Deutsche Bahn AGAn international mobility and logistics service provider

Presentation atBrest State Technical University

Deutsche Bahn AG

Michael Gödde

Brest (BY), 12 September 2013

DB’s history began 1835 with the opening of the six kilometer-long Nuremberg-Fuerth line

Deutsche Bahn AG 2

1835 1920 1949 TODAY

STARTNuremberg-Fuerth

with the Adler locomotive

Deutsche Bundesbahnand Deutsche Reichsbahn

merge to become Deutsche Bahn AG

Leading internationalpassenger and

logistics company

1994

Split up into Bundesbahn

and Reichsbahn

Founding of the Deutsche

Reichsbahn

The history of the railway in Germany

The Railway Reform Act of 1994 marked the beginning of anew railway era in Germany and the creation of Deutsche Bahn AG

Deutsche Bahn AG 3

Today

� Modern and efficient organization

� Competition is expanding

� Value-driven decision making

� Greater profitability

� Debt is continuously shrinking

� Rail is enjoying a renaissance

� Bureaucratic structures

� Monopoly structure

� Heavy government influence

� High losses – personnel expenses exceeded revenues

� More than EUR 30 bn in debt

� Rail was losing market share

Before Rail Reform

Implemented entrepreneurial structures

Rail opened up to competition

Responsibility for local rail passenger transport delegated to regional levels

�

�

�

With its nine business divisions DB is active in all segments of the transport market

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1 Within Germany as well as cross border traffic; 2 In UK with Arriva-affiliate ‘CrossCountry’ also long-distance passenger transport; 3 Business unit is assigned to the Rail Technology and Services division

Passenger Transport: Domestic and European-wide mobility services

� DB Bahn Long DistanceLong-distance rail pass. transport1

� DB Bahn RegioRegional/urban pass. transport (GER)

� DB ArrivaRegional/urban pass. transport (EU)2

DB Services3

Integrated range of services

Infrastruktur:Efficient and future-oriented rail infrastructure in Germany

� DB Netze TrackRail network

� DB Netze StationsTraffic stations

� DB Netze EnergyTraction current

Transportation and Logistics: Intelligent logistics services via land, air and the sea

� DB Schenker RailEuropean rail freight transport

� DB Schenker LogisticsGlobal logistics services

DB is the second biggest provider in the entire European passenger transport market

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As of December 31, 2012; Figures on the left side are rounded and exclude Arriva; 1 DB Bahn Sales is a service center within the passenger transport division

DB Bahn Long Distance

DB Bahn Sales1

DB Bahn Regional� 2.7billion passengers per year in trains and buses

� 25,000passenger trains per day

� Oncearound the world – thedistance traveled by everyICE train per month

� 9neighboring countries canbe reached directly via DB

� 2.7billion passengers per year in trains and buses

� 25,000passenger trains per day

� Oncearound the world – thedistance traveled by everyICE train per month

� 9neighboring countries canbe reached directly via DB

DB Arriva

Passenger Transport

DB is the second biggest worldwide provider of transport and logistics services

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As of December 31, 2012; Figures are rounded; 1 Twenty-foot Equivalent Unit

DB Schenker Rail

DB Schenker Logistics

Transportation and Logistics

� More than 2,000locations in over 130 countries

� 400million tonnes of freighttransported via rail per year

� 95million shipments sent per year via European landtransport

� 6 million square meters ofstorage space around theworld

� More than 2,000locations in over 130 countries

� 400million tonnes of freighttransported via rail per year

� 95million shipments sent per year via European landtransport

� 6 million square meters ofstorage space around theworld

DB operates the biggest rail network in the heart of Europe

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As of December 31, 2012; Figures are rounded; 1 DB Netze Projects is a service center within the infrastructure division

DB Netze Track DB Netze Stations

DB Netze Energy DB Netze Projects1

Infrastructure

� 5,700train stations serve asrailway gateways in Germany

� 34,000km long rail network – threetimes as long as theGerman Autobahn network

� 48,500 heated switches out of a total of 72,000

� 5thlargest provider of energy in Germany – annual volumeof available energy equal toenergy consumed by Berlin metropolitan area

� 5,700train stations serve asrailway gateways in Germany

� 34,000km long rail network – threetimes as long as theGerman Autobahn network

� 48,500 heated switches out of a total of 72,000

� 5thlargest provider of energy in Germany – annual volumeof available energy equal toenergy consumed by Berlin metropolitan area

DB Services is DB's nation-wide, high-performing internal service provider

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As of December 31, 2012; Figures are rounded; 1 Employees directly employed at DB Security

DB HeavyMaintenance

Services

� Over 6,000 "Call a bikes" in numerous major cities make us Germany's largest bicycle rental company

� 13facilities provide technical support for 6,900 locomotives and 2,100 railcars

