Deutsche Lufthansa Ag · XETR:LHA

Deutsche Lufthansa — Investor Presentation (June 2022)

36 slides from Deutsche Lufthansa's investor presentation, June 2022

  1. Slide 1: Investor Presentation June 2022

    Investor Presentation June 2022

  2. Slide 2: Disclaimer

    Disclaimer IMPORTANT: The following applies to this document and the oral presentation of the information in this document by Deutsche Lufthansa Aktiengesellschaft (the “Company”, and together with its consolidated subsidiaries, the “Group”) or any person on behalf of the Company, any question-and-a

  3. Slide 3: Disclaimer

    Disclaimer This Presentation does not constitute or form part of, and should not be construed as, an offer to sell or issue, or the solicitation of an offer to purchase, subscribe to or acquire, securities of the Company, its affiliates or an inducement to enter into investment activity in the Unite

  4. Slide 4: First Quarter 2022 Results, Strategy Update, Outlook

    First Quarter 2022 Results Strategy Update Operational and Financial Outlook Page 4

  5. Slide 5: Q1 Adj. EBITDA close to break-even due to recovery from Omicron lows

    Q1 Adj. EBITDA close to break-even due to recovery from Omicron lows – Strong booking intake drives clearly positive free cash flow (in EUR million) Q1 ’22 Q1 ’21 Change in % Revenues 5,363 2,560 +109% Operating expenses 6,361 3,885 +64% Of which fuel 987 275 +259% Of which staff 1,788 1,296 +38% Of

  6. Slide 6: Passenger Airlines: Yield strength and unit cost progress offset by Omicron hit

    Passenger Airlines: Yield strength and unit cost progress offset by Omicron hit Operational KPIs Adjusted EBIT in EUR million Comments  Group Airlines’ result heavily Q1 ’22 vs. 2021 vs. 2019 impacted by Omicron fears and high infection rates in home markets at ASK 45,656m +170.9% -42.5% -1,114 the

  7. Slide 7: Lufthansa Cargo reaches record profit, MRO recovers strongly

    Lufthansa Cargo reaches record profit, MRO recovers strongly, Catering result affected by non-recurrence of prior year positive one-off Adjusted EBIT in EUR million Comments 495 315  Cargo generates record result as Q1 ’22 Q1 ’21 global supply chain disruptions and yield strength continue 120  Luf

  8. Slide 8: Booking intake drives positive free cash flow

    Booking intake drives positive free cash flow First Quarter 2022 Adjusted EBIT / Adjusted free cash flow in EUR million 1,496 (889) 393 (630) 2,020 780 (86) -28 563 -591 Adjusted EBIT Depreciation & Adjusted Liability for Ticket-related Other1 Operating Net CAPEX2 Repayments Adjusted free Amortizati

  9. Slide 9: High levels of liquidity enable the repayment of the state-backed loan in CH

    High levels of liquidity enable the repayment of the state-backed loan in CH in EUR million Comments 9.9bn (204) 9.5bn 1,300 (1,254) 9.7bn 735 710  Free cash flow performance 1,254 2,000 1,044 facilitates repayment of EUR 352 Target liquidity: EUR 6-8bn million stabilization measures in CH and the

  10. Slide 10: Strong cash flows and lower pension deficit further strengthen balance sheet

    Strong cash flows and lower pension deficit further strengthen balance sheet Net debt in EUR million Net pension liability1 in EUR million Shareholder equity in EUR million 9,023 8,283 6,540 5,426 5,260 4,490 8,283 December 31, 2021 March 31, 2022 December 31, 2021 March 31, 2022 December 31, 2021 M

  11. Slide 11: Unpredictable jet crack movements make fuel cost outlook highly uncertain

    Unpredictable jet crack movements make fuel cost outlook highly uncertain – Group intends to pass on higher fuel cost to customers Expected fuel cost sensitivity after hedging (FY 2022)1 Hedging portfolio as of March 31, 2022 128 FY FY Q2 Q3 Q4 ø Market price crude oil2 7,150 7,350 7,600 7,800 8,000

  12. Slide 12: First Quarter 2022 Results, Strategy Update, Outlook

    First Quarter 2022 Results Strategy Update Operational and Financial Outlook Page 12

  13. Slide 13: Lufthansa Group's transformation is well under way

    Lufthansa Group’s transformation is well under way Decisive action taken to ensure Ongoing innovation drives convenient, liquidity and respond to industry individual and sustainable disruption product Key restructuring actions taken to Disciplined financial management create a stronger, more resilie

