Slide 1: Q2 2020 Results
Q2 2020 Results Analyst and Press Conference Call Carsten Spohr CEO and Chairman of the Executive Board Frankfurt 6 August 2020
Slide 2: Path to "New Normal" requires a restructuring of the business
Path to “New Normal” requires a restructuring of the business Grounding Restart Recovery New Normal Competitiveness & Ability to invest Transformation & Restructuring Expected 2023 Flexibility As of Q3 2020 -99% Passengers As of May Page 2
Slide 3: Network Airlines: Almost complete standstill of business in Q2
Network Airlines: Almost complete standstill of business in Q2 Q2 2020 6M 2020 Operational KPIs 33.7% Comments Lufthansa and SWISS mainly operate -9.3pts. -5.0% repatriation flights in April and May, -34.2pts. Austrian Airlines and Brussels Airlines grounded until mid-June -95.5% -60.3% Gradual
Slide 4: Eurowings: Operating profit declines despite significant cost reductions
Eurowings: Operating profit declines despite significant cost reductions Q2 2020 6M 2020 34.0pts. Operational KPIs Comments -1.1pts Significant reduction of flight -7,5% schedule in the second quarter -38.4% Operating expenses down 66% in the second quarter, primarily driven by -95.0% -64,8% imp
Slide 5: Fixed cash cost reduction limits monthly cash burn to c. EUR 550 million
Fixed cash cost reduction limits monthly cash burn to c. EUR 550 million Airline fixed cash costs reduced significantly Q2 Group cash burn -34% Key drivers: c. EUR 550 million • Implementation of short-time average monthly operating cash burn work (up to 90k employees) (excluding working capital, in
Slide 6: Profits in Logistics segment up strongly, losses in MRO and Catering
Profits in Logistics segment up strongly, losses in MRO and Catering Adjusted EBIT / Margin Q2 2020 6M 2020 nmf. nmf. Comments 299 39.0% 277 21.0% -9 +40.4pts. 15 +19.8pts. Profits in Cargo business benefit Q2 ’19 Q2 ’20 6M ’19 6M ’20 from doubling of yields in the second quarter as a result of ca
Slide 7: Impairments and fuel hedging losses burden net income
Impairments and fuel hedging losses burden net income Adjusted EBIT / Net Income 6M 2020 Comments Aircraft impairments relate to 65 planes which will be permanently grounded Goodwill impairments relate to LSG US, Eurowings and JV operations of Total adjustments: EUR 569 million Lufthansa Technik
Slide 8: Investments reduced drastically in response to the crisis
Investments reduced drastically in response to the crisis Gross Investments1 Comments Strong progress made in negotiating 3.757 adjustment of aircraft payment and 3.529 3.559 delivery schedules with aircraft manufacturers -53% 23 aircraft deliveries planned in 2020 (9 received in H1), 12 in 2021
Slide 9: Group-wide focus on cash preservation limits free cash flow decline
Group-wide focus on cash preservation limits free cash flow decline Working Capital Contribution Adjusted Free Cash Flow Comments to Operating Cash Flow Strict focus on cash preservation implemented across the Group 1.452 1.434 269 Receivables reduction and successful negotiations with suppliers
Slide 10: Net debt increases only moderately relative to earnings decline
Net debt increases only moderately relative to earnings decline Net debt Pension provisions Comments Discount Discount Only moderate decline of net debt +10% rate: +11% rate: 1.4% 1.5% compared to year-end 7.314 7.422 Pension provisions increase due to 6.662 6.659 negative asset performance Ad
Slide 11: Stabilization measures ensure the Group's going concern
