Opportunity and risk report
Our business activities are associated with risks as well as opportunities. Our business policy therefore aims to take advantage of opportunities through our opportunity management system, while also actively managing those risks identified within the framework of our risk management system. There were no changes to DB Group’s risk management system (2020 Integrated Report) in the first half of 2021. The opportunity/risk profile remains strongly shaped by the effects of the Covid-19 pandemic. The most likely scenario was taken into account in the anticipated development in 2021. When doing so, it was assumed that demand in passenger transport will recover significantly in the second half of 2021 due to the increasing vaccination rate and accumulated travel occasions, and that there will be no further lockdown.
Further opportunity and risk assessment is carried out in relation to the updated expected development of DB Group in 2021, with reference to the adjusted operating profit (EBIT adjusted). In view of the continuing uncertainty about development resulting from new variants of the virus or delays in combating the pandemic, our forecasts continue to be subject to increased uncertainty. In the event of a delayed recovery phase, we expect an additional impact on profits of up to € 0.9 billion. This contrasts with an opportunity of € 0.5 billion from additional government support, primarily for the local transport industry.
There is no valid way of quantifying the financial impact of the floods at present, as the current situation does not allow for the assessment of many facilities.
The other opportunities and risks are relatively low and only consist of probable opportunities and risks (probability of occurrence [PO] > 40% and ≤ 70%). Compared to the assessment as of December 31, 2020 (2020 Integrated Report) the overall assessment has slightly improved in relation to the EBIT forecast for the 2021 financial year (€ + 0.1 billion):
- For the forecast of EBIT development for the 2021 financial year µ60 f., factoring in countermeasures, there are further risks in the amount of € 0.3 billion (thereof very likely [vl; PO > 70%]: € 0.0 billion). These risks arise primarily from the areas of regulation as well as economic climate, market and competition. Further risks include ongoing collective bargaining negotiations with the GDL, including possible strikes, and the effects of the floods, which cannot currently be assessed.
- Opportunities for EBIT development amount to € 0.2 billion (thereof vl: € 0.0 billion) and also arise from the area of economic climate, the market and competition.
The general price increases observed and supply bottlenecks that occurred at times for raw materials in the first half of 2021 could lead to higher risks from capital expenditure projects.
According to our analyses of risks, countermeasures (including financial support from the Federal Government), hedging and precautionary measures, as well as in line with the opinion of the Group Management Board based on the current risk assessment and our mid-term planning, there are no risks that, individually or jointly, would pose a threat to DB Group as a going concern.