� 500 IT applications for the DB Group

� 2,300 security personnel in trains and at stations ensure the safety of our customers1

� Over 6,000 "Call a bikes" in numerous major cities make us Germany's largest bicycle rental company

� 13facilities provide technical support for 6,900 locomotives and 2,100 railcars

� 500 IT applications for the DB Group

� 2,300 security personnel in trains and at stations ensure the safety of our customers1

DB Services

DB Communications Technology DB Services

DB Security

DB Systel

DB Motor Vehicle Fleet

9Deutsche Bahn AG

DB is active in its market segments with independent commercialservices and publicly mandated services

Independent commercial services

Publicly mandated services

Passenger Transport

Long-distance transport services

� Direct competition, above all, withcars and airplanes

� End-customer business

� Intensive level of fixed assets

Local public transport services

� Contracted routes, tender competition

� Customers here are both thecontracting organization1 as well asthe passenger (end-customer)

� Intensive level of fixed assets

Transportation & Logistics

Rail freight transport services

� Rail competes directly with othermodes of transport

� Big customer business, clear sectorfocus

� Intensive level of fixed assets

Freight forward. and logistical services

� Direct competition (world-wide)

� Full service forwarder, large custo-mer base, broad mix of industries

� Less intensive level of fixed assets

1 Contracting organizations can be states, state-run enterprises, transport associations, or regional bodies

We differentiate between independent commercial servicesand publicly mandated services

Infrastructure

Provision of infrastructure

� No competition, monopoly position in regulated markets, public-sectorcontracts for reliable and efficientprovision of infrastructure atcompetitive prices

� Customer: Carriers (derived demand)

� Very intensive level of fixed assets

In 2012 DB achieved the highest revenue and profit in its history

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As of December 31, 2012; 1 Difference between total for divisions and DB Group due to other activities/consolidation

Revenues 2012 in € millions EBIT 2012 in € millions

DB Schenker Rail

DB Schenker Logistics

DB Bahn Long Distance

DB Bahn Regional

1

DB Services

DB Arriva

4,709

1,102

2,832

4,074

1,498

3,757

8,907

15,389

4,925

894

418

87

84

91

230

238

882

364

39,296 2,708

DB Netze Energy

DB Netze Track

DB Netze Stations

DB is becoming increasingly active in international markets –however, the primary focus remains on rail and Germany

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Stand: 31.12.2012; 1 Group financial statements according to IFRS

68%

62%

Revenues by activity100% ~ annual revenues in bn EUR)

Revenues by region(100% ~ annual revenues in bn EUR)

42%

20051

25.1

74%

26%

Germany

International

2012

39.3

58% 52%

48%

20051

25.1

59%

41%

Rail

Non-Rail

2012

39.3

DB has about 300,000 employees around the world, of which more than 190,000 are based in Germany

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As of December 31, 2012

32.2%

33.4%

16.7%

9.2%

8.5%

Employees by business unit 100% ~ 287,508 full time equivalent

DB Bahn Long Distance: 5.5%DB Bahn Regional: 12.9%DB Arriva: 13.8%

DB Netze Track: 14.4%DB Netze Stations: 1.7% DB Netze Energy: 0.6%

DB Services

Other activities

DB Schenker Rail: 11.1%DB Schenker Logistics: 22.3%

Employees by region 100% ~ 287,508 full time equivalent

North-America3%

Remaininginternational locations1%

Europe excluding G.27%

Asia5%

Germany65%

13

Today around 100,000 employees represent DB Schenker worldwide in 130 countries

Date: May 2013, natural employees

DB Schenker locations and employees

PartnersOwn locations

Europe (incl. Russia)approx. 74,800 employees

Asia-Pacific approx. 13,800

employeesNear MiddleEast / Africa

approx. 1,000 employees

Americaapprox. 9,100

employees

DB Schenker LogisticsDB Schenker Rail

Employees per business unit

68%

32%

DB Mobility Logistics AG, Transportation and Logistics division

With 20 bn EUR revenues DB Schenker is the secondlargest logistics company in the world

