Slide 1: Analyst and Investor Conference Call Q3 2017
Analyst and Investor Conference Call Q3 2017 Frankfurt, 25 October 2017
Slide 2: Disclaimer
Disclaimer The information herein is based on publicly available information. It has been prepared by the Company solely for use in this presentation and has not been verified by independent third parties. No representation, warranty or undertaking, express or implied, is made as to, and no reliance
Slide 3: Analyst and Investor Conference Call Q3 2017 – Carsten Spohr
Analyst and Investor Conference Call Q3 2017 Carsten Spohr, CEO and Chairman of the Executive Board Frankfurt, 25 October 2017
Slide 4: Modernization of the Lufthansa Group has made strong progress
Modernization of the Lufthansa Group has made strong progress Highlights of first nine months Strong share price performance, Best nine-month result of all times – leading in the German DAX 2017 third consecutive year with record result expected Competitiveness strengthened through Premium positioni
Slide 5: Analyst and Investor Conference Call Q3 2017 – Ulrik Svensson
Analyst and Investor Conference Call Q3 2017 Ulrik Svensson, CFO and Member of the Executive Board Frankfurt, 25 October 2017
Slide 6: Favourable trading environment in all major traffic areas
Favourable trading environment in all major traffic areas Operating KPIs Passenger Airlines Q3 ‘17 9M ‘17 +3.8% +1.5pts. +3.2% +1.0% +2.0pts. Q3 ‘17 9M ‘17 Q3 ‘17 9M ‘17 -2.7% +2.3% +1.7pts. +1.1pts. +1.2% +0.7% +4.2% +3.8pts +1.1% +1.1pts. +0.5% +1.3% -0.8% Q3 ‘17 9M ‘17 +3.9% North America +1.4% -
Slide 7: Group airlines drive strong profit improvement
Group airlines drive strong profit improvement Q3 and 9M 2017 operating KPIs and key profit figures at a glance Network Airlines Point-to-Point Airlines Aviation Services Q3 ‘17 9M ‘17 in m EUR Q3 ‘17 9M ‘17 ASK +11.8% +11.7% Adj. EBIT2 106 468 RASK Δ year-on-year -94 +91 +4.5% +2.0% (constant curre
Slide 8: Strong cash flow development drives reduction of net debt
Strong cash flow development drives reduction of net debt Key balance sheet and cash flow figures at a glance Network Airlines Point-to-Point Airlines Aviation Services Balance Sheet in m EUR 9M ‘17 vs. FY ‘16 Cash Flow in m EUR 9M ‘17 vs. 9M ‘16 Net financial debt 521 -80.7% Operating cash flow 4,4
Slide 9: Focus on cash generation and return of capital
Focus on cash generation and return of capital Long-term development of cash flow and ROCE 5 18,0% 16.7% 4,5 16,0% 4.5 4 13.2% 13.0% 12.8% 14,0% 3,5 12,0% 13.3% 3,000 3 10.4% 13,0% 3.2 3.0 9.1% 3.1 10,0% 11.0% 2,5 2.8 2,500 9.3% 2.6 10.0%1 11,0% 8,0% 8.3% 9,0% 2 6.8% 2,000 7.1% 7.0% 2.1 6.0% 6.4% 6,
Slide 10: Strong performance of Passenger Airlines and Cargo
Strong performance of Passenger Airlines and Cargo Segment overview Q3 2017 in m EUR Network Airlines Point-to-Point Airlines1 Revenue 6,598 4,627 1,297 723 Revenue 1,259 vs. Q3 ‘16 +369 +265 +44 +58 vs. Q3 ‘16 +619 Adj. EBIT 1,190 836 255 97 Adj. EBIT 222 vs. Q3 ‘16 +353 +275 +60 +17 vs. Q3 ‘16 +11
Slide 11: Forecast Lufthansa Group for Q4 2017
Forecast Lufthansa Group for Q4 2017 Network Airlines Point-to-Point Airlines Aviation Services1 ASK 5.5% organic growth2; corresp. to 14.4% total growth RASK Slightly positive (constant currency) Including mix effect from organic growth of P2P segment CASK Slightly negative (constant currency; ex-f
