Slide 1: Investor and Analyst Conference Call Q1 2016
Investor and Analyst Conference Call Q1 2016 Simone Menne, CFO Frankfurt, May 3, 2016
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 all dis
Slide 3: Overview
Overview Adjusted EBIT up by 114 m EUR to -53 m EUR in Q1 2016 Significant margin improvement at passenger airlines; all business segments except for Cargo in line with guidance Constant currency RASK down 6.6% Significant decline on routes to and from South America; structural effect due to Eur
Slide 4: Adjusted EBIT und Free Cash Flow develop positively
Adjusted EBIT und Free Cash Flow develop positively Q1 2016 at a glance Lufthansa Group (in m EUR) Q1 16 Q1 15 vs. PY Total revenue 6,916 6,973 -0.8% of which traffic revenue 5,235 5,447 -3.9% EBIT -49 -144 +66.0% Adjusted EBIT -53 -167 +68.3% Net income -8 425 -- Q1 16 Q1 15 vs. PY Passenger Airlin
Slide 5: Passenger airlines drive result improvement
Passenger airlines drive result improvement Segment overview Q1 2016 Passenger in m EUR Airline Group Revenue 5,072 3,350 984 400 377 vs. PY in % -1.6% -1.5% -6.7% +2.6% +11.5% Others & Consolidation2 Adj. EBIT1 -67 60 23 -30 -86 Revenue -645 vs. PY in % +73.6% -- -54.9% +43.4% -62.3% vs. PY in % +1
Slide 6: Decline in unit costs compensate for lower unit revenues
Decline in unit costs compensate for lower unit revenues Operating KPIs Passenger Airline Group Total Q1 2016 Europe Q1 2016 Asia/Pacific Q1 2016 Number of flights +3.0% ASK +3.6% ASK + 4.9% ASK +6.6% RPK +2.5% RPK +3.7% RPK +5.2% SLF -0.8pts. SLF -0.9pts. SLF -0.9pts. Yield -3.2% Yield -7.1% Yield
Slide 7: Lufthansa Group expects Adj. EBIT slightly above PY for 2016
Lufthansa Group expects Adj. EBIT slightly above PY for 2016 Forecast Lufthansa Group 2016 Lufthansa Group Adjusted EBIT Actual and Forecast Forecast FY 2016 unchanged: Expected fuel costs: 4.8 bn EUR1 slightly above previous year Tailwind of 1.0 bn EUR vs. PY at Brent forward of 42 USD/bbl; 1.1
Slide 8: Expert Session Eurowings in London on 10 June
Expert Session „Eurowings“ in London on 10 June Topic Strategic development of Eurowings Speakers Karl-Ulrich Garnadt (Member of the Lufthansa Group Board) and Eurowings Management Board Date Friday, 10 June 2016 Time 09:30am registration for a start at 10:00am The session will include a presentatio
Slide 9: Financial Figures FY 15 & Q1 16 – Appendix
Appendix – Financial Figures FY 15 & Q1 16 – Seite 9
Slide 10: Planned capacity growth of network carriers and Eurowings reduced
Planned capacity growth of network carriers and Eurowings reduced Lufthansa Group capacity growth 2016 per region 10.7% 4.0% 2.3% nmf. 3.5% Network Euro- LH 1.7% carriers wings Group nmf. Network Euro- LH 11.5% carriers wings Group 9.0% nmf. Network Euro- LH -2.6% -2.0% carriers wings Group Network
Slide 11: Expected Fuel costs decrease versus previous year
Expected Fuel costs decrease versus previous year Fuel forecast and sensitivities FY 2016 und 2017 Lufthansa Group fuel expenses after hedging Lufthansa Group price curve remainder of 2016 and 2017 (in bn EUR) 130 LH price 2016 120 LH price 2017 Sensitivities with deviating oil price Market price 5.
