Lufthansa Group Roadshow Presentation June 2015 Disclaimer in - - PowerPoint PPT Presentation

Lufthansa Group Roadshow Presentation

June 2015

Page 2

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

• f this data and information.

Page 3

• The Lufthansa Group is the world's largest aviation group

A unique portfolio of airlines and aviation services as basis for future success

• The Lufthansa Group is based on three strong pillars

Hub airlines to improve profitability at current size; P2P airlines and aviation services to grow

• Adjusted EBIT increases by more than 30 per cent in the first quarter 2015

All operating segments improve; SWISS and Lufthansa Cargo show strongest positive development

• For 2015 the Lufthansa Group expects an Adjusted EBIT of more than 1.5 bn EUR before strikes

2015 will be year of following through: fleet optimization, CASK reduction & revenue quality improvement

Page 4

Hub Airlines

Logistics Catering MRO

Other Services

Lufthansa Group

Multi-hub, multi-brand

Total revenue 2014 Total revenue 2014

Lufthansa Group is the world's largest Aviation Group Portfolio of several leading brands and businesses.

Internal Revenue External Revenue

21.4 bn € 2.6 bn € Total revenue 2014 Total revenue 2014 2.4 bn € 4.3 bn €

Poin-to-point

1.9 bn € Total revenue 2014

Page 5

A unique portfolio of airlines and aviation service companies Service companies sustainably contribute c. 500 m EUR to Adj. EBIT p.a.

Revenue Adjusted EBIT

• Adj. EBIT Margin range

Airlines

Passenger Airline Group Logistics (Cargo)

Service Companies

MRO Catering IT Services*

Others incl. Group Functions

+6.7% +1.8%

23.3 bn 2.4 bn 4.3 bn 0.7 bn 2.7 bn 44 m

2010 2011 2012 2013 2014 2010 2011 2012 2013 2014

non-airline profits

• f c. 500 m EUR

2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014

+3.9% 1.4% +12.1% +4.3%

123 m 701 m

2010 2011 2012 2013 2014 2010 2011 2012 2013 2014

+11.3% +7.4% +4.2% +3.2%

380 m 88 m

2010 2011 2012 2013 2014 2010 2011 2012 2013 2014

• 165 m

2010 2011 2012 2013 2014

*dissolved and partly integrated in „Others“ segment from FY 2015

Page 6

• 1. Lufthansa Group is profitable and

produces strong cash flows

• 2. Conservative fleet structure and

ambitious balance sheet targets provide security buffer

• 3. Solid financial profile provides

competitive edge in financing conditions; low net financial debt, but pension provision burden

in bn EUR

S&P Investment Grade Rating (BBB-, stable) confirmed in May 2015 pension provisions: flexible funding model, no "margin call" for additional fundings

• ca. 90% of fleet is owned vs. 10% leased

>70% of fleet is financially unburdened (not used as security for financing deals) Q1 2015 0.5 1.4 2014

• 0.3

2.0 2013 1.3 3.3 2012 1.4 2.8 2011 0.7 2.4 Free Cash Flow Operating Cash Flow Q1 2015

• 0.2

0.4 2014 1.2 1.4 2013 1.0 1.8 2012 0.7 1.8 2011 1.0 1.7

• Adj. EBIT

Depreciation

Target FY 14 Q1 15 Min. Liquidity 2.6bn EUR 3.0bn EUR Debt Re- payment Ratio 21% 17% Equity Ratio 13% 8% 45% (min. 35%) 25% midterm 2.3 bn EUR

Q1 2015 2014 2.9 10.2 3.4 7.2 2013 2011 1.7 4.7 2012 2.0 5.8 2.3 2.2 net financial debt pension provisions

Issuance of 1.125% Bond Volume of 500 m EUR and a maturity of 5 years (Sept 2014 - Sept 2019) Recent Debt financing

Lufthansa Group has a solid financial profile Conservative financial profile, but currently burdened by pension provisions

14.3 bn €

leased

• wned
• wned &

unencumbered

Page 7

Maintaining stable fleet size while complexity is being reduced Fleet overview and capex plan

