Obligation Deutsch Bahn 0% ( XS1027416095 ) en SEK

Deutsch Bahn

100 % ▼

Allemagne

XS1027416095 ( en SEK )

04/02/2021 - Obligation échue

Prospectus brochure de l'obligation Deutsche Bahn XS1027416095 en SEK 0%, échue

1 000 000 SEK

350 000 000 SEK

Deutsche Bahn (DB) est la principale compagnie ferroviaire d'Allemagne, assurant le transport de voyageurs et de marchandises sur un vaste réseau national et international.

L'Obligation émise par Deutsch Bahn ( Allemagne ) , en SEK, avec le code ISIN XS1027416095, paye un coupon de 0% par an.
Le paiement des coupons est annuel et la maturité de l'Obligation est le 04/02/2021

Deutsche Bahn Aktiengesellschaft
(Berlin, Federal Republic of Germany)
as Issuer and, in respect of Notes issued by
Deutsche Bahn Finance GmbH, as Guarantor
and
Deutsche Bahn Finance GmbH
(Berlin, Federal Republic of Germany)
as Issuer
35,000,000,000
Debt Issuance Programme
(the "Programme")
This prospectus (the "Prospectus") does not constitute a prospectus within the meaning of Regulation
(EU) No 2017/1129 of the European Parliament and of the Council of 14 June 2017 (as amended, the
"Prospectus Regulation"). Neither the Commission de Surveillance du Secteur Financier, the
Luxembourg competent authority under the Prospectus Regulation, nor any other "competent
authority" (as defined in the Prospectus Regulation) has approved this Prospectus or reviewed
information contained in this Prospectus.
This Prospectus has been approved as a prospectus in compliance with the Rules and Regulations of
the Luxembourg Stock Exchange dated January 2020 by the Luxembourg Stock Exchange as a
competent authority under Part IV of the Luxembourg Law of 16 July 2019 on Prospectuses for
Securities (Loi du 16 juil et relative aux prospectus pour valeurs mobilières) (the "Luxembourg
Prospectus Law"). Application has been made to list the notes to be issued under the Programme
(the "Notes") on the official list (the "Official List") of the Luxembourg Stock Exchange and for
admission to trading of the Notes on the Euro MTF operated by the Luxembourg Stock Exchange,
which is a multilateral trading facility for the purposes of Directive 2014/65/EU of the European
Parliament and of the Council on markets in financial instruments, as amended, ("MiFID II"), and,
therefore, not an EU-regulated market.
This Prospectus will be published in electronic form together with all documents incorporated by
reference on the website of the Luxembourg Stock Exchange (www.bourse.lu).
The payments of all amounts due in respect of the Notes issued by Deutsche Bahn Finance GmbH
will be unconditionally and irrevocably guaranteed by Deutsche Bahn Aktiengesellschaft.
The date of this Prospectus is 27 June 2022. This Prospectus is valid until 27 June 2023. It is published
in electronic form on the website of the Luxembourg Stock Exchange (www.bourse.lu) and available
at the investor relation's website of Deutsche Bahn Aktiengesellschaft (www.deutschebahn.com/ir).
This Prospectus does not constitute an offer to sell, or the solicitation of an offer to buy, the
Notes in any jurisdiction where such offer or solicitation is unlawful.
Arranger
Deutsche Bank

NOTICE
Each of the Issuers and the Guarantor have confirmed that this Prospectus contains to the best of their
knowledge all information with regard to the Issuers, the Guarantor and the Notes which is (in the
context of the Programme, the issue, offering and sale of the Notes and the guarantee of the Notes)
material; that such information is true and accurate in all material respects and is not misleading in any
material respect; that any opinions, predictions or intentions expressed herein are honestly held or
made and are not misleading in any material respect; that this Prospectus does not omit to state any
material fact necessary to make such information, opinions, predictions or intentions (in the context of
the Programme, the issue, offering and sale of the Notes and the guarantee of the Notes) not
misleading in any material respect; and that all proper enquiries have been made to verify the
foregoing.
