

Exel 

K&N 

Schenker 

2.9% 

2.5% 

3.9% 


Railion 

28% 

5.4% 

Freight 

Logistics 

8% 

6.6% 

(freight volume, 

%, 2002) 

Intermodal + 

Other 

1% 

12


Business units 

bulk goods 

Freight Logistics unit Schenker unit 

Intermodal unit Railion unit 

NCS 2) 

1) net of capital goods 

2) existing investment 

Coal and steel 

Construction 

materials 

Chemicals / BTT 

Commodities 1) 

Retail business 

packaged goods 

Land Operations/ 

Logistics 

Air & Sea / 

Logistics 

Railog 2) 

Schenker Automotive 

RailNet GmbH 

ATG 2) 

STINNES AG 


Sales 

combined rail/road 

transport operator 

Combined rail/road 

transport 

Sales Railion 

Rail freight transport 

Railion Deutschland 

Railion Nederland 

Railion Danmark 

13


Schenker unit 


Global business 

Market leader in European land transport, strong position in global air and 

sea freight 

In addition warehousing, value added services and special-purpose logistics, 

industrial fair and Olympic Games logistics 

Targets: maintain and strengthen market position / continued enhancement of 

product and network quality as well as extension of logistics competence 





Air + Sea 

Freight 

national 

9% 

Air + Sea 

Freight 

international 

33% 

Value drivers 

Further organic growth Revenues, transport volume 

Land 

Transport 

international 

45% 

Land Transport 

national 

13% 

Network extension and acquisitions in key markets Market share, economies of scale 

Restructuring of processes and IT systems Productivity, cost structure 

14


Railion unit 


Growing European business; international 

expansion based on domestic strength 

#1 in European rail freight transport 

Railion as an open platform; cooperations 

with other railways 

Refocused on carrier function 

Participation in market growth/ongoing 

liberalization in Europe 


Growth of transport market in 

Germany since 1993 (%, tkm) 

Trucking 

Rail (DB) 

Ship 

Railion 

(total) 

+24% 


+1% 

+15% 

Restructuring / optimization of production processes, in particular restructuring 

of single freight car business (e.g. Project PRP) 

Improved cooperation among Railion subsidiaries in different countries 

Continuation of cost cutting measures (operative and overheads) 

+83% 

Market: 

+54.7% 



Railion 

Nederland 

5% 

Railion 

Danmark 

2% 

Value driver 

Productivity, cost structure, 

utilization rate 

Traffic points served, 

cost structure, productivity 

Product campaign in unit train transport and in single freight car business Production processes 

Railion 

Deutschland 

93% 

15

Group Track Infrastructure Division 

Overview 


Domestic business 

Non-discriminatory access since 1994 

Europe-wide synchronized timetables; 

mutual activities of European railways to 

improve interoperability 

Modernization/optimization of infrastructure 

Capex focus on existing network/ 

command and control technology 


Network size 

(2002, thousand km) 

Efficiency improvements incl. headcount adjustments resulting from 

modernization programs 


Revenue structure incl. 

intra-Group revenues 2003 (%) 


Regional + 

Urban 

57% 

Railion 

17% 

Other 

1% 

Third-party 

railways 

7% 

Long-distance 

18% 

Cost structure, in particular, 

personnel expenses 

Optimization of track infrastructure for future transport needs Maintenance expenses 

Continuation of cost-cutting efforts (operating and overhead costs) 

Value drivers 

Implementation of GSM-R (Global Standard of Mobile Communication, Rail) Cost of operations 

DB 

SNCF / 

RFF (F) 

FS (I) 

RENFE (E) 

CD (CZ) 

9.5 

12.3 

16.0 

29.4 

35.8 

16

Group Passenger Stations Division 

Overview 


Domestic business 

Open non-discriminatory access for non-Group railroads since 1994 

Target: increasing attractiveness and profitability of passenger stations 

Capex / Modernization initiative in cooperation with federal government and 

federal states 

Immediate action program: cleanliness, safety and customer satisfaction 


Increasing rental income from existing portfolio and additional income from 

completion of newly-built / modernized stations 

Overall efficiency programs / optimized energy management 


Revenue structure incl. 

intra-Group revenues 2003 (%) 

€ 852 million 

Long-distance 

11% 

Rental 

30% 

Value drivers 

Other 

2% 

Rental income, 

reduction of vacancies 

Portfolio-management for optimization of concourse buildings Maintenance expenses 

