Slide 1: Press and Analyst Results Conference Q1 2015
Press and Analyst Results Conference Q1 2015 Simone Menne, Member of the Executive Board and CFO Frankfurt, May 5, 2015
Slide 2: Overview
Overview Increase of EBIT (+33.6%) and Adjusted EBIT (+30.4%) by 73 m EUR respectively in the first quarter 2015 All operating segments improve their result; SWISS and Lufthansa Cargo show strongest positive development Revenues and costs strongly affected by lower oil prices and weak Euro Curre
Slide 3: Key financial ratios clearly improve
Key financial ratios clearly improve Q1 2015 at a glance Lufthansa Group (in m EUR) Q1 2015 Q1 2014 vs. PY Total revenue 6,973 6,462 +7.9% of which traffic revenue 5,419 5,161 +5.0% EBIT -144 -217 +33.6% Adjusted EBIT -167 -240 +30.4% Net income 425 -252 -- Q1 2015 Q1 2014 vs. PY Passenger Airline K
Slide 4: Oil price, euro and interest rates influence costs and revenues
Oil price, euro and interest rates influence costs and revenues Operating costs and revenues Lufthansa Group (in m EUR) Q1 2015 vs. VJ Total revenue 6,973 +7.9% Other operating income 913 +74.9% Total operating income 7,886 +12.9% Operating expenses 8,019 +11.5% Non-fuel operating expenses 6,711 +18
Slide 5: Cash flow increases significantly, liquidity improves
Cash flow increases significantly, liquidity improves Cash flow statement Lufthansa Group (in m EUR) Q1 2015 vs. PY 3.3 2.8 2.4 EBT (earnings before income taxes) 356 +663 2.0 1.4 Depreciation & amortisation (incl. non-current assets) 395 +42 Net proceeds from disposal of non-current assets -23 -13
Slide 6: All operating segments contribute to result improvement
All operating segments contribute to result improvement Segment overview Q1 2015 Share of LH Group‘s external revenue 71.6% 8.7% 11.0% 7.7% 1.0% Q1 2015 vs. Q1 2014 Passenger Others & in m EUR Airline Group Logistics MRO Catering Consolidation Revenue 5,157 614 1,249 672 -719 vs. PY in % +5.2% +5.3%
Slide 7: Solid traffic figures but strong regional differences
Solid traffic figures but strong regional differences Operating KPIs Passenger Airline Group Total Q1 2015 Europe Q1 2015 Asia/Pacific Q1 2015 Number of flights -2.4% ASK -4.1% ASK +2.7% ASK +1.0% RPK -2.9% RPK +1.7% RPK +1.3% SLF +0.9pts. SLF -0.8pts SLF +0.2pts. Yield +3.7% Yield +1.3% Yield ex cu
Slide 8: Trading assumptions for 2015 remain unchanged
Trading assumptions for 2015 remain unchanged Trading assumptions FY 2015 Full Year 2015 assumptions Explanation Fleet rollover: No. of Flights further reduction Continued phase out of small, non-efficient aircraft Capacity c. +3% Capacity growth mainly achieved through more seats per (ASK) aircraft
Slide 9: Stronger US Dollar increases fuel cost expectation
Stronger US Dollar increases fuel cost expectation Fuel forecast and sensitivities FY 2015 and 2016 Lufthansa Group fuel expenses after hedging Lufthansa Group price curve remainder of 2015 and 2016 (in bn EUR) 130 Sensitivities with deviating oil price LH price 2015 6.8 6.7 (+20%) 120 LH price 2016
Slide 10: Adj. EBIT FY15 expected to be more than 1.5 bn EUR before strikes
Adj. EBIT FY15 expected to be more than 1.5 bn EUR before strikes Forecast Lufthansa Group 2015 Lufthansa Group Adjusted EBIT “more than 1.5 bn EUR" Financial Year 2015 Actual and Forecast Profit increase in 2015 mainly driven by passenger airlines 1,297 1,171 Four parameters will largely determ
Slide 11: Financial Figures Q1 2015
Appendix – Financial Figures Q1 2015 – Page 11
Slide 12: Group revenue and currency influence
