Deutsche Lufthansa Ag · XETR:LHA
Deutsche Lufthansa — Q3 2013 Earnings Presentation
28 slides from Deutsche Lufthansa's earnings presentation, Oct 31, 2013
Slide 1: Q1-Q3 2013 Press and Analysts' Conference
Q1-Q3 2 0 1 3 Press and Analysts' Conference Christoph Franz, Chairman of the Executive Board and CEO Simone Menne, Member of the Executive Board and CFO Frankfurt, 31 Oct 2013 Page 1
Slide 2: Disclaimer in respect of forward-looking statements
Disclaimer in respect of forward-looking statements Information published in this presentation concerning the future development of the Lufthansa Group and its subsidiaries consists purely of forecasts and assessments and not of definitive historical facts. These forward-looking statements are based
Slide 3: Lufthansa Group reached 661 m EUR op. profit after nine months
Lufthansa Group reached 661 m EUR op. profit after nine months Full year operating profit expected between 600 and 700 m EUR in EUR Jan-Sep 2013 vs. previous year Revenue 22.8bn -0.2% Operating Result 661m -27.1% Normalized Operating Result 859m +47.6% Net Result 247m -64.6% Free Cash Flow 1.6bn +59
Slide 4: On track to achieve full year target of 740 m EUR gross savings
On track to achieve full year target of 740 m EUR gross savings Monthly build-up of SCORE savings SCORE gross savings 2013 in m EUR 950 887 Target: 740 m EUR Jan Feb Mar Apr May Jun Jul Aug Sep Snapshot as of 30 Sep 2013 Target Projects in Idea Status Projects in Implementation Projects concluded /
Slide 5: SCORE pipeline is well filled with measures until 2015
SCORE pipeline is well filled with measures until 2015 SCORE pipeline 2013-2015 potential further headwinds that must be compensated by additional measures Projects in Idea Status Projects in Implementation Projects concluded / P&L-Effect 969 2.300 in m EUR 1.059 950 Target 2013: 740 m EUR gross con
Slide 6: Significant restructuring progress was made in first nine months
Significant restructuring progress was made in first nine months Key projects and decisions + 90m EUR Transfer of non-hub operations to lower cost platform op. result 2013 vs. 2012 Cologne, Stuttgart, Hannover and Dortmund already fully … in our transferred to new Germanwings operating Hamburg, Berl
Slide 7: Next big steps are to be implemented shortly
Next big steps are to be implemented shortly Processes and long-haul profitability at LH Passenger Airlines are in focus + 180 m EUR operating Lean, profit Restructuring of Efficient and by 2015 the process Competitive overhead structure organization at Lufthansa Passenger Airlines + 200 m EUR opera
Slide 8: While conducting SCORE we also invest in the future
While conducting SCORE we also invest in the future Becoming a 5 Star Airline will secure the revenue quality needed Aircraft order book Planned product upgrades Total Orders: 295 aircraft Vision: Europe's first five star airline in 2015 Short haul: 203 aircraft Lufthansa First Class already 5 Star
Slide 9: Our initiatives to upgrade products and revenue quality will result in significant one-time costs
Our initiatives to upgrade products and revenue quality will result in significant one-time costs Investment in revenue quality One-time costs for product and 5 Star initiative upgrades (project costs) FY13 FY14 FY15 level of project costs in normal year (regular run rate) 100 <100 additional projec
Slide 10: First Nine Months and Q3 Results
- First Nine Months and Q3 Results – Simone Menne and Member of Executive Board and CFO Page 10
Slide 11: Normalized operating result clearly improved in first nine months
Normalized operating result clearly improved in first nine months Key developments Group reached operating profit of 661 m EUR in first nine months, and 589 m EUR in Q3 In Q3 passenger airlines saw stable development, cargo weakened, MRO performed strongly Results were burdened by one-off costs of 1
Slide 12: 9M and Q3 2013 at a glance
9M and Q3 2013 at a glance Key figures for the Lufthansa Group Lufthansa Group (in m EUR) 9M '13 9M '12 vs. PY Q3 '13 Q3 '12 vs. PY Total revenue 22,768 22,821 -0.2% 8,304 8,312 -0.1% of which traffic revenue 18,663 18,786 -0.7% 6,885 6,935 -0.6% Operating result 661 907 -27.1% 589 672 -12.4% Normal
Slide 13: Excluding one-off items operating profit shows clear improvement
Excluding one-off items operating profit shows clear improvement Normalized operating results for 9M and Q3 +277 9M 2012 Austrian one-off operating profit (Tyrolean Transfer) normalized IAS 19 bmi pensions project operating profit restatement of -111 one-offs Austrian and bmi costs 9M 2013 one-offs
Slide 14: Adjusted for one-offs costs reduced in first nine months
