DB Schenker in CIS – challenges, prospects Uwe Leuschner , Vicepresident DB Schenker Logistics, Business Development CA and CIS Astana, November 07, 2013 Åberg June 2012 1

Logistics … New ideas, new solutions – new ways for international tradelanes … Uwe Leuschner, 20.04.2017 2

Trends in politics…. Eurasian Union is planned from 1.1. 2015 Page 3

Trends in globalization…. Russia is after nearly 20 years WTO – member …, Kazakhstan soon … Page 4

Trends in the markets … Contract Logistics - market size estimates for CIS in bn EUR CAGR Contract Logistics market for 2010 in CIS valued at about EUR 1.9bn – Russia with the largest share Market concentration is low, the share of its five largest logistics operators do not exceed 12% in total As CIS countries transform from traditional heavy industries towards more sophisticated industries such as Automotive and High-tech, increased need for more sophisticated supply chain management +11% 3.47 1.86 2010 2016 Russia 94% Kazakhstan 3% Ukraine 1% Belarus 1% Rest of CIS 1% Source: GSL market model based on InnoZ data; GSL estimates 5

Macroeconomics The CIS region shows an attractive GDP growth above level of the industrialized countries Relative growth by region, 2010-2015 Real GDP 2010-2015, Index: 2010 = 100 Relative growth by country, 2010-2015 Real GDP GAGR 2010-2015, in % Developed Asia Turkmenistan 150 Uzbekistan Kazakhstan Kyrgyz Republic 135 Sub-Sahara Tajikistan NME2) Moldova CIS1) Latin America Ukraine 120 Eastern Europe Armenia Industrialized countries Russia 105 Belarus Azerbaijan 100 1 Commonwealth Independent States 2 North Africa and Middle East Source: IMF, GSL DB Mobility Logistics AG, GSL, Jördis Deutschmann, 01/12/2012

Macroeconomics CIS contains important industrial areas fundamental for cross-border transports with Europe Commonwealth of Independent States Major cities, industry and raw material clusters CIS main industrial markets beyond a large raw material source are Russia, Kazakhstan, Ukraine Russia is equipped with vast reserves of raw materials (e.g. oil, gas, metals) The main industry clusters and largest cities can be found in the European part of Russia Major industrial clusters are primarily located at the Western border of Ukraine to Russia as well as at the Northern border of Kazakhstan to Russia In China, main industry clusters are concentrated on the coastal line Raw material cluster Industry cluster Major cities Source: GSL analysis, GTAI, Destatis, Bundesanstalt für Geowissenschaften, Asian Development Bank, web search DB Mobility Logistics AG, GSL, Jördis Deutschmann, 01/12/2012 7 7 7 7

Macroeconomics Based on import and export values, trade between Europe, Russia and China significant Main trade flows in the region1) - Schematic Total Import/Export values in bn EUR, 2010 Main trade flows are between Europe and Russia, China and Europe as well as Russia and China Major share from China to Europe is currently transported by ocean freight – not via the Transeurasian land bridge Most volumes are moving westbound into Europe Germany as major trade partner of Russia and China in Europe 1 Europe  China 2 Europe  Russia 3 China  Russia 1 Includes all modes of transport; Europe meaning all European countries except Russia and Turkey Source: GTAI, IMF, GSL estimates DB Mobility Logistics AG, GSL, Jördis Deutschmann, 01/12/2012

Transport and Logistics For CIS countries rail and road are major transport modes – whereas in China, waterways are by far dominating % % of total share of total tkm in CIS 13,517 Freight transport volumes by transport mode 2010 in bn tkm 2,369 77% 10% 9% 5% 1) Russia Kazakhstan Ukraine Rest of CIS China Waterways Air Waterways Air Waterways Air Waterways Air Air Road Road Rail Rail Road 1% 0% 4% 0% 8% 7% 0% 15% 0% 20% 27% 0% 3% Road 40% 48% 56% 72% 32% 85% 82% Rail Rail Rail Road Waterways 1 Excluding Tajikistan and Turkmenistan – no data available Source: National freight transport volume from National Statistics agencies; GSL analysis DB Mobility Logistics AG, GSL, Jördis Deutschmann, 01/12/2012

