Deutsche Lufthansa Ag · XETR:LHA

Deutsche Lufthansa — Q3 2021 Earnings Presentation

34 slides from Deutsche Lufthansa's earnings presentation, Nov 3, 2021

  1. Slide 1: Q3 2021 Results Analyst Conference

    Q3 2021 Results Analyst Conference Carsten Spohr, CEO Remco Steenbergen, CFO Munich, 03 November 2021

  2. 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

  3. Slide 3: Q3 2021 Results Analyst Conference

    Q3 2021 Results Analyst Conference Carsten Spohr, CEO Munich, 03 November 2021

  4. Slide 4: Significant operational and financial progress made in the third quarter

    Significant operational and financial progress made in the third quarter Capital increase successfully completed, repayment of stabilization measures until year-end Capacity almost doubled from Q2 to Q3 Return to operating profits and positive cash flows Lufthansa Cargo generates another record resu

  5. Slide 5: Strong bookings demonstrate ongoing momentum of operational recovery

    Strong bookings demonstrate ongoing momentum of operational recovery +119% Group Airlines new bookings by week New bookings back to Corporate sales DE 80% Q3 ’21 vs. Q2 ’21 2019 of pre-crisis Corporate sales 2021 levels steadily increasing WoW 2020 81% New US bookings CW1 CW21 CW41 CW 41 ’21 vs ’19

  6. Slide 6: Unprecedented strength of air cargo market to continue

    Unprecedented strength of air cargo market to continue Global air freight market Market-wide capacity Change vs. PY, in % Change vs. 2019, in % 50% 40% 40% 30% 20% 0% 10% 0% -10% -40% -20% -30% -80% 2018 2019 2020 2021 01 ’20 07 ’20 01 ’21 08 ’21 Demand (RFK) Offer (AFK) Freighter Belly Total Source

  7. Slide 7: Q3 2021 Results Analyst Conference

    Q3 2021 Results Analyst Conference Remco Steenbergen, CFO Munich, 03 November 2021

  8. Slide 8: Lufthansa Group returns to profits and generates positive Adjusted free cash flow

    Lufthansa Group returns to profits and generates positive Adjusted free cash flow in the third quarter (in EUR million) Q3 ’21 Q3 ’20 Change in % 9M ’21 9M ’20 Change in % Revenues 5,207 2,660 +96% 10,978 10,995 0% Operating expenses 5,709 5,435 +5% 14,234 18,013 -21% Of which fuel 752 289 +160% 1,4

  9. Slide 9: Network Airlines: Loads improve, yield above pre-crisis levels in Q3

    Network Airlines: Loads improve, yield above pre-crisis levels in Q3 Q3 2021 9M 2021 Comments ASK 48.8% ASK 34.2%  European short-haul business (ASK: Operational KPIs 65% in Q3) drives capacity expansion vs. 2019 SLF 67.5% SLF 57.9% -18.7pts. -24.9pts.  Leisure demand drives 74% seat load factor (

  10. Slide 10: Eurowings: Ramp-up into summer drives return to profits in Q3

    Eurowings: Ramp-up into summer drives return to profits in Q3 Q3 2021 9M 2021 Comments ASK 61.7% ASK 35.4%  Strong result of Sunexpress JV Operational KPIs contributes to positive Adjusted EBIT vs. 2019 SLF 78.1% SLF 74.4% in Q3 -8.9pts. -8.3pts.  Significant ramp-up into summer – Yield1 -13.7% Yi

  11. Slide 11: Eurowings: Results demonstrate strong progress in execution of turnaround plan

    Eurowings: Results demonstrate strong progress in execution of turnaround plan Key elements of 2019 plan Progress made to date Business model Exit long-haul business and focus on short-haul only  Long haul business taken over by Eurowings Discover adjustment &  Share of leisure/VFR increased by ca

  12. Slide 12: Unprecedented strength in Cargo continues, positive momentum in MRO accelerating

    Unprecedented strength in Cargo continues, positive momentum in MRO accelerating Adjusted EBIT in EUR million Q3 2021 9M 2021 Comments 301 941 169 446  Cargo results remain on record levels Q3 ’21 Q3 ’20 9M ’21 9M ’20 also in the lower-volume summer months 61 163  Lufthansa Technik records positiv