Adjusted for one-offs costs reduced in first nine months Cost development in 9m and Q3 Lufthansa Group (in EUR m) 9M 2013 vs. PY Notes Q3 2013 vs. PY Notes Total revenue 22,768 -0.2% 8,304 -0.1% Other operating income 1,403 -0.1% 431 -5.1% Total operating income 24,171 -0.2% 8,735 -0.4% Operating ex
Slide 15: Cash generation remained strong in the first nine months
Cash generation remained strong in the first nine months Cash flow statement in EUR m 9M 2013 vs. PY EBT (earnings before income taxes) 358 -333 Depreciation and amortisation (incl. d&a for non-current assets) 1432 -9 Net proceeds from disposal of non-current assets 1 +23 Result from equity investme
Slide 16: Clear profit improvements in Passenger Business and MRO
Clear profit improvements in Passenger Business and MRO Segment overview for first nine months Share of LH Group’s 76.4% 7.8% 8.6% 6.3% 0.9% external revenue Passenger Other & 9M 2013 vs. 9M 2012 in EUR m Airline Group Logistics MRO Catering IT Services consolidation Revenue 17,892 1.801 3,109 1,433
Slide 17: Underlying yields improved in Q3 but were strongly diluted by forex
Underlying yields improved in Q3 but were strongly diluted by forex Capacity and yield development Passenger Airline Group Total 9M '13 Q3 '13 Europe 9M '13 Q3 '13 Asia/Pacific 9M '13 Q3 '13 ASK +0.8% +2.6% ASK -3.1% +1.5% ASK -1.1% +3.4% RPK +2.1% +3.4% RPK +0.2% +3.1% RPK -1.7% +3.9% SLF +1.0P. +0
Slide 18: Trading trends from third quarter are expected to continue
Trading trends from third quarter are expected to continue Capacity forecast and current trading Passenger Business – Current Trading Capacity outlook for full year 2013 Passenger Airline Group [ASK] Restrictive growth and capacity in 2013 Moderate ASK growth in long-haul capacity, in particular due
Slide 19: Fuel cost expected at EUR 7.1 bn in FY13
Fuel cost expected at EUR 7.1 bn in FY13 Fuel forecast and sensitivities 150 LH price 140 2013 130 USD/barrel 120 Market price 110 current spot price USD 109/barrel 100 90 80 70 LH Group fuel expenses after hedging as of Oct 2013 70 80 90 100 110 120 130 140 150 Brent forward 109 USD/barrel (in bn E
Slide 20: Most segments are expected to improve in 2013
Most segments are expected to improve in 2013 Segment outlook Passenger Airline Group Logistics MRO Catering IT Services Outlook vs. PY new: new: new: revenue on par with operating profit below moderate revenue revenue on par with moderate revenue previous year previous year (105) growth and operati
Slide 21: Operating profit higher than last year's – Guidance specified
Operating profit higher than last year's – Guidance specified Group Outlook Outlook 2013 Revenue on previous year's level Operating profit 2013 between 600 and 700 m EUR Operating profit includes one-off costs of 300 m EUR (200 restructuring costs and 100 project costs) Normalized operating profit e
Slide 22: Q1-Q3 Press and Analysts' Conference
Q1-Q3 2 0 1 3 Press and Analysts' Conference Christoph Franz, Chairman of the Executive Board and CEO Simone Menne, Member of the Executive Board and CFO Frankfurt, 31 Oct 2013 Page 22
Slide 23: Supplementary Financial Information
- Supplementary Financial Information – Page 23
Slide 24: Group Revenue 9M 2013 vs. 9M 2012
Group Revenue 9M 2013 vs. 9M 2012 in EUR m Volume (+1.8%) Price (-0.4%) Currency (-2.1%) -72 +329 -380 18,786 18,663 Traffic revenue (-0.7%) 4,035 4,105 Other revenue (+1.7%) 22,821 Group revenue (-0.2%) 22,768 9M 2012 9M 2013 Page 24
Slide 25: Fuel Costs 9M 2013 vs. 9M 2012
Fuel Costs 9M 2013 vs. 9M 2012 in EUR m Volume (-2.2%) Hedging (+4.5%) Currency (-2.3%%) 5,567 -118 Price (-2.9%) +253 0 -130 -166 5,406 EUR -161m (-2.9%) 9M 2012 9M 2013 Page 25
Slide 26: Operating Result 9M 2013 vs. 9M 2012
Operating Result 9M 2013 vs. 9M 2012 in EUR m 9M 2013 9M 2012 vs. PY Result from operating activities 582 915 -333 Book gains/losses, non-current assets, financial assets -11 -25 +14 - of which disposals of aircraft -9 -20 +11 Measurement of non-current borrowing 7 6 +1 Past service costs -2 0 -2 Im
Slide 27: Earnings Figures 9M 2013 vs. 9M 2012
Earnings Figures 9M 2013 vs. 9M 2012 in EUR m 9M 2013 9M 2012 vs. PY Result from operating activities 582 915 -333 Result from equity investments 102 77 +25 Other financial items -69 -20 -49 - measurement of financial derivatives through profit and loss statement -69 -14 -55 EBIT 615 972 -357 Net in
Slide 28: Adj. operating margins (excl. one-offs and restructuring costs)
Adj. operating margins (excl. one-offs and restructuring costs) 9M 2013 vs. 9M 2012 9M 2013 (excl. one-offs and restructuring charges) 9M 2012 (excl. one-offs and restructuring charges) Lufthansa SWISS Austrian Passenger Logistics MRO IT Services Catering LH Group Passenger Airlines Airline Group Ai