Transport and Logistics Especially the road network in CIS requires immense investments in the future – rail network historically well supported Key characteristics of freight transport modes in CIS Rail freight Road network has its main routes along the important railway routes In the so called „Stan-countries“ road network seems more dense than rail network In general road infrastructure is of far lower quality than rail infrastructure in the CIS Increasing significance for long distance Road freight Ocean freight Air freight Rail dominates freight transport Monopolies of unreformed old-style national rail company for traction – increased privatization of equipment Imparity of gauge width between Europe (1435 mm) and CIS (1520 mm) Underdeveloped infrastructure - density rather low Important ports are connected to the main Asian rail and road network Maritime transport is one of the most important modes of international trade for Russia For other CIS countries, ocean freight not a key transport mode (mainly no access to sea) Currently only minor share in terms of tkm (generally below 4%) Mainly used for transport of mail, as well as unique or expensive goods Rising fuel prices reduce cost efficiency of aircraft Investments are not primarily made into airport infrastructures Source: GTAI, RBC 2007, AHK 2010, Progtrans 2010/2011, GSL DB Mobility Logistics AG, GSL, Jördis Deutschmann, 01/12/2012

Transport and Logistics The transport and logistics market is subject to challenges resulting from different trends Industry shift  e.g. CIS countries shift from heavy industries towards more sophisti-cated high-tech sectors Market liberalization Growing competition § e.g. customs union only easing cross-border trade between Russia, Belarus and Kazakhstan e.g. change from the cross-border operations to dom-estic services of internat. 3PL players like DHL Key challenges transport and logistics market Internationalization Privatization e.g. global cooperation like VW open subsidiaries in CIS countries e.g. increased privatization of rail equipment by RZD and KTS Infrastructure shortage e.g. limited availability of rail tracks supports shift to road; road with highest growth rates Source: GSL DB Mobility Logistics AG, GSL, Jördis Deutschmann, 01/12/2012 11

Strategic implications Agriculture, Automotive, and Electronics as main industries with future potential – DBS’ strong expertise in these sectors as chance  Positive trend  Stagnant trend PRELIMINARY Agriculture2) Metals and Mining Automotive Building materials3) Chemicals4) Oil& Gas Consumer5) Industrials Electronics Russia Kazakhstan Ukraine Belarus Major industry trends in major markets                                     Increased private income invested in status symbols like new, modern cars, but also in the acquisition of white goods and electronics, e.g. TVs Automotive in Russia already strongly developing – ongoing trend Suitability of former car production facilities for minor assembling with cheap labor costs will also benefit automotive industry, e.g. in Ukraine Governments of CIS countries actively searching for investors for automotive industry In particular for agricultural modernization and industrial production new machinery is required – Germany as a main supplier 1) Main industries also interesting for logistics services 2) includes food and meat base production; 3) related to construction; 4) without Oil and gas; 5 includes prepared food, 5) in particular FMCG 6) Machinery and white goods; excludes high-tech electronics Source: National Statistics; National Ministries of Economic Development; GTAI; press articles; GTAI, OECD, PWC, Industry reports, Factiva, GSL assumptions 2011 Current Relative importance of industry in terms of GDP contr. medium high DB Mobility Logistics AG, GSL, Jördis Deutschmann, 01/12/2012

For shipments to Russia we offer both direct rail service and sea-rail solutions Overview of DB Schenker rail network covering main cities in China and Russia Manzhouli (CN) - Zabaykalsk (RU) border Alashankou (CN) – Dostyk (KZ) border Sea-Rail intermodal transfer Explanation Transshipment and transit customs clearance/ Gauge Change 1 1435 mm normal gauge 1520 mm wide gauge Customs Union 2 RU St.Petersburg Moscow Yekaterinburg Novosibirsk Taishet Omsk Samara Chita 1 Sovgavan Irkutsk Khabarovsk KAZ MN 2 Vladivostok Vostochny Beijing Yingkou CN Chengdu Sea Rail Rail (block train only) Shanghai Chongqing Remark: DB Schenker currently focused on the Northern Route connecting China to Russia, while the Southern Route is only applied for company block train Guangzhou Shenzhen 13