Deutsche Bahn Aktiengesellschaft ("Deutsche Bahn AG", "Deutsche Bahn" or "DB AG" or, with
regard to Notes issued by Deutsche Bahn Finance GmbH, the "Guarantor", and together with its
subsidiaries and affiliates the "Deutsche Bahn Group" or "DB Group") and Deutsche Bahn Finance
GmbH ("Deutsche Bahn Finance") undertake with the dealers to be appointed (the "Dealers") to
publish a supplement to this Prospectus or to publish a new Prospectus if and when the information
herein should become materially inaccurate or incomplete or in the event of any significant new factor,
material mistake or material inaccuracy relating to the information included in this Prospectus which is
capable of affecting the assessment of the Notes which arises or is noted between the time when this
Prospectus has been approved and the time when trading of any Tranche of the Notes begins.
By approving this Prospectus, the Luxembourg Stock Exchange may not incur any liability whatsoever
and does not give any undertaking as to the economic and financial soundness of the operation or the
quality or solvency of the Issuer or the Guarantor. Investors shall make their own assessment as to
the suitability of investing in the Notes.
No person has been authorised to give any information which is not contained in or not consistent with
this Prospectus or any other document entered into in relation to the Programme or any information
supplied by any Issuer or Guarantor or such other information as in the public domain and, if given or
made, such information must not be relied upon as having been authorised by the Issuers, the
Guarantor, the Dealers or any of them.
In particular, the Notes have not been and wil not be registered under the United States Securities Act
of 1933, as amended (the "Securities Act") and are being sold pursuant to an exemption from the
registration requirements of the Securities Act. The Notes are subject to U.S. tax law requirements.
Subject to certain exceptions, the Notes may not be offered, sold or delivered within the United States
or to, or for the account or benefit of, U.S. persons (as defined in Regulation S under the Securities
Act ("Regulation S")).
No Dealer nor any other person mentioned in this Prospectus, excluding the Issuers, is responsible for
the information contained in this Prospectus or any supplement thereof, or any Final Terms (as defined
below) or any other document incorporated herein by reference, and accordingly, and to the extent
permitted by the laws of any relevant jurisdiction, none of these persons accepts any responsibility for
the accuracy or completeness of the information contained in any of these documents. This Prospectus
does not constitute an offer or an invitation by the Issuers or by Dealers or any of them to subscribe
for or purchase any of the Notes.
This Prospectus should be read and understood in conjunction with any supplement hereto and with
any other documents incorporated herein by reference and, in relation to any Series of Notes, together
with the relevant final terms (the "Final Terms"). For the avoidance of doubt, the content of websites
this Prospectus refers to in hyperlinks does not form part of this Prospectus.
This Prospectus and any supplement hereto as well as any Final Terms reflect the status as of their
respective dates. The delivery of this Prospectus or any Final Terms and the offering, sale or delivery
of any Notes may not be taken as an implication that the information contained in such documents is
accurate and complete subsequent to their respective dates or that there has been no adverse change
in the financial situation of the Issuers since such date or that any other information supplied in
connection with the Programme is accurate at any time subsequent to the date on which it is supplied
or, if different, the date indicated in the document containing the same.
The distribution of this Prospectus, any supplement thereto, and any Final Terms and the offering, sale
and delivery of any of the Notes in certain jurisdictions may be restricted by law. Persons into whose
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possession this Prospectus, any supplement thereto, or any Final Terms come are required by the
Issuers and Dealers to inform themselves about and to observe any such restrictions. For more
information, see "Selling Restrictions" on pages 240 to 244 of this Prospectus.
This Prospectus may be used for subsequent offers by the Dealers and/or further financial
intermediaries only insofar if and for the period so specified in the Final Terms for the relevant Tranche
of Notes.
MIFID II PRODUCT GOVERNANCE / TARGET MARKET  The Final Terms in respect of any Notes
may include a legend entitled "MiFID II Product Governance" which wil outline the target market
assessment in respect of the Notes and which channels for distribution of the Notes are appropriate.
