Slide 1: FY 2020 Results Analyst Conference
FY 2020 Results Analyst Conference Carsten Spohr, CEO Remco Steenbergen, CFO Frankfurt, 4 March 2021
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
Slide 3: FY 2020 Results Analyst Conference
FY 2020 Results Analyst Conference Carsten Spohr, CEO Frankfurt, 4 March 2021
Slide 4: 2020 – the most challenging year in Lufthansa Group's history
2020 – the most challenging year in Lufthansa Group’s history Revenues (€) 460 Repatriation 36.5m 13.6bn Flights for 91,000 passengers passengers -63% vs PY -76% vs PY Adj. EBIT (€) Adj. Free Cash Flow (€) Number of flights -5.5bn -3.7bn 390,000 Net Income (€) Available liquidity (€) -67% vs PY -6.7
Slide 5: All Group segments except Lufthansa Cargo record significant losses
All Group segments except Lufthansa Cargo record significant losses Group Airlines MRO Catering Logistics Revenues (€) 7.2bn 3.7bn 1.3bn 2.8bn -74% vs PY -43% vs PY -61% vs PY +11% vs PY Adjusted EBIT (€) -5.4bn -383m -284m +772m Page 5
Slide 6: The crisis offers a unique opportunity to accelerate the Group's strategic transformation
The crisis offers a unique opportunity to accelerate the Group’s strategic transformation Resize the organization: “New Normal” Transforming Get leaner and faster Modernized Fleet the way we connect Focus the Group on its core people, airline business Focused Portfolio Digitalization A-Z
Slide 7: FY 2020 Results Analyst Conference
FY 2020 Results Analyst Conference Remco Steenbergen, CFO Frankfurt, 4 March 2021
Slide 8: The Group's results were hit hard by the Corona pandemic
The Group’s results were hit hard by the Corona pandemic (in EUR million) FY ’20 FY ’19 Change in % Replace Revenues 13,589 36,424 -63% with 2 Operating expenses 20,846 37,124 -44% engine ac Of which fuel 1,875 6,715 -72% Of which staff 6,405 9,111 -30% Of which depreciation 2,561 2,692 -5% Adjusted
Slide 9: Significant capacity reduction in spring – recovery came to a halt in autumn and winter
Significant capacity reduction in spring – recovery over summer came to a halt in autumn and winter Capacity (ASK) in 2020 in % of PY, seat load factors 99% 98% 78% 75% 61% 62% 59% 58% 55% 48% 46% 49% 49% 42% 37% 25% 24% 23% 23% 19% 21% 4% 7% 3% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec ASK in
Slide 10: Group Airlines: results heavily impacted by the Corona pandemic
Group Airlines: results heavily impacted by the Corona pandemic Full year 2020 Operational KPIs Adjusted EBIT in EUR million Comments 1,776 Network Airlines -2.9% Long-haul load factors decline -20.4pts. -4,674 disproportionately Successful yield management and rising share of touristic short-ha
Slide 11: Logistics: record result due to ongoing yield strength
Logistics: record result due to ongoing yield strength Full year 2020 Operational KPIs +54.6% Comments +7.8pts. Market-wide capacity squeeze due to sharp reduction of available belly space in passenger aircraft Belly -66% -36.0% Significant yield increase driven by 1 AFK CLF Yield reduced market
Slide 12: Aviation Services: MRO one-off effects – LSG restructuring largely completed
Old, L Aviation Services: MRO one-off effects – LSG restructuring largely completed Full year 2020 Adjusted EBIT in EUR million Comments 463 Result at Lufthansa Technik -383 impacted by write-downs of FY ’19 FY ’20 receivables and spare parts of EUR 292 million Significant restructuring and stat
Slide 13: Fixed cash cost reduced by EUR 3.1 billion or 35% since beginning of crisis
Fixed cash cost reduced by EUR 3.1 billion or 35% since beginning of crisis Group total operating expenses1) Group fixed cash cost development1) Comments Q2 - Q4 2020, in EUR billion Q2 - Q4 2020, in EUR billion Variable cost decline by 72%, in line 28.4 with topline Variable cost Depreciation S
Slide 14: Net income impacted by impairments and losses on fuel derivatives
Net income impacted by impairments and losses on fuel derivatives Walk from Adjusted EBIT to Net Income for full year 2020 in EUR million Comments Aircraft impairments of EUR 1.5 billion relate to 115 planes/usage rights (no cash effect) Goodwill and JV impairments of EUR 0.3 billion mainly affe
