Slide 1: Analyst and Investor Conference Call Q3 2016
Analyst and Investor Conference Call Q3 2016 Carsten Spohr, CEO and Chairman of the Executive Board Frankfurt, 2 November 2016
Slide 2: Overview Q3 2016
Overview Q3 2016 Adjusted EBIT of 1,148 m EUR only slightly below previous year despite weakness in demand MRO and Catering with positive development, Passenger Airlines and Cargo below previous year Unit revenue decreased by 6.7%; demand from corporate travelers in summer months better than exp
Slide 3: Adj. EBIT in 9M on previous year's level; financial stability increased
Adj. EBIT in 9M on previous year‘s level; financial stability increased 9M and Q3 2016 at a glance Lufthansa Group (in m EUR) 9M 16 9M 15 vs. PY Q3 16 Q3 15 vs. PY Total revenue 23,870 24,304 -1.8% 8,828 8,939 -1.2% of which traffic revenue 18,674 19,486 -4.2% 7,037 7,305 -3.7% EBIT 2,330 1,663 +40.
Slide 4: Lufthansa Passage, Austrian and LSG with positive development
Lufthansa Passage, Austrian and LSG with positive development Segment overview 9M 2016 Passenger in m EUR Airline Group Revenue 18,166 11,767 3,347 1,637 1,562 vs. PY -573 -557 -112 +46 +109 Others & Consolidation3 Adj. EBIT1 1,406 955 329 79 -35 Revenue -1,982 vs. PY +56 +179 -46 +22 -95 vs. PY +19
Slide 5: Constant currency pricing developed better than expected
Constant currency pricing developed better than expected Operating KPIs Passenger Airline Group Total 9M '16 Q3 '16 Europe 9M '16 Q3 '16 Asia/Pacific 9M '16 Q3 '16 Number of flights +2.9% +3.8% ASK +2.8% +3.1% ASK +1.2% -0.6% ASK +4.1% +4.0% RPK +0.5% +1.4% RPK -0.8% -2.7% RPK +1.8% +2.1% SLF -1.7pt
Slide 6: LH Group expects Adj. EBIT 2016 approx. on previous year's level
LH Group expects Adj. EBIT 2016 approx. on previous year‘s level Specified forecast Lufthansa Group 2016 Lufthansa Group Adjusted EBIT Actual and Forecast Updated forecast FY 2016: approx. on Expected fuel costs: 4.85 bn EUR1 previous year’s level Improvement of about 950 m EUR vs. PY, 1,817 the
Slide 7: Our goal: #1 for customers, shareholders, employees and partners
Our goal: #1 for customers, shareholders, employees and partners Execution of strategy in three strategic pillars #1 for customers, shareholders, employees and partners Premium network Point-to-point Aviation Services airline system #1 in Europe #1 in home markets1 #1 world-wide Premium positioning
Slide 8: Successful implementation of further revenue and cost optimization
Network Airlines Successful implementation of further revenue and cost optimization Update measures at network airlines Ongoing revenue optimization Achieved cost optimization Extension of premium product offering Fleet renewal Broadband internet on board • Introduction A320neo & A350 (winter 16/17)
Slide 9: Sustainably successful through unique market position
Eurowings Sustainably successful through unique market position Business Model of the New Eurowings Development consistent with clear strategy Unique market position and competitive CASK #1 or #2 position in all relevant German airports Superior market position (excl. FRA, MUC): Additional • Current
Slide 10: Aviation Services with growth and efficiency improvement targets
Aviation Services Aviation Services with growth and efficiency improvement targets Individual projects and programs for each service company Growth projects Efficiency programs • Development of individual products: e.g. myAirCargo • Elimination of 35% of management positions decided and in implement
Slide 11: Consistent implementation of our strategy
Consistent implementation of our strategy Summary and outlook Result Q3 Successful capacity and revenue management in challenging environment; robust business model Forecast 2016 Adjusted EBIT expected to be ’approximately on previous year’s level’ Outlook 2017 Active capacity management supports re
Slide 12: Appendix – supplementary information –
Appendix – supplementary information – Page 12
Slide 13: A sound addition for Eurowings and the Lufthansa Group
A sound addition for Eurowings and the Lufthansa Group Business profile Brussels Airlines Attractive cost position Adequate fleet and focused network Financial performance CASK excl. fuel AR1 12 Long-haul: 23 destinations 1,136 1,186 1,073 1,082 -7.8% Focus on A320Fam Western 25 Africa A330 8 43 Sho
Slide 14: Capacity planning at network airlines and Eurowings further reduced