X2 A380-800 4 B747-8 44 B777 (Freighter + PAX) X1 A330-300 25 A350-900 76 166 A320 Family 30 Bombardier CS100 Delivery schedule

777-9X from 2020

2015 16 17 18 19 Aircraft type

Aircraft orders: long-haul

196

Aircraft orders: short-haul

Aircraft type Delivery schedule 2015 16 17 18 19

Lufthansa Group Fleet (as of 31. March 2015)

Thereof fleet invest FY 16 FY 17 2.5 FY 13 2.0 2.5 2.5 FY 15 2.9 FY 14 2.3 2.8

(bn EUR)

Net invest Gross invest Aircraft to be phased-out

Page 8

Lufthansa Group committed to future dividend payments Future dividends continue to be linked to profit development

2000 0.60 2014 0.00 2009 0.00 2008 0.70 2007 1.25 2006 0.70 2005 0.50 2004 0.30 2003 0.00 2002 0.60 2001 0.00 2013 0.45 2012 0.00 2011 0.25 2010 0.60

Dividend per share in EUR

continue regular payments

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Dividend Year Financial Year

Old Dividend Policy New Dividend Policy Operating Result EBIT 30%-40% pay-out 10-25% pay-out local GAAP net result = max payout in m EUR local GAAP net result = max payout in m EUR

Regular Pay-outs

Page 9

• The Lufthansa Group is the world's largest aviation group

A unique portfolio of airlines and aviation services as basis for future success

• The Lufthansa Group is based on three strong pillars

Hub airlines to improve profitability at current size; P2P airlines and aviation services to grow

• Adjusted EBIT increases by more than 30 per cent in the first quarter 2015

All operating segments improve; SWISS and Lufthansa Cargo show strongest positive development

• For 2015 the Lufthansa Group expects an Adjusted EBIT of more than 1.5 bn EUR before strikes

2015 will be year of following through: fleet optimization, CASK reduction & revenue quality improvement

Page 10

Our strength – the three pillars of the Lufthansa Group Ambitious targets for all segments

#3 Pan-European Point-to-Point Airline

Point to Point / Secondary Brand Eurowings

#1 in Aviation Services

Aviation Services

#1 Multi-Brand Premium Hub System in Europe

Hub Airlines

Integrated Value Chain Financial Stability Strong Brand Family Attractive Employer Strong Home Markets Natural Hedging Customer Data …

Margin improvement Profitable Growth

Page 11

Lufthansa Group continues to consistently approach challenges 7to1 - Our Way Forward: Seven fields of action, one goal

Constantly improving efficiency Customer centricity & quality focus Innovation & digitalization Effective & lean

• rganization

Value based steering New concepts for growth Culture & leadership

Page 12

Industry-leading products and services drive customer satisfaction Quality focus of hub airlines

New First Class New Business Class New Premium Economy Class 5 Star Service Upgrades

5 STAR

Lufthansa Passenger Airlines Lufthansa Group Airlines

Full flat Business Class seats now standard in the Lufthansa Group

600 new seats until Jun. 2015 7,000 new seats until Sep. 2015 3,600 new seats until Oct. 2015

Page 13

Network and partnerships are important drivers for revenue quality Passenger network and partner overview for all airlines

Intra- European 46.1%

(-0.5pts.)

Asia Pacific 17.8%

(+0.2pts)

North America 22.8%

(+1.4pts.)

South America 5.8%

(-0.5pts.)

Africa 3.7%

(-0.3pts.)

Mid-East 3.8%

(-0.3pts.)

First JV for Japan-Europe and Europe-China* Largest Transatlantic Joint Venture Largest Airline Group in Europe

Traffic revenue shares Passenger Airline Group as of 31 December 2014 (comparison to previous year) * Joint venture with Air China in progress (MoU signed in 2014)

Page 14

Classic GDS Distribution

GDS controlled

Content Corporate Retailer Online TA Travel Agency GDS

Limited add. feature

(i.e. Seat reservation)

Booking Class Price Route

etc.