Slide 15: Cash drain limited to EUR 304 million per month in Q4
Cash drain limited to EUR 304 million per month in Q4 Walk from Adjusted EBIT to Adjusted free cash flow for Q4 2020 in EUR million Change in unflown flight documents -665 693 105 603 (165) -762 Monthly cash drain1: (266) -1,090 EUR 304m -1,290 (770) Adjusted Depreciation & Non-cash Operating Net ne
Slide 16: Strict working capital management and other measures to protect liquidity
Strict working capital management and other measures to protect liquidity limit free cash flow decline Walk from Adjusted EBIT to Adjusted free cash flow for full year 2020 in EUR million 1,843 703 918 2,720 1,324 (914) (962) -3,669 (3,850) -5,451 Adjusted Depreciation & Net new Refunds Other workin
Slide 17: Net debt increase primarily related to free cash flow decline - pension provisions up
Net debt increase primarily related to free cash flow decline - pension provisions up mainly due to valuation effect Net debt in EUR million Pension provisions in EUR million 3,668 2,588 262 9,509 9,922 (408) 6,659 6,662 Due to decline of discount rate from 1.4% to 0.8% Jan 1, Adjusted Equity Dec 31
Slide 18: Successful return to capital markets at favorable conditions
Successful return to capital markets at favorable conditions Capital market transactions since June 2020 in EUR million ~3,700 ~500 Refinancing of liabilities maturing in 2021 has Aircraft Financing Q3 + Q4 ’20 been completed Convertible bond November ’20 @ 2.0% p.a. 600 Maturity: November ’25 Strai
Slide 19: Sufficient liquidity available to protect against ongoing market challenges
Sufficient liquidity available to protect against ongoing market challenges Group available liquidity Lufthansa stabilization package in EUR billion 10.6 in EUR billion 10.1 Drawdown: 9.0 Grant AT EUR 3.3 billion 0.3 0.2 WSF Equity 3.8 5.0 Cash at hand (before repayment of KfW 1.0 Syndicated KFW loa
Slide 20: Demand expected to pick up materially over the course of 2021
Demand expected to pick up materially over the course of 2021 2021 Capacity: 2021 Adj. EBIT: Q1 oper. Cash Drain: 40 – 50% Less negative than in c. EUR 300m per month of 2019 ASK 2020 Operating Cash Flow: 2021 Gross CapEx: Expected to turn positive c. EUR 1.3bn at 50% capacity Page 20
Slide 21: Focus of financial management on restoring balance sheet strength
Focus of financial management on restoring balance sheet strength STRENGTHENING OF BALANCE SHEET Return to profitability Repayment stabilization measures Divestments Achieve cost reductions to ensure Replace state aid funds through long- Divest non-core assets in part or in quick return to profitabi
Slide 22: FY 2020 Results Analyst Conference
FY 2020 Results Analyst Conference Carsten Spohr, CEO Frankfurt, 4 March 2021
Slide 23: The crisis offers a unique opportunity to accelerate the Group's strategic transformation
The crisis offers a unique opportunity to accelerate the Group’s strategic transformation Resize the organization: “New Normal” Transforming Get leaner and faster Modernized Fleet the way we connect Focus the Group on its core people, airline business Focused Portfolio Digitalization A-Z
Slide 24: Resolute and fast response to the crisis
Resolute and fast response to the crisis Reduced Flight operations Evaluation of Reduced -20% CAPEX CAPEX discontinued at Germanwings retirement of all aircraft >25 years Management by two thirds by two thirds positions Divestiture of LSG Closure of Europe completed SunExpress Successful return to D
Slide 25: Accelerated fleet restructuring will reduce complexity, costs and emissions
Accelerated fleet restructuring will reduce complexity, costs and emissions New Normal Intercontinental Large Very large 380 748 748 Phase-out of Decision in 2020 to 744 779 8 intercontinental phase-out 773 773 aircraft types 115 aircraft Medium 772 346 Reduction of CO2 Share of 4-engine 359
Slide 26: Significant progress achieved in the restructuring of Group airlines
