Slide 1: Second Quarter 2023 Results
Second Quarter 2023 Results Carsten Spohr, CEO Remco Steenbergen, CFO Frankfurt, 3 August 2023 lufthansagroup.com
Slide 2: Second Quarter 2023 Results
Second Quarter 2023 Results Carsten Spohr, CEO Frankfurt, 3 August 2023 lufthansagroup.com
Slide 3: Record second quarter forms the basis for a successful year
Record second quarter forms the basis for a successful year Adjusted EBIT Revenues Passengers EUR EUR 9.4bn 33m 1.1bn +17% vs. 2022 +14% vs. 2022 Yield Operating Cash Flow Net CAPEX +13% EUR 1.5bn ~ EUR 0.8bn vs. 2022 Page 3
Slide 4: Significant progress in the transformation into an Airline group
Significant progress in the transformation into an Airline group June May April Transformation Acquisition of 41% of Sale of payment into Airline specialist AirPlus Sale of LSG ITA Airways incl. option to SEB Kort Group to International to for a full takeover AURELIUS ▪ Positive effects on the conti
Slide 5: Operational measures have successfully stabilized operations
Operational measures have successfully stabilized operations Measures to support stable operations Punctuality improved Departure Punctuality 9,000 new employees YTD in 2023 mainly in operations 75% Close alignment with system partners 70% Flight plan adjustments to avoid overloads at peaks 66% Proc
Slide 6: Bottlenecks in air traffic control
Various constraints in the system impact our punctuality and will limit growth in the industry for a long time to come Bottlenecks Staff shortages Missing in air traffic at handling spare parts control providers Significant delays Engine Industry-wide in aircraft durability personnel deliveries issu
Slide 7: Demand remains strong also beyond summer – premium outperforms
Demand remains strong also beyond summer – premium outperforms Passenger development and booking outlook Recovery per customer segment Pax and yield vs. 2019 Flown pax in % of 2019 +19% +25% ~+25% 100 Premium Non-premium Leisure >90% 86% 80% Premium 50 Non-premium Corporate Q1 2023 Q2 2023 Q3 2023 Q
Slide 8: Continuous implementation of innovative solutions along the customer journey
Digital Green offers Fares Biometric Boarding Continuous implementation of innovative solutions along the customer journey Self- New Service Lounges Lufthansa App Page 8
Slide 9: Confident outlook
Confident outlook ✓ Demand remains strong, supply constrained ✓ Product and service innovations will support our premium positioning ✓ Transformation into Airline Group well underway Page 9
Slide 10: Second Quarter 2023 Results
Second Quarter 2023 Results Remco Steenbergen, CFO Frankfurt, 3 August 2023 lufthansagroup.com
Slide 11: Q2 Adjusted EBIT and net income reach new record level
Q2 Adjusted EBIT and net income reach new record level (in EUR million) Q2 ’23 Q2 ’22 Change in % Revenues 9,389 8,000 +17 Operating expenses 9,095 8,207 +11 Of which fuel 1,934 2,151 -10 Of which staff 2,064 1,752 +18 Of which depreciation 555 551 +1 Adjusted EBITDA 1,639 973 +75 Adjusted EBIT 1,08
Slide 12: Passenger Airlines: Strong Q2 performance as yields remain high
Passenger Airlines: Strong Q2 performance as yields remain high Operational KPIs Adjusted EBIT Comments in EUR million ▪ All airlines record an operated profit in Q2 ’23 vs. 2022 vs. 2019 Q2 - SWISS, Austrian Airlines, Brussels Airlines and Eurowings reach new ASK 78,520 +12,2% -17,5% record levels
Slide 13: Unit cost increases expected to moderate in H2
Unit cost increases expected to moderate in H2 – productivity improvements to support unit cost reduction in 2024 CASK expected to improve in H2 Productivity forecasted to recover in 2024 Quarterly CASK performance Crew productivity vs. PY -8% Drivers in H1: Drivers of expected H2 improvement: • Inv
Slide 14: Record results at Lufthansa Technik – Lufthansa Cargo's profits normalize
Record results at Lufthansa Technik – Lufthansa Cargo’s profits normalize Adjusted EBIT in EUR million Comments 482 ▪ Cargo business impacted by market- 37 wide rate declines and low volumes – Lufthansa Cargo gains market share Q2 ’23 Q2 ’22 and sustains its yield premium (Q2 yields up >40% vs. 2019
Slide 15: Free cash flow performance driven by strong operating result and bookings
Free cash flow performance driven by strong operating result and bookings H1 Adjusted EBIT / Adjusted free cash flow in EUR million (371) (69) (490) 3,100 2,119 (1,874) 1,099 1,071 (155) 812 Adjusted EBIT D&A Liability from Receivables Remaining Other1 Operating Net CAPEX Repayments Adjusted Free un