Any person subsequently offering, selling or recommending the Notes (a "Distributor") should take
into consideration the target market assessment; however, a Distributor subject to MiFID II is
responsible for undertaking its own target market assessment in respect of the Notes (by either
adopting or refining the target market assessment) and determining appropriate distribution channels.
A determination will be made in relation to each issue about whether, for the purpose of the MiFID
Product Governance Rules under EU Delegated Directive 2017/593 (the "MiFID Product Governance
Rules"), any Dealer subscribing for any Notes is a manufacturer in respect of such Notes, but
otherwise neither the Issuer nor the Arranger nor any further Dealer nor any of their respective affiliates
will be a manufacturer for the purpose of the MiFID Product Governance Rules. None of Deutsche
Bahn AG and Deutsche Bahn Finance is a manufacturer or Distributor for the purposes of the MiFID
Product Governance Rules.
UK MIFIR PRODUCT GOVERNANCE RULES / TARGET MARKET  The Final Terms in respect of
any Notes may include a legend entitled "UK MiFIR Product Governance" which will outline the target
market assessment in respect of the Notes and which channels for distribution of the Notes are
appropriate. Any Distributor should take into consideration the target market assessment; however, a
Distributor subject to the Financial Conduct Authority ("FCA") Handbook Product Intervention and
Product Governance Sourcebook (the "UK MiFIR Product Governance Rules") is responsible for
undertaking its own target market assessment in respect of the Notes (by either adopting or refining
the target market assessment) and determining appropriate distribution channels.
A determination will be made in relation to each issue about whether, for the purpose of the UK MiFIR
Product Governance Rules, any Dealer subscribing for any Notes is a manufacturer in respect of such
Notes, but otherwise neither the Arranger nor the Dealers nor any of their respective affiliates wil be a
manufacturer for the purpose of the UK MiFIR Product Governance Rules. None of Deutsche Bahn
AG and Deutsche Bahn Finance is a manufacturer or Distributor for the purposes of the MiFID Product
Governance Rules.
PRIIPs / IMPORTANT EEA RETAIL INVESTORS  If the relevant Final Terms include a legend
entitled "PROHIBITION OF SALES TO EEA RETAIL INVESTORS", the Notes are not intended to be
offered, sold or otherwise made available to and should not be offered, sold or otherwise made
available to any retail investor in the European Economic Area ("EEA"). For these purposes, a retail
investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article
4(1) of MiFID II; (ii) a customer within the meaning of Directive (EU) 2016/97 (as amended, the
"Insurance Distribution Directive"), where that customer would not qualify as a professional client
as defined in point (10) of Article 4(1) of MiFID II; or (iii) not a qualified investor as defined in the
Prospectus Regulation. Consequently, no key information document required by Regulation (EU) No
1286/2014 (as amended, the "PRIIPs Regulation") for offering or selling any Notes issued under the
Programme or otherwise making them available to retail investors in the EEA has been prepared and
therefore offering or selling the Notes or otherwise making them available to any retail investor in the
EEA may be unlawful under the PRIIPs Regulation.
UK PRIIPs / IMPORTANT UK RETAIL INVESTORS  If the Final Terms in respect of any Notes
includes a legend entitled "PROHIBITION OF SALES TO UK RETAIL INVESTORS", the Notes are not
intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise
made available to any retail investor in the United Kingdom of Great Britain and Northern Ireland
("UK"). For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client,
as defined in point (8) of Article 2 of Regulation (EU) No 2017/565 as it forms part of domestic law by
virtue of the European Union (Withdrawal) Act 2018 ("EUWA"); or (ii) a customer within the meaning
of the provisions of the Financial Services and Markets Act 2000 (as amended, "FSMA") and any rules
or regulations made under the FSMA to implement Directive (EU) 2016/97, where that customer would
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not qualify as a professional client, as defined in point (8) of Article 2(1) of Regulation (EU) No 600/2014
as it forms part of domestic law by virtue of the EUWA; or (iii) not a qualified investor as defined in the
Prospectus Regulation as it forms part of domestic law by virtue of the EUWA. If the above-mentioned
legend is included in the relevant Final Terms, no key information document required by Regulation
(EU) No 1286/2014 as it forms part of domestic law by virtue of the EUWA (the "UK PRIIPs
Regulation") for offering or selling the Notes or otherwise making them available to retail investors in
the UK has been prepared and therefore offering or selling the Notes or otherwise making them
available to any retail investor in the UK may be unlawful under the UK PRIIPs Regulation.