Offer

LH Direct Sales LH.com, Call Center, Airport Office, City Office

70% of bookings via GDS’s 30% of bookings via LH Direct Sales

Incentive GDS fee Transaction Fee Terminal Fee Discount for FCA*

Full Content

*Full Content Agreement (FCA): Additional contract specification, which offers access to „full content“ to the GDS (i.e. to all prices and availabilities as well as all functionalities). In return the GDS grants extensive discounts on the list prices

Current distribution through GDS is highly standardized This leads to the commoditization of Lufthansa Groups offer

• ur products are not a commodity. Customization only limited by GDS’s technological

capability But

Proprietary

Page 15

Travelers Lufthansa Group Alternative Content Aggregators* etc. Airline Offer Management System New Entrants Travel Agents

(including Travel Management Companies, Online Travel Agents and Independent Travel Agents)

Further Content Aggregation Direct Connect / Website Saver Flex Holiday Your Offer

Standardized Tailored Personalized

LH Passenger Airline Group enhance their distribution strategy Distributive freedom for a customer oriented dynamic product offering

Booking Class Route

Offer

Extensive Added value services Price

Corporate Online Booking Engine, Website, SME Portal

• Personalized product offerings in order to surprise customers
• Innovative product and service offerings
• Differentiation through customer orientation and focus on quality
• Enhancement of sales efficiency through controlled proprietary distribution channels

Benefit

Classic GDS Distribution GDS

etc.

Distributive Freedom

* DCC exempt if channel meets economic, technical and legal requirements by LHG

Page 16

Consistent focus on profitability measures Efficiency measures at Lufthansa Passenger Airlines

Reduce overhead costs through shared services Freeze fleet size Turn LHP into process oriented company Reduction of costs at all suppliers (ATC, internal suppliers, etc.) Introduction of 2 class long-haul fleet Roll-out new First and Business Class Become first western 5 Star Airline Premium Economy Restructuring of outstation operations

2015 Capacity & fleet dimensioning Fleet development and

• perational

platforms Invest in revenue quality General measures to reduce unit cost 2016 2017 2012 2013 2014

Phase-in A380 and B747-8 Reduced ASK growth rate until competitive structures have been established Lower cost sub-fleet of 14 A343 launch new technology a/c Eurowings long-haul operations Reduction of IT infrastructure costs Reduction short-haul fleet from 9 to 3 different a/c types Transfer non-hub operations to Germanwings and achievement of break-even Roll-over Eurowings fleet to A320 a/c

Revenue Quality Cost structures

Product initiatives

A320neo delivery Eurowings base in VIE Individualized customer approach New services along the customer travel chain Improved direct sales channels Renegotiation of labor contracts to competitive level Modification of pension schemes Strategic partnership Air China

Page 17

Strict focus on asset utilization Long-Term fleet and operating performance Passenger Airline Group

79,8% 722 77,9% 2009 234 710 2010 260 258 77,6% 2013 79,6% 615 696 2014 80,1% 144 432 75,0% 2005 147 2011 627 622 430 513 169 2006 75,2% 79,8% 2007 268 2012 2008 208 263 524 78,9% 78,8% 195 ASK (bn) # of aircraft SLF (%)

Page 18

Agreements with labor unions support competitiveness Current status of negotiations

 Agreement with pilots and cabin unions  Employees transfer into "new" Austrian  Arbitration with pilots union VC in preparation  Ongoing negotiations with ver.di !

