Slide 1: Analyst and Investor Conference Call Q2 2017
Analyst and Investor Conference Call Q2 2017 Ulrik Svensson, CFO and Member of the Executive Board Frankfurt, 2 August 2017
Slide 2: Disclaimer
Disclaimer The information herein is based on publicly available information. It has been prepared by the Company solely for use in this presentation and has not been verified by independent third parties. No representation, warranty or undertaking, express or implied, is made as to, and no reliance
Slide 3: New alignment of Group leads to substantially improved results
New alignment of Group leads to substantially improved results Overview Strongest Q2 and H1 in the history of Lufthansa Group • Q2 Adjusted EBIT increased by 435m EUR to 1,017m EUR • H1 Adjusted EBIT almost doubled from 529m EUR to 1,042m EUR • Free cash flow increases by 87% to 2.1bn EUR in H1; net
Slide 4: Favourable trading environment particularly in Asia and North America
Favourable trading environment particularly in Asia and North America Operating KPIs Passenger Airlines Q2 ‘17 H1 ‘17 +20.9% +17.3% Q2 ‘17 H1 ‘17 +2.8pts. +2.4pts. Q2 ‘17 H1 ‘17 +6.9% +6.7% -4.9% +6.3pts. -5.1% +5.1pts +4.0pts. +1.5% +0.9% +2.1pts. -0.4% -0.4% -0.2% -0.5% Q2 ‘17 H1 ‘17 +51.6% +41.3%
Slide 5: Group airlines drive strong profit improvement
Group airlines drive strong profit improvement Q2 and H1 2017 operating KPIs and key profit figures at a glance Network Airlines Point-to-Point Airlines Aviation Services Q2 ‘17 H1 ‘17 in m EUR Q2 ‘17 H1 ‘17 ASK +13.5% +11.7% Adj. EBIT2 165 362 RASK +1.8% +0.5% Δ year-on-year +23 +185 (constant curr
Slide 6: Strong cash flow development drives reduction of net debt
Strong cash flow development drives reduction of net debt Key balance sheet and cash flow figures at a glance Network Airlines Point-to-Point Airlines Aviation Services Balance Sheet in m EUR H1 ‘17 vs. FY ‘16 Cash Flow in m EUR H1 ‘17 vs. H1 ‘16 Net financial debt 1,139 -57.8% Operating cash flow 3
Slide 7: Strong performance of Passenger Airlines and Cargo
Strong performance of Passenger Airlines and Cargo Segment overview Q2 2017 in m EUR Network Airlines Point-to-Point Airlines1 Revenue 6,168 4,358 1,210 651 Revenue 1,089 vs. Q2 ‘16 +472 +302 +100 +79 vs. Q2 ‘16 +544 Adj. EBIT 797 581 152 62 Adj. EBIT 55 vs. Q2 ‘16 +346 +265 +46 +33 vs. Q2 ‘16 +66 A
Slide 8: Full year guidance changed to “above previous year”
Full year guidance changed to “above previous year” Forecast Lufthansa Group for H2 2017 Network Airlines Point-to-Point Airlines Aviation Services1 ASK 4.7% organic growth2 (= 13.5% total growth) RASK Negative (constant currency) Including mix effect from organic growth of P2P segment CASK Slightly
Slide 9: Appendix – supplementary information
Appendix – supplementary information – Page 9
Slide 10: Adj. EBIT expected above previous year
Adj. EBIT expected above previous year Forecast 2017 per segment Segment Adj. EBIT 2016 (m EUR) Adj. EBIT Forecast for 2017 Lufthansa German Airlines 1,090 above previous year SWISS 405 above previous year Austrian Airlines 58 above previous year Network airlines 1,555 above previous year Point-to-p
Slide 11: Focus on capacity discipline, growth driven inorganically
Focus on capacity discipline, growth driven inorganically Lufthansa Group capacity growth 2017 per region 9% 4% 1% Network Airlines Eurowings (organic) (organic) -25% Network Eurowings Airlines (organic) (organic) 79% 123% 10% 3% Network Eurowings Network Eurowings Airlines (organic) Airlines (organ
Slide 12: Appendix – financial figures Q2 / H1 2017
Appendix – financial figures Q2 / H1 2017 – Page 12
