Slide 1: Investor Presentation November 2023
Investor Presentation November 2023
Slide 2: Disclaimer
Disclaimer IMPORTANT: The following applies to this document and the oral presentation of the information in this document by Deutsche Lufthansa Aktiengesellschaft (the “Company”, and together with its consolidated subsidiaries, the “Group”) or any person on behalf of the Company, any question-and-a
Slide 3: Disclaimer
Disclaimer This Presentation does not constitute or form part of, and should not be construed as, an offer to sell or issue, or the solicitation of an offer to purchase, subscribe to or acquire, securities of the Company, its affiliates or an inducement to enter into investment activity in the Unite
Slide 4: Third Quarter 2023 Results
Third Quarter 2023 Results Strategy Update Investment in ITA Airways Operational and financial outlook Appendix Page 4
Slide 5: All Q3 key figures exceed the previous year's level
All Q3 key figures exceed the previous year's level (in EUR million) Q3 ’23 Q3 ’22 Change in % Revenues 10,275 9,537 +8 Operating expenses 9,561 9,114 +5 Of which fuel 2,266 2,475 -8 Of which staff 2,066 1,927 +7 Of which depreciation 558 554 +1 Adjusted EBITDA 2,026 1,678 +21 Adjusted EBIT 1,468 1,
Slide 6: Passenger Airlines: Very strong performance over summer
Passenger Airlines: Very strong performance over summer Operational KPIs Adjusted EBIT/(margin) Comments in EUR million ▪ All Group airlines report double-digit Q3 ’23 vs. 2022 vs. 2019 Adj. EBIT margins as demand remains robust, especially in (premium) leisure ASK 87,686 +12.9% -12.0% ▪ Performance
Slide 7: SWISS, Austrian and Brussels Airlines achieve record results in Q3
SWISS, Austrian Airlines and Brussels Airlines achieve record results in Q3 ASK Revenue Adj. EBIT Adj. EBIT Q3 Performance vs. 2019 [m EUR] [m EUR] margin Lufthansa German Airlines -17.4% 4,755 641 13.5% SWISS -8.5% 1.703 327 19.2% Austrian Airlines -7.1% 741 129 17.4% Brussels Airlines -17.5% 479 7
Slide 8: Lufthansa Technik on course for record result – Cargo demand stabilizing
Lufthansa Technik on course for record result – Cargo demand stabilizing Adjusted EBIT/(margin) in EUR million Comments 331 (29.0%) ▪ Cargo business impacted by weak 1 demand in the global air cargo market Q3 ’23 Q3 ’22 in a seasonally weak quarter ▪ Stabilization of Cargo yields (Q3: +39% vs. 2019)
Slide 9: Free cash flow performance driven by strong operating result
Free cash flow performance driven by strong operating result, booking increases and strict working capital management YTD Adjusted EBIT / Adjusted free cash flow in EUR million (345) 186 4,320 972 (430) Q3 FCF: 1,657 (2,415) EUR 592m 2,280 (242) 1,663 Adjusted D&A Liability from Receivables Remainin
Slide 10: Net debt and pension deficit decline further in Q3
Net debt and pension deficit decline further in Q3 Liquidity Net debt and net pension liabilities1 EUR billion EUR billion Comments Increase in 11.1 pension ▪ Strong free cash flow generation 10.4 2.1 8.9 discount rate reduces the Group’s leverage 2.1 Target liquidity: by 0.2%p. ratio (Adj. net debt
Slide 11: Strategy Update
Third Quarter 2023 Results Strategy Update Investment in ITA Airways Operational and financial outlook Appendix Page 11
Slide 12: Lufthansa Group is delivering on its key strategic priorities
Lufthansa Group is delivering on its key strategic priorities Customer New Product Multi-Airline Transformation into Experience Generation Multi-Hub an Airline Group Page 12
Slide 13: New Cabins Allegris
New Allegris Cabins Customer-focused Innovation Terminal 6 Digital at JFK Offers Page 13
Slide 14: Product and service innovations in premium
Customer Product Multi-Airline Airline Group Comprehensive product and service innovations underline our aspiration to define premium in the European airline industry New Premium Introduction of 27 Economy already in the air New First hirings in at SWISS ground Class suite 7 seat options in Business