Slide 12: Trading assumptions 2016 indicate profit improvement
Trading assumptions 2016 indicate profit improvement Trading assumptions FY 2015 and 2016 FY15 FY16 assumptions Explanation FY16 assumptions c. 2.1% Slight increase at network airlines; No. of Flights +0.2% increase mainly due to Eurowings fleet growth Network airlines +4.2% (thereof 1.3pts. strike
Slide 13: Passenger Airlines to improve Adj. EBIT, other segments slightly lower
Passenger Airlines to improve Adj. EBIT, other segments slightly lower Forecast 2016 per segment Segment Adj. EBIT 2015 (m EUR) Adj. EBIT Forecast for 2016 Lufthansa Passenger Airlines 970 slightly above previous year SWISS 429 slightly below previous year Austrian Airlines 52 significantly above pr
Slide 14: Fuel and currency effects release significantly
Fuel and currency effects release significantly Operating costs and revenues Lufthansa Group (in m EUR) Q1 2016 vs. PY Total revenue 6,916 -0.8% Other operating income 653 -28.5% Total operating income 7,569 -4.0% Operating expenses 7,590 -5.3% Non-fuel operating expenses 6,519 -2.9% Cost of materia
Slide 15: Free Cash Flow increases on lower capex
Free Cash Flow increases on lower capex Cash flow statement Lufthansa Group (in m EUR) Q1 2016 vs. PY 3.3 3.4 2.8 EBT (earnings before income taxes) -25 -381 2.0 1.1 Depreciation & amortization (incl. non-current assets) 417 +22 Net proceeds from disposal of non-current assets -5 +17 FY 2012 FY 2013
Slide 16: Group revenue and currency impact
Group revenue and currency impact Q1 2016 vs. Q1 2015 Currency influence on EBIT (in m EUR) in m EUR Q1 Q2 Q3 Q4 FY (YTD) -6 -6 Volume: +3.7 % Price: -7.2% 203 -393 Currency: -0.4% -22 5,447 Traffic revenue (-3.9%) 5.235 1,681 1,526 Other revenue (+10.2%) Q1 2015 Q1 2016 ∑ 6,973 ∑ Group revenue (-0.
Slide 17: Fuel costs Q1 2016 vs. Q1 2015
Fuel costs Q1 2016 vs. Q1 2015 Hedging result by quarter (in m EUR) in m EUR Q1 Q2 Q3 Q4 FY (YTD) 2015 -203 -205 -271 -309 -988 2016 -336 -336 -237 Volume Price 1,308 49 -471 Currency 1,071 Hedging 51 134 Q1 2015 Q1 2016 Seite 17
Slide 18: Adjusted EBIT and one-off factors
Adjusted EBIT and one-off factors Quarterly results 2015-2016 in m EUR Q1 Q2 Q3 Q4 6M 9M Full Year Adjusted EBIT 2015 -167 635 1,225 124 468 1,693 1,817 incl. strikes -42 -58 -30 -101 -100 -130 -231 incl. Venezuela -60 +5 -5 -12 -55 -60 -72 Adjusted EBIT ex one-off factors -65 688 1,260 237 623 1,88
Slide 19: Reconciliation from EBIT to Adjusted EBIT per segment
Reconciliation from EBIT to Adjusted EBIT per segment Q1 2016 Book gains/losses Adj. EBIT FY 15 Segment EBIT FY 15 (m EUR) Impairments Pension changes on asset disposals (m EUR) LH Passenger Airlines 70 -10 60 SWISS 23 23 Austrian Airlines -29 -1 -30 Eurowings -86 -86 Consolidation -43 9 -34 Passeng
Slide 20: Adjusted EBIT and EBIT per quarter 2015
Adjusted EBIT and EBIT per quarter 2015 in m EUR Q1 Q2 Q3 Q4 6M 9M Full Year Adj. EBIT -167 635 1,225 124 468 1,693 1,817 pension changes 0 +32 0 -57 +32 +32 -25 book gains / losses on asset disposals +22 +24 0 -7 +46 +46 +39 impairments +1 -84 -25 -47 -83 -108 -155 EBIT -144 607 1,200 13 463 1,663
Slide 21: 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 4.8% Cost of Debt1 Cost of Equity2 2.4% (FY 2016) 7.2% (FY 2016) Target Capital Structure 50 : 50 WACC: 4.8% 1 Currently no consideration of tax shield 2 Cost of Equity FY 2016 = Risk-free market interest rate of 1.7% + (Market ris
Slide 22: Current capital employed is ca. 18.8 bn EUR
Current capital employed is ca. 18.8 bn EUR Weighted average cost of capital is 5.9% 18,101 17,526 17,545 17,565 Average Capital Employed WACC 7.0% 6.2% 5.9 % 5.9% 2012 2013 2014 2015 Balance Sheet Total 28.559 29,108 30,474 32,462 ./. Non-Interest Bearing Liabilities 10.940 11,563 12,890 13,657 - l