EFTA01104990.pdf

STRICTLY PRIVATE AND CONFIDENTIAL cn -4 xi -4 m LIAM Anniciaj vz 0 0 m 0 C -4 m z IN3INISBAN z o m C -4 U) 0 I M 03 D. I Z 5-I rLt 4 O I-1 CfQ Po EFTA01104990  This presentation was prepared exclusively for the benefit and internal use of the J.P. Morgan client to whom it is directly addressed and delivered (including such client's subsidiaries, the 'Company) in order to assist the Company in evaluating, on a preliminary basis, the feasibility of a possible transaction or transactions and does not carry any right of publication or disclosure, in whole or in part, to any other party. This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by J.P. Morgan. Neither this presentation nor any of its contents may be disclosed or used for any other purpose without the prior written consent of J.P. Morgan. 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Unless expressly contemplated hereby, the information in this presentation does not take into account the effects of a possible transaction or transactions involving an actual or potential change of control, which may have significant valuation and other effects. STRATEGIC EQUITY INVESTMENT IN DEUTSCHE KAHN Notwithstanding anything herein to the contrary, the Company and each of its employees, representatives or other agents may disclose to any and all persons, without limitation of any kind, the U.S. federal and state income tax treatment and the U.S. federal and state income tax structure of the transactions contemplated hereby and all materials of any kind (including opinions or other tax analyses) that are provided to the Company relating to such tax treatment and tax structure insofar as such treatment and/or structure relates to a U.S. federal or state income tax strategy provided to the Company by J.P. Morgan. J.P. 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IF:Morgan EFTA01104991  Asia)Pacific Other 11% North America 4%- RoW 1% Deutsche Bahn operates a fully integrated business model 5e.4, Infrastructure 13% I DB Bahn Europe % 38%2 28 DB Schenker Germany Logistics DB Schenker 28% Rail 10% 62% DB Mobility Logistics AG ("DB ML") Sales 2009A = E40,555mm DB Bahn DB Schenker Infrastructure' Emm PF 20382 PF 20092 Ernm 2008 2009 €inm 2008 2009 Revenues 15,413 15,473 Revenues 19,683 15.347 Revenues 5,367 5,394 EBITDA 2.638 2,386 EE1TDA 1,111 478 ESATDA 1,946 1,933 %margin 17.1% 154% %margin 56% 3.1% %margin 36.3% 358% Long Distance Logistics Track • Provides national and transeuropean • Leading provider of integrated logistics transport services services • Responsible for the operations and • No. 1 in Germany with 99% market share • Offers worldwide land, air and ocean freight, maintenance of the rail infrastructure contract logistics and intermodal transport • Controlling and pricing of the allocation of the Regional solutions Business segments • Biggest segment within the transport services rail track • No. 1 in European land transport • Total of 1.243mm passengers in 2009 Stations • No. 2 in global air freight • No. 1 in Germany with 80% market share STRATEGIC EQUITY INVESTMENT IN DEUTSCHE BAHN • No. 3 in global sea freight • Operates more than 5,500 train stations in Urban • No. 6 in global contract logistics Germany • Operates the commuter rail in Berlin and Rail • Development and marketing of the stations Hamburg as well as bus services • Leading European rail freight service operator • No. 1 in bus transport and S-Bahn services in Germany • No. 1 in Europe with 22% market share • No. 1 in Germany with 75% market share Arriva • Provides pan-European public transport services (rail, bus, coach) 20% Arriva 13% Urban 41113% Long Distance 74% Logistics t 4 26% Rail 81% Track t 4 19% Stations 44% Regional L An equity investment in DB ML provides direct access to the global market Source: Company data Note: Revenues represent total revenues (external and internal); Exchange rate used for Arriva Financials: 1 GBP = 1.123 EUR ' Infrastructure excludes Services and other subsidiaries J.P.Morgan 2 All DB Bahn Financials (DB Bahn and Group) are pro•forma Including Arrive 1 EFTA01104992  DB ML is a leader in each business segment in which it operates European passenger market European rail freight market 1Rs it • Post acquisition of Arriva, DB Bahn is the • DB Schenker Rail is the leading European • DB Schenker Logistics is a global player largest European public passenger transport rail freight operator with leadership positions in sea, air and land company • Extensive network with strategic presence in • Unmatched breadth of service offering and • Diversified pan-European operations in bus key trade corridors and ports connectivity of global network and rail sectors 1 European operators (sales 2009 Emm) Freight transport performance European land Air freight 341 2009 (mm tons) transport 15.473 13,954 12% 6,948 134 6.059 120 97 86 2 3% 2% 2% 1% 0 co w co ig • g v 8or) X O ❑ / 6 0 w Geographic Presence (# countries) Volume 2009 (bn ton km) Sea freight Global Supply Chain 29 94 Management 9% 9% w 6% 5% CO 37 4% w 27 23 17 u. c co c 0. U O -81 + C0 O C O zi O .c O .c.4 ta O 7, O ccw, 4 > g "03 g O w Source: Competition report 2009. Company information Market share based on sales Note: EUR(GBP FX rate of 1.123 applied cc 2008 data co 