Slide 1: Full Year 2013 Results Conference
Full Year 2013 Results Conference Christoph Franz Chairman of the Executive Board and CEO Simone Menne Member of the Executive Board and CFO Frankfurt, March 13th 2014 Page 1
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 historical facts. These forward-looking statements are based
Slide 3: Simone Menne – Member of the Executive Board and CFO
Simone Menne – Member of the Executive Board and CFO – Page 3
Slide 4: Financial Summary
Financial Summary Lufthansa Group reached its profit targets for 2013, operating result excl. one-offs increased by 62% Improvement was mainly driven by passenger airlines and MRO business FY13 operating result reached 697 m EUR (reported) and 1,042 m EUR excluding one-off costs (normalized) One-off
Slide 5: Key KPIs improved in FY 2013 and Q4 2013
Key KPIs improved in FY 2013 and Q4 2013 Key figures for the Lufthansa Group Lufthansa Group (in m EUR) FY 2013 FY 2012 vs. PY Q4 2013 Q4 2012 vs. PY Total revenue 30,028 30,135 -0.4% 7,260 7,314 -0.7% of which traffic revenue 24,565 24,793 -0.9% 5,902 6,007 -1.7% Operating result 697 839 -16.9% 36
Slide 6: Good underlying cost development was achieved in 2013
Good underlying cost development was achieved in 2013 Operating costs and revenues Lufthansa Group (in m EUR) FY 2013 vs. PY Q4 2013 vs. PY Total revenue 30,028 -0.4% 7,260 -0.7% Other operating income 1,918 +0.3% 515 +1.4% Total operating income 31,946 -0.3% 7,775 -0.6% Operating expenses -31,249 +
Slide 7: Cash generation was again strong in 2013
Cash generation was again strong in 2013 Cash flow statement Group Cash Flow Statement in m EUR FY 2013 vs. PY EBT (earnings before income taxes) 545 -751 Depreciation & amortisation (incl. D&A for non-current assets) 1,738 -187 Net proceeds from disposal of non-current assets -11 +728 Result from e
Slide 8: Profit improvement was driven by passenger airlines and MRO
Profit improvement was driven by passenger airlines and MRO Segment overview for 2013 Share of LH Group’s 76.1% 8.0% 8.6% 6.4% 0.9% external revenue Passenger Other & FY 2013 vs. FY 2012 in EUR m Airline Group Logistics MRO Catering IT Services consolidation Revenue 23,513 2,442 4,180 2,514 640 -3,2
Slide 9: Passenger airlines showed strong operating performance
Passenger airlines showed strong operating performance Operating KPIs of Passenger Airline Group Total FY '13 Q4 '13 Europe FY '13 Q4 '13 Asia/Pacific FY '13 Q4 '13 Number of flights -3.7% -2.6% ASK +1.5% +3.2% ASK +2.4% +3.7% ASK +1.0% +1.4% RPK +4.3% +5.0% RPK +2.6% +5.5% RPK +2.3% +2.6% SLF +1.9p
Slide 10: Unit costs reduction by c. 4% and increasing revenue per flight
Unit costs reduction by c. 4% and increasing revenue per flight Trading assumptions FY 2014 Outlook 2014 Explanation Fleet Size fleet rollover, (no. of aircraft) overall stable phase-out of small, non-efficient aircraft capacity growth realized through larger aircraft (more Capacity c. +5% seats per
Slide 11: Fuel costs are expected to ease mainly due to weaker USD in 2014
Fuel costs are expected to ease mainly due to weaker USD in 2014 Fuel forecast and sensitivities Lufthansa Group fuel expenses after hedging LH price (in bn EUR) Sensitivities 2014 costs with deviating oil price 7.4 7.1 7.2bn (+20%) 6.8 7.0bn (+10%) 6.3 USD/barrel Market price 6.4bn (-10%) break-eve
Slide 12: Aircraft depreciation policy changed to 20 years and 5% residual value
Aircraft depreciation policy changed to 20 years and 5% residual value New depreciation policy Old: 12 years to New: 20 years to 15% residual value 5% residual value Reason for D&A change: IAS 16: joint review with auditors of assets' useful life and residual value FY 2013: no impact on operating re
Slide 13: Lufthansa Group operating profit 2014 expected at 1.3 to 1.5 bn EUR
Lufthansa Group operating profit 2014 expected at 1.3 to 1.5 bn EUR Outlook for the Group Result 2013 Segment Forecast for 2014 (m EUR) Lufthansa Passenger Airlines 265 significantly above previous year, but diluted by project costs SWISS 226 significantly above previous year Austrian Airlines 25 si
Slide 14: Christoph Franz – Chairman of the Executive Board and CEO
Christoph Franz – Chairman of the Executive Board and CEO – JANUARY 2 0 1 4 Commerzbank German Investment Seminar Simone Menne, Member of the Executive Board and CFO New York, 13 Jan 2014 Page 14
Slide 15: Operating profit trend has been reversed in 2013
Operating profit trend has been reversed in 2013 Dividend proposal of 0.45 Euros Lufthansa Group - Normalized operating result excluding one-off effects 1,680 - 1,880 in m EUR 1,020 1,042 Dividend of 0.45 Euro 820 (subject to AGM approval) 643 2010 2011 2012 2013 2014e effect from change in deprecia
