1. 8-9 October, 2013 Bucharest, Romania

2. CONTENT: 8-9 October, 2013 Bucharest, Romania 1. ABOUT HŽ CARGO 2. BUSINESS ACTIVITIES IN 2012 3. BUSINESS STRATEGY 4. GUIDELINES ON RESTRUCTURING 5. STRATEGIC GUIDELINES AND TARGETS 6. HŽ CARGO IN THE LIBERALIZATION OF TRANSPORT MARKET 7. CONCLUSION

3. 8-9 October, 2013 Bucharest, Romania ABOUT HŽ CARGO  Limited liability company  Activities: railway freight transport  Founder and sole member: the Republic of Croatia  Share capital: 531,006,500.00 KN  Business commenced on 1 January 2007  Number of employees on 31 August 2013  – 2,775 – HŽ CARGO  – 3,582 – HŽ CARGO AND COMPANIES  Branches: Zagreb, Rijeka, Split, Varaždin,  Vinkovci, Ploče

4. 8-9 October, 2013 Bucharest, Romania COMPANIES OWNED BY HŽ CARGO  AGIT d.o.o. Zagreb  Održavanje vagona Zagreb d.o.o.  Radionica željezničkih vozila Čakovec d.o.o.  Remont i proizvodnja željezničkih vozila Slavonski Brod d.o.o.  Freight transportation center Slavonski Brod  MANAGEMENT BOARD:  President of the Board - Ivan Lešković, dipl.ing.  Member of the Board- Vlado Hanžek, dipl.ing.  Member of the Board– mr. sc. Zlatko Martić, dipl. ing.

5. HŽ RAILROADS MAP 8-9 October, 2013 Bucharest, Romania

6. CARRIAGES AND TRACTION ENGINES  6,000 carriages  187 locomotives  121 diesel locomotives  66 electric locomotives 8-9 October, 2013 Bucharest, Romania

7. BUSINESS ACTIVITIES IN 2012 In 2012 HŽ Cargo transported:  11.4 m tons of goods  2.422 m net ton kilometers  increase of transport per quarters in 2012 8-9 October, 2013 Bucharest, Romania TRANSPORTED GOODS PER QUARTERS

8. BUSINESS RESULTS IN 2012 8-9 October, 2013 Bucharest, Romania INCOME PER QUARTERS IN MILLION KUNA FIRST QUARTER OF 2012 SECOND QUARTER OF 2012 THIRD QUARTER OF 2012 FOURTH QUARTER OF 2012 FIRST SECOND THIRD FOURTH QUARTER QUARTER 2012 2012 2012 2012

9. 8-9 October, 2013 Bucharest, Romania

10. 8-9 October, 2013 Bucharest, Romania

11. BUSINESS STRATEGY OF HŽ CARGO  Positioning on the market as the national freight transport provider which offers the services of haulage in own carriages  Leading railway transport provider in Croatia and SE Europe  Restructured and reorganized company  Strategic partner in transport 8-9 October, 2013 Bucharest, Romania

12.  Increase of income by 2.2% NTKM annually  Decrease of costs by 3.6% annually  Operating without government subsidies  Concluding long-term contracts (3 – 5 years ) BUSINESS STRATEGY OF HŽ CARGO 8-9 October, 2013 Bucharest, Romania

13. 8-9 October, 2013 Bucharest, Romania Restructuring is based on cost optimization, better liquidity and the analysis of conditions and operations so far. The process of restructuring is considered essential for the interests of HŽ Cargo d.o.o. according to the needs of the market, i.e. economic demands in the circumstances of forthcoming market liberalization. Restructuring includes:  STATUS CHANGES  RESTUCTURING OF DEPENDANT COMPANIES  TRANSFER OF BUSINESS SHARES  RATIONALIZATION OF BUSINESS GUIDELINES ON RESTRUCTURING

14. NUMBER OF EMPLOYEES No.COMPANY No. of employees on 31 Dec 2012 No. of employees on 31 Aug 2013 Staff cut by 1HŽ CARGO3,3302,775555 2RŽV ČAKOVEC375247128 Bjelovar188 Čakovec187 3ODRŽAVANJE VAGONA34027367 4RŽV SL.BROD15313716 5AGIT20514659 6FTC SL.BROD440 TOTAL (COMPANIES):1,077807270 TOTAL HŽ CARGO AND COMPANIES 4,4073,582825 7. Planned number of employees 201420152016 1,6051,2101,064 8-9 October, 2013 Bucharest, Romania

15. 8-9 October, 2013 Bucharest, Romania STRATEGIC GUIDELINES AND TARGETS OF HŽ CARGO  Strategic production and sales cooperation with operators  Special range of products for logistical teams – shipping agents  Development of logistics services towards end users  Proactive marketing activities  Developing HŽ Cargo product

16. 8-9 October, 2013 Bucharest, Romania  Presence of employees on all railway centers for loading and unloading  Professional potential and experience of employees  Excellent cooperation with port and railway operators  Carriages and haulage capacity  Storage capacity  Possibility of shipment delivery and dispatch “door to door” (“Agit“) HŽ CARGO IN THE LIBERALIZATION OF TRANSPORT MARKET

17. 8-9 October, 2013 Bucharest, Romania HŽ CARGO IN THE LIBERALIZATION OF TRANSPORT MARKET  Development of HŽ Cargo towards logistical activities  Partner relations with existing service providers  Possibility of financing (co-financing) significant projects and new technologies through financial stability and credibility  Informatization of company work process (production SAP + introducing RCS system)  Transforming HŽ Cargo into a leader

18. 8-9 October, 2013 Bucharest, Romania CONCLUSION  HŽ Cargo d.o.o. is a national operator in railway freight transport which wants to remain recognizable and be attractive partner constantly emphasizing its comparative advantages which can be summarized as “high level of social responsibility“.  Functional and rational organization through alliance, joint venture companies and logistics centers connected by international and national freight trains, and by keeping existing users.  After Croatia joined EU, HŽ-Cargo is transformed into a successful transport and logistics provider on the liberalized European transportation service markets.

19. 8-9 October, 2013 Bucharest, Romania HVALA! THANK YOU!