Deutsche Lufthansa Ag · XETR:LHA
Deutsche Lufthansa — UBS Transport Conference 2013
30 slides from Deutsche Lufthansa's conference presentation, Sep 17, 2013
Slide 1: UBS Transport Conference, Simone Menne, CFO
2 0 1 3 Simone Menne, Member of the Executive Board and CFO September 16-17th 2013 UBS Transport Conference 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: Overview
Overview Transformation of European airline sector continues After phase of M&A and continued consolidation, capacity growth remains on low levels Lufthansa Group is in a strong position to benefit from the industry transformation Globally diversified network, broad group set-up, strong financials a
Slide 4: Transformation of European airline sector continues
Transformation of European airline sector continues Capacity growth is on low levels, fuel costs remain high Competition is driven by three network Oil price remains on high level, Capacity growth in Europe is carriers and two main LCCs especially in EUR terms on low levels 160 15% 140 120 10% 100 +
Slide 5: Passenger Airline Group is keeping capacities restricted as well
Passenger Airline Group is keeping capacities restricted as well Planned capacity growth in FY2013 and winter 2013/14 Passenger: Passenger Cargo: Full Year 2013 vs. 2012 Winter 2013/14 vs. 12/13 Full Year 2013 vs. 2012 Total Long Short Total Long Short Total network haul haul network haul haul netwo
Slide 6: Fleet growth restrictive, comprehensive product upgrade
Fleet growth restrictive, comprehensive product upgrade Orders are mainly replacements, half of market growth targeted Example: Lufthansa Passenger Airlines Aircraft deliveries 2013-2025 Total market growth Airbus 380 4 LH base case ca. +2% p.a. Boeing 747-8i 15 stable fleet Boeing 777 (of which 5 f
Slide 7: Passenger Airline Group is globally diversified
Passenger Airline Group is globally diversified Balanced network supported by leading intercontinental JVs Largest Airline Group in Europe Largest Transatlantic Joint Venture First Asian-European Joint Venture Intra- European 46.3% North (share of traffic Asia revenue 2012) America Pacific 20.6% 18.
Slide 8: Balanced business setup is backed by strong financial profile
Balanced business setup is backed by strong financial profile Profitable despite conservative depreciations, strong cashflow generation 1. Lufthansa Group is profitable 2. Solid financial profile provides 3. Conservative fleet structure and produces strong cash flows competitive edge in financing al
Slide 9: Lufthansa Group can also rely on its broad portfolio of businesses
Lufthansa Group can also rely on its broad portfolio of businesses Non-flying business provide non-cyclical profit base of 300-450 m EUR Revenue Operating result Op. margin range Airlines 23.6 bn +4.8% Passenger Airline 258 m Group -0.1% +11.4% 2.7 bn Logistics 104 m (Cargo) -8.0% Service Companies
Slide 10: Operating profit is to be significantly improved by SCORE
Operating profit is to be significantly improved by SCORE SCORE targets an operating result of 2.3 bn EUR in 2015 Operating result target 2015 SCORE projects (examples) • New Germanwings • Push of special products • Efficient ground/admin (e.g. cool.td) processes • New warehouse • Raising profitabil
Slide 11: SCORE pipeline is well filled with projects through 2015
SCORE pipeline is well filled with projects through 2015 2.7bn EUR gross contributions before external cost inflation and one-offs further headwinds to be compensated by additional measures in m EUR Projects in idea status 904 Projects in implementation Projects concluded / P&L-effect 856 2.300 618
Slide 12: Execution of SCORE causes one-off costs
Execution of SCORE causes one-off costs Operating result will be especially burdened in 2013 and 2014 SCORE one-off costs FY2013 FY2014 FY2015 Restructuring Costs similar to 2012 level guidance will follow guidance will follow (severance payments, provisions (2012: 160 m EUR) late 13/ early 14 late
Slide 13: SCORE project "new Germanwings"
SCORE project "new Germanwings" Non-hub traffic merged into one profitable carrier with only two aircraft types 2009 2012 2015 # of 5 3 1 brands (Lufthansa, Germanwings, Eurowings, Cityline, Contact Air) (Lufthansa, Germanwings, Eurowings) (Germanwings) # of aircraft 8 5 2 (B737-300,-500,CRJ-200,-70
Slide 14: First SCORE impacts are becoming visible
First SCORE impacts are becoming visible Operating result before restructuring costs and one-offs improved in H1 '13 all numbers in m EUR +233 H1 2012 Austrian one-off Operating Profit (Tyrolean Transfer) SCORE Normalized IAS 19 restructuring operating profit bmi pensions restatement of costs H1 201
