Slide 1: Press and Analyst Results Conference H1 2015
Press and Analyst Results Conference H1 2015 Simone Menne, Member of the Executive Board and CFO Frankfurt, July 30, 2015
Slide 2: 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 discern
Slide 3: Overview
Overview Increase of Adj. EBIT by 290 m EUR to 468 m EUR in the first half-year 2015 Increase of operating margin in nearly all segments; fuel costs decrease by 309 m EUR Adj. EBIT margin of 7.6% in the second quarter Passenger airlines drive positive development; Lufthansa Technik und LSG SkyCh
Slide 4: Key financial ratios develop positively
Key financial ratios develop positively 6M and Q2 2015 at a glance Lufthansa Group (in m EUR) 6M 15 6M 14 vs. PY Q2 15 Q2 14 vs. PY Total revenue 15,365 14,166 +8.5% 8,392 7,704 +8.9% of which traffic revenue 12,123 11,466 +5.7% 6,704 6,305 +6.3% EBIT 463 216 +114.4% 607 433 +40.2% Adjusted EBIT 468
Slide 5: Currency effects significantly influence costs and revenues
Currency effects significantly influence costs and revenues Operating costs and revenues Lufthansa Group (in m EUR) 6M 2015 vs. PY Q2 2015 vs. PY Total revenue 15,365 +8.5% 8,392 +8.9% Other operating income 1,599 +69.0% 686 +61.8% Total operating income 16,964 +12.3% 9,078 +11.7% Operating expenses
Slide 6: Cash flow increases significantly, liquidity is on good level
Cash flow increases significantly, liquidity is on good level Cash flow statement Lufthansa Group (in m EUR) 6M 2015 vs. PY 3.3 2.8 2.4 2.5 EBT (earnings before income taxes) 981 +1,040 2.0 Depreciation & amortisation (incl. non-current assets) 887 +170 Net proceeds from disposal of non-current asse
Slide 7: All operating segments contribute to result improvement
All operating segments contribute to result improvement Segment overview 6M 2015 Share of LH Group‘s external revenue 73.6% 7.8% 10.3% 7.4% 0.9% 6M 2015 vs. 6M 2014 Passenger Others & in m EUR Airline Group Logistics MRO Catering Consolidation Revenue 11,642 1,207 2,556 1,448 -1,488 vs. PY in % +6.3
Slide 8: Constant currency pricing remains significantly negative
Constant currency pricing remains significantly negative Operative KPIs Passenger Airline Group Total 6M '15 Q2 '15 Europe 6M '15 Q2 '15 Asia/Pacific 6M '15 Q2 '15 Number of flights -0.1% +1.9% ASK -0.6% +2.0% ASK +5.4% +7.7% ASK +3.3% +5.2% RPK +0.9% +3.4% RPK +5.5% +9.0% RPK +3.6% +5.4% SLF +1.2pt
Slide 9: Trading assumptions for 2015 remain unchanged
Trading assumptions for 2015 remain unchanged Trading assumptions FY 2015 Full Year 2015 assumptions Explanation Fleet rollover: No. of Flights further reduction Continued phase out of small, non-efficient aircraft Capacity c. +3% Capacity growth mainly achieved through more seats per (ASK) aircraft
Slide 10: Oil price and currency lower fuel cost expectation
Oil price and currency lower fuel cost expectation Fuel forecast and sensitivities FY 2015 and 2016 Lufthansa Group fuel expenses after hedging Lufthansa Group price curve remainder of 2015 and 2016 (in bn EUR) 130 LH price 2015 120 LH price 2016 Sensitivities with deviating oil price 6.8 Market pri
Slide 11: Adj. EBIT FY15 expected to be more than 1.5 bn EUR before strikes
Adj. EBIT FY15 expected to be more than 1.5 bn EUR before strikes Unchanged forecast Lufthansa Group 2015 Lufthansa Group Adjusted EBIT “more than 1.5 bn EUR" Financial Year 2015 Actual and Forecast Profit increase in 2015 mainly driven by passenger airlines 1,297 1,171 Four parameters will larg
Slide 12: Appendix – Financial Figures H1 2015
Appendix – Financial Figures H1 2015 – Page 12
Slide 13: Group revenue and currency influence
Group revenue and currency influence 6M 2015 vs. 6M 2014 Currency influence on EBIT (in m EUR) in m EUR Q1 Q2 Q3 Q4 FY (YTD) -134 -24 -158 Currency: +7.4% Volume: +3.1% Price: -4.8% 356 846 -545 12,123 Traffic revenue (+5.7%) 11,466 3,242 2,700 Other revenue (+20.1%) H1 2014 H1 2015 ∑ 14,166 ∑ Group