Slide 15: Lufthansa Group accelerates fleet modernization
Customer Product Multi-Airline Airline Group Lufthansa Group accelerates fleet modernization Order book well filled with nearly 100 NewGen long-haul aircraft Today New Normal 380 748 748 744 789 34x 779 773 773 779 20x 772 6 older A/C 35K types to be 35K 10x phased out 359 359 completely in 789
Slide 16: Technological and commercial innovation are key to decarbonization
Customer Product Multi-Airline Airline Group Technological and commercial innovation are key to decarbonization Technology drives Rising contribution Among top-ranked emission reduction made by customers airlines in CDP Specific CO2 emissions: New Green fares launched Received top score (A-) in -11%
Slide 17: Emission reduction targets validated by SBTi
Customer Product Multi-Airline Airline Group Group’s emission reduction targets successfully validated by Science Based Targets initiative (SBTi) Index LHG CO2 Emissions (not to scale) Major levers for CO2 Reduction: 110 Growth Fleet (SBTi relevance) Reduction ▪ Fleet rollover 100 SBTi Sector Guidan
Slide 18: Multi-Hub and Multi-Brand strategy is key for success
Customer Product Multi-Airline Airline Group Multi-Hub and Multi-Brand strategy is key for the success of Lufthansa Group Customer centricity: • Strong national brands with unique identity • Customer offering tailored to market- specific needs • Connected networks offer maximum connectivity JOINT OP
Slide 19: Significant progress in the transformation into an Airline group
Customer Product Multi-Airline Airline Group Significant progress in the transformation into an Airline group Divesting non-core assets Consolidating the European Market LSG: 41% Investment in ITA Airways: Sale Ongoing dialogue with EU Commission, closed in expected closing in early 2024 October Air
Slide 20: Investment in ITA Airways
Third Quarter 2023 Results Strategy Update Investment in ITA Airways Operational and financial outlook Appendix Page 20
Slide 21: ITA provides access to the attractive Italian market
ITA provides the Group even better access to the very attractive Italian market and regional diversification Italy– aiskey market for Lufthansa Group Italy ITA & Lufthansa Group 3rd largest Economy in ▪ Attractive proposition to grow a profitable long- the EU (GDP) haul business in Rome Fiumicino ▪
Slide 22: Transaction terms minimize the Group's financial risk
Transaction terms minimize the Group’s financial risk and create optionality ▪ Acquisition of 41% of shares in ITA Airways through a capital increase ▪ Investment into the company’s equity, no payment to Italian Ministry of Economy and Finance (MEF) Key terms ▪ Capital increase of EUR 325 million fu
Slide 23: ITA Airways fully restructured as a cost-competitive airline
ITA Airways has been fully restructured and set up as a structurally cost- competitive airline with no legacy issues associated with the old Alitalia 2019 2020 / 2021 2022 Crew and cabin contracts renegotiated Passengers Italia Passengers: 10.1m Nov & no pension obligations from Alitalia Trasporto 2
Slide 24: Sound plan to turn ITA into a profitable airline
Lufthansa Group has a sound plan to turn ITA into a profitable airline Optimizing the network Driving profitable growth Maximizing synergies ▪ Ensure that ITA’s network is ▪ Capitalize on ITA’s favorable ▪ Unlock the significant potential complementary to the existing cost position for revenue and c
Slide 25: Rome Fiumicino as Southern Hub and Milan Linate
Network Profitable growth Synergies Rome Fiumicino as new Southern Hub and Milan Linate as premium point-to-point airport will interconnect the ITA and LHG networks Feeder network Rome Fiumicino Milan Linate ▪ Enhance the short-haul network for ▪ Focus the long-haul network on ▪ Expand the touristic
Slide 26: Competitive cost base and modern fleet