Increase 2011 - 2012

1 Without shipping lines, Chinese and Indian railway as well RZD 2 Strong foreign exchange effect

3 Invoiced net sales (comparable with revenue of DB Schenker) 4 CEVA is headquartered in the Netherlands

Sources: Annual statements, press, GSL

Top 10 Players of the wordwide transportation and logistics market1

Revenues 2011 und 2012, in bn EUR, variable foreign exchange rates

DHL Global Forwarding, Freight,

Supply Chain/CIS

2011 2012

Norfolk Southern 8.62

CSX Corporation 9.12

SNCF Geodis 9.5

12.72

Kühne + Nagel 14.22,3

BNSF 16.22

Union Pacific 16.32

20.3

7.2

27,5+6.2%

+2.6%

+15.4%

+15.8%

+8.0%

+3.4%

+0.9%

+8.4%

+7.0%

Nippon ExpressDistribution & Transportation

+4.8%CEVA4

29.2

14DB Mobility Logistics AG, Transportation and Logistics division

DB Schenker Rail offers a wide range of productsfor our customers

15

Core products

Inter-modal

Industry solutions

chem-solution

AutomotiveRailNet

oilsolution

disposalsolution

Blocktrain

Singlewagon

papersolution

Additional services

Door-to-Door

Logistics

Eco Plus

Mainte-nance

Rail Logistics

Sidings

ECO2PHANT

RailRo-Cargotraffic

DB Schenker Rail product portfolio

Source: GSL

DB Mobility Logistics AG, Transportation and Logistics division

Our network of integrated transport and logistics servicesis the basis to become profitable market leader

16

Profitable market leader

16

Network integrated transport – and logistics services

� Enhancement of solutions forselected corridors

– Transeurasia (China train)

– Southeast-Europe (Bosporus shuttle)

– West-East corridor(Automotive-Zug DE-PT)

� Strenghtening hinterlandnetworks of DB Schenker Rail and DB Schenker Logistics Ocean in Europe

� Cross-business unitdevelopment of multimodal industry solutions, for exampleregarding automotive, industryand consumer goods

Current actions

Multimodal transport solutions withintegrated contract logistics solutions

Dedicated industry solutions and marketdevelopment through competence centers

Door-to-door-solutions for the entire supply chain

Sources: GSL

DB Mobility Logistics AG, Transportation and Logistics division

Our organization makes European services possible

17

� Gefco is a new major customerof French subsidiary ECR

� Successful acquisition of high-quality transports, primarily by strengthening the wagon group network in France

GEFCO transportsRegular scheduled train between Portugal and Germany

Direct connection between the UK and Poland

� First regular rail freight transport offered between the UK and Poland

� Uses the High Speed One connection between the Channel Tunnel and London, which was completed in 2011

� Regular train connection with a specific focus on automotive customers added

� Short transit times (3-4 days) create a competitive advantage over truck transport

Source: DB SR

London

Wroclaw

Train transportation

Truck distribution

ECR / DB SR

Other partners

F

B

NL

DK

DPL

CZ

SK

HUAT

I

Gevrey hub

Lisbon

Porto

Brunswick

Frankfurt a.M.

DB Mobility Logistics AG, Transportation and Logistics division

18

DB Schenker is developing the rail corridor between China and Europe

Northern route

� Distance from Shanghai approximately 12,900 km

� Transit time (terminal-terminal): 18 – 20 days

� Uses the Trans-Siberian Railway

Southern route

� Distance from Chongqingapproximately 10,300 km

� Transit time (terminal-terminal): 16 – 18 days

� First pilot transports in 2011

� Additional border crossing and stop

� Transport alternative with

- Lower transport costs than air freight and

- Shorter transit times than ocean freight

� Interesting for customers in different industries, including electronics, automotive, chemicals

� Uses DB Schenker’s (logistics) networks and resources in China and Europe

� Trans Eurasia Logistics (TEL), an affiliate of Deutsche Bahn, operates rail service between the terminals

Routes

RU

BY

KAZMN

PL

CN

Chongqing

Duisburg

Mala/ Brest

Dostyk/ Alashankou

Zabaykalsk/Manzhouli

Moscow

Shanghai

DB Mobility Logistics AG, Transportation and Logistics division

In 2013, we will expand the Xrail network to Northern Italy

Source: Xrail, GSL

Xrail Alliance single wagonload networkObjectives

� Alliance of 7 European RUs to promote single wagonload transport across Europe

� Increase quality and competitiveness of European single wagonload network

Implementation

� Extension 2013: single wagonload in North Italy in co-operation with RCA

� By 2015: Implementation of common capacity management system (based on Netzwerkbahn)

Current Xrail countries

Extension in 2013

19DB Mobility Logistics AG, Transportation and Logistics division

Project Wadi ensures DB’s market presencein emerging railway markets

Project Wadi – Joint Venture with Etihad Rail (ER)

Objectives

� Securing long-term presence in the GCC2

region and door-opener for follow-on projects for DB group

� Establishment of an operations & maintenance joint venture

Status of tender process

� DB nominated as preferred bidder

� Negotiations with ER to be finalized end of Q1 2013

� Operations to commence in October 2013

Stage 1 characteristics:

❚ 266 km route between Ruwais and Shah

❚ One customer: ADNOC (Abu Dhabi National Oil Company)

❚ Operation of two trains daily

❚ Consulting services for stages 2 and 3

Construction of a UAE¹-wide federal freight and passenger railway in three stages

1 UAE = United Arab Emirates2 GCC = Gulf Cooperation Council

Source: L.RF

20DB Mobility Logistics AG, Transportation and Logistics division

Automotive RailNet offers efficient and flexible automotive transports European-wide

Automotive RailNet

� Provision of an European-wide railway network for automotive transports to connect manufacturers and suppliers with sales markets and production centers

� About 3 million vehicles per year are transported via rail

� More than 250 trains per day are in the Automotive RailNet – both single wagonload as well as block trains

� Safe and fast transport across Europe supported by modern IT-systems to monitor transport streams

� Development of integrated transport solutions

Source: DB SR

21DB Mobility Logistics AG, Transportation and Logistics division

22Deutsche Bahn AG

The strategic direction DB2020 can be explained along three core questions

� Where are we today?

