Slide 1: Financial Year 2012 Press and Analyst Conference
FINANCIAL YEAR 2 0 1 2 Press and Analyst Conference Christoph Franz, Chairman of the Executive Board and CEO Simone Menne, Member of the Executive Board and CFO Frankfurt/Main, March 14th, 2013 Page 1
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: Overview
Overview 2012 was financially sound. We have reached our guidance and performed better than most of our peers. But we cannot be satisfied with an operating result below last year's. We need to structurally improve our margins. The diversified setup of the Group has had a positive effect on our resul
Slide 4: Simone Menne – Member of the Executive Board and CFO
Simone Menne – Member of the Executive Board and CFO – Page 4
Slide 5: Financial Year 2012 at a glance: Key Figures for the Lufthansa Group
Financial Year 2012 at a glance Key Figures for the Lufthansa Group Lufthansa Group (in m EUR) FY 2012 FY 2011 vs. PY Group Revenue 30,135 28,734 +4.9% of which traffic revenue 24,793 23,779 +4.3% Operating result 524 820 -36.1% Adj. operating margin* 2.3% 3.4% -1.1pts. EBITDA 3,270 2,546 +28.4% Net
Slide 6: Financial Year 2012 strongly influenced by extraordinary factors
Financial Year 2012 strongly influenced by extraordinary factors Non-recurring effects SCORE achieved gross contributions of 618 million EUR in 2012 Savings were however overcompensated by external cost inflation, in particular fuel costs (up 1.1 bn Euro) SCORE restructuring costs of 160 million EUR
Slide 7: Good control of manageable costs shows SCORE progress
Good control of manageable costs shows SCORE progress Revenue and cost positions Lufthansa Group (in m EUR) FY 2012 vs. PY vs. PY Revenue 30,135 +4.9% Other Operating Income & inventory changes 2,898 +17.7% incl. 631 Amadeus Total Operating Income 33,033 +5.9% Total Operating Expenses -31,722 +4.3%
Slide 8: Despite lower operating result, cash flow generation was strong
Despite lower operating result, cash flow generation was strong Cash flow statement in m EUR 2012 vs. PY EBT (earnings before income taxes) 1,039 +593 Depreciation and amortisation 1,925 +145 Result from fixed asset disposals -739 -714 Income from subsidiaries, joint ventures and associates -94 -23
Slide 9: Airlines showed declining profits while Service Companies improved
Airlines showed declining profits while Service Companies improved Overview Group segments Share of external LH Group 75.8% 8.8% 8.1% 6.4% 0.9% Revenue Passenger Others & in m EUR Airline Group Logistics MRO Catering IT Services Consolidation Revenue 23,559 2,688 4,013 2,503 609 -3,237 vs. PY +5.7%
Slide 10: Capacity discipline paid off, good load factor and yield development
Capacity discipline paid off, good load factor and yield development Capacity and yield development All regions FY '12 Q4 '12 Europe FY '12 Q4 '12 Asia / Pacific FY '12 Q4 '12 ASK +0.6% -3.1% ASK +2.1% -2.2% ASK +0.2% -4.3% RPK +2.2% -1.3% RPK +3.7% -0.1% RPK +0.7% -5.1% SLF +1.2P. +1.4P. SLF +1.1P.
Slide 11: Lufthansa continues its restrictive capacity path in 2013
Lufthansa continues its restrictive capacity path in 2013 Capacity forecast Current trading Passenger Airline Group Capacity Outlook Full year 2013 Capacity growth on long-haul routes mainly driven by Passenger Airline Group [ASK] larger aircraft and currently higher Economy Class seat share In the
Slide 12: All segments expect to improve or stable results
All segments expect to improve or stable results Outlook Segments Passenger Airline Group Logistics MRO Catering IT Services Outlook modest increase in operating profit in the earnings are expected for 2013 expecting Revenue growth and revenue and operating three-digit million euro to be stable in 2
Slide 13: Fuel costs outlook shows slight decrease for 2013
Fuel costs outlook shows slight decrease for 2013 Fuel forecast and sensitivities 150 LH Price 2013 140 130 7.8bn EUR (+20% oil price) 7.6bn EUR (+10% oil price) 7.2bn EUR (base case) Market Price USD / bbl 120 6.8bn EUR (-10% oil price) 6.4bn EUR (-20% oil price) 110 108 USD/bbl as of 13 March 2013
Slide 14: IAS 19 impacts balance sheet and profit and loss statement
IAS 19 impacts balance sheet and profit and loss statement Implementation of IAS 19 Balance sheet as reported for FY2012… …and if based on new IAS19 Assets Liabilities Assets Liabilities non current shareholder's Equity Ratio Equity Ratio 4.8 assets 18.0 8.3 equity 29 % 17 % 5.9 pension 2.1 pension
Slide 15: Balance sheet targets adjusted with regards to new IFRS rules
Balance sheet targets adjusted with regards to new IFRS rules Financial targets New Old Current Target Target Status IFRS changes (especially pensions) have impaired equity Equity Equity 25% 25% 30% 29% sustainably but do not change underlying economic Ratio Ratio mid-term situation. Equity ratio ta
Slide 16: Operating profit 2013 to be higher than last year's
