Deutsche Lufthansa Ag · XETR:LHA
Deutsche Lufthansa — German Corporate Conference 2011
22 slides from Deutsche Lufthansa's conference presentation, Jan 17, 2011
Slide 1: LH 2011 – Powered by Profitable Growth
LH 2011 – Powered by Profitable Growth German Corporate Conference Frank Hülsmann, Head of Investor Relations Frankfurt/Main / January 17th, 2011
Slide 2: Disclaimer in respect of forward-looking statements
Disclaimer in respect of forward-looking statements Information published in this presentation with regard to 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 b
Slide 3: Summary of an extraordinary year
Summary of an extraordinary year 2010 characterized by one-off effects and dynamic recovery Extreme winter weather Strike Production losses and costs 160% LH share price development 150% 140% 130% 120% 110% 100% 90% 80% 31.12 31.1 28.2 31.3 30.4 31.5 30.6 31.7 31.8 30.9 31.10 30.11 31.12 Airspace lo
Slide 4: Profitable growth @ LH: proven stability in crisis and outperformance
Profitable growth @ LH: proven stability in crisis and outperformance in current recovery Adj. operating margins of LH Group and business segments Structural support 10% 6% Group structure stands for stability 2% and profitable growth -2% 2006 2007 2008 2009 ytd 2010 LH Group Passenger Airline Group
Slide 5: All business segments contribute operating profits
All business segments contribute operating profits Key figures of Lufthansa Group and segments 2010 (ytd) in m EUR Q1-Q3 2010 vs. PY Revenue 20,193 +24.9% Operating profit 612 +170.8% EBIT 957 +360.1% EBITDA 2,206 +55.7% Net profit 524 - Q1-Q3 2010 Passenger Logistics MRO IT Services Catering [m EUR
Slide 6: Positive momentum continues: Freight business
Positive momentum continues Freight business: dynamic recovery Traffic (like-for-like) clearly above +1.8% +11.3% +20.9% -3.9% pre-crisis level since Q2 RTK +12.5% 3000 +27.0% +20.8% +21.9% 2500 2008 2009 2010 2000 % 2010 vs. 2009 1500 % 2010 vs. 2008 1000 500 RTK (millions) LH Cargo 0 Q1 Q2 Q3 Q4 O
Slide 7: Positive momentum continues: Passenger business
Positive momentum continues Passenger business: strong traffic performance and outperformance +0.9%* +7.4% -2.3% +9.5% Traffic (like-for-like) above RPK +7.4% pre-crisis level since Q2 50000 +6.5%* +7.7% +4.1% 40000 2008 2009 2010 30000 % 2010 vs. 2009 20000 % 2010 vs. 2008 10000 RPK (millions) Pass
Slide 8: Lufthansa will continue profitable course and outperformance
Lufthansa will continue profitable course and outperformance Catalysts Our ongoing fleet modernization provides benefits for cost base and environment − Short-haul: phase-out of 50-seaters and new seats − Long-haul: introduction of A380 and B747-8 Our network has grown and is more balanced We contin
Slide 9: Ongoing investments in fleet reduce unit costs and improve ecological footprint
Ongoing investments in fleet reduce unit costs and improve ecological footprint Aircraft Thereof Total Efficiency gains 1991-2009 deliveries in 2011 A380 11 4 6,5 B747-8 20 - Lufthansa fleet 2009: 6.2 A330 10 2 4.3 litres / 100 pax-kilometres 6,0 A320 63 15 5.64 5,5 5.31 E190 14 6 5.14 4.98 CRJ900 7
Slide 10: Restructuring of short-haul business progresses
Restructuring of short-haul business progresses Unit costs clearly below last years’ Fleet roll-over • Phase-out of 50-seater aircraft almost completed Steps taken • 30 new CRJ9 and Embraer aircraft in service • +2.8% capacity at -2.6% flights (ytd Nov 2010) Updated seats and cabin layout • 2,000 ad
Slide 11: Improved revenue position and efficiency on long-haul