  13. Slide 13: Group generates positive free cash flow

    Group generates positive free cash flow: Good working capital management and strong bookings compensate for payment of deferred taxes Adjusted EBIT / Adjusted free cash flow in EUR million 142 (342) Monthly cash in1: EUR 130m 282 (193) 456 389 (15) 565 Compares to significant 443 outflows in normal

  14. Slide 14: Available liquidity exceeds EUR 8 billion even after planned repayments

    Available liquidity exceeds EUR 8 billion even when factoring in the planned repayment and termination of stabilization measures in Germany in EUR million Comments 11.9bn 2,100  Liquidity position further 11.1bn (5,500) strengthened during Q3 3,976  Repayment of stabilization measures 3,874 8.5 in

  15. Slide 15: Capital increase and reduction of pension provisions drive the deleveraging

    Capital increase and reduction of pension provisions drive the deleveraging Net debt in EUR million Pension provisions in EUR million Comments EUR -1.5bn Supported by increase of  Net debt significantly reduced to discount rate 10,506 from 0.8% to 1.3% EUR 8.4 billion on a pro forma basis, 9,922 re

  16. Slide 16: Measures for achievement of more than 70% of total savings volume implemented

    Measures for the achievement of more than 70% or EUR 2.5 billion of the total savings volume already implemented 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 implemen

  17. Slide 17: Group on track to structurally improve labor cost and productivity

    Group on track to structurally improve labor cost and productivity compared to pre-crisis levels Workforce reduction in GER1 (as of Sep 30, ’21) Focus on rightsizing of organization and productivity increases fixed in 2021 realized in 2021  Reduction of 7,000 positions in Germany fixed in particula

  18. Slide 18: Fuel hedging strategy reduces negative impact of rising oil prices for 2022

    Fuel hedging strategy reduces negative impact of rising oil prices for 2022 Expected fuel cost sensitivity after hedging (FY 2022)1 Fuel hedging strategy ø Market price crude oil 2 103  Hedging was resumed in early 2021 for 2022 and beyond 800 700 600 500 400 93 450 400 300 200 100  Average price

  19. Slide 19: Group targets to operate cash-positive even in challenging winter season

    Group targets to operate cash-positive even in challenging winter season Capacity (ASK): ca. 60% in Q4, ca. 40% in FY 21 Strong focus on cash flow – EBITDA to be positive also in Q4 (incl. c. EUR 80 million of restructuring expenses) 2021 Gross CapEx: ca. EUR 1.5bn Page 19

  20. Slide 20: Q3 2021 Results Analyst Conference

    Q3 2021 Results Analyst Conference Carsten Spohr, CEO Munich, 03 November 2021

  21. Slide 21: Recovery across all customer segments supports further ramp-up

    Recovery across all customer segments supports further ramp-up Expected recovery by customer segment Expected capacity offered by Group airlines Passengers in % of 2019 ASK in % of 2019 85% 85% 75% 70% c. 65% 65% c. 60% 60% 60% 50% 45% 40% FY 2022 FY 2021 ASK65% target: ASK60% target: 50% above 70%

  22. Slide 22: Group prepares for increasing passenger volumes

    Group prepares for increasing passenger volumes  Fully-automated and digital verification of travel documents such as EU vaccination certificates  Expansion of customer self-service options  Stabilization of call center capacities  Close cooperation with airport partners to ensure seamless trave

  23. Slide 23: Commitment to sustainability is at the heart of the Group's transformation

    Commitment to sustainability is at the heart of the Group’s transformation Pilot customer for the first industrially produced power-to- SBTi liquid fuel in Germany Commitment for 2030 Leasing agreement Largest buyer of concluded for an sustainable aviation Carbon Intensity / Carbon Efficiency Target