Network Profitable growth Synergies Competitive cost base and homogenous, modern fleet form a solid base for future growth Favorable cost position Modernized fleet 94 NewGen Highly competitive A330-900neo ▪ Homogeneous, all Airbus labour cost A350-900 fleet, allowing for 66 A320 efficiencies in oper
Slide 27: ITA can realize its full potential with Lufthansa Group
Network Profitable growth Synergies In combination with Lufthansa Group, ITA can realize its full potential by benefitting from the size and synergies of a global group COMMERCIAL & Global network management Access to global airline partner network (e.g. A++ JV with United and Air Canada) Global Int
Slide 28: Investment in ITA Airways has significant value for shareholders
Investment in ITA Airways has significant value for our shareholders Upgrade picture ITA Airways is a perfect addition to the quality portfolio of Lufthansa Group airlines Restructured and structurally cost-competitive airline: Sound plan in place to turn ITA profitable Investment approach minimizes
Slide 29: Operational and financial outlook
Third Quarter 2023 Results Strategy Update Investment in ITA Airways Operational and financial outlook Appendix Page 29
Slide 30: Demand remains strong beyond summer
Demand remains strong also beyond summer – with plenty of growth opportunities remaining Bookings Demand recovery by customer segment Pax in % vs. 2022 Jul & Aug 2023, Pax in % vs. 2019 Around 80% of total 100% VFR* bookings expected in 95% Q4 already received 95% Ind. Leisure 94% 113 115 114 118 10
Slide 31: Planned 2024 capacity compares favorably to demand recovery
Lufthansa Group’s planned capacity in 2024 compares favorably to the recovery in customer demand, supporting the unit revenue outlook North Atlantic China ~105% Europe ~80% ~100% ~110% ~65% ~105% APAC ex-China ~95% ~95% Estimated regional split of the RoW APAC Group’s 2024 10%p. capacity growth capa
Slide 32: Building on competitive advantages in a capacity-constrained industry
The Group is building on its competitive advantages in a capacity-constrained industry Industry-wide bottlenecks persist Lufthansa Group has better access to scarce resources Delays in new aircraft deliveries & Delivery of c.30 NewGen shortages in the supply of spare parts aircraft expected in 2024
Slide 33: Lufthansa Cargo's unique market position
Lufthansa Cargo’s unique market position expected to support performance also in the future Evaluation of At the Modern aircraft k retirement of all forefront of Pure 777F aircraft >25 years digitization long haul fleet Yields are normalizing in 2023 but eCommerce remain above pre-crisis level push
Slide 34: Lufthansa Technik well positioned in an attractive market
Lufthansa Technik well positioned to remain a leader in a very attractive market Leading position in highly Strongest portfolio of At the forefront of the attractive MRO market customers and OEM industry’s digital partnerships transformation ▪ >4,000 aircraft under exclusive ▪ Leading MRO portfolio
Slide 35: Fuel cost forecast and hedging
The forecast for fuel costs in 2023 has increased due to the rising oil price - a high hedge ratio offers good protection in 2024 Expected fuel cost sensitivity after hedging (FY 2023)1 Fuel unit costs expected to be stable in 2024 115 Ø Market price crude oil2 0 +50 +50 +100 +150 Fuel unit costs 10
Slide 36: Financial outlook for 2023 reconfirmed
Financial outlook for 2023 reconfirmed Full Year 2023 Around 85% of 2019 levels Capacity (ASK) (Q4 2023: c. 91%) Adjusted EBIT Above EUR 2.6bn Adjusted Free Cashflow Significantly positive Net CapEx EUR 2.5 - 3.0bn Page 36
Slide 37: The Group is confident to further improve performance in 2024
The Group is confident to further improve performance in 2024 Key assumptions for 2024 Mid-single digit %-rate cost inflation (before mitigation measures) Solid demand growth Adjusted EBIT margin At least 8% Increase of capacity to c. 95% of 2019 Adjusted ROCE Further system-wide operational At leas
