Deutsche Lufthansa Ag · XETR:LHA
Deutsche Lufthansa — German Investment Seminar 2012
25 slides from Deutsche Lufthansa's conference presentation, Jan 9, 2012
Slide 1: Shaping the Profile - German Investment Seminar 2012
Shaping the Profile German Investment Seminar 2012 Stephan Gemkow Member of the Executive Board and CFO New York, January 9th, 2012 0
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: The year 2011 developed differently than expected
The year 2011 developed differently than expected Economic slowdown and high oil prices weigh on industry profits GDP forecasts for FY 2011 vs PY (as of 2010 vs today) in % 8 6 2010 Forecast 2011 as of 2010 4 Forecast 2011 as of today 2 0 World Europe North Am erica South Am erica Asia/Pacific Sourc
Slide 4: Lufthansa, too, had to adjust expectations
Lufthansa, too, had to adjust expectations Stronger impact on flying businesses than on aviation services Operating profit Outlook FY 2011 (in m EUR) Operating profit vs. PY 2008 – 2010 as of Mar 11 as of Oct 11 Passenger Airline Group Logistics MRO IT Services Catering * Lufthansa Group 1.280 * Ope
Slide 5: Growth in the aviation industry continues, so do challenges
Growth in the aviation industry continues So do challenges Projected passenger growth 2011-2015 Challenges 2012 Strong uncertainty regarding ø +5.8% p.a. economic growth outlook +5.5% +6.0% +5.9% Fuel price remains on high level +6.3% +5.5% Risk of escalating euro crisis High capacity growth
Slide 6: Lufthansa strengthens its position in the aviation industry
Lufthansa strengthens its position in the aviation industry Profitable growth has many drivers Improving profitability − We find solutions for loss making entities − We strengthen internal cooperation and realize synergies within the Group − We accelerate our cost management initiatives Strong m
Slide 7: Important homework: finding solutions for loss making entities
Important homework: finding solutions for loss making entities Examples Closed after unsuccessful operations Sale to IAG Restructuring accelerated 6
Slide 8: Climb 2011 improves profitability in European traffic
Climb 2011 improves profitability in European traffic Unit cost savings without compromising on yield performance Climb 2011 Overhead Suppliers Staff Revenue Fleet Structure & Productivity Capacities Example Example Fleet roll-over New European Cabin • Phase-out of 50-seater completed • 2,000 additi
Slide 9: Latest development in short-haul traffic
Latest development in short-haul traffic Cooperation of LH Passenger Airlines and Germanwings enhanced Production Strict catchment logic for direct services aligned Germanwings: Cologne, Hanover, Stuttgart LH Passenger Airlines: Dusseldorf, Berlin, Hamburg Domestic traffic coordinated Commer
Slide 10: New Berlin service from summer timetable 2012
New Berlin service from summer timetable 2012 >30% unit costs reduction Lufthansa strategy for Berlin Location Berlin 15 aircraft based in BER and operated without Visitor growth in Berlin higher than in Paris, night-stops in other destinations London or New York High productivity of aircraft
Slide 11: Unit cost reductions are also being realized in long-haul business
Unit cost reductions are also being realized in long-haul business Boeing 747-8 Intercontinental represents new generation of technology Cruise Speed 0.855 mach Range 13,500 km • 16% fuel reduction • 30% smaller noise footprint • 26% more cargo capacity • 16% reduction in carbon emissions Source: Bo
Slide 12: Joint Ventures strengthen revenue potential in important markets
Joint Ventures strengthen revenue potential in important markets After successful "A++" implementation "J+" will be launched in April 2012 Scope of A++ Scope of J+ 11
Slide 13: At the same time consolidation continues around the world
At the same time consolidation continues around the world Wide range from proactive M&A to business failures 12
Slide 14: Lufthansa benefits from own strength and market trends
