Slide 1: Q3 2020 Results
Q3 2020 Results Analyst and Press Conference Call Carsten Spohr, CEO Frankfurt 5 November 2020
Slide 2: Lufthansa Group is in a good position to withstand the corona crisis
Lufthansa Group is in a good position to withstand the corona crisis Successful cost and cash management limits operating loss Lufthansa Cargo goes from strength to strength Disciplined capacity management and advantages of hub strategy will support performance in Q4 Solid liquidity position
Slide 3: Positive trends in early Restart phase reversed in September
Positive trends in early Restart phase reversed in September Capacity (ASK) in % of PY, seat load factors Comments 25% Performance in July and August 24% supported by good leisure demand 19% European short-haul routes perform significantly better than long-haul Deterioration in September cause
Slide 4: Network Airlines: Further step-up of cost reductions limits operating loss
Network Airlines: Further step-up of cost reductions limits operating loss Q3 2020 9M 2020 Operational KPIs +7.9% Comments -2.9% Capacity and seat load factors -16.3pts. decline significantly -36.5pts. Yields in Q3 benefit from mix effect -66.9% (higher share of continental traffic), -78.7% yiel
Slide 5: Eurowings: Touristic focus supports recovery in summer months
Eurowings: Touristic focus supports recovery in summer months Q3 2020 9M 2020 Operational KPIs Comments -6.6pts -15.5pts. -15.8% -10.5% Capacity decline less pronounced compared to Network Airlines High share of touristic traffic -65.8% -67.2% supports recovery in summer months 1 1 ASK SLF Yield
Slide 6: Logistics: On course for record result in 2020
Logistics: On course for record result in 2020 Q3 2020 9M 2020 Operational KPIs +46.7% +46.0% Comments +12.6pts. +7.0pts. Market-wide capacity squeezed by sharp reduction of available belly space in passenger aircraft -36.3% -42.1% Demand remains high throughout the 1 1 quarter ATK CLF Yield ATK
Slide 7: Results of the MRO and Catering segments burdened by the crisis
Results of the MRO and Catering segments burdened by the crisis Adjusted EBIT / Margin Q3 2020 9M 2020 nmf. nmf. Comments 116 -12% 351 -7% Year-to-date loss at Lufthansa -86 -20pts. -208 -14pts. Technik largely due to write-downs Q3 ’19 Q3 ’20 9M ’19 9M ’20 of receivables and spare parts Further
Slide 8: Significant reduction of operating cash drain compared to the second quarter
Significant reduction of operating cash drain compared to the second quarter Operating cash drain, EUR in million 1 Key drivers: Successful capacity expansion -60% Continued strength of Cargo business Monthly cash drain: Fixed cost reductions incl. short-time EUR 520 million work and other per
Slide 9: Impairments and fuel hedging losses burden net income
Impairments and fuel hedging losses burden net income Adjusted EBIT / Net Income 9M 2020 Comments Aircraft impairments relate to retirement of 110 planes/usage rights EUR 1.1bn of impairments in Q3 relate to long-term storage and Total adjustments: EUR 1,696 million permanent decommissioning of
Slide 10: Q3 free cash flow decline almost entirely driven by customer refunds
Q3 free cash flow decline almost entirely driven by customer refunds Earnings before tax / Adjusted free cash flow, Q3 2020, EUR in million 1,837 2,022 51 23 85 239 175 -2,069 252 -2,493 Other Net Leasing Adjusted Earnings Depreciation/ Ticket Net new Remaining Tax operating CapEx payments Free befo
Slide 11: Cash preservation continues to be the focus of Group financial management
Cash preservation continues to be the focus of Group financial management for the remainder of 2020 and going into 2021 1 Reduction of operating cash outflows 2 Strict working capital management Short-time work and other personnel measures (reduction of Accelerated collection of receivables over
Slide 12: Successful cash preservation has limited net debt increase to ca. EUR 2.3bn
Successful cash preservation has limited net debt increase to ca. EUR 2.3bn Adjusted free cash flow 1 Net debt Pension provisions Discount Discount n.m.f. +34% rate: +21% rate: 1.4% 1.3% 685 8,930 8,073 6,659 6,662 -2,579 9M ’19 9M ’20 Dec 31, ’19 Sept 30, ’20 Dec 31, ’19 Sep 30, ’20 1 Including amo
Slide 13: Stabilization package continues to sustain the Group's strong liquidity position
Stabilization package continues to sustain the Group's strong liquidity position Lufthansa stabilization package Group available liquidity EUR 10.1 billion EUR 9.0 billion Grant AT 0.2 Drawdown: Cash at hand 3.8 State-guaranteed 2.0 EUR 2.7 billion loans CH, AT, BE WSF Equity 0.3 Syndicated KfW loan