Slide 38: Appendix
Third Quarter 2023 Results Strategy Update Investment in ITA Airways Operational and financial outlook Appendix Page 38
Slide 39: Traffic Data
Traffic Data Jul vs.2019 Aug vs.2019 Sep vs.2019 Q3 vs.2019 Passengers in 1,000 12,979 -11.2% 12,682 -10.5% 12,510 -10.5% 38,171 -10.7% Available seat-kilometers (m) 29,724 -12.1% 29,401 -12.4% 28,562 -11.4% 87,686 -12.0% Revenue seat-kilometers (m) 25,915 -11.8% 25,280 -13.7% 24,420 -10.7% 75,615 -
Slide 40: Operating KPIs of Passenger Airlines by region
Operating KPIs of Passenger Airlines by region vs. 2019 (unless stated otherwise) Total Q3’23 Europe Q3’23 Asia / Pacific Q3’23 Number of flights -16.0% ASK -2.2% ASK -37.4% ASK -12.0% RPK -0.5% RPK -38.4% RPK -12.1% SLF +1.5pts. SLF -1.5pts. SLF -0.1pts. RASK incl. currency1) +14.5% RASK incl. curr
Slide 41: Calculation of operational airline KPIs
Calculation of operational airline KPIs Passenger Airlines, Q3 2023 1) Traffic revenues (€m) 8,108 1) Total Revenues (€m) 8,522 2) Not assignable (€m) 723 2) Other operating income (€m) 288 Yield = 3) Basis for Yield (1)–(2) (€m) 7,385 3) Reversal of provisions (€m) 19 RASK 4) RPK (m) 1 75,615 4) FX
Slide 42: Group P&L Q3
Group P&L Lufthansa Group (in EUR m) Q3 ’23 vs. Q3 ’22 Revenues 10,275 +8% Total operating income 10,901 +7% Operating expenses 9,561 +5% Of which fees & charges 1,249 +16% Of which fuel 2,266 -8% Of which staff 2,066 +7% Of which depreciation 558 +1% Result from equity investments 128 +137% Adjuste
Slide 43: Group P&L 9M
Group P&L Lufthansa Group (in EUR m) 9M ’23 vs. 9M ’22 Revenues 26,681 +18% Total operating income 28,746 +19% Operating expenses 26,571 +14% Of which fees & charges 3,360 +22% Of which fuel 5,886 +5% Of which staff 6,047 +15% Of which depreciation 1,657 +1% Result from equity investments 105 +1400%
Slide 44: EBIT / Adjusted EBIT bridge Jan - Sep 2023
EBIT / Adjusted EBIT bridge Jan - Sep 2023 in EUR million 2,218 2,280 40 27 (2) (3) EBIT Impairment of non- M&A related expenses net Book gains Others Adjusted EBIT current assets / assets held for sale Page 44
Slide 45: Adjusted EBIT / Net Income Jan - Sep 2023
Adjusted EBIT / Net Income Jan - Sep 2023 in EUR million 2,280 (62) (248) 50 (366) 1,606 (36) (12) Adjusted EBIT Adjustments Interest result Others Tax result Profit/loss from Profit/loss Net EBIT discontinued attributable to Income operations minority interests Page 45
Slide 46: Adjusted EBIT by Airline
Adjusted EBIT by Airline Adjusted EBIT (in EUR m) Q3 ’23 Q3 ’22 Change in % 9M ’23 9M ’22 Change in % Lufthansa German Airlines 641 224 186 790 -574 n.m.f. SWISS 327 234 40 676 279 142 Austrian Airlines 129 110 17 144 4 3,500 Brussels Airlines 71 52 37 59 -37 n.m.f Eurowings 181 103 76 147 -136 n.m.
Slide 47: Cash flow statement
Cash flow statement Lufthansa Group (in m EUR) Q3 ’23 vs. Q3 ’221 EBT (earnings before income taxes) 1,536 +458 1 Depreciation & amortization (incl. repairable MRO materials) +563 +10 Net proceeds from disposal of non-current assets +9 +16 Significant improvement in the operating 1 result compared t
Slide 48: Multi-year financial overview
Multi-year financial overview Lufthansa Group (in EUR million, as reported) 2016 2017 2018 20191 2020 2021 20224 Operating KPIs RASK ex currency -5.9% +1.9% -0.5% -2.5% -26.7% -6.1% -6.1% CASK ex currency, ex fuel2 -2.5% -1.8% -1.7% -1.5% +84.6% -25.8% -25.8% Profit & Loss Revenues 31,660 35,579 35,
Slide 49: Maturity profile of borrowings as of September 30, 2023
Maturity profile of borrowings as of September 30, 2023 in EUR million 3,000 2,500 2,000 1,500 1,000 500 0 YTG 2023 2024 2025 2026 2027 2028 2029 2030 Straight Bond Hybrid Convertible Bond Schuldscheindarlehen Aircraft Finance (secured) Other* *Mainly bilateral loans – does not include operating lea