BENCHMARKS REGULATION STATEMENT IN RELATION TO ADMINISTRATOR'S
REGISTRATION  Interest amounts payable on Notes with a floating rate of interest ("Floating Rate
Notes") will be calculated by reference to a specific benchmark which wil be provided by an
administrator. As at the date of this Prospectus, the specific benchmark applicable to an issue of
Floating Rate Notes has not yet been determined. However, interest amounts payable under Floating
Rate Notes issued under the Programme may be calculated by reference to e.g. the (i) Euro Interbank
Offered Rate ("EURIBOR") which is provided by the European Money Markets Institute ("EMMI"), (ii)
Stockholm Interbank Offered Rate (STIBOR) which is provided by the Swedish Financial Benchmark
Facility ("SFBF"), (iii) Tokyo Interbank Offered Rate (TIBOR) which is provided by the Japanese
Bankers' Association TIBOR Administration ("JBATA"), (iv) Euro Short-Term Rate ("STR") which is
provided by the European Central Bank ("ECB"), (v) Sterling Overnight Interest Average ("SONIA")
which is provided by the Bank of England ("BOE"), (vi) Secured Overnight Funding Rate ("SOFR")
which is provided by the Federal Reserve Bank of New York ("FRB") or (vii) another benchmark.
As at the date of this Prospectus, only EMMI appears on the register of administrators and benchmarks
established and maintained by the European Securities and Markets Authority (the "ESMA") pursuant
to Article 36 of the Benchmarks Regulation (EU) 2016/1011 of the European Parliament and the
Council of 8 June 2016 on indices used as benchmarks in financial instruments and financial contracts
or to measure the performance of investment funds and amending Directives 2008/48/EC and
2014/17/EU and Regulation (EU) No 596/2014 (the "Benchmarks Regulation"). As far as the Issuers
are aware, JBATA is not currently required to obtain authorisation or registration (or, if located outside
the European Union, recognition, endorsement or equivalence), while STIBOR is registered as a
critical benchmark under the Benchmarks Regulation and SFBF has submitted an application to the
competent authority on 27 December 2021 to become an authorised administrator in accordance with
the Benchmarks Regulation. Under the transitional provisions set out in the Benchmarks Regulation,
STIBOR may continue to be used while the competent authority evaluates the application. As at the
date of this Prospectus, STR, SONIA, and SOFR (in each case provided by a central bank) do not
fall within the scope of the Benchmarks Regulation.
The Final Terms will specify the name of the specific benchmark and the relevant administrator.
In such case, the Final Terms wil further specify if the relevant administrator is included in the register
of administrators and benchmarks established and maintained by ESMA pursuant to Article 36 of the
Benchmarks Regulation or whether the transitional provisions in Article 51 of the Benchmarks
Regulation apply.
The legally binding language of this Prospectus is the English language; except for the Guarantee and
Negative Pledge where the German language shall be binding and except for the Terms and
Conditions of the Notes and the Final Terms for specific Tranches where the legally binding language
will be specified in the applicable Final Terms.
Neither this Prospectus nor any Final Terms may be used for the purpose of an offer or
solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorised or
to any person to whom it is unlawful to make such an offer or solicitation.
