Deutsche Lufthansa Ag · XETR:LHA

Deutsche Lufthansa — H1 2021 Earnings Presentation

38 slides from Deutsche Lufthansa's earnings presentation, Aug 5, 2021

  1. Slide 1: First Half 2021 Results Analyst and Press Conference

    First Half 2021 Results Analyst and Press Conference Carsten Spohr, CEO Remco Steenbergen, CFO Frankfurt, 05 August 2021

  2. Slide 2: Disclaimer

    Disclaimer The information herein is based on publicly available information. It This presentation contains statements that express the Company‘s has been prepared by the Company solely for use in this opinions, expectations, beliefs, plans, objectives, assumptions or presentation and has not been v

  3. Slide 3: First Half 2021 Results Analyst and Press Conference

    First Half 2021 Results Analyst and Press Conference Carsten Spohr, CEO Frankfurt, 05 August 2021

  4. Slide 4: Surge in customer demand has enabled expanding our flight schedules

    Surge in customer demand has enabled expanding our flight schedules H1 Group Airlines net new bookings by week Operational KPIs for calendar week 30 46% (2021 vs. 2019) Passengers (1,503,143) 2019 51% 84% Flights Destinations 2021 (12,514) (275) 534 Active aircraft CW 2 4 6 8 10 12 14 16 18 20 22 24

  5. Slide 5: Successful ramp up and restructuring progress limit operating losses in Q2

    Successful ramp up and restructuring progress limit operating losses in Q2 Q2 Capacity (ASK) 29% of 2019 Q2 Adjusted EBIT (€) -952m +43% vs PY Q2 Operating cash flow (€) 0.8bn +1.8bn vs PY Page 5

  6. Slide 6: Accelerated transformation will deliver a structural winner

    Accelerated transformation will deliver a structural winner Sustained leadership and premium brands in highly attractive markets Targeted cost reduction by 2024 Enhanced product offering EUR 3.5 billion CONNECTING Innovation focus to drive revenue quality Accelerated PEOPLE, and customer satisfactio

  7. Slide 7: First Half 2021 Results Analyst and Press Conference

    First Half 2021 Results Analyst and Press Conference Remco Steenbergen, CFO Frankfurt, 05 August 2021

  8. Slide 8: Cash flows turn positive in the second quarter – operating losses reduced

    Cash flows turn positive in the second quarter – operating losses reduced (in EUR million) Q2 ’21 Q2 ’20 Change in % 6M ’21 6M ’20 Change in % Revenues 3,211 1,894 +70% 5,771 8,335 -31% Operating expenses 4,510 3,907 +15% 8,490 12,069 -30% Of which fuel 417 94 +344% 692 1,321 -48% Of which staff 1,5

  9. Slide 9: Network Airlines: Reduction of Q2 operating loss despite costs of ramp up

    Network Airlines: Reduction of Q2 operating loss despite costs of ramp up Q2 2021 6M 2021 Comments ASK 29.1% ASK 26.0%  Capacity (ASK) gradually expanded Operational KPIs to around 40% at quarter end vs. 2019 SLF 49.7% SLF 47.7% -33.6pts. -33.2pts.  Effects from fixed cost reduction by around one

  10. Slide 10: Eurowings: Significant fixed cost reductions limit operating loss

    Eurowings: Significant fixed cost reductions limit operating loss Q2 2021 6M 2021 Comments ASK 25.0% ASK 18.5%  Significant ramp up into summer – Operational KPIs capacity at quarter end >40% vs. 2019 SLF 70.5% SLF 66.3% -12.8pts. -13.6pts.  Yield development better compared to low cost peers Yiel

  11. Slide 11: Record results in Logistics, MRO and Catering achieve positive Adjusted EBIT

    Record results in Logistics, MRO and Catering achieve positive Adjusted EBIT Adjusted EBIT in EUR million Q2 2021 6M 2021 Comments 326 299 640 277  Profits in Cargo business continue to Q2 ’21 Q2 ’20 6M ’21 6M ’20 benefit from belly capacity squeeze and high demand for air freight 86 102  Earnings

  12. Slide 12: Operating cash drain further reduced to c. EUR 200 million per month in Q2

    Operating cash drain further reduced to c. EUR 200 million per month in Q2 Adjusted EBIT / Adjusted free cash flow in EUR million 269 962 340 (356) 549 (132) -535 Monthly cash -952 Drain1: EUR 198m Adjusted Depreciation & Non-cash Operating Net new Remaining Net Adjusted EBIT Amortization items/ res

  13. Slide 13: Available liquidity remains stable at above EUR 11 billion compared to year-end

    Available liquidity remains stable at above EUR 11 billion compared to year-end 2020 in EUR million Comments 11.1bn 11.1bn 348  EUR 4.0 billion of stabilization (607) measures drawn – EUR 1.0 billion (2,672) 2,864 KfW loan was repaid in Q1 5,460 6,666  New financing transactions compensate negativ

