Obligation Deutsch Bahn 0% ( XS1107266782 ) en EUR

Deutsch Bahn

100 % ▼

Allemagne

XS1107266782 ( en EUR )

08/09/2022 - Obligation échue

Prospectus brochure de l'obligation Deutsche Bahn XS1107266782 en EUR 0%, échue

1 000 EUR

300 000 000 EUR

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 EUR, avec le code ISIN XS1107266782, paye un coupon de 0% par an.
Le paiement des coupons est trimestriel et la maturité de l'Obligation est le 08/09/2022

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
30,000,000,000
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 relative aux prospectus pour valeurs mobilières) (the "Luxembourg Prospectus Law").
Application has been made to list 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 12 June 2020. This Prospectus is valid until 12 June 2021. 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 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 possession this
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Prospectus 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
230 to 233 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.
PRIIPs / IMPORTANT EEA AND UK RETAIL INVESTORS  If the relevant Final Terms include a
legend entitled "PROHIBITION OF SALES TO EEA AND 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 European Economic Area ("EEA") or in the
United Kingdom ("UK"). 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.
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) London Interbank Offered Rate ("LIBOR") which is provided by the ICE Benchmark Administration
Limited ("IBA"), (iii) Stockholm Interbank Offered Rate (STIBOR) which is provided by the Swedish
Bankers' Association ("SBA"), (iv) Tokyo Interbank Offered Rate (TIBOR) which is provided by the
Japanese Bankers' Association TIBOR Administration ("JBATA"), (v) Euro Short-Term Rate ("STR")
which is provided by the European Central Bank ("ECB"), (vi) Sterling Overnight Interest Average
("SONIA") which is provided by the Bank of England ("BOE"), (vii) Secured Overnight Funding Rate
("SOFR") which is provided by the Federal Reserve Bank of New York ("FRB") or (viii) another
benchmark.
As at the date of this Prospectus, only EMMI and IBA appear 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, the transitional provisions in Article 51 of the Benchmarks Regulation
apply, so that SBA and JBATA are not currently required to obtain authorisation or registration
(or, if located outside the European Union, recognition, endorsement or equivalence). 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 Benchmark Regulation.
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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
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.
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TABLE OF CONTENTS
Page
RISK FACTORS .................................................................................................................................... 7
Risk Factors with regard to or in respect of Deutsche Bahn AG ....................................................... 7
Risk Factors with regard to or in respect of Deutsche Bahn Finance.............................................. 10
Risk Factors with regard or in respect of the Notes......................................................................... 12
RESPONSIBILITY STATEMENT ........................................................................................................ 18
GENERAL DESCRIPTION OF THE PROGRAMME .......................................................................... 19
General ............................................................................................................................................ 19
Issue Procedures ............................................................................................................................. 20
General ........................................................................................................................................ 20
Options for sets of Terms and Conditions ................................................................................... 20
Documentation of the Conditions ................................................................................................ 20
Determination of Options / Completion of Placeholders .............................................................. 20
Determination of Options ............................................................................................................. 20
Completion of Placeholders ......................................................................................................... 20
Controlling Language .................................................................................................................. 21
TERMS AND CONDITIONS OF THE NOTES English Language Version ...................................... 22
TERMS AND CONDITIONS OF THE NOTES German Language Version ..................................... 22
EMISSIONSBEDINGUNGEN.............................................................................................................. 22
GUARANTEE AND NEGATIVE PLEDGE ........................................................................................ 174
Non-binding translation of the Guarantee: ..................................................................................... 174
FORM OF FINAL TERMS ................................................................................................................. 182
Part I. TERMS AND CONDITIONS ............................................................................................... 185
Part II. OTHER INFORMATION .................................................................................................... 198
DEUTSCHE BAHN AKTIENGESELLSCHAFT AS ISSUER AND GUARANTOR ............................ 205
DEUTSCHE BAHN FINANCE GMBH AS ISSUER ........................................................................... 222
TAXATION ........................................................................................................................................ 226
GENERAL INFORMATION ............................................................................................................... 230
Selling Restrictions ........................................................................................................................ 230
1. General .................................................................................................................................. 230
2. European Economic Area and UK ......................................................................................... 230
3. United Kingdom of Great Britain and Northern Ireland (the "United Kingdom") .................... 231
4. United States of America (the "United States") ..................................................................... 231
5. Japan ..................................................................................................................................... 233
Use of Proceeds ............................................................................................................................ 234
Method to determine the yield ....................................................................................................... 234
Authorisation .................................................................................................................................. 234
Documents Incorporated by Reference ......................................................................................... 235
Availability of Documents .............................................................................................................. 236
REGISTERED OFFICES OF THE ISSUERS AND OTHER PARTIES INVOLVED ...................... 237