Slide 16: SCORE pipeline is well filled with measures until 2015
SCORE pipeline is well filled with measures until 2015 SCORE pipeline 2012-2015 potential further headwinds that must be compensated by additional measures 886 Normalized operating result Projects in idea status Projects in implementation Projects concluded / P&L effective Headwinds 2,650 1,187 as o
Slide 17: Top SCORE projects in 2014 and 2015
Top SCORE projects in 2014 and 2015 Selected SCORE measures and additional measures under review Projects in existing SCORE pipeline Further projects under review Key projects in 2014 and 2015 Aim: Build buffer for potential further headwinds Germanwings Two-class-fleet Ancillary revenue potentials
Slide 18: 2014 will be a year of many long-haul product upgrades
2014 will be a year of many long-haul product upgrades New business class will be widely rolled out, Premium Eco launched Premium Economy New Business Class Two-Class Fleet Available for sale as of May 80% of long-haul fleet by end 2014 30 aircraft to be reconfigured Up in the air from October More
Slide 19: Miles & More will be transferred into separate legal entity
Miles & More will be transferred into separate legal entity New legal structure Objectives Higher degree of transparency and integrated commercial steering Accelerated speed to market through dedicated Bonus program activities resources and higher degree of entrepreneurial freedom to be transferred
Slide 20: Lufthansa Technik and LSG produced best ever results in 2013
Lufthansa Technik and LSG produced best ever results in 2013 Service companies as competitive advantage for the Lufthansa Group No. 1 Independent MRO-provider No. 1 Airline caterer 101 105 404 316 318 85 72 76 268 Operating result 2013: 257 Operating result 2013: 404 m EUR 105 m EUR Global market le
Slide 21: Summary 2013
Summary 2013 Normalized operating result increased by more than 60%, further improvement of 40% expected for 2014 Improvement in 2013 was mainly driven by Passenger Airlines and MRO LH Group is profitable in all segments, increase in profitability in 2013 in almost all segments Austrian achieved bre
Slide 22: Outlook 2014 and beyond
Outlook 2014 and beyond Passenger airlines are upgrading to leading product and services Improved customer experience; Lufthansa Passenger Airlines aims at becoming the first Western 5 Star airline Premium Economy class will be offered for first time in 2014; new business class roll-out continues Pr
Slide 23: Page 23
Page 23
Slide 24: Appendix – Financial data FY 2013
Appendix – Financial data FY 2013 Page 24
Slide 25: Group Revenue FY2013 vs. FY 2012
Group Revenue FY2013 vs. FY 2012 in m EUR Volume: +2.1% Price: -0.7% -175 Currency: -2.3% 513 -566 30,135 30,028 Traffic revenue (-0.9%) 24,565 24,793 5,463 5,342 Other revenue (+2.3%) FY 2012 FY 2013 30,135 Group revenue (-0.4%) 30,028 Page 25
Slide 26: Fuel Cost FY 2013 vs. FY 2012
Fuel Cost FY 2013 vs. FY 2012 Hedging results by Quarter in m EUR Q1 Q2 Q3 Q4 25 42 32 26 125 -334 m EUR +7,392 Volume -114 Price Hedging Currency -123 +125 -222 +7,058 FY 2012 FY 2013 Page 26
Slide 27: Operating Result FY 2013 vs. FY 2012
Operating Result FY 2013 vs. FY 2012 in m EUR FY 2013 FY 2012 vs. PY Profit from operating activities 849 1,622 -773 Net book gains / losses on assets and financial investments -29 -747 +718 - thereof aircraft disposals -23 -33 +10 - thereof book gains from sale of Amadeus and Fraport shares 0 -631
Slide 28: Earnings figures FY 2013 vs. FY 2012
Earnings figures FY 2013 vs. FY 2012 in m EUR FY 2013 FY 2012 vs. PY Profit from operating activities 849 1,622 -773 - thereof book gains from sale of Amadeus and Fraport shares 0 631 -631 Income from subsidiaries, joint ventures and associates 125 94 +31 Other financial items -83 -48 -35 - thereof
Slide 29: Excluding one-off items operating profit shows clear improvement
Excluding one-off items operating profit shows clear improvement Normalized operating results for FY and Q4 +62.1% 1,042 100 839 -115 245 697 -31 643 -210 160 FY 2012 Austrian bmi pernsions IAS 19 restructuring FY 2012 FY 2013 restructuring project costs FY 2013 operating profit one-offs one-offs re
Slide 30: Operating margins (normalized) FY2013 vs. FY2012
Operating margins (normalized*) FY2013 vs. FY2012 10.0 9.7 all numbers in % 9.0 8.2 8.0 7.0 6.0 5.4 5.6 5.0 4.8 4.2 4.0 3.9 4.0 3.5 3.2 3.3 3.0 2.5 2.1 2.1 2.0 1.2 1.0 0.8 0.1 0.0 -1.0 -2.0 -2.1 -3.0 Lufthansa SWISS Austrian Passenger Logistics MRO Catering IT Services LH Group Passenger Airlines Ai