2 J.PMorgan EFTA01104993  DB ML outperforms its public transport and rail peers, while offering upside in logistics DB Bahn DB Schenker Rail DB Schenker Loglsti EBITDA margin FY 2009 EBIT margin EBITDA margin FY 2009 2008 , 2009 PF DB Bahn 15.4% Kuehne + Nagel DB Stagecoach 11.8% Schenker DSV RrstGroup 11.3% Rai National Express 9.9% CD Cargo DB Schenker Logistics Keois' 7.2% Go-Ahead 6.6% Green Veola Transport2 5.7% Cargo Rail Cargo EBITDA/Employees FY 2009 (In EBITDA/Employees FY 2009 (in €) Austria 2 PF DB Bahn 25.911 [eV 14,130 L 0 Stagecoach - 9,324 SNCF3 Kuehne + Nagel 10.892 Go-Ahead 7,370 0 I DB Schenker Logistics 6,494 I z National Express 6,959 PKP Cargo -10.0% Panalpina 3.835 z FirstGroup 6,309 w CEVA 3.624 5,840 RENFE DHL Logistics 2,801 Veolia Transport 2 MI 1,863 Source: Company information a Note: Financials ca endarised to 31 December 2009: DB Bahn pro-forma including Arriva: EUR'GBP FX rate of 1.123 applied 2008 figure. 2 Veolia 2008 PF for merger with Transdev. 3 Transport and Logistics division w 0 w 0 w 3 J.PMorgan EFTA01104994  DB ML has recovered financially and expects strong growth in 2011 and 2012 DB ML forecasted financials (€mm) €mm Revenue 2009A 31,473 2010E 34,888 2011E 36,394 2012E 37,638 Long-tens trend E=r I ■ Export growth from Northern % growth (11.9%) 10.8% 4.3% 3.4% 3.0% Europe DB Bahn 15.473 15.758 15,952 16.116 ■ Industry experience and scale to DB Schenker 15.347 18.402 19,663 20.715 win substantial market share, DB Services 1.237 1.311 1.364 1.391 especially in the European EBITDA 2,960 3,404 3,829 4,153 public transportation sector post recent acquisition of Arriva % rrargin 9.4% 9.8% 10.5% 11.0% 11.5% ■ Growing momentum for 2 DB Bahn 2.386 2.330 2,484 2.587 intermodal operations driven by < DB Schenker 478 969 1,214 1.429 environmental concerns and w DB Services 297 307 332 339 globalisation •co I Net income (77) 695 931 1.198 ■ Emergence of Eastern % margin (0.2%) 20% 2.8% 3.2% European and Asian economies 0 as engine of growth in global Total net debt' 7,239 10,273 9,408 8,350 trade Total equity 2,770 3,465 4,396 5,594 w Financial leverage2 2.8x 3.1x 2.4x 1.9x co Source: J.P. Morgan Research. Company information w Note: Divisional revenues do not add up to total revenues due to consolidation differences of internal revenues and 'other' not being taken into account: All financials are pro-forma for the acquisition of Arriva Net debt defined as total financial debt (short-term and longterm) minus Cash >- 2 Financial leverage defined as total financial debt (short-term and long-term) over book value of equity 0 w a w CC Co 4 J.PMorgan EFTA01104995  DB ML's strategy is very clear — increased integration on a regional and global basis Integrated approach to each business • DB Bahn's public transportation network is truly integrated, both intra-modal as well as across modes • Spanning 12 countries across Europe • Ranging from regional and long distance rail services, urban and inter-city bus operations to Mobility / Logistics • Coaches, water buses, tram and car sharing • The interrelation between DB Schenker's freight rail and logistics activities create a network c NbE Rail unmatched in its • Capillarity z DB SCHE • Density r CO ■ Distance LU ■ Geographical footprint Logistics ■ Diversified offering w 0 z • Network and operational integration is a key driver of DB ML's competitive strength, providing z unique synergies driven by: Infrastructure w ■ Shared market insight CO CO • Competitive commercial initiatives CU • Best practices in network planning and operation, systems and procurement • DB ML's integrated passenger and freight rail services allow for optimal infrastructure network usage and efficient infrastructure investment programmes 0 w w cc 5 J.PMorgan EFTA01104996  A strategic equity investment in DB ML could be a "win-win" proposition Rationale for an equity investment in DB ML Rationale for Deutsche Bahn ■ Attractive opportunity to invest in the leading global ■ Early stage preparation for full privatisation in 2012/2013 mobility provider ■ Tap expertise at board level to refine and optimize DB ML's ■ Best-in-class operator and leading market presence in operating and financial performance all segments n Leverage the partner's geographical reach and contacts to ■ Opportunity to participate in upside potential driven by take advantage of strategic opportunities global macro backdrop and positive outlook for transport ■ Additional capital would be deployed in attractive ■ Additional upside potential driven by outsourcing / investment opportunities tendering trends in European public transport and freight 2 rail as well as a growing momentum in logistics ■ Rail outsourcing and global trade ■ Logistics I ■ Potential to invest at attractive pre-IPO valuation ■ Passenger transport co w z w 2 - 0 w w CC cel 6 IPMorgan EFTA01104997 A Deutsche Bahn investment should be financially attractive Indicative investment in DB ML • Business leadership Pre-IPO entry multiple • Global trade growth IPO exit multiple E841mm • Enhanced operational performance (2.4% stake) • Full profit orientation • Strong cash flow/dividend • Change in business mix NS°I° E500mm (2.4% stake) 2011 2014+ Pre IPO investment Shareholding in publicly traded company 7 J.PMorgan EFTA01104998