Lufthansa benefits from own strength and market trends Success story continues in 2011 in passenger business … Passengers 44m Passengers FY 2002 ~ 100m FY 2011e Passenger Airline Group Jan-Nov 2011 (change yoy in %) *Q1–Q3 2011 13
Slide 15: Lufthansa benefits from own strength and market trends: cargo
Lufthansa benefits from own strength and market trends … as well as in cargo business Freight/mail (t) 1.6m Freight/mail (t) FY 2002 ~ 2.1m FY 2011e Lufthansa Cargo Jan-Nov 2011 (change yoy in %) *Q1–Q3 2011 14
Slide 16: The new runway in Frankfurt improves the performance
The new runway in Frankfurt improves the performance Higher punctuality, no change in total capacity trend LH Passenger Airlines ASK growth New Runway Northwest yoy in % Opened on 21 Oct. 2011 LH Passenger Airlines number of flights Punctuality FRA in % yoy in % Departure 15
Slide 17: However, the night flight ban in Frankfurt causes disruptions
However, the night flight ban in Frankfurt causes disruptions Passenger and cargo businesses are both affected Preliminary night flight ban: Currently no take-off or landing between 11pm and 5am Federal Administrative Court will review night flight ban in March 2012 LH Passenger Airlines LH Carg
Slide 18: Group supported by market leading aviation services companies
The Group's structure and performance is supported by market leading aviation services companies Aviation Services in EUR MRO IT Services Catering S&F * ∑ Revenue 4.0bn 2006 - 2010 7.4bn 2.2bn 0.6bn 0.5bn 6.9bn Operating 268m 478m result 76m 62m 2006 - 2010 10m 416m 8.8% (2008) 8.1% (2006) 4.2% (200
Slide 19: Comprehensive risk management: fuel efficiency and structural hedging
Comprehensive risk management: fuel efficiency is being continuously improved while structural hedging gives time to react Long term: Short term: Invest in modern fleet enhances fuel efficiency Structural fuel hedging reduces volatility Progress in average fuel consumption 1991 - 2010 Fuel hedging l
Slide 20: Strong financial profile supports LH Group development
Strong financial profile supports LH Group development Financial strength provides operational and strategic flexibility Cash flow and free cash flow generation Strong balance sheet in bn EUR Aircraft & 3.0 Engines Total aircraft: 708 long-haul: 167 2.0 11.8 bn EUR short-haul: 331 regional:
Slide 21: We have successfully concluded several financing transactions
We have successfully concluded several financing transactions Rating confirmed by S&P in December 2011 Liability Management French Lease Japanese Operating with Private Placement Lease EUR 407m early repayment 1 x Airbus A380-800 4 x Airbus A321 EUR 450m new issue Lufthansa’s third A380 in
Slide 22: Profitability of the Group has room for improvement: flexibility in capacity
Profitability of the Group has room for improvement I. Lufthansa utilizes its flexibility in capacity and cost base FY 2012 capacity – Passenger Airline Group FY 2012 capacity – Lufthansa Cargo +9 % -6 PP +3 % -3 PP +3% 0% Old plan Current plan Old plan Current plan after adjustment after adjustment
Slide 23: Profitability of the Group has room for improvement: cost management
Profitability of the Group has room for improvement II. Cost management initiatives accelerated Group-wide initiatives were launched to structurally improve profitability Various programs driven by business segments Extend "Shared Services" Next level procurement initiative Optimize IT struc
Slide 24: Current valuations are influenced by uncertainty and external factors
Current valuations are influenced by uncertainity and external factors Lufthansa share price development 2000 - 2011 Financial Crisis 9/11 H1N1 Euro Crisis 30 H5N1 Strong winter 25 SARS Volcano 20 15 10 5 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 FY 2001 FY 2003 FY 2009 Q1-Q3 201
Slide 25: German Investment Seminar 2012
[Title ] German Investment Seminar 2012 Stephan StephanGemkow Gemkow Member Member ofthe of theExecutive ExecutiveBoard Boardand andCFO CFO New th NewYork, York,January January99th, ,2012 2012 24