Neither this Prospectus nor any Final Terms constitutes an offer or an invitation to subscribe
for or to purchase any Notes and should not be considered as a recommendation by the
relevant Issuer, the Arranger, any Dealer or any of them that any recipient of this Prospectus
or any Final Terms should subscribe for or purchase any Notes.
In connection with the issue of any Tranche of Notes, a Dealer or Dealers (if any) named as
stabilisation manager(s) (or persons acting on behalf of any stabilisation manager(s)) (the
"Stabilisation Manager(s)") in the applicable Final Terms may over-allot Notes or effect
transactions with a view to supporting the market price of the Notes at a level higher than that
which might otherwise prevail. However, stabilisation may not necessarily occur. Any
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stabilisation action may begin on or after the date on which adequate public disclosure of the
terms of the offer of the relevant Tranche of Notes is made and, if begun, may cease at any
time, but it must end no later than the earlier of 30 days after the issue date of the relevant
Tranche of Notes and 60 days after the date of the allotment of the relevant Tranche of Notes.
Any stabilisation action or over-allotment must be conducted by the relevant Stabilisation
Manager(s) (or persons acting on behalf of any Stabilisation Manager(s)) in accordance with all
applicable laws and rules.
In this Prospectus all references to "", "EUR", "Euro", "euro" and "EURO" are to the single currency
of the member states of the European Union participating in the third stage of the European Economic
and Monetary Union.
For the avoidance of doubt, the content of websites this Prospectus refers to in hyperlinks does not
form part of this Prospectus.
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FORWARD-LOOKING STATEMENTS
This Prospectus contains certain forward-looking statements. Forward-looking statements are
statements that do not relate to historical facts and events. They are based on the analyses or forecasts
of future results and estimates of amounts not yet determinable or foreseeable. These forward-looking
statements are identified by the use of terms and phrases such as "anticipate", "believe", "could",
"estimate", "expect", "intend", "may", "plan", "predict", "project", "wil " and similar terms and phrases,
including references and assumptions. This applies, in particular, to statements in this Prospectus
containing information on future earnings capacity, plans and expectations regarding each of the
relevant Issuer's business and management, its growth and profitability, and general economic and
regulatory conditions and other factors that affect it.
Forward-looking statements in this Prospectus are based on current estimates and assumptions that
the relevant Issuer makes to the best of its present knowledge. These forward-looking statements are
subject to risks, uncertainties and other factors which could cause actual results, including each of the
relevant Issuer's financial condition and results of operations, to differ materially from and be worse
than results that have expressly or implicitly been assumed or described in these forward-looking
statements. Each of the relevant Issuer's business is also subject to a number of risks and uncertainties
that could cause a forward-looking statement, estimate or prediction in this Prospectus to become
inaccurate. Accordingly, potential investors are strongly advised to read the following sections of this
Prospectus: "Risk Factors", "Deutsche Bahn Aktiengesellschaft as Issuer and Guarantor" and
"Deutsche Bahn Finance GmbH as Issuer". These sections include more detailed descriptions of
factors that might have an impact on each of the relevant Issuer's business and the markets in which
it operates.
In light of these risks, uncertainties and assumptions, future events described in this Prospectus may
not occur. In addition, none of the Issuers assumes any obligation, except as required by law, to update
any forward-looking statement or to conform these forward-looking statements to actual events or
developments.
ESG RATINGS
DB Group's exposure to Environmental, Social and Governance ("ESG") risks and the related
management arrangements established to mitigate those risks has been assessed by several
agencies, including CDP, ECOVADIS, Sustainalytics, ISS ESG and MSCI, among others, through
Environmental, Social and Governance ratings ("ESG ratings"). Please refer to the section "Deutsche
Bahn Aktiengesellschaft as Issuer and Guarantor 13. Sustainability" for further information.
ESG ratings may vary amongst ESG ratings agencies as the methodologies used to determine ESG
ratings may differ.