  14. Slide 14: Equity above year-end 2020 level even when excluding the effect from the SPI drawdown

    Equity above year-end 2020 level even when excluding the effect from the SPI drawdown – pension provisions decline by c. EUR 1.9 billion Net debt in EUR million Pension provisions in EUR million Shareholder equity in EUR million 10,430 9,531 3,145 9,922 1,500 Drawdown of SPI 7,607 Effect 1,500 from

  15. Slide 15: Restructuring progress faster than planned: Measures already implemented will account for more than half

    Restructuring progress faster than planned: Measures already implemented will account for more than half of the targeted cost savings Targeted cost savings in EUR billion Measures implemented and recognized in P&L Measures implemented, not recognized in P&L yet Measures not yet implemented ~3.5 ~1.8

  16. Slide 16: Reduction of 5,000 positions in Germany and further 2,000 positions in Switzerland fixed

    Reduction of 5,000 positions in Germany and further 2,000 positions in Switzerland fixed Overview workforce reduction as of now  Realized (GER): Workforce reduction through volunteer 3,0001 programs, fluctuation (Deutsche Lufthansa AG / Lufthansa Technik AG) and social plan (Germanwings) 2,000 2,00

  17. Slide 17: Focus of financial management on restoring balance sheet strength

    Focus of financial management on restoring balance sheet strength STRENGTHENING OF BALANCE SHEET Return to profitability Repayment stabilization measures Divestments Achieve cost reductions to ensure Replace state aid funds through long- Divest non-core assets in part or in quick return to profitabi

  18. Slide 18: First Half 2021 Results Analyst and Press Conference

    First Half 2021 Results Analyst and Press Conference Carsten Spohr, CEO Frankfurt, 05 August 2021

  19. Slide 19: Air traveling has started to become less restricted and easier again

    Air traveling has started to become less restricted and easier again Travel restrictions and regulations are easing Digital initiatives to facilitate more seamless and safe travel Restrictions in destination countries 15% 15% 26% 37% “Where to travel” Covid-19 services in Contactless Biometric 85% 8

  20. Slide 20: Recovery in bookings across all customer segments, first green shoots in long-haul

    Recovery in bookings across all customer segments, first green shoots in long-haul driven by the Transatlantic Leisure Demand by region Leisure sales to key markets1 2021 vs. 2020 (volume) Top 5 point of sales in June by absolute number of passengers +48% 2021 vs May 735,865 +92% 2021 2020 vs May 36

  21. Slide 21: Ramp up expected to progress also in the remaining year 2021

    Ramp up expected to progress also in the remaining year 2021 Key assumptions for ramp up Expected capacity ASK in % of 2019 c.60%  Westbound Transatlantic travel c.50% c.50% c. 47% assumed to be possible again from late September onwards  Recovery of corporate travel FY 2021 demand to gain momentu

  22. Slide 22: Lufthansa Cargo: Structural supply/demand gap and strategic initiatives support long-term outlook

    Lufthansa Cargo: Structural supply/demand gap and strategic initiatives support long-term outlook Market-wide capacity gap expected to remain until 2025 Strategy execution & cost reductions to support future results Global Air Cargo Market | Capacity Predictions  Strong growth expected for Indexed

  23. Slide 23: Lufthansa Technik is well positioned to benefit from the market recovery

    is well positioned to benefit from the market recovery Global footprint supports the recovery Strong, growing business pre-crisis Strategic focus areas Geographical split for 2019 third-party revenues Operating results 2019 third-party revenues in EUR million  Re-organization from 8 to 5 business O

  24. Slide 24: Three focus areas identified to reduce the Group's environmental footprint

    Three focus areas identified to reduce the Group’s environmental footprint Invest in Improve the Offset carbon Technology Infrastructure footprint 50% less net carbon  175 cutting-edge,  SES needed: 3+millions  Compensaid: 200k tons emissions by 2030 green aircraft until 2029 tons of CO2 less ann

  25. Slide 25: Proposed EU initiative “Fit for 55” would place EU carriers at a competitive disadvantage

    Proposed EU initiative “Fit for 55” would place EU carriers at a competitive disadvantage Example Passenger travelling from Madrid to Tokyo deciding to connect via Frankfurt or Istanbul FRA all EEA1 Cost impact2 per ticket Intra EEA1 by 2033 (EUR) departures HND IST Transfer via EU-ETS Kerosene Tax

  26. Slide 26: Lufthansa Group expects operating cash drain to stop in Q3

    Lufthansa Group expects operating cash drain to stop in Q3 2021 Adj. EBIT: Less negative than in 2020 Operating cash drain to be stopped in Q3 – EBITDA to be positive 2021 Gross CapEx: c. EUR 1.5bn Page 26

  27. Slide 27: Appendix - supplementary information

    Appendix - supplementary information- Page 27

  28. Slide 28: Traffic Data

    Traffic Data Q1 vs.2019 Apr vs.2019 May vs.2019 June vs.2019 Q2 vs.2019 6M vs.2019 Passengers in 1,000 3,043 -89.7% 1,446 -88.5% 2,201 -83.3% 3,328 -75.9% 6,976 -82.4% 10,022 -85.5% Available seat-kilometers (m) 16,843 -78.8% 7,455 -75.7% 8,943 -72.3% 10,919 -66.1% 27,317 -71.3% 44,171 -74.7% Revenu

  29. Slide 29: Operating KPIs of Network Airlines by region vs. 2019

    Operating KPIs of Network Airlines by region vs. 2019 Total Q2’21 6M’21 Europe Q2’21 6M’21 Asia / Pacific Q2’21 6M’21 Number of flights -73.8% -78.2% ASK -71.3% -76.9% ASK -82.2% -82.5% ASK -70.9% -74.0% RPK -77.8% -81.7% RPK -93.8% -93.1% RPK -82.6% -84.7% SLF -17.9pts. -15.7pts. SLF -55.1pts. -50.