Slide 12: Analyst and Investor Conference Call Q3 2017 – Carsten Spohr
Analyst and Investor Conference Call Q3 2017 Carsten Spohr, CEO and Chairman of the Executive Board Frankfurt, 25 October 2017
Slide 13: Our objective remains: #1 for customers, shareholders, employees
Our objective remains: #1 for customers, shareholders, employees Set-up of Lufthansa Group Goal: #1 for customers, shareholders, employees Customer #1 Employee Shareholder #1 Network #1 Point-to-Point #1 Aviation Airlines Airline in home Services in Europe markets world-wide Strategic focus topics A
Slide 14: Network Airlines: Customer centricity and cost reduction
Network Airlines Network Airlines: Customer centricity and cost reduction Current measures Commercial integration Network Airlines Customer centricity and Cost reduction and strengthening of premium positioning flexibilization Skytrax: Lufthansa = Focus on reducing unit costs of all „Best Airline in
Slide 15: Eurowings: Europe's third largest Point-to-Point Airline
Point-to-Point Airlines Eurowings: Europe’s third largest Point-to-Point Airline Key figures Eurowings Group ~32 ~40 80,000 additional flights and 50 new Passengers ~17 ~18 (in m) connections in the network as of 2018 2015 2016 2017 2018 Aircraft 2017 2018 Eurowings to become third largest 2015 2016
Slide 16: Eurowings: Acquisition of parts of Air Berlin Group
Point-to-Point Airlines Eurowings: Acquisition of parts of Air Berlin Group Key facts of the transaction Overview Timeline Taking over two AOCs of Air Berlin Group Signing Eurowings grows by 81 aircraft1 13 October 2017 Eurowings grows by 3,000 employees (1,700 from LGW & Niki, 1,300 job postings at
Slide 17: Aviation Services: Current developments and outlook
Aviation Services Aviation Services: Current developments and outlook Highlights Current developments Outlook • Significant increase in revenues • Extending partnerships and freight load factor (e.g. ANA Cargo, United) • Ongoing restructuring leads to • Digitalizing business reduction of unit costs
Slide 18: The modernization of the Lufthansa Group continues
The modernization of the Lufthansa Group continues Executive Summary Strengthening competitiveness: Modernization of Lufthansa Group has made strong progress Structural cost reductions and modern pension systems through labor agreements, cost reduction remains in focus Historical record result impro
Slide 19: Appendix – supplementary information
Appendix – supplementary information – Page 19
Slide 20: Adj. EBIT expected "above previous year"
Adj. EBIT expected “above previous year” Forecast 2017 per segment Segment Adj. EBIT 2016 (m EUR) Adj. EBIT Forecast for 2017 Lufthansa German Airlines 1,090 above previous year SWISS 405 above previous year Austrian Airlines 58 above previous year Network Airlines 1,555 above previous year Point-to
Slide 21: Focus on capacity discipline, growth driven inorganically
Focus on capacity discipline, growth driven inorganically Lufthansa Group capacity growth 2017 per region 9% 4% 2% Network Airlines Eurowings (organic) (organic) -25% Network Eurowings Airlines (organic) (organic) 83% 124% 9% 2% Network Eurowings Network Eurowings Airlines (organic) Airlines (organi
Slide 22: Appendix – financial figures Q3 / 9M 2017
Appendix – financial figures Q3 / 9M 2017 – Page 22
Slide 23: Strong performance of passenger airlines and cargo