Operating profit 2013 to be higher than last year's Outlook for the Group Outlook 2013 Revenue above previous year Operating profit 2013 higher than reported operating profit for 2012 SCORE activities should make a substantial gross contribution to profits in 2013 Operating result 2013 will be signi
Slide 17: Christoph Franz – Chairman of the Executive Board and CEO
Christoph Franz – Chairman of the Executive Board and CEO – Page 17
Slide 18: Profit trend must be turned around, passenger business in focus
Profit trend must be turned around, passenger business in focus Long-term margin trend Lufthansa Group Largest Segment: Passenger Airline Group Operating result and adj. op margin Operating result and adj. op margin 1,280 1,020 820 5.8% 789 4.7% 4.9% 629 524 4.0% 3.4% 349 1.4% 2.3% 2.1% 258 1.6% 130
Slide 19: Transforming the Group into a strong and more profitable Lufthansa
Transforming the Group into a strong and more profitable Lufthansa Corporate restructuring and SCORE measures since 2011 Unprofitable Lufthansa Italia shut down in Oct 2011 Highly loss making British Midland sold Exit from Jade Cargo Austrian Airlines' operations transferred into ca. -25% lower cost
Slide 20: In 2012 SCORE made a gross contribution of 618 m EUR
In 2012 SCORE made a gross contribution of 618 m EUR SCORE pipeline 2012-2015 further headwinds to be compensated by additional measures in m EUR 744 768 900 Target 2013: 740 m EUR gross contributions Snapshot as of 28 February 2013 Page 20
Slide 21: SCORE transforms the Group in all areas
SCORE transforms the Group in all areas SCORE project overview Examplatory projects per airline / segment Number of projects per Group segment Company Project Passenger Airline LHP New Germanwings Group Logistics MRO Catering IT Services Premium Economy Extension of "Two-Product Fleet" SHAPE! 526 30
Slide 22: Tough but necessary decisions were made
Tough but necessary decisions were made Status of severance payments per year-end Provisions for >2,000 severances packages Further restructuring measures have recently been announced GLOBE Group-wide pooling of HR, Procurement, Finance and Accounting ~ 1.100 FTE affected ~ 200 m EUR cumulative savi
Slide 23: Market consolidation in Europe has reached an advanced stage
Market consolidation in Europe has reached an advanced stage Consolidation and long-term capacity development Competition is driven by three network carrier systems Capacity growth on lowest levels since 2001 and two main LCCs 15% 10% 5% 0% EU to rest of world intra-European -5% 2001 2002 2003 2004
Slide 24: SCORE supports comprehensive fleet modernisation
SCORE supports comprehensive fleet modernisation Fleet and product investments Aircraft orders overview 2013-2025 Example: Lufthansa Passenger Airlines market growth # orders LH base case Long-haul 33 stable fleet Short-haul 203 current fleet (less planned phased outs) orders in place orders outstan
Slide 25: Summary and Outlook
Summary and Outlook All our activities are forward looking. They aim at improving the future viability of the Lufthansa Group. SCORE works. SCORE has become an every daily reality for our people. It helps us drive the change we need to emerge stronger from this change process than before. 2013 and 2
Slide 26: Appendix – Financial data FY 2012
Appendix – Financial data FY 2012 Page 26
Slide 27: Group Revenue FY2012 vs. FY 2011
Group Revenue FY2012 vs. FY 2011 Currency 2.7% +648 24,793 Price 0.5% Volume 1.1% +112 in m EUR +254 23,779 Traffic revenue (+4.3%) 4,955 5,342 Other revenue (+7.8%) 28,734 30,135 Group revenue (+4.9%) 2011 2012 Page 27
Slide 28: Fuel Cost FY 2012 vs. FY 2011
Fuel Cost FY 2012 vs. FY 2011 Currency Hedging results by Quarter +519 7,392 Q1 Q2 Q3 Q4 -114 -40 0 +26 -128 Price Hedging +876 -128 in m EUR Volume 6,276 -151 +1,116 m EUR (+17.8%) 2011 2012 Page 28
Slide 29: Operating Result FY 2012 vs. FY 2011
Operating Result FY 2012 vs. FY 2011 in m EUR 2012 2011 vs. PY Profit from operating activities 1,311 773 +538 Net book profit / loss assets / financial investments -747 20 -767 - thereof aircraft disposals -33 -32 -1 Valuation from non-current borrowings -21 86 -107 Past service costs -1 24 -25 Imp
Slide 30: Earnings figures FY 2012 vs. FY 2011
Earnings figures FY 2012 vs. FY 2011 in m EUR 2012 2011 vs. PY Profit from operating activities 1,311 773 +538 Income from subsidiaries, joint ventures and associates 94 71 +23 Other financial items -48 -110 +62 - thereof changes in time value of fuel hedge options 82 -96 +178 EBIT 1,357 734 +623 Ne
Slide 31: Adjusted operating margin per airline and business segment 2012
Adjusted operating margin per airline and business segment 2012 FY2012 vs. FY2011 10,0% 9,1% 8,6% 8,0% 6,9% 6,6% 6,0% 4,7% 4,2% 4,0% 3,8% 3,9% 4,0% 3,6% 3,7% 3,4% 2,1% 2,3% 2,0% 1,4% 1,6% 0,3% 0,0% -2,0% -2,7% -4,0% Lufthansa SWISS Austrian Passenger Logistics MRO IT Services Catering LH Group Passe