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The sustainability approach of DBMeeting with SITRA                                    Deutsche Bahn AG                   ...
DB’s organizational structure consists of three divisionsand nine business units    Passenger transport:                  ...
Record revenues in 2011 –EBIT increased about 24% compared to 2010                                                        ...
The Railway Reform Act of 1994 marked the beginning of anew railway era in Germany and the creation of Deutsche Bahn AG   ...
DB’s success story since the 1994 Rail Reform has made itpossible to sustainably strengthen rail transport in Germany  Vol...
DB Group’s revenues have risen continuously since 1994 –with just one exception in 2009 due to the global economic crisisD...
Earnings before interest and taxes have shown a favorabledevelopment in the last yearsDevelopment of DB Group EBITEarnings...
Starting positionWe need to prepare ourselves in advance for themany and varied challenges in our market environment      ...
Starting positionFuture challenges require a broader management approachto assure DB‘s sustainability   DB‘s sustainabilit...
List of milestonesImportant milestones have been reached since theSustainability Project was launched in mid-2011  Topics ...
1     Status quo and goalsAfter establishing the status quo of DB’s sustainability activities,the goals for DB were define...
2    Best PracticeThe most successful best-practice companies have systematicallyincorporated sustainability in target and...
3    Sustainable Strategy DB2020Achieve sustainable business success by bringing allthree dimensions into harmony with eac...
3    Sustainable Strategy DB2020We want to become the profitable market leader by 2020                                    ...
3    Sustainable Strategy DB2020We want to become one of the top 10 employers in Germany by2020 – and also be a top-ranked...
3    Sustainable Strategy DB2020By 2020 we’ll be recognized as the pioneer of environmentalmeasures including cutting emis...
4    Target systemsTop targets will be defined for achieving the DB vision – takinginto account the specific challenges of...
5    Mission statementSustainability is incorporated in our mission statement,corporate policies and directives           ...
6    Incorporation in organisational structuresSustainability is permanently incorporated in the DB organisation:Chief Sus...
7     Definition of CSR profileIn the future DB brings four key topics into focus  Target image                 On the tra...
Next stepsThe DB2020 Strategy provides a framework –much work is required for further implementation    The kick-off was a...
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The Sustainability Approach of Deutsche Bahn

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The Sustainability Approach of Deutsche Bahn

  1. 1. The sustainability approach of DBMeeting with SITRA Deutsche Bahn AG Dr. Markus Rometsch Corporate Strategy Berlin, November 6, 2012
  2. 2. DB’s organizational structure consists of three divisionsand nine business units Passenger transport: Infrastructure: Transport and logistics: Domestic and European-wide Efficient and future-oriented rail Intelligent logistics services mobility services infrastructure in Germany via land, air and the sea DB Bahn Long Distance DB Netze Track DB Schenker Rail Long-distance rail passenger Rail network European rail freight transport transport1 DB Bahn Regional DB Netze Stations DB Schenker Logistics Regional/urban passenger Traffic stations Global logistics services transport (Germany) DB Arriva DB Netze Energy DB Services3 Regional/urban passenger Traction current Integrated range of services transport (Europe)21 Within Germany as well as cross border traffic; 2 In UK with Arriva-affiliate ‘CrossCountry’ also long-distance passenger transport;3 Business unit is assigned to the Rail Technology and Services divisionDeutsche Bahn AG | Dr. Markus Rometsch | November 6, 2012 2
  3. 3. Record revenues in 2011 –EBIT increased about 24% compared to 2010 Revenues 2011 in € millions EBIT 2011 in € millions DB Bahn Long Distance DB Bahn Regional DB Arriva DB Netze Track DB Netze Stations DB Netze Energy DB Schenker Rail DB Schenker Logistics DB Services 1 37,901As of December 31, 2011; 1 Difference between total for divisions and DB Group due to other activities/consolidationDeutsche Bahn AG | Dr. Markus Rometsch | November 6, 2012 3
  4. 4. The Railway Reform Act of 1994 marked the beginning of anew railway era in Germany and the creation of Deutsche Bahn AG Before Rail Reform Today  Implemented entrepreneurial structures  Rail opened up to competition  Bureaucratic structures Responsibility for  Modern and efficient  Monopoly structure  Heavy government influence  local rail passenger transport delegated to regional levels organization  Competition is expanding  High losses – personnel  Value-driven decision making expenses exceeded revenues  Greater profitability  More than EUR 30 bn in debt  Debt is continuously shrinking  Rail was losing market share  Rail is enjoying a renaissanceDeutsche Bahn AG | Dr. Markus Rometsch | November 6, 2012 4
