Slide 1: Analyst and Investor Conference Call – Q1 2018
Analyst and Investor Conference Call – Q1 2018 Ulrik Svensson CFO and Member of the Executive Board Frankfurt, 26 April 2018
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: Good development in Q1: Driven by Network Airlines and Cargo
Good development in Q1: Driven by Network Airlines and Cargo Overview Q1 2018 Q1 ’18 Adjusted EBIT and operating cash flow stable on last year’s level • Adjusted EBIT of 26m EUR (+1m EUR) • Operating cash flow of 1,625m EUR (-23m EUR) Airlines continue to perform well: Unit revenues increase while u
Slide 4: Unit revenues positive while unit costs continue to come down
Unit revenues positive while unit costs continue to come down Operating KPIs Passenger Airlines Q1 ‘18 +14.5% +2.3 pts. Q1 ‘18 Q1 ‘18 -2.8% +6.3% +5.2% +2.2 pts. +2.3% -0.2 pts. -0.3% Q1 ‘18 North America +4.0% South America +1.0% +6.1% +2.9 pts. Q1 ‘18 8.6% -3.1% +1.7 pts. +1.2% +0.5% -0.5% ASK SLF
Slide 5: Airlines with good underlying profit improvement
Airlines with good underlying profit improvement Q1 2018 operating KPIs and key profit figures at a glance Network Airlines Eurowings Group Aviation Services Q1 ‘18 in m EUR Q1 ‘18 ASK +8.6% Adj. EBIT2 115 RASK +1.2% Δ year-on-year -82 (constant currency) CASK -0.5% (constant currency; ex-fuel) Fuel
Slide 6: Cash flow generation remains on strong level
Cash flow generation remains on strong level Key balance sheet and cash flow figures at a glance Network Airlines Eurowings Group Aviation Services Balance Sheet in m EUR Q1 ‘18 vs. FY ‘17 Cash Flow in m EUR Q1 ‘18 vs. Q1 ‘17 Net financial debt 2,090 -27,5% Operating cash flow 1,625 -1.4% Pension pr
Slide 7: Network Airlines and Cargo with strong margin improvement
Network Airlines and Cargo with strong margin improvement Segment overview Q1 2018 Network Airlines Eurowings Group2 in m EUR in m EUR Revenue1 4,728 3,340 1,061 396 Revenue1 793 vs. Q1 ‘17 -201 -142 0 -44 vs. Q1 ‘17 +110 Adj. EBIT 114 83 99 -67 Adj. EBIT -203 vs. Q1 ‘17 +154 +95 +64 -8 vs. Q1 ‘17 -
Slide 8: Focus on profitable investments: Boeing 777-300ER at SWISS
Focus on profitable investments: Boeing 777-300ER at SWISS Benefits compared to A343 Currently 10 aircraft // 340 seats // 13,650 km range Increasing revenues Clear savings on cost side c. 50% additional capacity per aircraft c. 25% unit cost reduction per aircraft c. 30% additional revenue per flig
Slide 9: Adjusted EBIT expected to be slightly below previous year
Adjusted EBIT expected to be slightly below previous year 2018 full year guidance remains unchanged Forecast Comments Organic • Network Airlines: Driven by short-haul growth in FRA, upgauging in MUC, ZRH and VIE Capacity Growth c. +6% • Eurowings Group: Taking over parts of Air Berlin operations, lo
Slide 10: Thank you for your attention
LUFTHANSA GROUP Thank you for your attention
Slide 11: Appendix - supplementary information
Appendix - supplementary information-
Slide 12: Fuel costs expected c. 600m EUR above previous year
Fuel costs expected c. 600m EUR above previous year Fuel forecast and sensitivities FY 2018 Lufthansa Group fuel expenses after hedging (in bn EUR) Lufthansa Group price curve for 2018 5.8 6.1 (+20%) 5.9 (+10%) Sensitivities 110 5.2 5.6 (- 10%) (deviating oil price) LH price 2018 2017 5.3 (- 20%) Ma
Slide 13: IFRS 15 effect on Lufthansa Group
IFRS 15 will structurally improve the Adj. EBIT margin by around 0.4 pts. Profit & Loss effect of IFRS 15 Context • IFRS 15 relates to the accounting of revenues arising from contracts with customers • Netting of revenues and related expenses required in some cases (e.g. ticket related taxes, airpor
Slide 14: Network Airlines and Cargo with good profit momentum