Improved revenue position and efficiency on long-haul Performance of FRA–NRT after the introduction of A380 Example: average A380 flight vs. B747 flight, July 2010 FRA-NRT ASK +49.9% A380 SLF 93.2% (+2.3 PP) B747 RASK -3.7% Revenue +44.4% A380-800 vs. B747-400 Length 72.7 m 70.7 m Wing span 79.8 m 6
Slide 12: Our network has grown and is more balanced
Our network has grown and is more balanced Traffic revenue distribution 2010 vs. 2002 LH Passenger Airlines 2002 Passenger Airline Group 2010* 11% 5% 20% Europe 20% Americas 46% 52% Asia/Pacific Mid.East / Africa 23% 23% 9.7 bn ~ 20 bn EUR traffic revenue traffic revenue + 13 members 27 members 642
Slide 13: Leverage of increased exposure to long-haul markets: established markets
Leverage of increased exposure to long-haul markets Closer cooperation in established markets LH Group market share in long-haul traffic + 42% 17.0% 24.1% North Atlantic: Closer cooperation Acting as one airline in Atlantic++ Strengthen competitiveness Increasing Enhancing customer yields propositio
Slide 14: Leverage of increased exposure to long-haul markets: growth markets
Leverage of increased exposure to long-haul markets Benefits of enlarged airline group in growth markets LH Group market share in EU-Asia/Pacific traffic Example Africa: 265 weekly flights to 38 destinations 22.3% +36% 30.3% 2002 Nov 2010 LH Group market share in EU-Mid East/Africa + 44% 17.0% 24.4%
Slide 15: Restructuring of Austrian Airlines and bmi makes progress
Restructuring of Austrian Airlines and bmi makes progress Austrian Airlines expected to return operating profit in 2011 Goals and steps of 100m GBP restructuring ”Austrian Next Generation“ in first phase of turnaround bmi restructuring Goals: • Capacity adjustments and staff reduction 1. Positive Ca
Slide 16: 5th anniversary of the integration of SWISS
2010 we celebrated the 5th anniversary of the integration of SWISS Success story driven by restructuring and synergies Case study SWISS integration Cost cutting and downsizing Valuable home market and niche market positions meet sales power of LH Group Integration into STAR and Frequent Flyer Progra
Slide 17: Strong financial profile supports development of the LH Group
Strong financial profile supports development of the LH Group Financial strength provides operational and strategic flexibility Cash flow and FCF generation Strong balance sheet in bn EUR 3.0 Aircraft & Engines Total aircraft: 716 2.0 − long-haul: 165 11.2 bn EUR − short-haul: 317 1.0 − regional: 23
Slide 18: Risk management remains in focus
Risk management remains in focus Systematic, rule-based hedging reduces volatilities Fuel Currency Fuel costs are a major item of expenses for any airline 60 currencies are relevant for the Current LH forecast for FY 2011 is approx. 6.5bn EUR* Lufthansa Group LH follows policy of continuous hedging
Slide 19: Earnings potential of Lufthansa Group has substantially grown
Earnings potential of Lufthansa Group has substantially grown versus earlier cycles ? Next Peak LH Group including +1.4 bn€ Peak (2007) LH Group including +130 m€ & Low Synergies +28 m€ (2009) Low LH Group (2001) LH Group 19 Lufthansa Group
Slide 20: Surprising early winter impacted performance in Q4 2010
Surprising early winter impacted performance in Q4 2010 20 Lufthansa Group
Slide 21: Outlook remains unchanged
Outlook remains unchanged Operating profit is expected to exceed 800 m EUR mark in 2010 Development of operating result Outlook 2010 Further profit improvement in Q4 expected m EUR Strong winter affected December performance For the full year 2010, the operating result is 1500 1,378 still expected t
Slide 22: Thank you!
Thank you! Frank Hülsmann, Head of Investor Relations Frankfurt/Main / January 17th, 2011
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