Deutsche Lufthansa Ag · XETR:LHA
Deutsche Lufthansa — dbAccess German, Swiss & Austrian Conference 2014
37 slides from Deutsche Lufthansa's conference presentation, June 2014
Slide 1: Lufthansa Group Company Presentation
Lufthansa Group Company Presentation dbAccess German, Swiss & Austrian Conference June 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: Executive Summary
Executive Summary In 2013 operating profit was above SCORE starting point Clear progress in passenger business led to Group operating result excl. one-offs of 1,042 m EUR Lufthansa Group's financial profile remains strong Non-cyclical profit base; strong free cash flow; low net debt; investment grad
Slide 4: Profit improvements made in FY 2013 and continued in Q1 2014
Profit improvements made in FY 2013 and continued in Q1 2014 Key figures for the Lufthansa Group Lufthansa Group (in m EUR) FY 2013 FY 2012 vs. PY Q1 2014 Q1 2013 vs. PY Total revenue 30,028 30,135 -0.4% 6,462 6,628 -2.5% of which traffic revenue 24,565 24,793 -0.9% 5,161 5,338 -3.3% Operating resul
Slide 5: Profit improvement mainly driven by changes in passenger business
Profit improvement mainly driven by changes in passenger business Development 2013 vs. 2011 (initiation of SCORE) FY 2013 vs. FY 2011 Explanation Fleet Size fleet rollover, (no. of aircraft) -2.6% phase-out of small, non-efficient aircraft Capacity capacity growth realized through (ASK) +1.7% larger
Slide 6: Executive Summary
In 2013 operating profit was above SCORE starting point Clear progress in passenger business led to Group operating result excl. one-offs of 1,042 m EUR Lufthansa Group's financial profile remains strong Non-cyclical profit base; strong free cash flow; low net debt; investment grade rating; dividend
Slide 7: Lufthansa operates a broad portfolio incl. non-cyclical businesses
Lufthansa operates a broad portfolio incl. non-cyclical businesses 300-550 m EUR non-cylical profit base Revenue Operating result Op. margin range Airlines 23.5 bn 495 m +4.8% Passenger Airline Group 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 -0.1% 2.4 bn 77 m +11.4% Logistics (Cargo) 2009 20
Slide 8: 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 9: Strong cash flow generation and conservative financial setup
Strong cash flow generation and conservative financial setup Strong balance sheet, fleet in ownership 1. Lufthansa Group is profitable and 2. Conservative fleet structure and 3. Solid financial profile provides produces strong cash flows ambitious balance sheet targets provide competitive edge in fi
Slide 10: Dividend policy is being currently reviewed/adjusted
Dividend policy is being currently reviewed/adjusted Lufthansa Group historical dividend pay-outs Group dividend policy 30-40% pay-out ratio of operating result Net profit of Deutsche Lufthansa AG (German GAAP/HGB) must allow for dividend payment Further payments possibly from extraordinary income,
Slide 11: Executive Summary
In 2013 operating profit was above SCORE starting point Clear progress in passenger business led to Group operating result excl. one-offs of 1,042 m EUR Lufthansa Group's financial profile remains strong Non-cyclical profit base; strong free cash flow; low net debt; investment grade rating; dividend
Slide 12: Start into the year 2014 showed unit costs on track but weak revenues
Start into the year 2014 showed unit costs on track but weak revenues Operating KPIs of Passenger Airline Group Total FY '13 Q1 '14 Europe FY '13 Q1 '14 Asia/Pacific FY '13 Q1 '14 Number of flights -3.7% -1.2% ASK +1.5% +2.8% ASK +2.4% -1.3% ASK +1.0% +0.4% RPK +4.3% +1.6% RPK +2.6% -0.0% RPK +2.3%
Slide 13: Unit revenues are not expected to recover throughout the year
Unit revenues are not expected to recover throughout the year Trading assumptions FY 2014 adjusted Full Year 2014 assumptions Explanation Fleet Size Fleet rollover: Phase-out of small, non-efficient aircraft (no. of aircraft) overall stable Capacity growth mainly achieved through more seats per Capa
Slide 14: Fuel cost relief driven by weak USD which also burdens revenues
Fuel cost relief driven by weak USD which also burdens revenues Fuel forecast and sensitivities 150 LH price 140 2014 130 Lufthansa Group fuel expenses after hedging (in bn EUR) Sensitivities 120 costs with deviating USD/barrel Market price 7.4 oil price 7.1 7.1bn (+20%) 110 break-even of hedges at
Slide 15: Lufthansa Group reduces operating profit forecast 2014
Lufthansa Group reduces operating profit forecast 2014 Ad-hoc release 11 June 2014 FY 2014 The Executive Board of Deutsche Lufthansa AG reduces its operating profit forecast for 2014. It now expects an operating result of approximately 1 billion Euros, normalized approximately 1.3 billion Euros. Rea
Slide 16: Executive Summary
In 2013 operating profit was above SCORE starting point Clear progress in passenger business led to Group operating result excl. one-offs of 1,042 m EUR Lufthansa Group's financial profile remains strong Non-cyclical profit base; strong free cash flow; low net debt; investment grade rating; dividend
Slide 17: Group portfolio is being continuously optimized
Group portfolio is being continuously optimized Miles and More in new legal structure, IT Infrastructure outsourcing Bonus program activities to be Infrastructure division to be outsourced to transferred into separate legal entity international IT service provider Implementation from July 2014 Airli
Slide 18: Fleet is being modernized and complexity is reduced
Fleet is being modernized and complexity is reduced Outlook fleet structure: Lufthansa Passenger Airlines 2011 2025 5 aircraft types 5 aircraft types A380 400-500 A380 Development seats 747-8I long-haul -20%CASK Phase-out by age 777-9X vs. replaced 300-400 740-400 aircraft seats A340-600 Phase-out b
Slide 19: 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 20: Deutsche Lufthansa AG Investor Relations
Deutsche Lufthansa AG Investor Relations / FRA IR Lufthansa Aviation Center Airportring D-60546 Frankfurt Andreas Hagenbring, Head of IR Phone: +49 (0) 69 696 28000 Fax: +49 (0) 69 696 90990 E-mail: investor.relations@dlh.de Page 20
Slide 21: Supplementary Information – Network, Fleet & Product
– Supplementary Information – Network, Fleet & Product Page 21
Slide 22: Balanced network supported by leading intercontinental JVs
Balanced network supported by leading intercontinental JVs Passenger network overview Largest Airline Group in Europe Largest Transatlantic Joint Venture First Asian-European Joint Venture Intra- European 46.6% North (+0.3pts.) Asia America Pacific 21.4% 17.6% (+0.8pts.) (-1.3pts) Mid-East 4.1% (-0.