Slide 14: Fuel costs
Fuel costs 6M 2015 vs. 6M 2014 Hedging result by quarter (in m EUR) in m EUR Q1 Q2 Q3 Q4 FY (YTD) 2014 -21 -2 -30 -96 -149 2015 -203 -205 -408 -309 Volume Price 3,243 106 Currency 2,934 -1,572 770 Hedging 387 H1 2014 H1 2015 Page 14
Slide 15: Adjusted EBIT and one-off factors
Adjusted EBIT and one-off factors Quarterly results 2014-2015 in m EUR Q1 Q2 Q3 Q4 6M 9M Full Year Adjusted EBIT 2014 -240 418 810 183 178 988 1,171 incl. strikes -10 -60 -35 -127 -70 -105 -232 incl. Venezuela -38 -23 +7 -5 -61 -54 -59 Adjusted EBIT ex one-off factors -192 501 838 315 309 1,147 1,46
Slide 16: Adjusted EBIT margins 6M 2015 vs. 6M 2014
Adjusted EBIT margins 6M 2015 vs. 6M 2014 10.9 11.0 10.5 all figures in % 10.0 9.0 8.1 8.0 7.0 6.0 5.0 4.3 4.1 4.0 3.7 3.0 3.0 2.1 1.8 2.0 1.3 1.1 1.0 0.7 0.0 -1.0 -0.5 -1.1 -2.0 -1.8 -3.0 -4.0 -5.0 -4.6 Lufthansa SWISS Austrian Airlines Passenger Logistics MRO Catering Lufthansa Passenger Airline G
Slide 17: Adjusted EBIT margins Q2 2015 vs. Q2 2014
Adjusted EBIT margins Q2 2015 vs. Q2 2014 13.0 12.4 all figures in % 12.0 12.0 11.1 11.0 10.0 9.0 8.0 7.8 7.8 7.6 7.0 6.8 6.4 6.0 5.4 5.0 4.5 4.0 3.8 3.7 3.1 3.0 2.3 2.0 1.8 1.0 0.0 -1.0 -0.3 Lufthansa SWISS Austrian Airlines Passenger Logistics MRO Catering Lufthansa Passenger Airline Group Group A
Slide 18: Adjusted EBIT and EBIT per quarter 2014
Adjusted EBIT and EBIT per quarter 2014 in m EUR Q1 Q2 Q3 Q4 6M 9M Full Year Operating result -245 359 735 105 114 849 954 Adj. EBIT -240 418 810 183 178 988 1,171 pension changes 0 0 +15 +33 0 +15 +48 book gains / losses on asset disposals +13 0 +8 -100 +13 +21 -79 impairments +10 +15 -1 -164 25 24
Slide 19: Reconciliation from EBIT to Adjusted EBIT per segment 6M 2015
Reconciliation from EBIT to Adjusted EBIT per segment 6M 2015 Book gains/losses Adj. EBIT 6M 15 Segment EBIT 6M 15 (m EUR) Impairments Pension changes on asset disposals (m EUR) LH Passenger Airlines 89 -5 1 94 SWISS 211 32 178 Austrian Airlines -17 -17 Consolidation -6 -6 Passenger Airline Group 27
Slide 20: New system directly links profit figures and value creation metric
New system directly links profit figures and value creation metric EBIT, EACC and ROCE are transparent and can be calculated easily Total Op. Income Balance Sheet Total (Rev.+ Oth. Op. Income) ./. non-interest bearing ./. operating costs liabilities Capital Employed + Income from Current Year 50 Sub
Slide 21: New system links profit figures: calculation for financial year 2014
New system directly links profit figures and value creation metric Calculation for financial year 2014 in m EUR 30,474 32,114 ./. 12,980 ./. 31,235 17,584 + 121 50 : 50 17,545 EBIT: 1,000 + 84 -48 ./. 271 +77 5.9% X ./. 1,036 +142 EACC: -223 Adj. EBIT: 1,171 (1,000 + 84 - 271) ROCE = = 4.6% 17,565 P
Slide 22: EBIT is a structurally higher number than operating result
EBIT is a structurally higher number than operating result Main difference is that income from subsidiaries is included 1,645 Operating profit EBIT 1,171 Adj. EBIT 972 936 986 954 1,000 820 864 839 725 699 2011 2012 2013* 2014 Total Operating Income 31,070 32,947 32,149 32,114 ./. Operating Expenses
Slide 23: WACC is based on a target capital structure of 50:50
WACC is based on a target capital structure of 50:50 Current WACC is 5.9% Cost of Debt1 Cost of Equity2 3.4% (FY 2014) 8.4% (FY 2014) Target Capital Structure 50 : 50 WACC: 5.9% 1 Currently no consideration of tax shield 2 Cost of Equity FY2014 = Risk-free market interest rate of 2.6% + (Market risk
Slide 24: Current capital employed is ca. 17.6 bn EUR
Current capital employed is ca. 17.6 bn EUR Weighted average cost of capital is 5.9% 18,101 17,526 17,545 17,565 Average Capital Employed WACC 7.0% 7.0% 6.2 % 5.9% 2011 2012 2013* 2014 Balance Sheet Total 28,081 28,559 29,108 30,474 ./. Non-Interest Bearing Liabilities 10,649 10,940 11,563 12,890 -