DB Group's ESG ratings are not necessarily indicative of its current or future operating or financial
performance, or any future ability to service the Notes and are only current as of the dates on which
they were initially issued. Prospective investors must determine for themselves the relevance of any
such ESG ratings information contained in this Prospectus or elsewhere in making an investment
decision. Furthermore, ESG ratings shall not be deemed to be a recommendation by the Issuers, the
Guarantor, the Dealers or any other person to buy, sell or hold the Notes. Currently, the providers of
such ESG ratings are not subject to any regulatory or other similar oversight in respect of their
determination and award of ESG ratings. For more information regarding the assessment
methodologies used to determine ESG ratings, please refer to the relevant ratings agency's website
(which website does not form a part of, nor is incorporated by reference in, this Prospectus).
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TABLE OF CONTENTS
Page
RISK FACTORS .................................................................................................................................... 8
Risk Factors with regard to or in respect of Deutsche Bahn AG ....................................................... 8
Risk Factors with regard to or in respect of Deutsche Bahn Finance.............................................. 13
Risk Factors with regard or in respect of the Notes......................................................................... 13
RESPONSIBILITY STATEMENT ........................................................................................................ 19
GENERAL DESCRIPTION OF THE PROGRAMME .......................................................................... 20
General ............................................................................................................................................ 20
Issue Procedures ............................................................................................................................. 21
General ........................................................................................................................................ 21
Options for sets of Terms and Conditions ................................................................................... 21
Documentation of the Conditions ................................................................................................ 21
Determination of Options / Completion of Placeholders .............................................................. 21
Determination of Options ............................................................................................................. 21
Completion of Placeholders ......................................................................................................... 21
Controlling Language .................................................................................................................. 22
TERMS AND CONDITIONS OF THE NOTES English Language Version ...................................... 23
TERMS AND CONDITIONS OF THE NOTES German Language Version ..................................... 23
EMISSIONSBEDINGUNGEN.............................................................................................................. 23
GUARANTEE AND NEGATIVE PLEDGE ........................................................................................ 184
Non-binding translation of the Guarantee: ..................................................................................... 184
FORM OF FINAL TERMS ................................................................................................................. 192
Part I. TERMS AND CONDITIONS ............................................................................................... 197
Part II. OTHER INFORMATION .................................................................................................... 210
DEUTSCHE BAHN AKTIENGESELLSCHAFT AS ISSUER AND GUARANTOR ............................ 217
DEUTSCHE BAHN FINANCE GMBH AS ISSUER ........................................................................... 235
TAXATION ........................................................................................................................................ 239
GENERAL INFORMATION ............................................................................................................... 240
Selling Restrictions ........................................................................................................................ 240
1. General .................................................................................................................................. 240
2. European Economic Area ...................................................................................................... 240
3. United Kingdom of Great Britain and Northern Ireland (the "United Kingdom") .................... 241
4. United States of America (the "United States") ..................................................................... 242
5. Japan ..................................................................................................................................... 244
Use of Proceeds ............................................................................................................................ 245
Method to determine the yield ....................................................................................................... 245
Authorisation .................................................................................................................................. 245
Documents Incorporated by Reference ......................................................................................... 246
Availability of Documents .............................................................................................................. 247
REGISTERED OFFICES OF THE ISSUERS AND OTHER PARTIES INVOLVED ...................... 248

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RISK FACTORS
The following is a description of risk factors (i) which may affect DB AG's or Deutsche Bahn Finance's
ability to fulfil its obligations under the Notes or (in case of DB AG) the Guarantee, and (ii) which are
material in respect of the Notes with regard to the market risk associated with these Notes.
Prospective investors should consider these risk factors before deciding to purchase the Notes. The
sequence in which the following risk factors are listed is not an indication of the likelihood of their
occurrence or the potential extent of their commercial consequences.
Prospective investors should consider all of the information provided in this Prospectus or incorporated
by reference into this Prospectus and consult with their own professional advisers if they consider it
necessary.