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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 is
dependent on the overall economic development, among other things:
·
Economic growth fuels the trends underlying its strategy in its operating markets.
·
Macroeconomic shocks such as economic and financial crises or economic downturns
resulting from, amongst other things, conflicts or epidemics can have a significant negative
impact on DB Group's business.
·
The Covid-19 pandemic has led to a substantial reduction in passenger numbers and reduced
cargo volumes, both of which have led to lower revenues. In addition, DB Group has incurred
higher expenditures for disinfection measures to protect both passengers and staff. If this
pandemic protracts or similar developments occur again, this could have a significant negative
impact on DB Group's financial position.
·
The development of key economic factors (such as disposable income or the number of
persons in active employment) is particularly important for passenger transport.
·
Risks arising from depleted public sector budgets could have adverse effects (particularly in
the form of spending cuts), especially on DB Arriva activities.
Developments in the competitive environment are of particular importance for DB Group:
·
In long-distance transport, DB Group is exposed to heavy intramodal competition, particularly
with motorized individual transport as the dominant competitor, but also with long-distance
bus services and air transport. Increased competition has among others a negative impact on
price perception.
·
There is intense competition in regional transport throughout Europe for securing long-term
contracts. The market volume is largely determined by the financial situation of the contracting
organizations. As a result, Deutsche Bahn may lose revenues and profits. There is a risk of
performance loss or failure to win tenders. To be able to compete in this market, DB Group is
constantly working to optimize its tender management and cost structure. In addition, risks
arise from the implementation of transport contracts if the parameters of the underlying
calculation do not materialize as planned. In order to continuously increase quality and
customer satisfaction and improve our efficiency, DB Group has put together appropriate
programs at DB Regional and DB Arriva.
·
There is fierce intramodal and considerable intermodal competitive pressure in the rail freight
transport industry. Risks arise from the fact that, to some extent, competitors can operate with
less expensive cost structures while enjoying greater flexibility, and from possible future
efficiency gains of trucks due to digitalization.
·
In the freight forwarding business, there is both intense competition with other providers and
a concentration in the carrier market, which causes changes in the offerings of cargo space
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with corresponding effects on the purchase and sales prices. DB Group is responding to this
by further expanding its networks and improving its cost structures, services and IT
infrastructure.
Production and technology
If the 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 and the condition of rail 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
modernize the infrastructure through digitalization and automation. Intense construction work on the
network affects schedules and the production quality of carriers, part of which may not be
compensated.
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. Deutsche Bahn therefore keeps up an intense dialog with its suppliers and business partners
on the subject of quality. This is of particular importance in the vehicle industry.
Ensuring sufficient availability of DB Group's vehicle fleet is particularly critical. Significant restrictions
on resources jeopardize operating schedules. In regional transport, there is the additional risk of
penalties if trains are canceled or punctuality is insufficient. DB Group tries to minimize this risk by
taking preventative action and also by mitigating the consequences of an occurrence, such as by
providing replacement vehicles or by organizing substitute transport.
The technical production resources used in rail transport must comply with applicable standards and
requirements, which are subject to change. Deutsche Bahn may receive technical complaints
concerning its vehicles, creating the risk that Deutsche Bahn may only be permitted to use individual
series or rail car types under certain conditions, such as limited speeds, shorter intervals between
maintenance or reduced wheel set loads. In addition, Deutsche Bahn cannot accept new vehicles that
have flaws or for which the necessary vehicle certification has not been granted.
As a result of technical defects or conditions, there may be the need to refit vehicles that could lead to
significant restrictions on availability or even temporary prohibition of use.
In regional transport, risks can arise from the redundancy of vehicles following the expiry or re-
tendering of a transport contract.
Increasing digitalization leads to a higher dependence on secure and constantly available IT systems.
This results in IT, telecommunication 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.
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
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
Regulation to the detriment of rail (for example due to additional legislative requirements) has the
potential to endanger intermodal competitiveness. 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.
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These regulations govern the individual components of the pricing systems, and the general terms and
conditions applied by DB Group's Railway Infrastructure Companies so that margins can come under
pressure or even become negative.
Political risks concern particularly a tightening of existing standards and regulations affecting the
railways (e.g. passenger rights). The structure of DB Group may also be exposed to regulatory risks.
Procurement and energy markets
Purchase prices for raw materials, energy and transport services vary according to market conditions.
DB Group responds to the risk of increasing energy prices by using among other things appropriate
derivative financial instruments and entering into long-term procurement contracts. However, these
safeguards also limit opportunities arising from trends in energy prices. In the event of falling prices,
DB Group does not benefit from the market development.
This means that depending on the market and competitive situation, it may not be possible, or may
only be possible to a very limited extent, to pass increased costs on to the customer in the short term.
This in turn has a negative impact on margins.
Noticeable train-path price increase outside of Germany cannot always be passed on to customers