Group revenue and currency influence Q1 2015 vs. Q1 2014 Currency influence on EBIT (in m EUR) in m EUR Q1 Q2 Q3 Q4 FY (YTD) -56 -56 Currency: +6.9% Volume: +0.9% Price: -2.8% 358 44 -144 5,419 Traffic revenue (+5.0%) 5,161 1,554 1,301 Other revenue (+19.4%) Q1 2014 Q1 2015 ∑ 6,462 ∑ Group revenue (
Slide 13: Fuel costs
Fuel costs Q1 2015 vs. Q1 2014 Hedging result by quarter (in m EUR) in m EUR Q1 Q2 Q3 Q4 FY (YTD) 2014 -21 -2 -30 -96 -149 2015 -203 -203 -209 Volume Price 1,517 20 Currency 1,308 -724 313 Hedging 182 Q1 2014 Q1 2015 Page 13
Slide 14: Adjusted EBIT and one-off factors
Adjusted EBIT and one-off factors Quarterly results 2014-2015 in m EUR Q1 Q2 Q3 Q4 6M 9M Full Year Adjusted EBIT 2014 -240 418 810 183 178 988 1,171 incl. strikes -10 -60 -35 -127 -70 -105 -232 incl. Venezuela -38 -23 +7 -5 -61 -54 -59 Adjusted EBIT ex one-off factors -192 501 838 315 309 1,147 1,46
Slide 15: Adjusted EBIT margins
Adjusted EBIT margins Q1 2015 vs. Q1 2014 9.8 10.0 all figures in % 8.5 8.5 8.0 6.0 4.8 4.3 4.0 2.0 0.4 0.0 -0.4 -2.0 -1.0 -2.4 -4.0 -3.7 -6.0 -4.9 -6.3 -8.0 -7.2 -6.8 -10.0 -12.0 -14.0 -13.6 -13.4 Lufthansa SWISS Austrian Airlines Passenger Logistics MRO Catering Lufthansa Passenger Airline Group G
Slide 16: Adjusted EBIT and EBIT per quarter 2014
Adjusted EBIT and EBIT per quarter 2014 in m EUR Q1 Q2 Q3 Q4 6M 9M Full Year Operating result -245 359 735 105 114 849 954 Adj. EBIT -240 418 810 183 178 988 1,171 pension changes 0 0 +15 +33 0 +15 +48 book gains / losses on asset disposals +13 0 +8 -100 +13 +21 -79 impairments +10 +15 -1 -164 25 24
Slide 17: Reconciliation from EBIT to Adjusted EBIT per segment
Reconcilitation from EBIT to Adjusted EBIT per segment Q1 2015 Book gains/losses Adj. EBIT Q1 15 Segment EBIT Q1 15 (m EUR) Impairments Pension changes on asset disposals (m EUR) LH Passenger Airlines -233 -1 -234 SWISS 51 51 Austrian Airlines -53 -53 Consolidation -18 -18 Passenger Airline Group -2
Slide 18: New system directly links profit figures and value creation metric
New system directly links profit figures and value creation metric EBIT, EACC and ROCE are transparent and can be calculated easily Total Op. Income Balance Sheet Total (Rev.+ Oth. Op. Income) ./. non-interest bearing ./. operating costs liabilities Capital Employed + Income from Current Year 50 Sub
Slide 19: Calculation for financial year 2014
New system directly links profit figures and value creation metric Calculation for financial year 2014 in m EUR 30,474 32,114 ./. 12,980 ./. 31,235 17,584 + 121 50 : 50 17,545 EBIT: 1,000 + 84 -48 ./. 271 +77 5.9% X ./. 1,036 +142 EACC: -223 Adj. EBIT: 1,171 (1,000 + 84 - 271) ROCE = = 4.6% 17,565 P
Slide 20: EBIT is a structurally higher number than operating result
EBIT is a structurally higher number than operating result Main difference is that income from subsidiaries is included 1,645 Operating profit EBIT 1,171 Adj. EBIT 972 936 986 954 1,000 820 864 839 725 699 2011 2012 2013* 2014 Total Operating Income 31,070 32,947 32,149 32,114 ./. Operating Expenses
Slide 21: WACC is based on a target capital structure of 50:50
WACC is based on a target capital structure of 50:50 Current WACC is 5.9% Cost of Debt1 Cost of Equity2 3.4% (FY 2014) 8.4% (FY 2014) Target Capital Structure 50 : 50 WACC: 5.9% 1 Currently no consideration of tax shield 2 Cost of Equity FY2014 = Risk-free market interest rate of 2.6% + (Market risk
Slide 22: Current capital employed is ca. 17.6 bn EUR
Current capital employed is ca. 17.6 bn EUR Weighted average cost of capital is 5.9% 18.101 17.526 17.545 17.565 Average Capital Employed WACC 7.0% 7.0% 6.2 % 5.9% 2011 2012 2013* 2014 Balance Sheet Total 28,081 28,559 29,108 30,474 ./. Non-Interest Bearing Liabilities 10,649 10,940 11,563 12,890 -