� What challenges and opportunities will we encounter on ourjourney?

� Where will we be in 2020 and how will we get there?

23Deutsche Bahn AG

We hold leading market positions in Europe and the world

NetzeNo.1

Rail infrastructure

No.1Operation of railwaystations

Bahn

No.2Local rail passenger transport

No.2Long-distance passenger rail transport

No.2Bus transport

Schenker

No.1Rail freight transport

No.1Land transport No.

Ocean freight

5Contract logistics

No.2Air freight

3No.

Today

As of Dec. 31, 2012

24Deutsche Bahn AG

The megatrends of the future

Liberalization

Demographicchange

scarcer resources

Climate changeand

Globalization

Challenges and Opportunities

Deutsche Bahn AG

The world is growing together, and isbecoming more complex and connected

25

Challenges and Opportunities

Achieve sustainable business success by bringing all three dimensions into harmony with each other

Deutsche Bahn AG 26

Customer andquality

Profitable growth

Strategic directions

Vision We are becoming the world's leading mobility and logistics companySustainable business success and social acceptance

1

2

3 4Cultural change/ employeesatisfaction

Resourcepreservation/ emissions andnoise reduction

Strategy

Sustain-ability

dimension

Profitable market leaderEconomic

Top employerSocial

Eco-pioneerEnvironmental

Top TopTop 1101

We want to improve customer satisfaction by offering comprehensive information, friendly service and modern vehicles

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1 Of which € 34 billion were DB funds (ex-M&A projects)

Strategy

86Areas for action(selected examples)

� Expand customerinformation and service

� Modernization of vehiclefleet

� Upgrade and expandinfrastructure

� Consistent process quality

� Link global IT systemstogether

� Modernize and expandpassenger stations

� Push product and processinnovation

Customer and quality

1

Information andService

Gross capitalexpendituresuntil 2020

billion €1

We intend to defend and expand our leading market position bygrowing continuously

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Strategy

Acquisitions and

tenders

Expand existing and

new customer business

2010 2020

+100%

34,4

70

Profitable growth

2Areas for action(selected examples)

� Develop networks

� Cross-modal solutions

� Improve capacity utilizationand productivity

� Expand industrialcompetence

� Liberalization opportunitiesoffered by European passenger transport market

We want to become one of the top 10 employers in Germany by2020 – and also be a top-ranked employer in international markets

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Top 10

Top 20

…

…

NEU

Top

As a top employer wewin and build loyaltywith qualifiedemployees who workwith enthusiasm for DB and its customers

Strategy

10I’m a proud

DB

employee

We want to significantly increase employee satisfaction via thecultural change we initiated

Deutsche Bahn AG 30

Strategy

Cultural change/ employee satisfaction

3 employees

enthusiasticallywork

for DB and its customers

Qualified Areas for action(selected examples)

� Regional future-focuseddiscussions

� Employee satisfaction

� Employer attractiveness

� Manage demographics

� Understanding leadership

� Diversity in leadership

� Compatibility of career andfamily

� Internationalization

� Talent Pools

� Career planning

By 2020 we’ll be recognized as the pioneer of environmental measures including the reduction of CO2 emissions and noise

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Specific CO2-emissions DB

2006 2020 2010 2020

Share of renewableenergy in the DB railenergy mix

-20%1Top

2000 2020

+75%

Rail noise

-50%

20%

35%

As an eco-pioneer ourproducts set standardsfor the efficient use ofresources

Strategy

We will expand our leading environmental position by usingresources more efficiently, as well as by reducing CO2 and noise

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Strategy

Resource preservation/ emissions and noise reduction

4

We are a leader in

environmental protection

Areas for action(selected examples)

� Use of wind and hydro-electric energy

� Noise abatement

� Efficient use of energy

� Freight transport usingEcoSolutions

� CO2-free offers forpassenger transport

� Electro-mobility on theroad

� Efficient usage of materialsand resources

We are becoming the

world’s leadingmobility and

logistics company

For people.For markets.For tomorrow.

33

Our DB2020 strategy defined the framework, we will resolutely continue with its realization

Deutsche Bahn AG