Regional + 

Urban 

52% 

Third-party 

5% 

17

Outlook 

DB Group - on track for IPO 

German Rail Reform 1 st stage: 

incorporation of DB AG 

1994 1999 

Establishing entrepreneurial 

structures, roll-out 

Achievements: 

Sustainable participation in 

market growth 

Significant efficiency 

improvements (since 1994 a 

total of € 5.1 billion) 

Benefit to German taxpayers 

compared to structures prior to 

German Rail Reform > € 108 

billion 

German Rail Reform 2 nd stage: 

transparent structures 

“DB 2001 Campaign” - Restructuring, 

Performance, Growth 

Strategic direction: 

“DB Campaign” - restructuring, 

performance, growth: improved 

competitiveness and portfolio 

focus on profitable business 

segments 

Increased capital expenditures 

and enhanced modernization 

efforts 


2004 

Completion of 

German Rail Reform 

2004 

2005/2006 

Readiness for IPO 

Leading international mobility, 

transport and logistics provider 

Generating further growth: 

Sound growth prospects for 

relevant market segments 

Strengthening of Stinnes´ position 

as a leading global transport and 

logistics player 

Positioning as a leading 

European player in passenger 

transport 

18

Deutsche Bahn Group: 

Financial Situation and Capital Markets Activities 

Wolfgang Reuter 

Group Treasurer

Financial Year 2003 

General remarks 

Economic 

environment 

Third-party 

infrastructure 

utilization 

Comparability 

to previous 

financial year 

Ongoing economic slow-down in domestic core market, 

Germany as well as in Euro zone 

Postponement of trucking toll until beginning of 

2005/2006 

Increasing third-party utilization of DB infrastructure 

First-time full-year inclusion of Stinnes 

Reporting of non core activities: Brenntag / Interfer FY 2003 under segment Other, 

divestiture in FY 2004 

Transfer of non-core real estate assets to Aurelis 

In 2002 expiration of federal compensation payments (last payment in 2002, € 443 mn) 

Segment reporting reflects current corporate structure 

Group Transport and Logistics division: consolidation of former Group division 

Freight Transport with Stinnes / Schenker 

Group Services division: bundling of all major service companies / business units 


D GDP 2002 2003 

Germany 0.2% -0.1% 

Euro zone 0.9% 0.4% 

TOCs* 

Number 260 280 

Train-path km (mn) 50.2 70.4 

* train operating companies (third-party) 

20


Development of transport performance 

Growth rates, passenger transport in Germany 

(%) 

Rail (DB) 

Air 

(domestic) 

Car 

Public 

transport 

Rail passenger transport (pkm billion) 

69.8 

-3.0 

-0.4 

69.5 

2002 2003 

+0.5 

Total market 

2003 vs. 2002: -2.4% 

2003 vs. 2002: -0.4% 


+5.0 

DB market share intermodal: 8% 

DB market share intramodal: >95% 

Growth rates, freight transport in Germany (%) 

Rail (DB) 

Trucking 

Ship 

Rail freight tansport (tkm billion) 

78.0 

-9.0 

79.9 

2002 2003 

+2.1 

+2.0 

Total market 

2003 vs. 2002: +1.0% 

2003 vs. 2002: +2.4% 

DB market share intermodal: 16% 

DB market share intramodal:~93% 

21



Revenues (€ million) 

18,685 

15,575 15,890 

2002 2003 

total 

comparable 

28,228 

total 

comparable 

Change: +51.1% 

Comparable: +2.0% 



( ) previous year 

Passenger 

Transport 

40% 

(60%) 

Other* 

19% 

(8%) 

Services 

1% 

(1%) 

Transport 

and 

Logistics 

38% 

(29%) 

Passenger 

Stations 

1% 

(1%) 

Track Infrastructure 

1% 

(1%) 

* other activities including Benntag/Interfer and consolidation: € 5,486 million 

22


Gross capital expenditures 

Gross capital expenditures 

(€ million) 

9,994 

9,054* 

9,121 

2002 2003 

total 

comparable 

total 

* in 2002 non-recurring item, repurchase of 

telecommunication assets of Arcor (€ 940 million) 

Change: -8.7% 


Gross capex / revenues: 32.3% 

Break down (%) 

( ) previous year 

Other 

1% 

(


Operating income after interest 

Operating income after interest 

(€ million) 

-454 

-172 

2002 2003 

Change: € +282 million 

-34 

Passenger 

Transport 


Performance of Group divisions* (€ million) 

= change year on year 

- 259 +222 +256 +222 

288 

Transport 

and 

Logistics 

38 

Passenger 

Stations 

-307 

Track Infrastructure 

* other activities including Benntag / Interfer and consolidation: € -276 million (previous 

year: € -139 million) 

