Extract from the 2013 Jungfraubahn Holding AG Business Report

Important note:
This extract from the official business report was specially prepared for presentation on Internet. It is a considerably shortened version. Please note that the proposals by the Executive Board and Annual General Meeting for approval / resolution refer to the unabridged printed version in the German language. Only the full version is binding. The full version of the report (in German) may be downloaded using the link below.
The report is in some places associated with a view to medium and long-term prospects. All statements relating to the future hold uncertainties. They are projections that reflect the current views of the decision makers. Actual future events and decisions may turn out differently, particularly in relation to changes in environmental conditions. All declarations referring to the future are based on facts current at the time the report was prepared in March 2014.

Dear Shareholders,
Ladies and Gentlemen

The outstanding success of our group in the Jungfrau Railway’s centenary year was a challenging benchmark. It seemed hardly possible to exceed this result in the following year. And yet in 2013, for a second time the Jungfraujoch welcomed over 800,000 visitors. With 823,000 visitors, the number was almost the same as the previous year. A higher average yield per visitor was also achieved in this highly competitive market. This was mainly due to fewer special offers and promotions as well as the successful implementation of price adjustments, including in Asian overseas business. Traffic income for the entire group was CHF 121.5 million. This is 5.6% above the record figure of the previous year. Profit even rose by 16% thanks to good results in all business sectors and favoured by a course of business without negative special terms. With CHF 30.2 million, the Jungfrau Railway Group achieved a new record result.

Thanks to employees

Our employees have repeated their exceptional performance of last year. And this not only on the Jungfrau Railway, but also on the ski slopes and the small Harder Railway, where the 6 employees transported 114,000 guests in the 2013 summer season, achieving an amazing 18% growth in visitor numbers. The entire personnel of Jungfrau Railways are owed our special thanks for this commitment

Long-term business strategy

Business with tour operators is our strongest pillar of income. Once again we were able to broaden and increase this throughout the entire Asian area. On average, 60 groups or 1730 group travellers visited the Jungfraujoch per day. This is the result of long-term cultivation.

Continuity is the hallmark of our business policy, which expresses itself in loyalty to our Asian business partners and above all to our network in the Jungfrau Region. As value stock, we focus on strategic financial objectives that are aligned to a healthy balance between cash flow and investment. In particular, the Jungfrau Railway Group set a special free cash flow target for the preceding ten years. The firm intention to acquire free capital with the group was underlined with a corresponding long-term oriented compensation component for the company's management and personnel. The objective set in 2003 was reached at the end of 2013 and the sum built up continually over 10 years will be distributed. This was measured on the annually achieved free cash flow.

V-Cableway

Thanks to its clear targets, in the past years the Jungfrau Railway Group has achieved a total free cash flow of CHF 207.6 million. Following the capital-intensive renewal of the Wengernalp Railway (MCA 2005, and double-track WABPLUS) the company has again long been free of bank liabilities and is accordingly set to take a further step into the future. The V-Cableway puts the journey to the Jungfraujoch more in line with customer needs and thus also makes our group and the entire Jungfrau Region more competitive. The project has been given its name because of the two cableways planned with the Gondelbahn Grindelwald-Männlichen AG (GGM). They will operate in the shape of a V from a joint terminal at Grindelwald Grund to the Männlichen as well as the Eigergletscher station at the entrance to the Jungfrau Railway tunnel. The cooperation with the GGM will generate considerable economic benefits and ensure the independence of the GGM. The task of the municipalities of Grindelwald and Lauterbrunnen to provide excellent winter sports facilities will thus be shared.

During 2014, the municipalities will vote on the amendments to land-use planning required for this project. The 250-million project will strengthen the Jungfraujoch – Top of Europe and ensure an internationally competitive quality of winter sport in the ski resorts of Wengen and Grindelwald. It is broadly based in two business segments or two seasons, summer and winter. The V-Cableway includes other important elements such as the procurement of new rolling stock for the Wengernalp Railway and Jungfrau Railway. The railcars for the Wengernalp Railway are already under construction and on 24 December 2013 we gave ourselves a Christmas present with the order of new Jungfrau Railway trains. With this project we are pursuing long-term perspectives, are committed to creating new jobs and are laying the foundation for further investment in winter sport. More information on the 250-million franc project is found on our website at www.jungfrau.ch/v-bahn.

Prospects

Jungfrau Railways has started the year well. Demand from Asia in particular remains high. Winter sport and our excursion destinations for families, sport fans and hikers can essentially benefit from the slight change in trend in tourism that was noticeable last year. In order to better safeguard ourselves against extreme weather conditions, we need to promote longer holiday stays for winter sport as opposed to the more volatile one-day ski business. The prerequisite for this is an attractive and efficient transport capacity to the ski area with no waiting time - a step that we are preparing with the V-Cableway.

Thanks

In addition to our employees, we above all wish to offer our heartfelt thanks to our customers as well as to the authorities, municipalities, mountain cooperatives, tourism organizations, neighbouring rail & cableways, distributors, suppliers, the International Foundation High Altitude Research Station Jungfraujoch and Gornergrat and all the other partners with whom we are able to maintain such fruitful relationships. In conclusion, we would also like to sincerely thank our valued shareholders for their trust in our group and loyalty to the Jungfraubahn Holding AG.

Prof. Dr. Thomas Bieger                     Urs Kessler

Chairman of the Executive Board        Chief Executive Officer

Business Report 2013 in German