Slide 16: Credit rating upgrades reflect significant progress in deleveraging
Credit rating upgrades reflect significant progress in deleveraging Liquidity Net debt and net pension liabilities1 EUR billion EUR billion Ratings upgraded Reduction in 10.8 ▪ S&P Global: Upgrade to BB+ from 10.4 pension 2.1 discount rate BB with positive outlook in April 2.1 Target liquidity: 8.9
Slide 17: Option-based fuel hedging offers protection while leaving opportunity to benefit from lower prices
Option-based fuel hedging offers protection while leaving the opportunity to benefit from lower prices Expected fuel cost sensitivity after hedging (FY 2023)1 Hedging portfolio excl. LH Cargo 104 Q3 H2 2023 Ø Market price crude oil2 500 450 400 300 250 94 350 300 250 200 100 Hedge ratio Crude (%) 86
Slide 18: Significant progress towards 2024 targets expected in 2023
Significant progress towards 2024 targets expected in 2023 Q3 2023 Full Year 2023 Full Year 2024 Capacity (ASK) Capacity (ASK) Adjusted EBIT margin c. 88% of 2019 levels Around 85% of 2019 levels At least 8% Adjusted EBIT Adjusted EBIT Adjusted ROCE (excl. cash) Above 2019 level of Above EUR 2.6bn A
Slide 19: Appendix - supplementary information
Appendix - supplementary information- Page 19
Slide 20: Traffic Data
Traffic Data Apr vs.2019 May vs.2019 Jun vs.2019 Q2 vs.2019 Passengers in 1,000 10,234 -18.3% 11,235 -14.9% 11,826 -14.4% 33,296 -15.8% Available seat-kilometers (m) 24,857 -18.9% 26,369 -18.4% 27,295 -15.2% 78,520 -17.5% Revenue seat-kilometers (m) 20,374 -20.2% 21,653 -17.5% 23,262 -15.3% 65,289 -
Slide 21: Operating KPIs of Passenger Airlines by region vs. 2019
Operating KPIs of Passenger Airlines by region vs. 2019 (unless stated otherwise) Total Q2’23 Europe Q2’23 Asia / Pacific Q2’23 Number of flights -19.0% ASK -7.7% ASK -37.4% ASK -17.5% RPK -6.0% RPK -39.5% RPK -17.6% SLF +1.5pts. SLF -2.8pts. SLF -0.1pts. RASK incl. currency1) +15.6% RASK incl. curr
Slide 22: Calculation of operational airline KPIs
Calculation of operational airline KPIs Passenger Airlines, Q2 2023 1) Traffic revenues (€m) 7,270 1) Total Revenues (€m) 7,669 2) Not assignable (€m) 763 2) Other operating income (€m) 218 Yield = 3) Basis for Yield (1)–(2) (€m) 6,507 3) Reversal of provisions (€m) 33 RASK 4) RPK (m) 1 65,289 4) FX
Slide 23: Group P&L
Group P&L Lufthansa Group (in EUR m) Q2 ’23 vs. Q2 ’22 Revenues 9,389 +17% Total operating income 10,154 +19% Operating expenses 9,064 +11% Of which fees & charges 1.202 +20% Of which fuel 1,934 -10% Of which staff 2,064 +18% Of which depreciation 555 +1% Result from equity investments -5 +60% Adjus
Slide 24: EBIT / Adjusted EBIT bridge H1 2023
EBIT / Adjusted EBIT bridge H1 2023 in EUR million 812 777 18 (8) (4) 29 EBIT Impairment of non- M&A related expenses net Book gains Others Adjusted EBIT current assets / assets held for sale Page 24
Slide 25: Adjusted EBIT / Net Income H1 2023
Adjusted EBIT / Net Income H1 2023 in EUR million 812 (35) (172) (74) (78) (37) 414 (2) Adjusted EBIT Adjustments Interest result Others Tax result Profit/loss from Profit/loss Net EBIT discontinued attributable to Income operations minority interests Page 25
Slide 26: Adjusted EBIT by Airline
Adjusted EBIT by Airline Adjusted EBIT (in EUR m) Q2 ’23 Q2 ’22 Change in % 6M ’23 6M ’22 Change in % Lufthansa German Airlines 515 -83 n.m.f. 149 -798 n.m.f. SWISS 272 107 +154% 349 45 n.m.f. Austrian Airlines 88 3 n.m.f. 15 -106 n.m.f. Brussels Airlines 31 -27 n.m.f -12 -89 87 Eurowings 69 -76 n.m
Slide 27: Cash flow statement
Cash flow statement Lufthansa Group (in m EUR) Q2 ’23 vs. Q2 ’221 EBT (earnings before income taxes) 1,086 +730 1 Depreciation & amortization (incl. repairable MRO materials) +562 +22 Net proceeds from disposal of non-current assets -16 -13 1 Significant improvement in the operating result compared
Slide 28: Multi-year financial overview
Multi-year financial overview Lufthansa Group (in EUR million, as reported) 2016 2017 2018 20191 2020 2021 20224 Operating KPIs RASK ex currency -5.9% +1.9% -0.5% -2.5% -26.7% -6.1% -6.1% CASK ex currency, ex fuel2 -2.5% -1.8% -1.7% -1.5% +84.6% -25.8% -25.8% Profit & Loss Revenues 31,660 35,579 35,
Slide 29: Maturity profile of borrowings as of June 30, 2023
Maturity profile of borrowings as of June 30, 2023 3,000 2,500 2,000 1,500 1,000 500 0 YTG 2023 2024 2025 2026 2027 2028 2029 2030 Straight Bond Hybrid Convertible Bond Schuldscheindarlehen Aircraft Finance (secured) Other* *Mainly bilateral loans – does not include operating leases; as drawn on Jun