  5. 5. DB’s success story since the 1994 Rail Reform has made itpossible to sustainably strengthen rail transport in Germany Volumes sold rail passenger transport Volumes sold rail freight transport1 Germany, in bn passenger kilometers Germany, in bn tonne kilometer +60.3% +30.1%Sources: DB AG, Federal Statistical Office, BMVBS/BAGAs of March 2012; 1 Up to 1998 net transportation performance, from 1999 gross transportation performance = gross weight includes weight of freight plus container weightDeutsche Bahn AG | Dr. Markus Rometsch | November 6, 2012 5
  6. 6. DB Group’s revenues have risen continuously since 1994 –with just one exception in 2009 due to the global economic crisisDevelopment of DB Group revenuesin bn € 1 +156%As of December 31, 2011; 1 Revenue 2003 has been adjusted for effects from Stinnes acquisitionDeutsche Bahn AG | Dr. Markus Rometsch | November 6, 2012 6
  7. 7. Earnings before interest and taxes have shown a favorabledevelopment in the last yearsDevelopment of DB Group EBITEarnings before interest and taxes, in € millions HGB IFRS EBIT with compensation for legacy burdens - 2,998 EBITAs of December 31, 2011; Adjusted EBIT shownDeutsche Bahn AG | Dr. Markus Rometsch | November 6, 2012 7
  8. 8. Starting positionWe need to prepare ourselves in advance for themany and varied challenges in our market environment Are we sure that we can keep pace with other companies in the battle to acquire skilled How do we respond to the need for increased public workers? participation in planned infrastructure projects? ? How can we facilitate age-appropriate work, so that each and every employee can play an There is no future without innovation – are we active role in our company? aware of customers’ future needs and are we developing products to meet them? How do we defend our market position in the face of increasing competition? Do we recognize the working conditions at our sub- contractors around the world – are there any risks for us if customers are increasingly better informed? What are the implications of a scarcity of resources for our cost structure? Some of our employees have a downbeat view of the future – can we therefore provide outstanding service for our customers? …Deutsche Bahn AG | Dr. Markus Rometsch | November 6, 2012 8
  9. 9. Starting positionFuture challenges require a broader management approachto assure DB‘s sustainability DB‘s sustainability approach Decisions of the board Entrepreneurial success is more than economic performance Sustainable business success and social Sustainable business success and social acceptance acceptance as overall Goals for DB‘s sustainability activities. Economy, social affairs and ecology should Economy Social affairs Ecology be into harmony with each other DB undertakes various individual activities, but needs to develop a consistent corporate concept Mid-2011: Group-wide project team Profitable Top- Eco- established to further the incorporation of market leader employer pioneer sustainabilityDeutsche Bahn AG | Dr. Markus Rometsch | November 6, 2012 9
  10. 10. List of milestonesImportant milestones have been reached since theSustainability Project was launched in mid-2011 Topics Explanation Description of status quo and stipulation of goals 1 Status quo and DB sustainability goals for sustainability at DB Approx. 15 meetings with companies demons- 2 Discussions with best-practice companies trating best practices (from different sectors) Development of a new corporate strategy in which 3 Developing a sustainable strategy concept sustainability sets the key Development of target systems incl. integration in 4 Review of Group and BU target systems financial planning Amending mission statement towards 5 Amendment of mission statement sustainability Since March 2012: CSO takes on overall responsibility 6 Incorporation in organisational structures for sustainability. Steering through Competence Center 7 Definition of CSR profile Developing a clear target image for future social and environmental commitmentDeutsche Bahn AG | Dr. Markus Rometsch | November 6, 2012 10
  11. 11. 1 Status quo and goalsAfter establishing the status quo of DB’s sustainability activities,the goals for DB were defined – the third step will be target derivation 1. Establishment of status quo 2. Defining the goals  Recording the status quo of  Stipulating a detailed goal for DB’s sustainability activities, each criterion of the German evaluation on basis of levels of Sustainability Code and excellence specifying target excellence  Criteria of German Sustainability level Code (GSC) as basis for  This also takes into account structuring the status quo best practice at several major analysis business playersDeutsche Bahn AG | Dr. Markus Rometsch | November 6, 2012 11
  12. 12. 2 Best PracticeThe most successful best-practice companies have systematicallyincorporated sustainability in target and incentive systems Exchange of experience Consulted companies (selection) Lessons learned – best practice  Sustainability is a fixed element of the corporate vision  Sustainability targets are specified in all three sustainability dimensions in the Group target system  Sustainability targets are incorporated in incentive systems “Sustainability is an integral “The central success  All sustainability dimensions are part of the BMW genes: factor for the implemen- systematically taken into account in sustainability is the starting tation of sustainability is board decisions point for our corporate the high commitment of strategy and is consistently the Daimler Board of integrated into our target Management.” systems.”Deutsche Bahn AG | Dr. Markus Rometsch | November 6, 2012 12
