Deutsche Lufthansa Ag · XETR:LHA
Deutsche Lufthansa — Q1 2021 Earnings Presentation
34 slides from Deutsche Lufthansa's earnings presentation, Apr 29, 2021
Slide 1: Q1 2021 Results Analyst and Press Conference
Q1 2021 Results Analyst and Press Conference Carsten Spohr, CEO Remco Steenbergen, CFO Frankfurt, 29 April 2021
Slide 2: Disclaimer
Disclaimer The information herein is based on publicly available information. It This presentation contains statements that express the Company‘s has been prepared by the Company solely for use in this opinions, expectations, beliefs, plans, objectives, assumptions or presentation and has not been v
Slide 3: Q1 2021 Results Analyst and Press Conference
Q1 2021 Results Analyst and Press Conference Carsten Spohr, CEO Frankfurt, 29 April 2021
Slide 4: Good progress made in the Group's restructuring – recovery expected to gain momentum
Good progress made in the Group’s restructuring – recovery expected to gain momentum in the second half year Q1 Capacity (ASK) Adjusted EBIT (€) FY Capacity (ASK) 21% -1.1bn ~40% of 2019 +6% vs PY of 2019 Demand remains Modernization and Group prepared to significantly below restructuring take advan
Slide 5: Group Airlines: Significant cost reductions limit operating losses
Group Airlines: Significant cost reductions limit operating losses Q1 2021 Operational KPIs vs. 2019 Adjusted EBIT in EUR million Comments Network Airlines ASK SLF Yield1) Contribution from cargo supports -891 higher capacity at Network Airlines 22.2% 44.7% -7.9% -1,261 Network Airlines operatin
Slide 6: Profits in Logistics segment up strongly, improvements in MRO and Catering
Profits in Logistics segment up strongly, improvements in MRO and Catering Q1 2021 Adjusted EBIT in EUR million Comments 314 -22 Profits in Cargo business benefit Q1 ’20 Q1 ’21 from belly capacity squeeze and high demand for air freight Result at Lufthansa Technik 16 supported by recovery of Nor
Slide 7: Group transformation accelerated – Lufthansa is well positioned to seize opportunities ahead
Group transformation accelerated – Lufthansa is well positioned to seize opportunities ahead Scaling Up Operations Flexibly Capturing Market Opportunities Streamline fleet and capitalize on strength of brands, Adjusting our offer to secure share in hubs and partnerships strategic markets and drive p
Slide 8: Q1 2021 Results Analyst and Press Conference
Q1 2021 Results Analyst and Press Conference Remco Steenbergen, CFO Frankfurt, 29 April 2021
Slide 9: Significant cost savings reduce operating loss compared to prior year period
Significant cost savings reduce operating loss compared to prior year period (in EUR million) Q1 ’20 Q1 ’21 Change in % Revenues 6,441 2,560 -60% Operating expenses 8,162 3,980 -51% Of which fuel 1,227 275 -78% Of which staff 2,143 1,390 -35% Of which depreciation 680 566 -17% Adjusted EBIT -1,220 -
Slide 10: Cash drain limited to EUR 235 million per month in Q1
Cash drain limited to EUR 235 million per month in Q1 Adjusted EBIT / Adjusted free cash flow in EUR million 559 (45) -629 Monthly cash (231) Drain1): (87) -947 EUR 235m -1,143 Adjusted Depreciation & Non-cash Operating Trade working Net Adjusted EBIT Amortization items/ result Cash Drain capital/ C
Slide 11: Available liquidity continues to exceed EUR 10 billion
Available liquidity continues to exceed EUR 10 billion 11,117 Comments 10,557 (947) 56 EUR 2.5 billion of stabilization (1,770) 2.213 measures drawn 5.460 New financing transactions 5.110 Incl. EUR 1bn compensate negative free cash flow KfW loan and repayments: EUR 1.6 billion bond EUR 0.35
Slide 12: Net debt increase primarily related to free cash flow decline
Net debt increase primarily related to free cash flow decline - pension provisions decline mainly due to valuation effect Net debt in EUR million Pension provisions in EUR million 947 10.924 9.531 1.797 9.922 (55) 87 7.821 Due to increase of discount rate from 0.8% to 1.2% Dec 31, Adj. Free Pension