Risk Factors with regard to or in respect of Deutsche Bahn AG
Economic climate, market and competition
Demand for DB Group's mobility services and, in particular, for its transport and logistics services
depends, among other things, on overall economic developments:
·
Macroeconomic shocks such as economic and financial crises, disruptions to supply chains
or economic downturns resulting from, amongst other things, geopolitical conflicts or
pandemics can have a significant negative impact on DB Group's business due to possibly
significantly lower revenues and/or higher expenses.
·
Risks arising from depleted public sector budgets in some European countries could have
negative effects (particularly in the form of spending cuts). The market volume is greatly
determined by the financial situation of the contracting organizations.
Developments in the competitive environment are of particular importance for DB Group:
·
In long-distance transport, DB Group is primarily exposed to fierce intermodal competition,
particularly with motorized individual transport as the dominant competitor, but also with long-
distance bus services and aviation.
·
In regional transport, there is intense competition throughout Europe for securing long-term
transport contracts. This means there is a risk of volume losses. In order to remain competitive
in this market, DB Group is constantly working to optimize its tender management and its cost
structures. In addition, risks arise from the implementation of transport contracts if the
parameters of the underlying calculation do not materialize as planned.
·
In rail freight transport, there is a high level of competitive pressure. Risks arise from the fact
that, to some extent, competitors can operate with less expensive cost structures while
enjoying greater flexibility. Further risks result from possible future efficiency gains of trucks,
for example by digitalization.
·
In the freight forwarding business, there is, on the one hand, intense competition with other
providers and, on the other hand, a concentration of the market in the carrier sector that
causes changes in the supply of cargo space with corresponding effects on the purchase and
sales prices.
Production and technology
If the production quality of passenger transport services suffers, this has an impact on production and
service quality and can lead to the loss of customers. Postponed deliveries of new vehicles may result
in revenue losses and additional expenses, for example, due to substitute transport services or penalty
payments.
The availability, capacity and the condition of the track infrastructure are significant prerequisites for
competitive rail transport. In order to maintain the future viability of rail in the long term, it is also
necessary to digitalize and automate the infrastructure.
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The intensity of construction activity on the network has increased noticeably and can have a strong
negative impact on the carriers' schedules and production quality, some of which cannot be
compensated for.
The range and quality of the services depend to a significant extent on the availability and reliability of
the production resources used, intermediate services procured and the quality of any partners'
services. DB Group therefore maintains an intense dialog with its suppliers and business partners on
the subject of quality. This is of particular importance in the vehicle industry.
Sufficient availability of DB Group's vehicle fleet is particularly critical. Significant restrictions endanger
operating schedules. In regional transport, there is the additional risk of penalties if trains are canceled
or punctuality is insufficient.
The technical production resources used in rail transport must comply with applicable standards and
requirements, which are subject to change. As a result, DB Group may receive technical complaints
concerning its vehicles. This leads to the risk that DB Group may not be permitted to use individual
series or rail car types, or only under certain conditions, such as limited speeds, shorter intervals
between maintenance or reduced wheel set loads. In addition, DB Group cannot accept new vehicles
that have defects or for which the necessary vehicle certification has not been granted.
As a result of technical defects or conditions, vehicles may need to be refitted, which could lead to
significant restrictions on availability or even temporary prohibition of use.
In regional transport, a risk can arise from the redundancy of vehicles following the expiry or re-
tendering of a transport contract.
Increasing digitalization means that dependence on secure IT that is available around the clock is
increasing. This results in IT, telecommunications and cyber risks such as the interruption of the
availability of IT systems, which can lead to serious business interruptions, or the unauthorized access
of third parties to customer data.
Human Resources
To implement the Strong Rail strategy, DB Group relies on adequate equipment and qualified, skil ed
employees. DB Group has a high annual need for new employees. This is reinforced by the age-related
retirement of numerous employees as well as the elective model for working hours agreed under
collective bargaining agreements.
Due to demographic changes and the associated lack of skil ed employees, it is becoming increasingly
difficult to fil vacancies with qualified employees. This in turn results in risks such as low personnel
coverage to safeguard ongoing business and the long-term loss of knowledge, especially for railway-
specific professions.