Capacity planning at network airlines and Eurowings further reduced Lufthansa Group capacity growth 2016 per region 9.8% 3.9% 2.4% nmf. 2.0% Network Eurowings LH Group Airlines 0.1% nmf. Network Eurowings LH Group 10.6% Airlines 8.2% nmf. Nework Eurowings LH Group -3.1% -2.5% Airlines Network Eurowi
Slide 15: Appendix – financial figures 9M 2016 –
Appendix – financial figures 9M 2016 – Page 15
Slide 16: Expected fuel costs decrease versus previous year
Expected Fuel costs decrease versus previous year Fuel forecast and sensitivities FY 2016 und 2017 Lufthansa Group fuel expenses after hedging Lufthansa Group price curve remainder of 2016 and 2017 (in bn EUR) 130 120 LH price 2016 Sensitivities with deviating oil price LH price 2017 Market price 11
Slide 17: Trading assumptions indicate profit approx. on previous year's level
Trading assumptions indicate profit approx. on previous year’s level Updated Trading assumptions FY 2015 and 2016 FY15 FY16 assumptions Explanation FY16 assumptions c. 1.4% Slight increase at network airlines; No. of Flights +0.2% increase mainly due to Eurowings fleet growth Network airlines +2.2%
Slide 18: Passenger Airlines now expected Adj. EBIT above previous year
Passenger Airlines now expected Adj. EBIT above previous year Forecast 2016 per segment Segment Adj. EBIT 2015 (m EUR) Adj. EBIT Forecast for 2016 Lufthansa Passenger Airlines 970 above previous year* SWISS 429 below previous year Austrian Airlines 52 above previous year Eurowings negative result Re
Slide 19: Absolute costs (excl. fuel) continue to decrease in third quarter
Absolute costs (excl. fuel) continue to decrease in third quarter Operating costs and revenues Lufthansa Group (in m EUR) 9M 2016 vs. PY Q3 2016 vs. PY Total revenue 23,870 -1.8% 8,828 -1.2% Other operating income 1,641 -24.9% 409 -30.1% Total operating income 25,511 -3.7% 9,237 -3.0% Operating expe
Slide 20: Free cash flow increases due to lower capex
Free cash flow increases due to lower capex Cash flow statement Lufthansa Group (in m EUR) 9M 2016 vs. PY 3.3 3.4 2.8 3.1 EBT (earnings before income taxes) 2,303 308 2.0 Depreciation & amortization (incl. non-current assets) 1,340 54 Net proceeds from disposal of non-current assets -49 -3 FY 2012 F
Slide 21: Group revenue and currency influence
Group revenue and currency influence 9M 2016 vs. 9M 2015 Currency influence on EBIT (in m EUR) in m EUR Q1 Q2 Q3 Q4 FY (YTD) +85 -28 -22 +35 Volume: +1.6% Price: -4.9% 306 -948 Currency: -0.9% -170 Traffic revenue (-4.2%) 19,486 18,674 5,196 Other revenue (+7.8%) 4,818 9M 2015 9M 2016 ∑ 24,304 ∑ Gro
Slide 22: Fuel costs 9M 2016 vs. 9M 2015
Fuel costs 9M 2016 vs. 9M 2015 Hedging result by quarter (in m EUR) in m EUR Q1 Q2 Q3 Q4 FY (YTD) 2015 -203 -205 -271 -309 -988 2016 -336 -235 -219 -790 Change versus previous year -798 Volume Price 4,494 86 -1,017 Currency 3,696 Hedging 22 111 9M 2015 9M 2016 Page 22
Slide 23: Adjusted EBIT and one-off factors
Adjusted EBIT and one-off factors Quarterly results 2015-2016 in m EUR Q1 Q2 Q3 Q4 6M 9M Full Year Adjusted EBIT 2015 -167 635 1,225 124 468 1,693 1,817 incl. strikes -42 -58 -30 -101 -100 -130 -231 incl. Venezuela -60 +5 -5 -12 -55 -60 -72 Adjusted EBIT ex one-off factors -65 688 1,260 237 623 1,88
Slide 24: Reconciliation from EBIT to Adjusted EBIT per segment
Reconciliation from EBIT to Adjusted EBIT per segment 9M 2016 Book gains/losses Adj. EBIT 9M 16 Segment EBIT 9M 16 (m EUR) Impairments Pension changes on asset disposals (m EUR) LH Passenger Airlines 1,580 +116 -713 -28 955 SWISS 329 329 Austrian Airlines 83 -4 79 Eurowings -35 -35 Consolidation 52
Slide 25: Adjusted EBIT and EBIT per quarter 2015
Adjusted EBIT and EBIT per quarter 2015 in m EUR Q1 Q2 Q3 Q4 6M 9M FY Adj. EBIT -167 635 1,225 124 468 1,693 1,817 pension changes 0 +32 0 -57 +32 +32 -25 book gains / losses on asset disposals +22 +24 0 -6 +46 +46 +39 impairments +1 -84 -25 -48 -83 -108 -155 EBIT -144 607 1,200 13 463 1,663 1,676 i
Slide 26: Adjusted EBIT and EBIT per quarter 2016
Adjusted EBIT and EBIT per quarter 2016 in m EUR Q1 Q2 Q3 Q4 6M 9M FY Adj. EBIT -53 582 1,148 529 1,677 pension changes 0 0 +721 0 +721 book gains / losses on asset disposals +5 +37 +7 +42 +49 impairments -1 -52 -64 -53 -117 EBIT -49 567 1,812 518 2,330 interest on liquidity taxes (25% lump sum) cos
Slide 27: 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 facts. These forward-looking statements are based on all dis