Stabilization measures ensure the Group’s going concern Centrally available liquidity & Stabilization package (undrawn as of Jun 30, ’20) Conclusion EUR 9.0 billion c. EUR 11.8 billion Total available liquidity as of June 30, 2020 ~4,250 3,0 Syndicated KfW loan Group fully funded for the next twel
Slide 12: Ambitious targets for the New Normal
Ambitious targets for the New Normal Business unit restructuring Maximum payback of stabilization plans achieved package 22,000 FTE reduced to Targets 15% productivity increase to reach adjust to new size 2023 ASK level of 2019 in 2023 Redimensioned Corporate Headquarter and LH Group minus 100 A/C i
Slide 13: Core elements of the restructuring program ReNew
Core elements of the restructuring program ReNew ReStructure Business Business unit restructuring Units ReBoot++ Sunrise2 … ReFocus ReOrg RePay Corporate Portfolio optimization, Corporate and functional Capital market initiatives and partnering opportunities restructuring refinancing of credit facil
Slide 14: Lufthansa Group intends to restore half of its capacity by year-end
Lufthansa Group intends to restore half of its capacity by year-end Total Capacity LHG Hub Airlines (% of 2019 ASK) 80% 82% Restoring network width: 95% of continental and 70% of intercontinental destinations by year-end ~55% ~50% ~40% Stronger focus on touristic: 90% of leisure destination portfoli
Slide 15: Financial outlook continues to be challenged by the effects of the Corona crisis
Financial outlook continues to be challenged by the effects of the Corona crisis Expansion of flight schedules will moderately reduce cash burn Restrictions in long-haul business and lower loads and yields expected to result in substantial Adjusted EBIT losses also in H2 Full year outlook rema
Slide 16: Appendix - supplementary information
Appendix - supplementary information- Page 16
Slide 17: Traffic Data
Traffic Data Q1 yoy Apr yoy May yoy June yoy Q2 yoy 6M yoy Passengers in 1,000 21,756 -26.1% 241 -98.1% 412 -96.9% 1,066 -92.3% 1,719 -95.7% 23,475 -66.0% Available seat-kilometers (m) 64,296 -19.1% 1,090 -96.4% 840 -97.4% 2,378 -92.6% 4,307 -95.5% 68,604 -60.7% Revenue seat-kilometers (m) 47,099 -2
Slide 18: Group P&L
Group P&L Lufthansa Group (in EUR m) Q2 ’20 vs. Q2 ’19 6M ’20 vs. 6M ’19 Revenues 1,894 -80.2% 8,335 -52.1% Total operating income 2,311 -77.2% 9,287 -49.8% Operating expenses 3,907 -58.8% 12,069 -33.5% Of which fees & charges 175 -85.1% 1,049 -52.7% Of which fuel 94 -94.8% 1,321 -59.0% Of which sta
Slide 19: Operating KPIs of Network Airlines by region
Operating KPIs of Network Airlines by region Total Q2 ’20 6M ’20 Europe Q2 ’20 6M ’20 Asia / Pacific Q2 ’20 6M ’20 Number of flights -93.8% -59.9% ASK -94.1% -61.2% ASK -95.3% -62.5% ASK -95.5% -60.3% RPK -95.8% -66.8% RPK -97.9% -66.8% RPK -97.4% -64.9% SLF -22.9pts. -10.9pts. SLF -46.2pts. -9.6pts
Slide 20: Cash flow statement
Cash flow statement Lufthansa Group (in m EUR) 6M ’20 vs. 6M ’19 Includes regular depreciation and crisis- 1 EBT (earnings before income taxes) -4,419 -4,531 related impairments Depreciation & amortization (incl. non-current assets) 1,831 +483 1 Net proceeds from disposal of non-current assets 9 -5
Slide 21: Multi-Year financial overview
Multi-Year financial overview Lufthansa Group (in m EUR, as reported) 2015 2016 2017 2018 20191 Operating KPIs RASK ex currency -3.0% -5.9% +1.9% -0.5% -2.5% CASK ex currency, ex fuel 2 +2.4% -2.5% -1.8% -1.7% -1.5% Profit & Loss Revenues 32,056 31,660 35,579 35,542 36,424 Fuel Cost 5,784 4,885 5,23