Slide 23: LHP focuses on markets with highest margins: large and premium
LHP focuses on markets with highest margins: large and premium Fleet and network clusters Share of premium passengers 30% Small Niche Mid-Size Premium Premium Trunk Expansion of 20% New Technology Aircraft A380 and 747-8I Fleet 10% Introduction of 2 Class Fleet 5% & New Technology Aircraft Small & G
Slide 24: Reduce complexity, lower unit costs, but also invest in new aircraft
Reduce complexity, lower unit costs, but also invest in new aircraft SCORE at Lufthansa Passenger Airlines 2013 2014 2015 2016 onwards freeze fleet size at 400 aircraft, ASK growth at half of market rate (ca. 3% p.a.) 1 Capacity & fleet dimensioning ASK growth mainly through more seats per plane (i.
Slide 25: Capacity growth with stable fleet size leads to unit cost reductions
Capacity growth with stable fleet size leads to unit cost reductions Growth path: Lufthansa Passenger Airlines Number of aircraft fleet size Fleet size frozen at 400 aircraft throughout 2016 3% roll-over effects 1% 2-class fleet capacity growth ASK growth year-on-year 1% productivity, stage length F
Slide 26: Lufthansa Passage aims at becoming the first Western 5 Star airline
Lufthansa Passage aims at becoming the first Western 5 Star airline Service initiatives underway to significantly improve customer experience Aircraft order book 2014 et sqq. Planned product improvements Total Orders: 261 aircraft Short haul: 177 aircraft Premium Economy Long haul: 84 aircraft Avail
Slide 27: Supplementary Financial Information – FY 2013 + Q1 2014
– Supplementary Financial Information – FY 2013 + Q1 2014 Page 27
Slide 28: 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 28
Slide 29: Group Revenue Q1 2014 vs. Q1 2013
Group Revenue Q1 2014 vs. Q1 2013 in m EUR 6,628 Volume: +0.1% Price: -1.0% 4 -52 Currency: -2.4% -129 6,462 5,338 Traffic revenue (-3.3%) 5,161 1,301 1,290 Other revenue (+2.3%) Q1 2013 Q1 2014 6,628 Group revenue (-2.5%) 6,462 Page 29
Slide 30: 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 30
Slide 31: Fuel Cost Q1 2014 vs. Q1 2013
Fuel Cost Q1 2014 vs. Q1 2013 in m EUR -157 m EUR +1,674 Volume -17 Price -68 Hedging Currency -5 -67 +1,517 Q1 2013 Q1 2014 Page 31
Slide 32: 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 Q1 2014 vs. PY Total revenue 30,028 -0.4% 6.462 -2.5% Other operating income 1,918 +0.3% 480 -11.8% Total operating income 31,946 -0.3% 6,942 -3.2% Operating expenses -31,249
Slide 33: 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 34: Cash generation was again strong in 2013
Cash generation was again strong in 2013 Cash flow statement FY 2013 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 Resul
Slide 35: Positive free cash flow despite higher investments in the first quarter
Positive free cash flow despite higher investments in the first quarter Cash flow statement Q1 2014 Group Cash Flow Statement in m EUR Q1 2014 vs. PY EBT (earnings before income taxes) -307 +272 Depreciation & amortisation (incl. D&A for non-current assets) 353 -153 Net proceeds from disposal of non
Slide 36: 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
Slide 37: Operating margins (normalized) Q1 2014 vs. Q1 2013
Operating margins (normalized*) Q1 2014 vs. Q1 2013 10.0 9.2 all numbers in % 8.1 8.0 6.0 4.7 4.0 3.6 3.2 2.0 2.0 0.6 0.5 0.0 -0.7 -2.0 -1.6 -4.0 -2.9 -4.5 -6.0 -6.1 -8.0 -7.1 -7.2 -8.0 -10.0 -12.0 -14.0 -13.4 -13.1 Lufthansa SWISS Austrian Passenger Logistics MRO Catering IT Services LH Group Passe
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