because of the competitive situation.
Capital markets and taxes
A currency risk arises from DB Group's international business. This risk is largely limited to the so-
called translation risk, since usually there is a high regional congruence between the production and
sales markets. DB Group uses primary and derivative financial instruments to address interest rate,
currency and energy price risks from its operating business. There is a risk that these hedging
measures will not pay off.
Pensions and similar retirement benefit obligations are partially covered by plan assets from stocks,
real estate, fixed-income securities and other investments. Value losses in these assets directly reduce
the cover of pension plan obligations, potentially resulting in DB AG having to provide additional cover.
In addition, there are potential risks from back-tax payments from tax audits that are in progress and
from amendments to tax laws.
Law and contracts
As a result of delayed vehicle deliveries and vehicle defects, operating difficulties, especially in regional
and long-distance transport, may occur. In regional transport, this may result in contractual violations
or non-compliance with the contracting organizations. Higher expenses and penalty payments
combined with lower fares are the result. Ensuing damage claims are asserted against the
manufacturers. Provisions have been made for legal and contractual risks based on an assessment of
their probability of occurrence.
Compliance with current laws, company guidelines and recognized regulatory standards is the task
and duty of every DB Group employee. It is the mission of DB Group's compliance department to
ensure compliance with such criteria.
With its very high purchasing volume and over 40,000 suppliers, DB Group is one of the largest
purchasers in Germany. Large-scale capital expenditures mean that the infrastructure business units
in particular are exposed to a significant risk of becoming the target and victim of corruption, cartel
agreements or fraud. As a provider of grants, the Federal Government places high demands on DB
Group with its anti-corruption guidelines.
Significant events
DB Group's activities as a train-operating company are based on a technologically complex, networked
production system. In general, DB Group tries to combat the risk of potential operational disruptions
through regular maintenance and hiring qualified employees, along with continuous quality assurance
and improvement of its processes. The nature of rail transport as an open system means that certain
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factors (such as natural disasters, accidents, sabotage and theft) over which DB Group has only limited
influence could have a negative impact on operations. Its efforts in such cases focus on minimizing the
potential effects. However, this could also result in cost risks from countermeasures and reputational
risks.
Additional measures to improve public security in passenger stations and other areas (for example,
higher requirements for the quality and quantity of video surveillance), may result in additional costs.
Project risks
DB Group's measures involve not only in part huge capital expenditure volumes, but also a large
number of highly complex projects. Changes to the legal framework, delays in implementation
(including due to ever-more comprehensive public consultation) or necessary adjustments during
terms (often lasting several years), deviations from the ramp-up curve of funds for capital expenditures
agreed with the Federal Government or changes to purchase prices may lead to project and liquidity
risks. In case of delays in completion, planned shifts in the mode of transport from road to rail will not
be feasible.
With the implementation of planned profit and efficiency gains from various business-unit-specific
programs and projects (such as Strong Rail Strategy for the integrated rail system in Germany or
Primus at DB Schenker), there is the risk that it will either not be possible to implement the planned
effects at al , or only to a lesser extent and/or may be delayed.
Infrastructure Financing
As a key element of the German rail reform, the Federal Government has the constitutional obligation
to finance the capital expenditures in rail infrastructure. The key factor here is securing sufficient
funding, but also the ability to plan the availability of funding for the existing network as well as new
construction and expansion (requirement plan capital expenditures). A limited availability may lead to
insufficient resources for maintaining the existing network or eliminating bottlenecks and therefore
limiting the competitiveness of rail as a mode of transport.
DB Group has an agreement with the Federal Government that sets out the financing of the existing
network until 2029. The LuFV III and the associated securing of infrastructure quality and availability
in the long term improve the attractiveness of rail as a mode of transport, which also results in higher
revenues for infrastructure companies. Risks result from a potential failure to achieve the contractual
objectives set out in the LuFV III and from a possible reclaim by the Federal Government following
audits of applications of funds for the purposes set.
The economic sustainability of capital expenditures or financial contributions to capital expenditure
projects funded with DB funds is essential to ensure DB Group's ability to invest in the long term.
Political risks
DB Group is active in Great Britain through DB Arriva, DB Schenker and DB Cargo. The ongoing
uncertainty about the future relationship with Great Britain after its departure from the European Union
(Brexit) results in risks to our activities. In this case, a weakening of the British economy and new trade
barriers may have a negative impact. DB Group is responding to this risk by preparing as best as
possible.
The European Company for the Financing of Railroad Rolling Stock (Europäische Gesellschaft für die
Finanzierung von Eisenbahnmaterial; EUROFIMA), Basel/Switzerland, in which Deutsche Bahn AG
holds an equity stake, has given loans to state-owned railways in states that now have poor credit
ratings. If these state-owned railways fail to meet their financial obligations to EUROFIMA, this could
have repercussions for the carrying amount of the investment, and under certain circumstances trigger
further financial obligations.
Risk Factors with regard to or in respect of Deutsche Bahn Finance
As a financing company, Deutsche Bahn Finance in general faces the risk that loans granted by it may
not be repaid when due and payable for whatever reason.
All loans are granted to either Deutsche Bahn AG or to one of its Group companies. Therefore, the risk
of no repayment is directly dependent on Deutsche Bahn AG.
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