Slide 14: Lufthansa Group has revised its capacity plans in response to the deteriorating market outlook
Lufthansa Group has revised its capacity plans in response to the deteriorating market outlook Market Capacity European Short-haul Traffic Total Capacity LHG Hub Airlines % ASK vs. 2019 % ASK vs. 2019 Sharp rise in new infections 82% 80% Intercont Cont Implementation of lockdowns Resurgence of
Slide 15: Hub strategy allows bundling of traffic flows for O&Ds
Hub strategy allows bundling of traffic flows for O&Ds which cannot be served economically via P2P in the current market environment Current Market Environment LHG Hub Strategy Example: FRA-VCE passenger split for August 2020 by origin 14,689 passengers ARN FRA VCE FRA-ARN 2 cancelled routes Local P
Slide 16: Lufthansa Group has initiated restructuring measures across all business units and functions
Lufthansa Group has initiated restructuring measures across all business units and functions ReStructure Business Business unit restructuring Units ReBoot++ Sunrise2 … ReFocus ReOrg RePay Corporate Portfolio optimization, Corporate and functional Capital market initiatives and partnering opportuniti
Slide 17: The Group has made good initial progress in adjusting its size to a smaller market
The Group has made good initial progress in adjusting its size to a smaller market Number of employees reduced by almost Overview of labor negotiations 14,000 already Deutsche Lufthansa AG: 20% reduction of top management positions LSG: ~10,500 Lufthansa: agreement on long-term crisis package wi
Slide 18: The Group's financial outlook continues to reflect the effects of the crisis
The Group’s financial outlook continues to reflect the effects of the crisis Provisions for restructuring expenses and other crisis- related one-time effects expected to burden Adjusted EBIT in Q4 Operating cash drain to amount to around EUR 350 million (excl. restructuring and crisis-related on
Slide 19: #WeCare
Connecting people, cultures and economies will remain core of our business Maximum flexibility Connecting for customers People, Cultures and Maintain Economies traffic infrastructure to/from Europe Best airline product in Europe #1 Sustainable and Industry-leading value-oriented hygiene measures gro
Slide 20: Appendix - supplementary information
Appendix - supplementary information- Page 20
Slide 21: Traffic Data
Traffic Data 6M yoy Jul yoy Aug yoy Sep yoy Q3 yoy 9M yoy Passengers in 1,000 23,475 -66.0% 2,905 -80.1% 3,265 -77.0% 2,512 -82.0% 8,681 -79.7% 32,157 -71.2% Available seat-kilometers (m) 68,604 -60.7% 6,449 -80.9% 8,288 -75.3% 7,596 -76.4% 22,333 -77.6% 90,937 -66.8% Revenue seat-kilometers (m) 49,
Slide 22: Group P&L
Group P&L Lufthansa Group (in EUR m) Q3 ’20 vs. Q3 ’19 9M ’20 vs. 9M ’19 Revenues 2,660 -73.7% 10,995 -60.1% Total operating income 3,059 -71.5% 12,346 -57.8% Operating expenses 4,276 -55.2% 16,345 -41.0% Of which fees & charges 397 -67.2% 1,446 -57.9% Of which fuel 289 -84.5% 1,610 -68.4% Of which
Slide 23: Operating KPIs of Network Airlines by region
Operating KPIs of Network Airlines by region Total Q3 ’20 9M ’20 Europe Q3 ’20 9M ’20 Asia / Pacific Q3 ’20 9M ’20 Number of flights -71.3% -64.0% ASK -68.3% -63.9% ASK -84.8% -70.3% ASK -78.7% -66.9% RPK -75.5% -70.3% RPK -94.2% -76.8% RPK -87.7% -73.5% SLF -18.9pts. -13.9pts. SLF -55.0pts. -18.6pt
Slide 24: Cash flow statement
Cash flow statement Lufthansa Group (in m EUR) 9M ’20 vs. 9M ’19 Includes regular depreciation and crisis- 1 related impairments for 110 aircraft and EBT (earnings before income taxes) -6,912 -8,545 aircraft usage rights Depreciation & amortization (incl. non-current assets) 3,668 +1,555 1 Net proce
Slide 25: Maturity profile of borrowings
Maturity profile of borrowings 3,177 1,668 1,367 896 578 335 290 207 65 Q4 2020 2021 2022 2023 2024 2025 2026 2027 2028 Straight Bond Hybrid Bond Schuldscheindarlehen Aircraft Finance (secured) Credit Lines State Aid* Commercial Paper Other * As drawn at Sep 30 - predominantly repayment of EUR 1bn K
Slide 26: Multi-Year financial overview
Multi-Year financial overview Lufthansa Group (in m EUR, as reported) 2015 2016 2017 2018 20191 Operating KPIs RASK ex currency -3.0% -5.9% +1.9% -0.5% -2.5% CASK ex currency, ex fuel 2 +2.4% -2.5% -1.8% -1.7% -1.5% Profit & Loss Revenues 32,056 31,660 35,579 35,542 36,424 Fuel Cost 5,784 4,885 5,23