Slide 13: Strong performance of cargo and passenger airlines
Strong performance of cargo and passenger airlines Segment overview H1 2017 in m EUR Network Airlines Point-to-Point Airlines1 Revenue 11,097 7,840 2,271 1,091 Revenue 1,772 vs. H1 ‘16 +696 +434 +177 +119 vs. H1 ‘16 +850 Adj. EBIT 757 569 187 3 Adj. EBIT -77 vs. H1 ‘16 +270 +208 +60 +4 vs. H1 ‘16 +5
Slide 14: Fuel costs increase due to consolidation of Brussels Airlines
Fuel costs increase due to consolidation of Brussels Airlines Fuel forecast and sensitivities FY 2017 Lufthansa Group fuel expenses after hedging Lufthansa Group price curve remainder of 2017 (in bn EUR) 100 LH price 2017 Sensitivities with deviating oil price 90 Market price 4.9 4.8 5.1 (+20%) +280
Slide 15: Absolute costs increase in the second quarter and first half-year
Absolute costs increase in the second quarter and first half-year Operating costs and revenues Lufthansa Group (in m EUR) Q2 ‘17 vs. Q2 ‘16 H1 ‘17 vs. H1 ‘16 Total revenue 9,260 +14.0% 16,951 +12,7% Other operating income 613 +5.9% 1,174 -4.7% Total operating income 9,873 +13.4% 18,125 +11.4% Operat
Slide 16: Free cash flow increases despite higher capex
Free cash flow increases despite higher capex Cash flow statement Lufthansa Group (in m EUR) H1 ‘17 vs. H1 ‘16 3.3 3.4 3.2 3.2 EBT (earnings before income taxes) 882 +384 2.0 Depreciation & amortization (incl. non-current assets) 902 +7 Net proceeds from disposal of non-current assets -27 +15 FY 201
Slide 17: Favourable trading environment particularly in Asia and N. America
Favourable trading environment particularly in Asia and N. America Operating KPIs Group Airlines Total Q2 '17 H1 '17 Europe Q2 '17 H1 '17 Asia/Pacific Q2 '17 H1 '17 Number of flights +10.5% +8.4% ASK +20.9% +17.3% ASK +1.5% +0.9% ASK +13.5% +11.7% RPK +25.4% +21.2% RPK +9.6% +7.4% RPK +19.1% +15.6%
Slide 18: Group revenue and currency impact
Group revenue and currency impact H1 2017 vs. H1 2016 Currency influence on EBIT (in m EUR) in m EUR Q1 Q2 Q3 Q4 FY (YTD) -39 34 -5 Volume: +8.8% Currency: +0.6% -60 65 Price: -0.5% 1,040 Brussels Airlines: +5.3% 611 Traffic revenue (+14.2%) 13,293 11,637 3,658 Other revenue (+7.4%) 3,405 H1 2016 H1
Slide 19: Fuel cost development
Fuel cost development H1 2017 vs. H1 2016 Hedging result by quarter (in m EUR) Q1 Q2 Q3 Q4 FY (YTD) 2016 -336 -235 -219 -115 -905 2017 -30 -63 -93 in m EUR Change versus previous year 223 Price +441 Brussels Airlines 2,560 Volume -478 Currency 2,337 +143 +70 +47 Hedging H1 2016 H1 2017 Page 19
Slide 20: Adjusted EBIT and one-off factors
Adjusted EBIT and one-off factors Quarterly results 2016-2017 in m EUR Q1 Q2 Q3 Q4 6M 9M Full Year Adjusted EBIT 2016 -53 582 1,148 75 529 1,677 1,752 Strikes 0 0 0 -100 0 0 100 Adjusted EBIT ex one-off factors -53 582 1,148 175 529 1,677 1,852 Adjusted EBIT 2017 25 1,017 1,042 One-off effects 0 0 0
Slide 21: Adjusted EBIT and EBIT per quarter 2017
Adjusted EBIT and EBIT per quarter 2017 in m EUR Q1 Q2 Q3 Q4 6M 9M FY Adj. EBIT 25 1,017 1,042 pension changes -32 0 -32 book gains / losses on asset disposals +23 +5 +28 impairments / badwill 0 -7 -7 EBIT 16 1,015 1,031 interest on liquidity taxes (25% lump sum) cost of capital EACC average capital
Slide 22: Adjusted EBIT and EBIT per quarter 2016
Adjusted EBIT and EBIT per quarter 2016 in m EUR Q1 Q2 Q3 Q4 6M 9M FY Adj. EBIT -53 582 1,148 75 529 1,677 1,752 pension changes 0 0 +721 -43 0 +721 +678 book gains / losses on asset disposals +5 +37 +7 -11 +42 +49 +38 impairments / badwill -1 -52 -64 -76 -53 -117 -193 EBIT -49 567 1,812 -55 518 2,3