- 22 

119 

Services 

24


Balance sheet structure 

Balance sheet structure (as of Dec 31, 2003) 

Assets Equity and Liabilities 

Fixed 

assets 

(+4.0%) 

86.8% 

41.4 

Current 

assets (-0.0%) 12.9% 6.1 

Prepay./Acc. Inc.* (+38.3%) 0.3% 0.1 

Total 

(± 2002) 

(+3.5%) 

(±%) = relative change to previous year 

share 

100.0% 

€ billion 

47.6 


Equity 5.1 

Interest-free 

loans 

Provisions 

Interest-bearing 

debt 

Other 

liabilities 

Acc./Def. Inc.* 

Total 

*incl. rounding differences 

(± 2002) 

(-11.1%) 

(-1.0%) 

(+3.5%) 

share 

30.8% 

1.8% 

100.0% 

€ billion 

(-2.8%) 15.8% 7.5 

14.7 

(+15.2%) 26.7% 12.7 

(+17.1%) 

(-4.7%) 

10.7% 

14.2% 

6.8 

0.8 

47.6 

25


Equity and interest-bearing debt 

Equity (€ million) 

5,708 

5,076 

2002 2003 

Change: 

Ziel-ROCE Kapitalkosten 

-11.1% 

in % of total assets 2003: 10.7% 

Interest-bearing debt (€ million) 

11,051 

2002 2003 


12,731 

Change: 

Ziel-ROCE Kapitalkosten 

+15.2% 

in % of total assets 2003 : 26.7% 

Notes 

Change in equity: 

Decline through negative 

net income and offset of 

goodwill 

Interest-bearing debt: 

Capital market activities, 

fund raising € 2.1 bn 

Development as scheduled: 

Current performance in 

accordance with plan 

announced in 2001 

Target: Improvement of ratios in 

upcoming years 

26


Value management 

ROCE (%) 

0.1% 

1.5% 

10% 

2002 2003 Target 

Redemption coverage (%) 

11.0% 

12.6% 


30% 

2002 2003 Target 

Gearing (%) 

Ziel-ROCE 

EBIT 

Kapitalkosten 

Operating cash flow 

Ziel-Tilgungsdeckung 

Net financial debt 

Ziel für Gearing 

Capital Employed 

Net financial debt incl. leasing Book value equity 

257% 

320% 

100% 

2002 2003 Target 

27

Development Since Start of German Rail Reform 

Productivity 

Productivity - rail (thousand ptkm / employee) 

328 

127 

388 

413 

135 

327 

299 

603 

261 

533 239 

468 

140 

139 

144 

145 

656 

221 

+ 163% 

699 

144 

206 

798 

155 

194 


840 833 

862 

184 177 173 

155 148 149 

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 

ptkm (billion) Employees - rail (thousand, annual average) Productivity 

Notes 

163% productivity 

increase since 

beginning of German 

Rail Reform 

Transport 

performance: 

pkm: +11% 

tkm: +24% 

Employees rail: 

-215,000 (-55%) 

28

Development Since Start of German Rail Reform 


EBITDA (€ million) 

1,248 

-2,014 

1,401 

-1,520 

1,658 

-910 

1,920 

-445 

1,997 

3,262 2,921 2,568 2,365 1,962 

427 


35 

€ +5.1 bn 

2,036 

2,492 

1,264 

2,271 

1,433 

2,464 

2,021 

3,092 

1,609 1,228 838 443 0 


Compensation payments 

EBITDA after compensation payments 

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 

Notes 

Reduction of 

government 

compensation 

payments in the 

amount of € 3.3 bn 

Increase of EBITDA 

before compensation 

payments of 

€ 5.1 bn or 

approx. € 0.6 bn p.a. 

EBITDA margin 

improved from 

-13.6% to +11.0% 

Increase of EBIT of 

€ 3.5 bn or 

€ 385 million p.a. 

