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 material changes to DB Group’s risk management system (2022 Integrated Report) in the first half of 2023.
At the time of writing, ongoing collective bargaining negotiations – and those scheduled for fall 2023 – have not yet been concluded. It is not possible to rule out more extensive strike action in 2023.
The opportunity and risk assessment is carried out in relation to the updated expected development of DB Group in 2023, with reference to the adjusted operating profit (EBIT adjusted). Compared with the assessment as of December 31, 2022 (2022 Integrated Report) the overall assessment has deteriorated significantly in relation to the EBIT forecast for the 2023 financial year:
- For the forecast of EBIT development for the 2023 financial yearµ 68, factoring in countermeasures, there are further risks in the amount of € 0.7 billion (thereof very likely (> 70% probability of occurrence): € 0.0 billion). These risks mainly relate to the economy, the market and competition, production and technology, procurement and the energy market, and law and contracts.
- The chances for EBIT development exist in the amount of € 0.1 billion (thereof very likely: € 0.1 billion); they also result from the areas of procurement and the energy market, as well as production and technology.
Depending on the market conditions, the purchase prices for raw materials, energy, and transport and construction services may fluctuate significantly. Prices remain at a high level. In addition, prices may rise again later in 2023 due to weather conditions (drought in summer, cold in winter). Risks relating to energy costs and construction prices are expected here.
The Federal Government’s budgetary allocation is of crucial relevance for the quality and expansion of infrastructure capacity when it comes to implementing the mobility transition in Germany. We therefore assume that a significant increase in funds for infrastructure from the Federal Government is required. If the Federal funds for infrastructure are not increased significantly above the current Federal budget line proposals, then there would be considerable risks for network quality, transport services and economic development.
In the context of a cost review for the Stuttgart 21 project, due in the second half of 2023, the total value could increase due to further increases in prices for construction services and raw materials.
According to our analyses of risks, countermeasures (including financial support from the Federal Government), hedging and provisions, 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 the assets, financial situation or results of operations of DB Group.