Strong performance of passenger airlines and cargo Segment overview 9M 2017 in m EUR Network Airlines Point-to-Point Airlines1 Revenue 17,695 12,467 3,568 1,814 Revenue 3,031 vs. 9M ‘16 +1,065 +699 +221 +177 vs. 9M ‘16 +1,469 Adj. EBIT 1,947 1,405 442 100 Adj. EBIT 145 vs. 9M ‘16 +623 +483 +120 +21
Slide 24: Fuel costs expected above previous year
Fuel costs expected above previous year Fuel forecast and sensitivities FY 2017 and 2018 Lufthansa Group fuel expenses after hedging Lufthansa Group price curve remainder of 2017 and 2018 (in bn EUR) 110 LH price 2017 Sensitivities with deviating oil price 100 LH price 2018 Market price 4.9 5.0 90 5
Slide 25: Revenue increases faster than absolute costs in Q3 and 9M 17
Revenue increases faster than absolute costs in Q3 and 9M 2017 Operating costs and revenues Lufthansa Group (in m EUR) Q3 ‘17 vs. Q3 ‘16 9M ‘17 vs. 9M ‘16 Total revenue 9,810 +11.1% 26,761 +12.1% Other operating income 573 +40.1% 1,747 +6.5% Total operating income 10,383 +12.4% 28,508 +11.7% Operati
Slide 26: Free cash flow increases strongly despite higher capex
Free cash flow increases strongly despite higher capex Cash flow statement Lufthansa Group (in m EUR) 9M ‘17 vs. 9M ‘16 4.5 3.3 3.4 3.2 EBT (earnings before income taxes) 2,350 +47 2.0 Depreciation & amortization (incl. non-current assets) 1,449 +109 Net proceeds from disposal of non-current assets
Slide 27: Favourable trading environment in all major traffic areas
Favourable trading environment in all major traffic areas Operating KPIs Group Airlines Total Q3 '17 9M '17 Europe Q3 '17 9M '17 Asia/Pacific Q3 '17 9M '17 Number of flights +10.8% +9.3% ASK +3.8% +3.2% ASK +1.1% +0.5% ASK +11.8% +11.7% RPK +5.7% +6.0% RPK +2.4% +5.2% RPK +13.2% +14.6% SLF +1.5pts.
Slide 28: Group revenue and currency impact
Group revenue and currency impact 9M 2017 vs. 9M 2016 Currency influence on EBIT (in m EUR) in m EUR Q1 Q2 Q3 Q4 FY (YTD) -39 34 -73 -78 Price: +1.5%% Volume: +8.1% 272 -113 Currency: -0.6% 1,527 Brussels Airlines: +5.4% 1,000 Traffic revenue (+14.4%) 21,360 18,674 5,401 Other revenue (+3.9%) 5,196
Slide 29: Fuel cost development
Fuel cost development 9M 2017 vs. 9M 2016 Hedging result by quarter (in m EUR) Q1 Q2 Q3 Q4 FY (YTD) 2016 -336 -235 -217 -115 -903 2017 -30 -63 -29 -122 in m EUR Change versus previous year 243 Price +616 -666 Brussels Airlines 3,939 Volume 3,696 +210 +110 -27 Hedging Currency 9M 2016 9M 2017 Page 29
Slide 30: Adjusted EBIT and one-off effects
Adjusted EBIT and one-off effects Quarterly results 2016-2017 in m EUR Q1 Q2 Q3 Q4 6M 9M Full Year Adjusted EBIT 2016 -53 582 1,148 75 529 1,677 1,752 Strikes 0 0 0 -100 0 0 100 Adjusted EBIT ex one-off factors -53 582 1,148 175 529 1,677 1,852 Adjusted EBIT 2017 25 1,017 1,518 1,042 2,560 One-off e
Slide 31: Adjusted EBIT and EBIT per quarter 2017
Adjusted EBIT and EBIT per quarter 2017 in m EUR Q1 Q2 Q3 Q4 6M 9M FY Adj. EBIT 25 1,017 1,518 1,042 2,560 pension changes -32 0 -9 -32 -41 book gains / losses on asset disposals +23 +5 +6 +28 +34 impairments / badwill 0 -7 -111 -7 -118 EBIT 16 1,015 1,404 1,031 2,435 interest on liquidity taxes (25
Slide 32: 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 75 529 1,677 1,752 pension changes 0 0 +721 -43 0 +721 +678 book gains / losses on asset disposals +5 +37 +7 -11 +42 +49 +38 impairments / badwill -1 -52 -64 -76 -53 -117 -193 EBIT -49 567 1,812 -55 518 2,3