China to Central Asia Route Example Rail reaches most cities in Central Asia and Mongolia with competitive prices and lead times China to Mongolia Multimodal Route Example Astana Shanghai-Ulanbator Rail Mode Truck-Rail Total Transit Time 10 days Est. Cost / 40’HC $7,000 KAZ MN Almaty Ulanbator Tashkent Urumqi Beijing Tianjin Bishkek Ashgabat Dushanbe Lianyungang CN Chengdu Bonded truck-rail multimodal solution based on single wagon solution, door-terminal service Chongqing Shanghai Guangzhou Shenzhen China to Central Asia Route Example Shanghai-Almaty Beijing-Almaty Rail Mode Full Rail Lead Time (Door-Terminal) 30 days 29 days Est. Cost / 40’HC $9,000 $8,700 based on single wagon solution, door-terminal service 14

Case study 1: Shanghai/Shenzhen to Moscow/ Novosibirsk rail transport for a cosmetic brand Overview Moscow Russia Customer: a global skin/body care company Cargo: cosmetics Routing: Shenzhen / Shanghai (CN) – Moscow / Novosibirsk (RU) Lead Time: 28~32days (door-terminal) Volume: 100 FEUs per year Potential demand: Ocean-rail solution via Lianyungang to Central Asia (e.g. Kazakhstan) cargo from U.S. and North Asia Novosibirsk KAZ MN China Shanghai Shenzhen Achievement Consolidation center built in Shanghai & Guangzhou collecting cargo from local suppliers with small volume shipment Reduction of transit time by more than 25 days (compared to ocean-rail via Europe), and achieve reduction in transport cost at same time 15

Case study 2: Suzhou-Kazakhstan for a leading machine manufacturer (oversized equipment) Overview RU Customer: a leading machine manufacturer Cargo: finished vehicle (Oversized) Route 1: Suzhou – (bonded truck) – Nanjing – (rail) – Kazakhstan cities (in gauge) Route 2: Suzhou – (bonded truck) – Alashankou – (rail) – Kazakhstan cities (out gauge) Lead time: average 31days (door-terminal) Aktobe KAZ MN Aktau Almaty Nanjing Bonded truck Rail Suzhou CN Achievement Additional protective packing, packing solution designed for customer Flat wagon lashing for the vehicles 16

Case Study 3: Regular block trains from Chongqing to Duisburg for leading electronics customer Overview Customer: a leading hi-tech producer Goods: electronic goods (notebook) Routing: Chongqing (CN) – Duisburg (DE) (10,800km) & on-carriage to the Netherlands Lead Time: 22days (door-door) Volume: 41-50 FEU per train Frequency: regular weekly RU PL BY Duisburg KAZ MN CN Chongqing Achievement Innovative security concept based on DB Schenkersmartbox enable real-time cargo status monitoring High flexibility to accommodate additional volume (alternative solution) Special train Sea-air solution Door-door lead time reduction by 12-15 days, compared to previous ocean freight Time to market advantage Cost of capital reduction DB Schenker as the pioneer of block train runner on southern route 17

We are present on three different key lanes Rail-Air-Solution We are present on three different key lanes 1 From Chongqing 1 To Frankfurt/Main (FRA) Via Almaty (ALA) International Airport From Zhengzhou 2 To Amsterdam (AMS) From Chengdu 3 DBSL RLF | JS 11.09.2013 18

Product sheet Rail-Air-Solution 2 Relation: from China via Kazakhstan / Rail-Air mode change / Destination Europe Product specifics Combined rail-air container shipments Based on blocktrain Product type Bonded and guarded trucking from Almaty-1 rail station to Almaty Airport Customs transit formalities at mode- change from rail to air Rail-Air transshipment DB Schenker Chinatrain Product platform Air: 1 day Rail: 9-10 days Single container Optional: Winter solution Product offer Container provision (included) Smartbox (included) Audited Supply Chain Security Services Door-Door time: 12-14 days DBSL RLF | JS 11.09.2013 19

The Eurasian Landbridge: One Team, One Mission Thank you for your participation! DBSL RLF | JS 11.09.2013 20