Slide 13: Focus of financial management on restoring balance sheet strength
Focus of financial management on restoring balance sheet strength STRENGTHENING OF BALANCE SHEET Return to profitability Repayment stabilization measures Divestments Achieve cost reductions to ensure Replace state aid funds through long- Divest non-core assets in part or in quick return to profitabi
Slide 14: Return to 90-95% of pre-crisis capacity projected in 2024
Return to 90-95% of pre-crisis capacity projected in 2024 despite expected reduction in corporate travel Expected Group Airlines Capacity Expected demand recovery by customer segment ASK (annual average in % of 2019) RPK (% of 2019) 100% 90-95% 2019 80% level 90% 60% 80% 40% 40% 20% VFR Leisure Corp
Slide 15: Three main levers will mitigate the impact from a slower recovery of corporate demand
Three main levers will mitigate the impact from a slower recovery of corporate demand Flexibility in premium offering Focus on fast recovering markets Innovation in revenue management Aircraft retirements decided in Corporate travel to recover faster in Expansion of direct distribution 2020 ac
Slide 16: More than a third of personnel cost reductions driven by structural measures
More than a third of personnel cost reductions driven by structural measures Group cost position and development, last 12 months (LTM) Deep-dive personnel fixed cost development in EUR million in EUR million 16.6 -36%/EUR 3.0bn 8.366 Variable cost 6,6 - 70% vs. 2019 Incl. structural cost savings of
Slide 17: Personnel reduction target achieved ex-Germany, further reductions necessary in Germany
Personnel reduction target achieved ex-Germany, further reductions necessary in Germany FTE reduction by segment in last 12 months FTE reduction1) by region in last 12 months -24,000 FTE/ -8,000 FTE -16,000 FTE - 25,700 employees 60,200 57,000 117,500 52,200 41,000 Catering ~10,000 19,050 LSG EU ~6,
Slide 18: Personnel cost reductions in Germany based on union agreements, voluntary leaves and dismissals
Personnel cost reductions in Germany will be based on a combination of union agreements, voluntary leaves and forced dismissals Cabin: Agreement with UFO (until end of 2023) Option A Pilots: Agreement with VC (until end of Q1 2022) Long-term agreement Ground staff: Agreement with ver.di (until end o
Slide 19: Lufthansa Group seeks to repay stabilization measures as early as possible
Lufthansa Group seeks to repay stabilization measures as early as possible STRENGTHENING OF BALANCE SHEET Return to profitability Repayment stabilization measures Divestments Achieve cost reductions to ensure Replace state aid funds through long- Divest non-core assets in part or in quick return to
Slide 20: Authorized Capital C creates an additional lever to strengthen the balance sheet
Authorized Capital C creates an additional lever to strengthen the balance sheet Group is asking for Authorized Capital C in the IFRS equity under increasing pressure upcoming Annual General Meeting on May 4 Book Value of Equity of Lufthansa Group in EUR billion Group Available Liquidity New autho
Slide 21: Divestments of non-core assets to contribute to balance sheet restoration
Divestments of non-core assets to contribute to balance sheet restoration STRENGTHENING OF BALANCE SHEET Return to profitability Repayment stabilization measures Divestments Achieve cost reductions to ensure Replace state aid funds through long- Divest non-core assets in part or in quick return to p
Slide 22: Divestment of AirPlus and LSG RoW currently under consideration
Divestment of AirPlus and LSG RoW currently under consideration Comprehensive range Specialized provider of of products, concepts business travel payment and services related to Rest of World business in-flight service Four expert brands Adjusted EBIT 2019 including Strong international footprint LS
