2018 Integrated Report – On track towards a better Railway

Opportunity and risk report

Opportunity and risk management within DB Group

Opportunity and risk management in DB Group comprises the systematic identification, assessment and management of opportunities and risks. The primary objective of opportunity and risk management is to ensure the long-term existence of DB Group.

The principles of opportunity and risk management are laid down by Group management and implemented on a Group-wide basis. As part of our early-warning system, op­­portunity and risk reports are submitted to the Management Board and the Supervisory Board of DB AG three times a year. Major risks occurring outside of this reporting cycle must be reported immediately. Planned acquisitions are subject to additional specific monitoring.

Our risk management system (RMS) maps all of the op­­portunities and risks in an opportunity and risk portfolio and also individually in detail, factoring in materiality thresh­­olds. The opportunities and risks considered within the risk management report are categorized and classified accord­­ing to probability of occurrence. Together with possible con­­­sequences, the analysis also takes into account the starting position and the cost of countermeasures. In organizational terms, Group controlling is the central coordination point for our opportunity and risk management.Our strategic opportunity and risk management efforts are mainly derived from the targets and strategies of our business units. Operational management personnel in the business units are directly responsible primarily for the early and regular identification, analysis and management of stra­­­­tegic opportunities and risks. These activities are an integral element of the Group-wide planning and controlling systems. We focus intensely on detailed analyses of our markets and competitors, market scenarios, relevant cost drivers and critical factors for success, including those within our political and regulatory environment. Concrete opportunities for specific business units are identified and analyzed from these.

DB Group’s business environment is in a state of constant change. Only if we understand the change, we can actively shape it. We use DB.Trend.Radar to monitor the ex­­­ternal developments most important to DB Group so that we can take advantage of opportunities and react to risks in good time. The focus is on the issue of how chan­­ges in society, pol­­itics, technology and the global economy affect our markets. The individual topics are all highly interconnected and of great importance for the future of DB Group. DB.Trend.Radar helps DB Group to focus its business operations on the future and actively make use of opportunities.

In conjunction with Group financing, with its strict focus on the operating business, Group Treasury is responsible for limiting and monitoring the resulting credit, market price and liquidity risks. The centralized handling of the relevant trans­­actions (money market, securities, foreign exchange and derivative transactions) means that potential risks can be managed and limited centrally. Group Treasury is organized in line with the appropriate risk control and management system minimum requirements for banks (Mindest­anforderungen an das Risikomanagement; MaRisk), which means that it complies with the resulting criteria of the Act on Supervision and Transparency in the Corporate Sector (Gesetze zur Kontrolle und Transparenz im Un­­ter­­neh­mens­bereich; KonTraG).