Significant progress achieved in the restructuring of Group airlines Lufthansa SWISS Austrian Brussels Airlines Eurowings Crisis agreements Reduction to just one 8% Headcount achieved for all main -1,100 FTE by 2023 -20% FTE AOC in Germany reduction unions completed 14 A380 & New collective labour F
Slide 27: Lufthansa Group committed to sustainability and CO2 reduction
Lufthansa Group committed to sustainability and CO2 reduction CO2 Balance Customer & Sustainability Further ESG aspects Target: CO2-neutral aviation until Sustainable product and service offer: Active noise reduction 2050, 50% reduction of net emissions Emission compensation Global commitm
Slide 28: Ready for steep demand pick-up: leisure, digitalization and new services
Ready for steep demand pick-up: leisure, digitalization and Digitalization, new services and New Leisure Offers Digital Customer Innovation Product & Service Innovation New Touristic Destinations: Star Alliance Biometrics: contactless New Business Class in 2022 customer experience at airports
Slide 29: Appendix - supplementary information
Appendix - supplementary information- Page 29
Slide 30: Traffic Data
Traffic Data 9M yoy Oct yoy Nov yoy Dec yoy Q4 yoy FY yoy Passengers in 1,000 32,157 -71.2% 2,011 -84.9% 950 -90.8% 1,237 -87.4% 4,198 -87.5% 36,354 -75.0% Available seat-kilometers (m) 90,937 -66.8% 7,238 -77.3% 5,511 -79.2% 6,142 -76.6% 18,891 -77.7% 109,828 -69.4% Revenue seat-kilometers (m) 61,3
Slide 31: Group P&L
Group P&L Lufthansa Group (in EUR m) Q4 ’20 vs. Q4 ’19 FY ’20 vs. FY ’19 Revenues 2,594 -70.9% 13,589 -62.7% Total operating income 3,248 -66.5% 15,594 -60.0% Operating expenses 4,501 -52.2% 20,846 -43.8% Of which fees & charges 350 -67.9% 1,796 -60.3% Of which fuel 265 -83.6% 1,875 -72.1% Of which
Slide 32: Operating KPIs of Network Airlines by region
Operating KPIs of Network Airlines by region Total Q4 ’20 FY ’20 Europe Q4 ’20 FY ’20 Asia / Pacific Q4 ’20 FY ’20 Number of flights -77.5% -67.2% ASK -78.6% -67.2% ASK -83.8% -73.5% ASK -77.7% -69.5% RPK -85.1% -73.6% RPK -94.2% -80.9% RPK -88.6% -77.0% SLF -23.3pts. -15.1pts. SLF -53.8pts. -23.6pt
Slide 33: Operating KPIs of Eurowings
Operating KPIs of Eurowings Total Q4 ’20 FY ’20 Number of flights -80.0% -69.1% ASK -77.5% -68.3% RPK -84.2% -71.8% SLF -24.0pts. -9.1pts. Yield -39.9% -15.6% Yield ex currency -39.9% -15.6% RASK -54.8% -13.2% RASK ex currency -56.5% -15.2% CASK excl. fuel +150.3% +78.8% CASK ex currency ex fuel +15
Slide 34: Fuel cost bridge
Fuel cost bridge Hedging result by quarter (in m EUR) Q1 Q2 Q3 Q4 FY (YTD) 2019 17 35 -46 -45 -39 2020 -133 1 -45 -27 -204 Change versus previous year in m EUR -4,840 6,715 Hedging +165 1,875 -4,512 -485 -8 Volume Price Currency FY 2019 FY 2020 Page 34
Slide 35: Cash flow statement
Cash flow statement Lufthansa Group (in m EUR) FY ’20 vs. FY ’19 Includes regular depreciation and crisis- 1 related impairments for 115 aircraft and EBT (earnings before income taxes) -8,631 -10,491 aircraft usage rights Depreciation & amortization (incl. non-current assets) 4,552 +1,715 1 Net proc
Slide 36: Maturity profile of borrowings as of December 31, 2020
Maturity profile of borrowings as of December 31, 2020 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 Commercial Paper Credit Lines Aircraft Finance (secured) State Aid * Other ** * As drawn on Dec 31 - predomina
Slide 37: Lufthansa pension accounting
Lufthansa pension accounting Schematic overview of cash flows 1 Contributions to pension assets Valuation effects 235m EUR LUFTHANSA Pension • Revaluation of DBO position at lower IFRS GROUP 510m EUR Fund discount rate Refund of pension payments from • Revaluation of plan assets for unexpected 2 pla
Slide 38: Fleet overview
Fleet overview thereof Change since Aircraft Type LH LX OS SN EW LCAG Group fleet 3) Lease 31 Dec 2019 Airbus A220 29 29 Airbus A319 69 7 19 11 106 32 -7 Airbus A320 102 32 29 16 56 235 36 10 -404) Airbus A321 69 11 6 5 91 2 3 Airbus A330 261) 16 10 52 10 -1 -4 Airbus A340 34 9 43 -9 -10 Airbus A350
Slide 39: 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