Slide 23: Capacity ramp up delayed by ongoing travel restrictions
Capacity ramp up delayed by ongoing travel restrictions - travel demand recovers fast when restrictions are lifted Travel restrictions remain Capacity outlook revised Pent up demand is significant Example : Germany – Palma de Mallorca Travel restrictions 2021 Guidance: in March 10, 2021 – 83% 40 % M
Slide 24: Group confident to further limit operating cash drain in Q2
Group confident to further limit operating cash drain in Q2 2021 Adj. EBIT: Q2 oper. Cash Drain guidance 2021 Gross CapEx: Less negative than in further reduced: c. EUR 1.3bn 2020 c. EUR 200m per month Page 24
Slide 25: Appendix - supplementary information
Appendix - supplementary information- Page 25
Slide 26: Traffic Data
Traffic Data Jan vs.2019 Feb vs.2019 Mar vs.2019 Q1 vs.2019 Passengers in 1,000 1,108 -87.8% 788 -91.3% 1,147 -89.8% 3,043 -89.7% Available seat-kilometers (m) 6,234 -76.3% 4,697 -80.8% 5,912 -79.4% 16,843 -78.8% Revenue seat-kilometers (m) 2,932 -85.4% 1,978 -89.4% 2,675 -88.4% 7,584 -87.8% Passeng
Slide 27: Operating KPIs of Network Airlines by region
Operating KPIs of Network Airlines by region Total yoy vs.2019 Europe yoy vs.2019 Asia / Pacific yoy vs.2019 Number of flights -79.6% -83.6% ASK -80.5% -84.1% ASK -77.0% -82.9% ASK -72.7% -77.8% RPK -83.3% -87.4% RPK -88.8% -92.3% RPK -83.3% -87.3% SLF -9.4pts. -14.6pts. SLF -39.6pts. -45.6pts. SLF
Slide 28: Operating KPIs of Eurowings
Operating KPIs of Eurowings Total yoy vs.2019 Number of flights -88.4% -91.6% ASK -86.8% -90.1% RPK -90.9% -93.1% SLF -23.2pts. -23.1pts. Yield +27.7% +25.3% Yield ex currency +27.6% RASK -0.9% RASK ex currency +6.8% CASK excl. fuel +185.8% CASK ex currency ex fuel +187.5% Page 28
Slide 29: Calculation of operational airline KPIs
Calculation of operational airline KPIs Network Airlines, Q1 2021 Eurowings, Q1 2021 1) Traffic revenues (€m) 620 1) Traffic revenues (€m) 38 2) Not assignable (€m) 113 2) Not assignable (€m) 6 Yield Yield = 3) Basis for Yield (1)–(2) (€m) 507 = 3) Basis for Yield (1)–(2) (€m) 38 4) RPK (m) 1) 7,240
Slide 30: Group P&L
Group P&L Lufthansa Group (in EUR m) Q1 ’21 vs. Q1 ’20 Revenues 2,560 -60.3% Total operating income 2,888 -58.6% Operating expenses 3,980 -51.2% Of which fees & charges 285 -67.4% Of which fuel 275 -77.6% Of which staff 1,390 -35.1% Of which depreciation 566 -16.8% Result from equity investments -51
Slide 31: Walk from Adjusted EBIT to Net Income for Q1 2021
Walk from Adjusted EBIT to Net Income for Q1 2021 in EUR million Total EBIT adjustments: 8 259 10 (60) -1,049 -1,143 (2) 5 (118) Adjusted Aircraft Bookgain/-loss, Interest result Profit/loss Tax result Other Net EBIT impairments write-backs attributable to Income minority interests Page 31
Slide 32: Cash flow statement
Cash flow statement Lufthansa Group (in m EUR) Q1’21 vs. Q1 ’20 Decrease related to non-recurrence of 1 crisis-related aircraft impairments in 2020 EBT (earnings before income taxes) -1,313 +1,363 and terminated lease agreements Depreciation & amortization (incl. non-current assets) 559 -586 1 Net p
Slide 33: Multi-Year financial overview
Multi-Year financial overview Lufthansa Group (in m EUR, as reported) 2015 2016 2017 2018 20191) 2020 Operating KPIs RASK ex currency -3.0% -5.9% +1.9% -0.5% -2.5% -26.7% CASK ex currency, ex fuel 2) +2.4% -2.5% -1.8% -1.7% -1.5% +84.6% Profit & Loss Revenues 32,056 31,660 35,579 35,542 36,424 13,58
Slide 34: Maturity profile of borrowings as of March 31, 2021
Maturity profile of borrowings as of March 31, 2021 3,000 2,500 2,000 1,500 1,000 500 0 2021 2022 2023 2024 2025 2026 2027 2028 Straight Bond Hybrid Convertible Bond Schuldscheindarlehen Commercial Paper Credit Lines Aircraft Finance (secured) Stabilization measures* Other ** * As drawn on Mar 31 –