Against the backdrop of an economic crisis with unclear prospects, the personnel cost structure plays
an important role in recruitment. In terms of the labor market and transport market, DB Group`s target
is therefore to always conclude competitive collective bargaining agreements. Additional pressure on
the development of wages can be expected from the surge in prices.
DB Group's digital transformation is critical for the successful implementation of the Strong Rail
strategy:
· The challenge is to get new employees up to speed quickly, to facilitate access to relevant
knowledge and thus to empower employees from all working areas and from different
generations to be equally capable in a changing working environment.
· Another challenge is to promote digital cooperation, innovative strength and resilience in the
context of a modern corporate culture. Major risks could arise if DB Group as a company were
unable to react flexibly to the changing requirements of a volatile market environment and
failed to meet our employees' requirements in a modern working environment.
Personnel
Given the competitive environment, DB Group's staff cost structure plays an important role. The
competitive environment might result in labour disputes or even strikes. DB Group's intention is to
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conclude competitive collective agreements in terms of the labour market and the transport market.
Due to demographic changes and the associated lack of skil ed employees, it is becoming increasingly
difficult to fill vacancies with qualified personnel. This in turn leads to risks such as lack of know-how
transfer and the restriction of opportunities for career development.
Regulation
Changes to the legal framework at a national or European level could pose risks to DB Group's
business. This general regulatory risk could result in tangible negative effects on DB Group's revenues
and profit.
These regulations govern, among other things, the individual components of the pricing systems and
general terms and conditions applied by DB Group's rail infrastructure companies. There are risks of
complaints and intervention in this regard. Measures that threaten or even prevent DB Group from
attaining reasonable returns in its infrastructure business units (such as an intervention in pricing
systems) can therefore threaten financing contributions by DB Group to capital expenditures in
infrastructure.
Political risks concern in particular a tightening of existing standards and regulations. The integrated
structure of DB Group may also be exposed to regulatory risks.
Procurement and energy markets
Depending on market conditions, purchase prices for raw materials, energy and transport and
construction services may fluctuate significantly. In addition, there is the risk of sustained price
momentum, particularly in the construction and logistics sectors.
The Ukraine war and, in particular, the sanctions imposed on Russia as a result and Russia's possible
reactions to them are already resulting in significant price increases, not only for gas and oil, but also
for raw materials. These developments may be significantly exacerbated by further shortages in supply
quantities, the suspension of deliveries or bans on imports. This may result in significant risks in terms
of energy costs and construction prices.
Among other things, DB Group counter the risk of energy price increases by using appropriate
derivative financial instruments and concluding long-term procurement contracts. However, these
safeguards only have an effect for a limited period, and limit opportunities arising from falling energy
prices.
This means that, depending on the market and competitive situation, it may not be possible or may
only be possible to a very limited extend to pass increased costs on to the customer in the short term.
This in turn has a negative impact on margins.
Capital markets and taxes
A currency risk arises from DB Group's international business. This risk, however, is largely limited to
the so-called translation risk since there is usually a high regional congruence between the production
and sales markets. Among other things, DB Group hedge interest rate and currency risks from its
operating business through primary and derivative financial instruments. Their use is only permitted in
DB Group for hedging purposes. There is a risk that these hedging measures will not pay off, or not in
the way expected.
To prevent counterparty default risk from financial and energy derivatives, Deutsche Bahn concludes
credit support agreements (CSA) for longer-term hedges. These agreements require both trading
partners to put up cash collateral if market values of the derivatives are negative. These
collateralisation requirements may put a strain on Deutsche Bahn's cash balances.
Due to the long-term capital employed, DB Group also use long-term, fixed-interest financial
instruments. As a result, only new issues are exposed to the risk of rising interest rates.
Liabilities from pensions and similar retirement benefit obligations are partially covered by plan assets
from stocks, real estate, fixed-interest securities and other investments. Losses of value in these assets
reduce the cover of pension obligations by plan assets, potentially resulting in DB Group having to
provide additional cover.
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