  13. 13. 3 Sustainable Strategy DB2020Achieve sustainable business success by bringing allthree dimensions into harmony with each other Vision We are becoming the worlds leading mobility and logistics company Sustainable business success and social acceptance Sustain- Profitable market leader Top employer Eco-pioneer ability Economic Social Environmental dimension Strategic Top 1 Customer and 1 Top 10 3 Cultural change/ Top 4 Resource 1 directions quality employee preservation/ satisfaction emissions and 2 Profitable growth noise reductionDeutsche Bahn AG | Dr. Markus Rometsch | November 6, 2012 13
  14. 14. 3 Sustainable Strategy DB2020We want to become the profitable market leader by 2020 Leading Appropriate Financial stability market position returns Redemption coverage revenues in € billion ROCE in % in % 70 ≥10% ≥30% 1 > 10 +100% M&A Top 6% 18% 34.4As a profitablemarket leaderwe offer ourcustomers first-classmobility and logisticssolutionsDeutsche Bahn AG | Dr. Markus Rometsch | November 6, 2012 14
  15. 15. 3 Sustainable Strategy DB2020We want to become one of the top 10 employers in Germany by2020 – and also be a top-ranked employer in international markets Top 10 NEU … Top 20 …As a top employer we I’m a proudwin and build loyalty 10 DBwith qualified employeeemployees who workwith enthusiasm for DBand its customers TopDeutsche Bahn AG | Dr. Markus Rometsch | November 6, 2012 15
  16. 16. 3 Sustainable Strategy DB2020By 2020 we’ll be recognized as the pioneer of environmentalmeasures including cutting emissions of CO2 and noise 1 Specific CO2- Share of renewable Noise emissions – emissions DB energy in the DB rail rail energy mix 35% -15% Top -50% 20% +75%As an eco-pioneer ourproducts set standardsfor the efficient use ofresourcesDeutsche Bahn AG | Dr. Markus Rometsch | November 6, 2012 16
  17. 17. 4 Target systemsTop targets will be defined for achieving the DB vision – takinginto account the specific challenges of the different business units Principles of target selection Target system in practice  Balanced set of targets, i.e. each strategic direction is represented by the same number of targets  Target system applies throughout the entire Group, but takes into account the specific challenges of the different business units  Monitoring during the course of the year and discussion at board level envisagedDeutsche Bahn AG | Dr. Markus Rometsch | November 6, 2012 17
  18. 18. 5 Mission statementSustainability is incorporated in our mission statement,corporate policies and directives Example: DB Mission Statement  The Mission Statement describes the mission, vision and values of the DB Group and answers central questions such as: “Who are we?”, “What is our goal?” and “How do we achieve this?”  Sustainability is particularly important in the question “What is our goal?”: “We design our leading position around economic, social and environmental dimensions. We bring these aspects into harmony with each other in order to ensure sustainable business success and social acceptance.”Deutsche Bahn AG | Dr. Markus Rometsch | November 6, 2012 18
  19. 19. 6 Incorporation in organisational structuresSustainability is permanently incorporated in the DB organisation:Chief Sustainability Officer appointed and Competence Center established Organisational level Essential tasks Primary decision Chief Sustainability level Officer  Chief Sustainability Officer has overall responsibility for ensuring that all activities and units at DB are geared to meeting sustainability requirements Steering and  Competence Center Sustainability Competence Center decision-making supports the Chief Sustainability Officer Sustainability body as a steering and decision-making body  Working level is responsible for the operational handling of all central Sustainability questions Management dept. Working level Working groupsDeutsche Bahn AG | Dr. Markus Rometsch | November 6, 2012 19
  20. 20. 7 Definition of CSR profileIn the future DB brings four key topics into focus Target image On the track for tomorrow we take everyone on board! Offering perspectives Climate protection Ad hoc Priorities Integration & Care Education & Culture & disaster relief nature conservation „strengthening“ „promoting“ „helping“ „protecting“  Off-Road-Kids  Stiftung Lesen  Luftfahrt ohne  Fahrtziel Natur Examples of  Bahn-Azubis gegen  DB Museum Grenzen  Bergwald-projekt measures1 Hass & Gewalt  Chance Plus  …  …  …  …1 Selected examples of existing societal measures of DBDeutsche Bahn AG | Dr. Markus Rometsch | November 6, 2012 20
  21. 21. Next stepsThe DB2020 Strategy provides a framework –much work is required for further implementation The kick-off was a success Next steps (selection)  Talks with executives indicate a high degree  Consistently monitoring targets and of acceptance of the strategy underpinning the DB2020 strategy with measures and further implementation  Positive reports in the press following the  Development of business unit strategies Annual Results Press Conference derived from the corporate strategy DB2020  Solid framework and target system in place –  Broad internal and external communication numerous individual measures have already and dialogue (incl. integrated reporting and been developed stakeholder management)Deutsche Bahn AG | Dr. Markus Rometsch | November 6, 2012 21

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