  30. Slide 30: Operating KPIs of Eurowings vs. 2019

    Operating KPIs of Eurowings vs. 2019 Total Q2’21 6M’21 Number of flights -81.3% -86.0% ASK -75.0% -81.5% RPK -78.9% -84.6% SLF -12.8pts. -13.6pts. Yield -18.9% -10.4% Yield vs 2020 +31.7% -2.9% Yield ex currency vs 2020 +31.8% -3.0% RASK -31.3% -25.7% RASK ex currency vs 2020 -54.9% -15.6% CASK +48.

  31. Slide 31: Calculation of operational airline KPIs RASK CASK

    Calculation of operational airline KPIs Network Airlines, 6M 2021 Eurowings, 6M 2021 1) Traffic revenues (€m) 1,628 1) Traffic revenues (€m) 156 2) Not assignable (€m) 224 2) Not assignable (€m) 28 Yield Yield = 3) Basis for Yield (1)–(2) (€m) 1,404 = 3) Basis for Yield (1)–(2) (€m) 128 4) RPK (m) 1

  32. Slide 32: Group P&L

    Group P&L Lufthansa Group (in EUR m) Q2’21 vs. Q2 ’20 6M’21 vs. 6M ’20 Revenues 3,211 +69.5% 5,771 -30.8% Total operating income 3,571 +54.5% 6,459 -30.5% Operating expenses 4,510 +15.4% 8,490 -29.7% Of which fees & charges 404 +130.9% 689 -34.3% Of which fuel 417 +343.6% 692 -47.6% Of which staff 1

  33. Slide 33: Walk from Adjusted EBIT to Net Income for H1 2021

    Walk from Adjusted EBIT to Net Income for H1 2021 in EUR million Total EBIT adjustments: -19 421 -1,805 11 (24) 93 -2,095 (6) 8 (213) Adjusted Aircraft Bookgain/-loss, Book losses on Interest result Profit/loss Tax result Other Net EBIT impairments write-backs LSG share sales attributable to Income

  34. Slide 34: Cash flow statement

    Cash flow statement Lufthansa Group (in m EUR) 6M’21 vs. 6M ’20 Decrease related to non-recurrence of 1 crisis-related aircraft impairments in 2020 EBT (earnings before income taxes) -2,234 +2,185 and lower depreciation and amortization Depreciation & amortization (incl. non-current assets) 1 1,114

  35. Slide 35: Liabilities from unflown flight documents

    Liabilities from unflown flight documents in EUR million 5,602 5,798 3,969 4,071 4,499 4,487 3,089 2,064 2,093 Dec 31, 2018 Dec 31, 2019 Dec 31, 2020 Mar 31, 2019 Mar 31, 2020 Mar 31, 2021 Jun 30, 2019 Jun 30, 2020 Jun 30, 2021 Page 35

  36. Slide 36: Fleet overview

    Fleet overview thereof Change since Change since Aircraft Type LH LX OS SN EW LCAG Group fleet Lease 31 Dec 2020 30 Jun 2020 Airbus A220 30 30 +1 +1 Airbus A319 42 7 18 34 101 29 -5 -9 Airbus A320 100 32 29 16 56 233 36 -2 +5 Airbus A321 73 11 6 4 94 2 +3 +6 Airbus A330 261 16 8 50 8 -2 -2 Airbus A3

  37. Slide 37: Multi-Year financial overview

    Multi-Year financial overview Lufthansa Group (in m EUR, as reported) 2015 2016 2017 2018 20191) 2020 Operating KPIs RASK ex currency -3.0% -5.9% +1.9% -0.5% -2.5% -26.7% CASK ex currency, ex fuel 2) +2.4% -2.5% -1.8% -1.7% -1.5% +84.6% Profit & Loss Revenues 32,056 31,660 35,579 35,542 36,424 13,58

  38. Slide 38: Maturity profile of borrowings as of June 30, 2021

    Maturity profile of borrowings as of June 30, 2021 3,000 2,500 2,000 1,500 1,000 500 0 2021 2022 2023 2024 2025 2026 2027 2028 Straight Bond Hybrid Convertible Bond Schuldscheindarlehen Credit Lines Aircraft Finance (secured) Stabilization measures* Other** * As drawn on Jun 30 - predominantly sched

Deutsche Lufthansa — H1 2021 Earnings Presentation on 6ix