  24. Slide 24: Appendix - supplementary information

    Appendix - supplementary information- Page 24

  25. Slide 25: Traffic Data

    Traffic Data 6M vs.2019 Jul vs.2019 Aug vs.2019 Sep vs.2019 Q3 vs.2019 9M vs.2019 Passengers in 1,000 10,022 -85.5% 6,015 -58.9% 6,994 -50.6% 6,615 -52.7% 19,623 -54.1% 29,664 -73.5% Available seat-kilometers (m) 44,171 -74.7% 15,954 -52.8% 17,318 -48.4% 16,611 -48.5% 49,883 -49.9% 94,073 -65.7% Rev

  26. Slide 26: Operating KPIs of Network Airlines by region vs. 2019

    Operating KPIs of Network Airlines by region vs. 2019 Total Q3’21 9M’21 Europe Q3’21 9M’21 Asia / Pacific Q3’21 9M’21 Number of flights -46.5% -66.8% ASK -34.6% -61.0% ASK -79.9% -81.6% ASK -51.2% -65.8% RPK -41.4% -65.7% RPK -89.5% -91.8% RPK -61.8% -76.1% SLF -8.6pts. -9.4pts. SLF -42.4pts. -47.4p

  27. Slide 27: Operating KPIs of Eurowings vs. 2019

    Operating KPIs of Eurowings vs. 2019 Total Q3’21 9M’21 Number of flights -55.4% -74.6% ASK -38.3% -64.6% RPK -44.5% -68.2% SLF -8.9pts. -8.3pts. Yield -13.7% -12.8% Yield vs 2020 +2.4% -2.5% Yield ex currency vs 2020 +2.4% -2.6% RASK -22.5% -21.6% RASK ex currency vs 2020 +11.4% -7.3% CASK -25.2% +1

  28. Slide 28: Calculation of operational airline KPIs

    Calculation of operational airline KPIs Network Airlines, 9M 2021 Eurowings, 9M 2021 1) Traffic revenues (€m) 4,189 1) Traffic revenues (€m) 529 2) Not assignable (€m) 454 2) Not assignable (€m) 89 Yield Yield = 3) Basis for Yield (1)–(2) (€m) 3,735 = 3) Basis for Yield (1)–(2) (€m) 440 4) RPK (m) 1

  29. Slide 29: Group P&L

    Group P&L Lufthansa Group (in EUR m) Q3’21 vs. Q3 ’20 9M’21 vs. 9M ’20 Revenues 5,207 +95.8% 10,978 -0.2% Total operating income 5,605 +83.2% 12,064 -2.3% Operating expenses 5,649 +32.1% 14,139 -13.5% Of which fees & charges 701 +76.6% 1,390 -3.9% Of which fuel 752 +160.2% 1,444 -10.3% Of which staf

  30. Slide 30: Walk from Adjusted EBIT to Net Income for 9M 2021

    Walk from Adjusted EBIT to Net Income for 9M 2021 in EUR million Total EBIT adjustments: -45 (65) 431 20 -1,877 -2,078 137 10 (332) Adjusted Aircraft Result of non- Interest result Profit/loss Tax result Other Net EBIT impairments current asset attributable to Income disposals, other minority intere

  31. Slide 31: Cash flow statement

    Cash flow statement Lufthansa Group (in m EUR) 9M’21 vs. 9M ’20 Decrease related to non-recurrence of 1 crisis-related aircraft impairments in 2020 EBT (earnings before income taxes) -2,318 +4,594 and lower depreciation and amortization Depreciation & amortization (incl. non-current assets) 1 1,694

  32. Slide 32: Liabilities from unflown flight documents

    Liabilities from unflown flight documents in EUR million 5,602 5,798 4,499 4,499 4,487 3,089 3,074 2,729 2,093 Mar 31, 2019 Mar 31, 2020 Mar 31, 2021 Jun 30, 2019 Jun 30, 2020 Jun 30, 2021 Sep 30, 2019 Sep 30, 2020 Sep 30, 2021 Page 32

  33. 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

  34. Slide 34: Maturity profile of borrowings as of September 30, 2021

    Maturity profile of borrowings as of September 30, 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 Credit Lines Aircraft Finance (secured) Stabilization measures* Other** * As drawn on Sep 30 - predominantly

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