Presentation Seoul · Lufthansa Group has a global reach, but is at home in Germany, Austria and Switzerland 0 10000 20000 30000 40000 50000 60000 70000 80000 90000 US$ GDP …

Presentation

Seoul

February 2017

Page 2

Presentation Seoul

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 on all discernible information,

facts and expectations available at the time. They can, therefore, only claim validity up to the

date of their publication. Since forward-looking statements are by their nature subject to

uncertainties and imponderable risk factors – such as changes in underlying economic

conditions – and rest on assumptions that may not occur, or may occur differently, it is possible

that the Group’s actual results and development may differ materially from the forecasts.

Lufthansa makes a point of checking and updating the information it publishes. However, the

Company is under no obligation to update forward-looking statements or adapt them to

subsequent events or developments. Accordingly, it neither explicitly nor implicitly accepts

liability, nor gives any guarantee for the actuality, accuracy or completeness of this data and

information.

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Presentation Seoul

Three take-aways

Lufthansa is at home in strong and sustainable economies

Germany, Switzerland and Austria are top notch in terms of GDP per citizen

Lufthansa is more than an airline and its business model is strong

Lufthansa, SWISS, Austrian, Eurowings are strong brand names, but Lufthansa’s maintenance and

catering services also contribute strongly to Lufthansa’s success story

Lufthansa’s financial setup is leading in the industry

Strong balance sheet; investment grade rating; sustainable free cash flows;

Consistent hedging policy

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Presentation Seoul

Three take-aways









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Presentation Seoul

The European Union is home to world leading economies

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Gross domestic product (GDP)Source: German Federal Statistic Office

Bn US$

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Presentation Seoul

Lufthansa Group has a global reach, but is at home in Germany,

Austria and Switzerland

0

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GDP Ranking (per citizen)Source: German Federal Statistic Office

Seite 7

Presentation Seoul

Lufthansa Group acts in a strong economic environment

The hubs of the Lufthansa Group are located in Switzerland, Austria and Germany

GDP/citizen Germany:

40,952 USD

Hubs:

Munich, Frankfurt

GDP/citizen Austria:

43,414 USD

Hub: Vienna

GDP/citizen

Switzerland:

80,603 USD

Hub: Zurich

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Presentation Seoul

Lufthansa Group offers unique connectivity in Europe and beyond

Lufthansa, Swiss, Austrian, Brussels Airlines and Eurowings: Lufthansa

Group offers unique connectivity within Europe, both via hubs and point-

to-point.

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Presentation Seoul

Lufthansa Group has forged strong

alliances with leading partners all over

the world

Intra-

European

Asia

Pacific

North

America

LATAM

Africa

Mid-

East

The leading Airline Group in Europe

First joint venture Europe-Japan

New joint venture Europe-China

Leading transatlantic joint venture

First joint venture Europe-South East Asia

Lufthansa Group has established joint ventures with some of the best names in the

industry, thus setting the standard for a time-efficient and seamless travel

experience across the continents.

