2018 Integrated Interim Report – Departure into a new era!

Development in the first half of 2018

  • Lower demand for electricity and diesel products.
  • Higher prices on primary energy markets.
  • Increased capital expenditures in building new traction current lines and modernizing existing ones.

DB Netze Energy

H1

Change

2018

2017

absolute

%

Supply reliability (%)

99.99

99.99

Traction current
(16.7 Hz and direct current) (GWh)

4,146

4,283

137

3.2

Traction current pass-through
(16.7 Hz) (GWh)

842.6

999.6

157.0

15.7

Stationary energy
(50 Hz and 16.7 Hz) (GWh)

8,885

9,813

928

9.5

Diesel fuel (million l)

214.3

218.1

3.8

1.7

Total revenues (million)

1,383

1,416

33

2.3

External revenues (million)

628

654

26

4.0

EBITDA adjusted (million)

47

79

32

40.5

EBIT adjusted (million)

12

44

32

72.7

ROCE (%)

2.2

9.4

Capital employed as of Jun 30 (million)

1,097

947

+150

+15.8

Net financial debt as of Jun 30 (million)

646

445

+201

+45.2

Redemption coverage (%)

12.2

24.7

Gross capital expenditures (million)

81

48

+33

+68.8

Net capital expenditures (million)

40

17

+23

+135

Employees as of Jun 30 (FTE)

1,734

1,742

8

0.5

Supply reliability again remained at its previous high level.

Volumes declined:

  • Traction current sales decreased, mainly due to less de­­mand from DB Group customers, particularly in freight transport.
  • Traction current volumes passed through for non-Group customers decreased. Adjusted for this effect, an in­­crease was recorded from shifts from full power supply to pass-through.
  • Sales of stationary energy to non-Group customers de­­creased, primarily due to smaller volumes from short-term portfolio optimization measures on the energy market as a result of fewer energy schedule deviations. On the opposite side, business with industrial customers increased.
  • The declining demand for diesel fuels is attributable to the development of DB Group customers in freight and regional passenger transport. Demand from non-Group customers increased slightly.

The economic development was negative. Lower income and much higher purchase prices on the primary energy markets resulted in weaker adjusted EBITDA and EBIT.

  • Revenues decreased in the wake of lower sales volumes of traction current and portfolio optimizations on the energy market. Higher revenues from industrial customers had a compensating effect and were driven by both volumes and prices.
  • The increase in other operating income (+47.4%) was due to higher income from insurance payouts and effects from the release of provisions.
  • The cost of materials – which is mainly determined by the trend in energy purchase costs – was virtually un­­changed (+ 0.2%). Volume-driven declines were completely offset by negative price effects from much higher primary energy prices for electricity and mineral oil products.
  • Personnel expenses (+1.7%) increased as a result of collective bargaining agreements.
  • The increase in other operating expenses (+ 7.1%) re­­flects the costs of further developing our IT systems.
  • Depreciation was virtually unchanged.

The decrease in operating profit, accompanied by an increase in capital employed, resulted in a significant weakening of the ROCE. The higher capital employed is due in particular to the increase in inventory and temporarily higher trade receivables from non-Group customers.

Redemption coverage decreased significantly due to a decline in operating cash flow accompanied by an increase in net financial debt. The development of net financial debt was influenced by the higher capital employed.

Increased capital expenditures in building new traction current lines and modernizing existing ones resulted in an increase in capital expenditures, together with the faster execution of projects.

The number of employees was virtually unchanged.