Slide 15: Current business development is regionally diverse but stable
Current business development is regionally diverse but stable Current trading conditions for passenger and cargo business Passenger Business Cargo Business Restrictive growth and capacity strategy will be continued Low visibility going forward Moderate ASK growth in long-haul capacity, in particular
Slide 16: Yield development diluted by deliberately higher Economy share
Yield development diluted by deliberately higher Economy share Changed cabin layout leads to higher non-premium capacity Overall share of Economy passengers increased because of new modern aircraft with more Economy capacity and changed cabin configuration at LH Passenger Airlines Jan-Jun 2012 vs. -
Slide 17: Fuel costs are expected at 7.2bn EUR
Fuel costs are expected at 7.2bn EUR, 200m EUR less than in 2012 Fuel forecast and sensitivities 150 LH price 140 2013 7.4bn (+20% oil price) 130 7.3bn (+10% oil price) 7.2bn (base case) USD/barrel 120 Market price 7.0bn (-10% oil price) 6.8bn (-20% oil price) current spot price USD 112/barrel 110 1
Slide 18: Group Outlook: Operating profit higher than last year's
Group Outlook: Operating profit 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 earnings in 2013 Operating result will be signi
Slide 19: UBS Transport Conference, Simone Menne, CFO
2 0 1 3 Simone Menne, Member of the Executive Board and CFO September 16-17th 2013 UBS Transport Conference Page 19
Slide 20: Appendix – Supplementary Financial Information
Appendix – Supplementary Financial Information – Page 20
Slide 21: Outlook 2013 for individual business segments
Outlook 2013 for individual business segments Outlook Segments Passenger Airline Group Logistics MRO Catering IT Services Outlook moderate increase in operating profit in the moderate increase in revenue on par with moderate revenue revenue and operating three-digit million euro revenue and operatin
Slide 22: H1 and Q2 2013 at a glance
H1 and Q2 2013 at a glance Key figures for the Lufthansa Group Lufthansa Group (in m EUR) H1 '13 H1 '12 vs. PY Q2 '13 Q2 '12 vs. PY Total revenue 14,464 14,509 -0.3% 7,836 7,890 -0.7% of which traffic revenue 11,778 11,851 -0.6% 6,441 6,502 -0.6% Operating result 72 235 -69.4% 431 594 -27,4% Adjuste
Slide 23: FY 2012 Key Figures for the Group
FY 2012 (as reported before IAS19 restatement) Key Figures for the 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
Slide 24: FY 2012: Adj. operating margin per airline and business segment
FY 2012: Adj. operating margin per airline and business segment 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
Slide 25: FY 2012 Overview Group segments
FY 2012 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% -8,7% -2.0% +8.9% +1.7% -7.2% Op. result 258 104 318 97 21
Slide 26: IAS 19 resulted in a clear shift on the balance sheet
As expected, IAS 19 resulted in a clear shift on the balance sheet Implementation of IAS 19 Balance sheet as of 31.12.2012 (prior to new accounting) Balance sheet as of 31.3.2013 (based on new accounting) assets equity and liabilities assets equity and liabilities non current assets equity ratio equ
Slide 27: SCORE leads to one-off restructuring costs
SCORE leads to one-off restructuring costs Overview of staff measures Provisions for >2,000 severances packages Further restructuring measures have recently been announced in FY 2012 GLOBE Group-wide pooling of HR, Procurement, Finance and Accounting ~ 1.100 FTEs affected ~ 200 m EUR cumulative savi
Slide 28: Lufthansa's fuel hedging strategy
Lufthansa's fuel hedging strategy Rolling approach to reduce volalitility of costs Current hedging level status FY2013 77% FY2014 56% Lufthansa's hedging strategy is designed to reduce volatility Rolling approach with 24 months lead time before actual consumption Hedging level is increased month-by-
Slide 29: High flexibility is the key in a volatile industry
High flexibility is the key in a volatile industry Example: LH Cargo flexibly adapts to all market phases % 50 ton km sales in % vs. previous year 40 2008 2009 2010 2011 2012 2013 30 Operating profit in m EUR (per quarter) 20 109 10 86 80 76 47 64 69 29 35 40 19 28 19 38 27 0 4 -72 -62 -66 -10 -20 f
Slide 30: Lufthansa Investor Relations Contact
Lufthansa Investor Relations Contact 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: [email protected] Visit our webpage: lufthansa-group.com