29

Financial Year 2004 / 1 st Quarter 

General remarks 

Economic 

environment 

Regulatory 

environment 

Activities 

Slight recovery in German home market 

Competitive environment in mobility, transport and 

logistics markets 

Further increase in transport performance of thirdparty 

TOCs on DB infrastructure expected for 2004 

Close focus on core business 

Brenntag / Stinnes-Interfer: sale to Bain Capital (Jan 1, 2004) 

MITROPA AG: sale to Compass Group (April 1, 2004) 

Service and Quality as main focus in FY 2004, in particular increasing punctuality 

Efficient capital allocation through refocusing capital expenditures 


D GDP Q1 04* 

Germany 0.4% 

* vs. previous year 

TOCs** 

Train-path km (mn) 21 

** train operating companies (third-party) 

Decline of federal infrastructure funding in the amount of € 0.6 billion in FY 2004 

and further decline until 2008 

Premature repayment of interest-free loans of approx. € 2 billion (nominal value) planned 

30

Financial Year 2004 / 1 st Quarter 

Key data 

Transport performance (ptkm bn) 

35.6 

19.2 

16.4 

21.0 

16.6 

1Q 2003 1Q 2004 

Gross capital expenditures (€ million) 

1,327 

37.6 

1,280 

1Q 2003 1Q 2004 

Passenger transport: +1.2% 

Rail freight transport: +9.4% 

Rail freight transport 

Passenger transport 

Change: -3.5% 


Revenues (€ million) 

6,919 

5,513 

Operating income after interest (€ million) 

-120 

5,727 

1Q 2003 1Q 2004 

-82 

1Q 2003 1Q 2004 

Change: -17.2% 


total 

comparable 

Change: € +38 million 

31

Future Capex and Financing 

Financing requirements 

Financing requirements and cash flow 2004 - 08 (€ bn) 

1.3 

1.1 

0.2 

-1.1 

1.0 

1.6 


0.7 

1.9 

1.5 

2004 P 2005 P 2006 P 2007 P 2008 P 

1.2 

Redemption of interest-free federal loans 

(present value) 

Financing requirements 

Expiring debt instruments 

Cash flow after capex 

* Cash flow after capex = income before taxes + depreciation + change in pension provisions - capex funded by DB 

Notes 

Capital markets 

activities 

2004 

supplement to 

self-financing and 

redemption of interestfree 

federal loans 

2006 - 2008 

partial refinancing of 

bonds, depending on 

dividend and earnings 

retention policy 

DB will continue to tap 

the capital markets 

32

Financing 2004 - 08 

Rating and refinancing structure 

Current rating 

Excellent rating: 

Moody´s: Aa1 / stable 

S&P: AA / stable 

Interest bearing debt 

(as of 31 Dec, 2003) 

€ 12.7 bn 

Bonds MTN 

40% 

Other 

16% 

Other bonds 

29% 

EUROFIMA 

15% 

Major refinancing activities in 2003 / 2004 

Duplication of debt issuance and CP program to € 10 bn and € 2 bn, respectively 

Issue 2003: 12 year bond: initial offering € 500 mn / € 200 mn increase 

Issue 2003: 15 year bond: initial offering € 500 mn / € 200 mn increase 

€ 400 m EIB loan to DB Netz AG 

Issue 2004: 7 year bond: $ 250 mn and 10 year bond: ¥ 5 bn 

Maturity profile bonds / EUROFIMA (€ billion) 

as of Dec 31, 2003 

in 2004 


< 0.1 

0.7 

1.6 

1.2 

2.0 

1.0 

0.3 

as of Dec 31, 2003 bonds 

and EUROFIMA with 

together € 10.6 bn represent 

83.5 % of total interestbearing 

debt 

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 

1.1 

0.8 

0.5 

0.7 

1.0 

Currency structure of 

MTN program (%) 

€ 5.3 bn 

as of May 31, 2004 

Other 

4% 

JPY 

2% 

EUR 

59% 

USD 

15% 

CHF 

20% 

33

DB Group 

Focus on preserving our rating 

Very good 

rating 

Obligations of 

federal and 

state 

governments 

No. 1 mobility 

service 

provider 

Operating 

performance 

Rating: Moody´s (Aa1) / S&P (AA) 

Intention to maintain strong business and financial profile 

Obligations of the federal Republic of Germany as defined under Art. 87e of the Basic Law 

„Infrastructure obligations“: Funding of infrastructure capex, approx. € 3 bn p.a. 

„Public interest obligations“: supply of funds to federal states for ordering local 

passenger transport services, approx. € 6.7 bn p.a. 

Privatization hurdle of 49.9% shares (majority shareholding) 

Deutsche Bahn is the principal provider of mobility in Germany and the largest transport 

and logistics company in Europe with extensive global transport activities 

Stable cash flows due to long-term service contracts with federal states (revenue share in 

2003: 16%) 

Vertical integration a major business success factor 

Productivity increased by 163%, EBITDA before special burden compensation 

payments increased by € 5.1 bn and EBIT increased by € 3.5 bn since beginning of 

German Rail Reform 

Sound financing structure and conservative funding strategy 


34

Revenues - Deutsche Bahn AG

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