Network Airlines and Cargo with good profit momentum Segment overview Q1 2018 – excluding IFRS 15 effect Network Airlines Eurowings Group1 in m EUR in m EUR Revenue 5,091 3,620 1,070 470 Revenue 912 vs. Q1 ‘17 +161 +138 +9 +30 vs. Q1 ‘17 +229 Adj. EBIT 114 83 99 -67 Adj. EBIT -203 vs. Q1 ‘17 +154 +9
Slide 15: Adjusted EBIT expected slightly below previous year
Adjusted EBIT expected “slightly below previous year” Forecast 2018 per segment unchanged Segment Adj. EBIT 2017 (m EUR) Adj. EBIT Forecast for 2018 Lufthansa German Airlines 1,627 slightly below previous year SWISS 542 slightly below previous year Austrian Airlines 94 slightly below previous year N
Slide 16: Passenger Airlines growing capacity into a consolidating market
Passenger Airlines growing capacity into a consolidating market Lufthansa Group capacity growth 2018 per region 8% 8% Network Airlines Eurowings Group* 5% 5% (organic) (organic) 24% Network Airlines Eurowings Group* 5% (organic) (organic) Network Airlines Eurowings Group* 6% Organic growth 8.5% Tota
Slide 17: Appendix - financial figures Q1
Appendix - financial figures Q1-
Slide 18: Revenue increases faster than absolute costs in Q1 2018
Revenue increases faster than absolute costs in Q1 2018 Operating costs and revenues Lufthansa Group (in m EUR) Q1 ‘18 vs. Q1 ‘17 Q1 ’18 excl. IFRS 15 adj. vs. Q1 ‘17 Total revenue 7,640 -0.7% 8,035 +4.5% Other operating income 405 -27.8% 492 -12.3% Total operating income 8,045 -2.5% 8,527 +3.3% Ope
Slide 19: Operating cash flow on par with Q1 2017
Operating cash flow on par with Q1 2017 Cash flow statement 5.0 Lufthansa Group (in m EUR) Q1‘18 vs. Q1 ‘17 3.4 3.2 EBT (earnings before income taxes) -39 +16 2.0 1.6 Depreciation & amortization (incl. non-current assets) 462 +34 FY 2014 FY 2015 FY 2016 FY 2017 Q1 2018 Net proceeds from disposal of
Slide 20: Positive RASK development despite visible growth in most regions
Positive RASK development despite visible growth in most regions Operating KPIs Passenger Airlines Total Q1 '18 Europe Q1 '18 Asia/Pacific Q1 '18 Number of flights +8.5% ASK +14.5% ASK +6.3% ASK +8.6% RPK +18.3% RPK +6.1% RPK +10.9% SLF +2.3pts. SLF -0.2pts. SLF +1.7pts. Yield -5.1% Yield -4.8% Yiel
Slide 21: Group revenue and currency impact
Group revenue and currency impact Q1 2018 vs. Q1 2017 Currency influence on EBIT (in m EUR) in m EUR Q1 Q2 Q3 Q4 FY (YTD) -21 Price: +2.7% Volume: +9.8% 158 -264 565 Currency: -4.5% -482 IFRS 15 adj.: -8.3% 5,808 5,785 Traffic revenue (-0.4%) 1,883 Other revenue (-1.5%)1 1,855 Q1 2017 Q1 2018 ∑ 7,69
Slide 22: Fuel cost development
Fuel cost development Q1 2018 vs. Q1 2017 Hedging result by quarter (in m EUR) Q1 Q2 Q3 Q4 FY (YTD) 2017 -30 -30 2018 107 in m EUR Change versus previous year +11 Price +245 -137 Volume 1,210 Hedging -171 1,221 +74 Currency Q1 2017 Q1 2018 Page 22
Slide 23: Adjusted EBIT and one-off effects
Adjusted EBIT and one-off effects Quarterly results 2017-2018 in m EUR Q1 Q2 Q3 Q4 6M 9M Full Year Adjusted EBIT 2017 25 1,017 1,518 413 1,042 2,560 2,973 Strikes 0 0 0 0 0 0 0 Adjusted EBIT ex one-off factors 25 1,017 1,518 413 1,042 2,560 2,973 Adjusted EBIT 2018 26 One-off effects 0 Adjusted EBIT
Slide 24: EBIT and Adjusted EBIT per quarter 2018
EBIT and Adjusted EBIT per quarter 2018 in m EUR Q1 Q2 Q3 Q4 6M 9M FY EBIT 27 pension changes +2 book gains / losses on asset disposals -3 impairments / badwill 0 Adj. EBIT 26 interest on liquidity taxes (25% lump sum) cost of capital EACC average capital employed WACC ROCE (after tax) Adj. ROCE (af
Slide 25: EBIT and Adjusted EBIT per quarter 2017
EBIT and Adjusted EBIT per quarter 2017 in m EUR Q1 Q2 Q3 Q4 6M 9M FY EBIT 16 1,015 1,404 875 1,031 2,435 3,310 pension changes +32 0 +9 -592 +32 +41 -551 book gains / losses on asset disposals -23 -5 -6 -3 -28 -34 -37 impairments / badwill 0 +7 +111 +133 +7 +118 +251 Adj. EBIT 25 1,017 1,518 413 1,