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Presentation Seoul

Three take-aways









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Presentation Seoul

Lufthansa Group – more than just an airline

A normal day at Lufthansa Group

every30sec.takeoff or landing

approx.300k passengers

approx..5.100tons

cargoapprox.1.000aircraft getting MRO

approx.1.5M meals

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Presentation Seoul

The Lufthansa Group is based on three strong pillars

Margin and growth-oriented goals for the business segments

1 Germany, Austria, Switzerland and Belgium

#1for customers, shareholders, employees and partners

Premium network

airline system

#1 in Europe

Margin improvement Profitable growth

Premium positioning &

cost optimization

Establishment of

Eurowings as dual brand

Participation in global

market development

Point-to-point

#1 in home markets1

Aviation Services

#1 worldwide

Exploiting synergies and consistent capital allocation

… and others

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Presentation Seoul

Lufthansa Group is the world’s largest aviation group

Portfolio of several leading brands and businesses

Hub Airlines

Logistics

Catering

MRO

Further Service

Companies

Multi-Hub, Multi-BrandRevenues 2015

Revenues 2015

Internal Revenues

External Revenues

EUR 24.4bn

EUR 3.0bn

Revenues 2015

Revenues 2015

EUR 2.4bn

EUR 5.1bn

Point-to-Point

EUR 1.9bn

Revenues 2015

Total revenue in 2015: EUR 32.056 bn,

of which traffic revenue: EUR 25.322 bn

//upload.wikimedia.org/wikipedia/commons/3/31/Logo_AeroLogic.svg

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Presentation Seoul

Business segment: Passenger Airline Group

Lufthansa Passenger Airlines is the largest airline in Germany

75,17477,547

79,305

2013 2014 2015

A leading global quality carrier

Deliver high-quality product and service in all travel

classes

Maintain strong position as premium long-haul carrier

Operation of the two biggest German hubs in Frankfurt

and Munich

Steadily expand the private travel segment

Leading customer loyalty programme Miles & More

A fleet of 364 aircraft (as of 30 June 2016)

Increasing passenger numbers underpin

leading position(000 passengers)

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Presentation Seoul

Lufthansa’s new Premium Economy Class More

comfort and exclusivity for both private and business travels

Ergonomically optimized “state of the

art” seat

Up to 50% more space

17 cm wider seat pitch

More seat width and a much higher

recline

Movable footrests in every row (leg

rest in first row)

Power outlet and a USB-port at every

seat

Welcome drink

Amenity kit plus a water bottle

provided at every seat

Two bags (23kg) free of charge

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Presentation Seoul

The Lufthansa Business Class seat – 1.98 m bed length

Plenty of space to arrive rested at your destination

Fully-flat bed with a length of 1.98 m

Optimum comfort, both while sitting and lying

Passengers no longer need to get up from

their seats if they want to change their

position from sitting to lying

Seats can be intuitively operated thanks to

the simplified seat technology

Feeling of spaciousness

Adequate privacy

Additional storage space

A 15-inch monitor which can be moved to the

sides and pivoted

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Presentation Seoul


SWISS and Austrian Airlines with local market expertise

SWISS is Switzerland’s flag carrier

Dominant position at Zurich Airport

Connecting premium home market with global destinations

High product and service quality strategy


More than 17.5 million passengers carried in 2015

Edelweiss Air is Switzerland’s leading holiday airline

Complement SWISS product line in the leisure segment

Austrian Airlines is Austria‘s largest airline


More than 10.8 million passengers carried in 2015

Austrian Airlines is the specialist for CEE*

Ideal hub between East and West thanks to central base in

Vienna

Restructuring achievements to contribute to earnings

improvements

*CEE denotes Central and Eastern Europe

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Presentation Seoul


Eurowings is #1 point-to-point carrier in home markets

Cost reduction from transfer of platforms

External growth opportunities

• Currently assessment of options to foster consolidation

opportunities

• Defined criteria for partnerships:

• Competitive cost position

• Synergies via economies of scale

• Attractive catchment addition

Productivity gains and growth leverage Competitive cost structure and growth options

1 According to current planning; CASK excl. fuel, ETS, FX and project costs

Establishment of European brand:

Launch of EW Europe in Vienna

as first basis outside of Germany

Levers for productivity improvement:

Fleet streamlining:

Upgauging of CR9 to Airbus A320 fleet

Expansion of long-haul operations:

16 destinations by the end of 2016

7.2 8.3 9.5

4U A320 EW DEA320

EW EUA320

Average block hours / aircraft / day

7.2

2016 2020

5.8

2015

8.0 -28%

CASK1

in eurocents

LH 4U EW

-20%-23%

Cockpit costs per block hour

Competitive tariff structures;

shift of platforms

Network and flight

plan optimization

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Presentation Seoul

Interplay of business segments offers integrated value chain and puts

the Lufthansa Group in a superior position over its competitors

The world’s largest provider of services

related to in-flight service, including

catering, in-flight sales, entertainment, in-

flight service equipment and the

associated logistics

Third largest cargo airline worldwideWith more than 790 customers and more

than 3,500 aircraft under exclusive

contracts, world’s leading independent

MRO provider

e.g. Miles & More: Europe‘s leading customer loyalty programme with over

28 million members.

e.g. AirPlus: With more than 46,500 corporate customers, one of the globally

leading providers of solutions for paying for and analyzing business travel.