  14. Slide 14: EUR 2.9bn of targeted EUR 3.5bn cost savings secured

    EUR 2.9bn of targeted EUR 3.5bn cost savings secured and measures for remaining gap identified Targeted sustainable cost savings 2020 - 2024 in EUR billion Measures implemented and recognized in P&L ~3.5 ~1.8 Measures implemented, not yet recognized in P&L Measures not yet implemented 57% 1.4bn 21%

  15. Slide 15: Shift of capacity to airlines with lower costs and higher productivity

    Shift of capacity to airlines with lower costs and higher productivity will drive unit cost declines Scheduled short-haul fleet for July 2022 number of aircraft in % of 2019 Comment ~110%  Regional and leisure-focused Group airlines ~95% offer significant cost and productivity advantages over Netwo

  16. Slide 16: Clear action plan in implementation to meet the demands of our customers

    Clear action plan in implementation to meet the demands of our customers Accelerating process improvement Examples along customer journey Improve  Upgrade of hub infrastructure and service center performance lounges  Automation of document Optimize verification airport processes  Shorten call cen

  17. Slide 17: Lufthansa Cargo: Structural supply/demand gap and strategic initiatives

    Lufthansa Cargo: Structural supply/demand gap and strategic initiatives support long-term outlook Lufthansa Cargo Q1 Yield Development Strategy execution & cost reductions to support future results  Strong growth expected for +136% pharmaceutical transports Strength in high  2019 level of automoti

  18. Slide 18: Lufthansa Technik well positioned to benefit from the market recovery

    is well positioned to benefit from the market recovery Global footprint supports the recovery Strong, growing business pre-crisis Strategic focus areas Geographical split for 2019 third-party revenues Operating results 2019 third-party revenues in EUR million  Re-organization from 8 to 5 business O

  19. Slide 19: Lufthansa Group is leading the industry with its green agenda

    Lufthansa Group is leading the industry with its green agenda More green offerings for customers Target 50% “green offerings” by 2025 Fleet renewal ongoing Target 120 new technology aircraft until 2025, 180 until 2030 Our ultimate goal SAF leader Net carbon neutral Initial USD 250mn SAF investment u

  20. Slide 20: Portfolio management aims at maximizing the value of the Group

    Portfolio management aims at maximizing the value of the Group and its businesses Core business Continued preparations Conclusion of sale for partial divestiture/ IPO agreement once full value can be realized Transaction targeted in the course of 2023 Page 20

  21. Slide 21: First Quarter 2022 Results, Strategy Update, Outlook

    First Quarter 2022 Results Strategy Update Operational and Financial Outlook Page 21

  22. Slide 22: Demand has returned strongly and at attractive yields

    Demand has returned strongly and at attractive yields Group Airlines new bookings Group Airlines bookings on stock1 by week as of end of CW17 in 2022 vs. end of CW17 in 2019  Transatlantic particularly strong 81 82 2022 77  Premium recovers more strongly than non-premium 2019  Corporate travel ex

  23. Slide 23: High demand supports the significant ramp-up of planned capacity

    High demand supports the significant ramp-up of planned capacity Expected capacity offered by Group airlines Short-haul Transatlantic Total ASK in % of 2019 Eurowings above 2019 capacity ~95% ~90% ~85% ~85% ~85% ~80% ~75% ~80% ~75% Q2 Q3 FY 2022 Page 23

  24. Slide 24: Outlook confirmed despite uncertainty caused by recent spike in fuel prices

    Outlook confirmed despite uncertainty caused by recent spike in fuel prices 2022 Capacity (ASK): Around 75% of 2019 ASK 2022 Adjusted EBIT: Improvement compared to prior year 2024 Adj. EBIT margin: At least 8% Page 24

  25. Slide 25: Lufthansa Group is set to emerge from the crisis as a structural winner

    Lufthansa Group is set to emerge from the crisis as a structural winner New Normal. New Strength. Delivering on our promise. New Lufthansa Group. More efficient, faster and more flexible Retained more than 100k jobs and leading position Creating value. Connecting the world, Building on the best prot

  26. Slide 26: Appendix - supplementary information

    Appendix - supplementary information- Page 26

  27. Slide 27: Traffic Data

    Traffic Data Jan vs.2019 Feb vs.2019 Mar vs.2019 Q1 vs.2019 Passengers in 1,000 3,706 -59.2% 3,788 -58.2% 5,679 -49.7% 13,173 -55.2% Available seat-kilometers (m) 15,623 -40.6% 12,964 -47.0% 17,070 -40.4% 45,656 -42.5% Revenue seat-kilometers (m) 9,251 -54.0% 8,336 -55.5% 12,274 -46.9% 29,862 -51.8%

  28. Slide 28: Operating KPIs of Passenger Airlines by region vs. 2019

    Operating KPIs of Passenger Airlines by region vs. 2019 (unless stated otherwise) Total Q1’22 Europe Q1’22 Asia / Pacific Q1’22 Number of flights -49.1% ASK -41.4% ASK -71.1% ASK -42.5% RPK -46.7% RPK -80.2% RPK -51.8% SLF -6.5pts. SLF -26.2pts. SLF -12.5pts. RASK incl. currency1) -19.5% RASK incl.

  29. Slide 29: Calculation of operational airline KPIs

    Calculation of operational airline KPIs Passenger Airlines, Q1 2022 1) Traffic revenues (€m) 2510 1) Total Revenues (€m) 3,020 2) Not assignable (€m) 300 2) Other operating income (€m) 138 Yield = 3) Basis for Yield (1)–(2) (€m) 2,210 3) Reversal of provisions (€m) 22 RASK 4) RPK (m) 1 29,862 4) FX

  30. Slide 30: Group P&L

    Group P&L Lufthansa Group (in EUR m) Q1 ’22 vs. Q1 ’21 Revenues 5,363 +109.5% Total operating income +5,813 +101.3% Operating expenses 6,361 +63.7% Of which fees & charges 678 +137.9% Of which fuel 987 +258.9% Of which staff 1,788 +38.0% Of which depreciation 563 -0.5% Result from equity investments

  31. Slide 31: EBIT / Adjusted EBIT bridge Q1 2022

    EBIT / Adjusted EBIT bridge Q1 2022 in EUR million 110 (70) (9) 18 -591 -640 EBIT Impairments, material Release of remaining Restructuring costs, Other Adjusted EBIT write-offs and other provisions after mainly relating to LCAG extraordinary expenses successful completion of voluntary leave program

  32. Slide 32: Adjusted EBIT / Net Income Q1 2022

    Adjusted EBIT / Net Income Q1 2022 in EUR million 108 -591 -584 33 (49) (2) (83) Adjusted EBIT Adjustments Interest result Profit/loss attributable Tax result Other Net EBIT to minority interests Income Q1 ’22 FY ’21 Page 32

  33. Slide 33: Adjusted EBIT by Airline

    Adjusted EBIT by Airline Adjusted EBIT (in EUR m) Q1 ’22 Q1 ’21 Change in % Lufthansa German Airlines -715 -831 +14.0% SWISS -62 -211 +70.6% Austrian Airlines -109 -104 -4.8% Brussels Airlines -62 -70 +11.4% Eurowings -163 -143 -14.0% Passenger Airlines -1,114 -1,359 +18.0% Page 33

  34. Slide 34: Cash flow statement

    Cash flow statement Lufthansa Group (in m EUR) Q1 ’22 vs. Q1 ’21 EBT (earnings before income taxes) -690 +623 Positive working capital effect driven by Depreciation & amortization (incl. repairable MRO materials) 616 +57 EUR 1,131 million net cash effect from new bookings Net proceeds from disposal

  35. Slide 35: Multi-Year financial overview

    Multi-Year financial overview Lufthansa Group (in m EUR, as reported) 2015 2016 2017 2018 20191) 2020 2021 Operating KPIs RASK ex currency -3.0% -5.9% +1.9% -0.5% -2.5% -26.7% -6.1% CASK ex currency, ex fuel 2) +2.4% -2.5% -1.8% -1.7% -1.5% +84.6% -25.8% Profit & Loss Revenues 32,056 31,660 35,579 3

  36. Slide 36: Maturity profile of borrowings as of March 31, 2022

    Maturity profile of borrowings as of March 31, 2022 3,000 2,500 2,000 1,500 1,000 500 0 2022 2023 2024 2025 2026 2027 2028 2029 Straight Bond Hybrid Convertible Bond Schuldscheindarlehen Aircraft Finance (secured) Stabilization measures* Other** * As drawn on Mar 31 - – predominantly scheduled repay

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