Other business segments

and others

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Presentation Seoul

Three take-aways









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Presentation Seoul

Adj. EBIT in 9M on previous year‘s level; financial stability increased

9M and Q3 2016 at a glance

Lufthansa Group (in m EUR) 9M 16 9M 15 vs. PY

Total revenue 23,870 24,304 -1.8%

of which traffic revenue 18,674 19,486 -4.2%

EBIT 2,330 1,663 +40.1%

Adjusted EBIT 1,677 1,693 -0.9%

Net income 1,851 1,748 +5.9%

ASK = Available Seat Kilometre

RPK = Revenue Passenger Kilometre

RASK = Revenue per Available Seat Kilometre

CASK = Cost per Available Seat Kilometre

9M 16 9M 15 vs. PY

Operating cash flow 3,054 3,160 -3.4%

Net invest 1,536 1,960 -21.6%

Free cash flow 1,518 1,200 +26.5%

9M 16 FY 15 vs. FY 15

Equity ratio 14.1% 18.0% -3.9pts.

Net debt (excl. pensions) 2,201 3,347 -34.2%

Pension provisions1 10,537 6,626 +59.0%1 incl. pension changes due to tariff agreement with UFO

amounting to 713 m EUR applying current IRFS discount rate – FY 2015:

2.8%; 9M 2016: 1.5%;

Passage Airline KPIs 9M 16 Q3 16

No. of flights +2.9% +3.8%

ASK (capacity) +4.1% +4.0%

RPK (volume) +1.8% +2.1%

SLF (load factor) -1.9pts. -1.6pts.

Yield (pricing) -4.7% -5.0%

RASK (unit revenue) -6.7% -6.9%

CASK (unit costs) -11.9% -16.5%

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Presentation Seoul

Investments are focused on efficient and less complex fleet

Fleet overview and capex plan

1 Airbus 330-300

25 Airbus 350-900

43 Boeing 777

69

152 A320 Family

30 Bombardier CSeries

Delivery schedule

2016 17 18 19 20Aircraft type

Aircraft orders: long-haul

182

Aircraft orders: short-haul

Aircraft type

Delivery schedule

2016 17 18 19 20

Lufthansa Group Fleet (as of 30 September 2016)

Aircraft to be phased-out (in 2016/2017)

until 2023

until 2025

777-9X

from 2020

Manufacturer / type LH LX OS LCAG EW Group Fleet

Airbus A319 30 5 7 0 43 85

Airbus A320 68 28 16 0 36 148

Airbus A321 64 9 6 0 0 79

Airbus A330 19 17 0 0 4 40

Airbus A340 42 12 0 0 0 54

Airbus A380 14 0 0 0 0 14

Boeing 737 7 0 0 0 0 7

Boeing 747 32 0 0 0 0 32

Boeing 767 0 0 6 0 0 6

Boeing 777 0 6 5 5 0 16

Boeing MD11F 0 0 0 14 0 14

Bombardier CRJ 25 0 0 0 10 35

Bombardier CSeries 0 2 0 0 0 2

Bombardier Q-Series 0 0 18 0 0 18

ATR 0 0 0 0 0 0

Avro RJ 0 15 0 0 0 15

Embraer 33 0 10 0 0 43

Fokker F70 0 0 3 0 0 3

Fokker F100 0 0 10 0 0 10

Total aircraft 334 94 81 19 93 621

Capital expenditure1

(bn EUR)

FY 19

~ 2.2

FY 18

~ 2.2

FY 17

~2.7

FY 16

2.5

FY 15

2.62.6

Net investGross invest Thereof fleet invest

1 Adjustments possible due to integration of Brussels Airlines and wet lease with AB

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Presentation Seoul

Financially unencumbered aircraft

Unencumbered asset base

The majority of aircraft remains

unencumbered:

An unencumbered fleet grants more

financial and operational flexibility

Unencumbered aircraft can be used as

collateral in future financing projects

~90% of fleet owned vs. 10% leased

~75% of fleet financially unencumbered

(not used as security for financing deals)

The book value of all aircraft and reserve

engines is EUR 14.7bn (as of 30 June

2016)

14.7 bn EUR

owned & unencumbered

owned

leased

Fleet structure of Lufthansa Group

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Presentation Seoul

Group Financing

Diversified sources of financing and balanced maturity profileFinancing of the Lufthansa Group:

Capital Markets

Bank Loans

Aircraft Financing

Balanced Maturity Profile Global Investors

EUR m, 30 June 2016

Good access to diversified

sources of funding

1,763

1,296

3,488

Bonds

Liabilities tobanks

Leasingliabilities andother loans*

* Leasing liabilities and other loans relate exclusively to finance leases and

aircraft financing arrangements

EUR m, 01 February 2017

81%

15%

4%

5 years

7 years

10 years

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Presentation Seoul

Group Financing

Attractive Debt Financing: Lufthansa‘s EUR 1.2 bn promissory note

2%

35%

42%

2%

5%

1%

4%2%

3% 3% 1%AUTCHNDEUFRAINDITLJPNNEDSWETURTWN

78%

14%

8%

BanksSavings BanksCredit Unions

Deutsche Lufthansa AG has placed a large-volume promissory

note. The note was issued with maturities of five, seven and ten

years. As a result, the group has secured a total of 1.2 billion

euros in funding.

With over 180 investors, the transaction proved very popular with

a wide range of investors.

In addition to investors from the sector of savings banks, credit

unions and other European banks, a significant share was

bought by Asian investors.

Borrower Deutsche Lufthansa Aktiengesellschaft, Köln

Rating Ba1/BBB-/BBB-, Moody’s/S&P/Scope

Funding instrument Schuldscheindarlehen

Status senior, unsecured

Use of Funds General corporate purposes

Lending volume EUR 1.200.000.000,--

Term

5 years

7 years

10 years

Spreads

110 bps

130 bps

150 bps

Distribution by Geography% of allocation

Distribution by Period% of allocation

Distribution by Investor Type% of allocation

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Presentation Seoul

Group Financing

Aircraft Financing: continuously used at Lufthansa

>120 transactions closed with a total volume of

appr. USD 9bn over the past 18 years

JOLCO

US Lease

French Lease

QTE

Swedish Lease

ECA

Plain Vanilla

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Presentation Seoul

Group Financing

Lufthansa raises more than EUR 600m with aircraft financing

• 2 Airbus A321 & 1 Airbus A380

• Total volume: USD 296mApril 2016

• 2 Airbus A320

• Total volume: USD 78mJuly 2016

• 2 Airbus A320

• Total volume: USD 78mOctober 2016

• 6 Airbus A320

• Total volume: USD 234mDecember 2016

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Presentation Seoul

LH Group expects Adj. EBIT 2016 approx. on previous year‘s level

Specified forecast Lufthansa Group 2016

986

725

972

approximately

on previous

year’s level

Lufthansa Group Adjusted EBIT

Actual and Forecast

in m EUR

2011 Forecast

2016

2015

1,817

2014

1,171

20132012

Updated forecast FY 2016:

Expected fuel costs: 4.9 bn EUR

Improvement of about 950 m EUR vs. PY, thereof c. 140 m

EUR in the fourth quarter (at Brent forward of 51 USD/bbl;

1.12 USD/EUR)

Operating KPIs passenger airlines:

ASK growth full year: +4.7%

RASK1 fourth quarter: -7 to -8%

CASK1 fourth quarter: -2 to -3%

Other business segments in fourth quarter (Logistics, MRO,

Catering and Others) in total earnings contribution slightly below

fourth quarter 2015

Forecast before strike costs of c. 100m EUR

EBIT ca. 600 m EUR above Adj. EBIT, in particular due to tariff

agreement with UFO

Ability to pay dividend for FY2016 confirmed

1 Unit revenues excl. currency, unit costs excl. currency and fuel

Expected overall profit for the entire airline industry

in 2016: USD 35.6 bn

(Source: IATA/Boeing market analysis)

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Presentation Seoul

Thank you for your attention and „Welcome on Board“

Markus Ohlert

Head of Leasing – FRA RC/L

Phone: +49 (0) 69 696 72315

E-Mail: [email protected]

Matthias Eck

FRA RC/L

Phone: +49 (0) 69 696 72314


Tetyana Orlova

FRA RC/L

Phone: +49 (0) 69 696 72313


Documents

Presentation Seoul · Lufthansa Group has a global reach, but is at home in Germany, Austria and Switzerland 0 10000 20000 30000 40000 50000 60000 70000 80000 90000 US$ GDP …