Mediators will propose recommendation about provisions for cabin crews on 20th June

 Agreements with pilots and cabin unions  Perspective for further development with

new fleet of Airbus A320

 Agreement with pilots and cabin unions  Pension age and productivity increased  Agreement with pilots’ union VC for operation

• f Airbus A340-300 aircraft

 Chances from current tariff agreement for

pilots and cabin crew

Page 19

• First A320 operating since Feb 2015
• Four more A320 until summer 2015
• Two A330 and one B767 (TUI) for

long-haul operations from fall 2015

• Two A320 based in Vienna this fall

with Austrian crews

Eurowings to be the #3 point-to-point airline in Europe Evolution of Eurowings

Until 2013

Evolution into Eurowings Long-haul flights to start from Nov 2015

2013-2015 2015 onwards New Eurowings New Germanwings LH Direct and Germanwings

Ancillaries

BEST

Pricing Inflight entertainment In-seat + own devices

loss- making break- even 2015 #3 point-to- point carrier

Fare structure

Innovations News

Varadero Punta Cana Phuket Bangkok Dubai

Page 20

Lufthansa Technik and LSG with stable development Significant revenue increase as part of service company’s growth strategy

• No. 1 Independent MRO-provider
• No. 1 Airline caterer

398 404 318 2014 2013 2012 100 105 85 2012 2014 2013

• Operating result 2014:

100 m EUR

• Global market leader in

airline-catering

• Further development of
• nboard retail
• Expansion convenience and

retail business

• Continuously enhanced

product and service portfolio

• Successful transfer of know

how in food and logistics to new adjacent markets

• Operating result 2014:

392 m EUR

• Global market leader as

independent MRO-provider

• Expansion of customer specific

services

• 3 bn EUR Revenue growth in

APAC, Middle East, North America until 2018

• Product innovations and

strategic partnerships enable access to new customers and markets

• Extension of Joint Venture with Air

China (MoU signed in 2014)

Page 21

Lufthansa Cargo and Financial Services complement portfolio Service companies as competitive advantage for the Lufthansa Group

• Higher degree of transparency

and integrated commercial steering

• Accelerated speed to market

through dedicated resources and higher degree of entrepreneurial freedom

• Enable business and profits to grow
• Attract new partner companies also from

non-travel industries

• Enhance attractiveness for "less frequent" flyers
• Implement dedicated mileage program for

point-to-point platforms

• Operating result 2014:

EUR 100m despite weak air cargo market

• Among the world's biggest

cargo carriers with approx. 300 destinations

• Five new Boeing 777F join the fleet between

2013 and 2015

• Innovations for industry specific solutions
• Increase share high value freight

100 77 105 2012 2014 2013

Page 22

Lufthansa Group focuses on sustainable development Corporate responsibility is an important objective

The Lufthansa Compliance

• Program ensures compliance with applicable law
• The Lufthansa Compliance Office is responsible for

implementation, development and communication

• Consisting of 5 modules:

Lufthansa Compliance program Fuel consumption dropped below 4 liters in 2013* Corporate social responsibility Continuous efficiency gain improves CO2 footprint

*Fuel consumption per passenger per 100 km

• Humanitarian aid

Help Alliance, Cargo Human Care, SOS Kinderdorf

• Environmental responsibility

fuel efficiency, noise reduction, crane protection

• Cultural and Sports

sponsorships

Page 23

• The Lufthansa Group is the world's largest aviation group

A unique portfolio of airlines and aviation services as basis for future success

• The Lufthansa Group is based on three strong pillars

Hub airlines to improve profitability at current size; P2P airlines and aviation services to grow

• Adjusted EBIT increases by more than 30 per cent in the first quarter 2015

All operating segments improve; SWISS and Lufthansa Cargo show strongest positive development

• For 2015 the Lufthansa Group expects an Adjusted EBIT of more than 1.5 bn EUR before strikes

2015 will be year of following through: fleet optimization, CASK reduction & revenue quality improvement

Page 24

Q1 2015 Q1 2014

• vs. PY

Operating cash flow 1,394 855 +63.0% Net invest 862 660 +30.6% Free cash flow 532 195 +172.8% Q1 2015 FY 2014

• vs. FY 2014

Equity ratio 7.5% 13.2%

• 5.7pts.

Net debt (excl. pensions) 2,890 3,418

• 15.4%

Pension provisions 10,211 7,231 +41.2%

Key financial ratios clearly improve Q1 2015 at a glance

Passenger Airline KPIs

Q1 2015

• No. of flights
• 2.4%

ASK (capacity) +1.0% RPK (volume) +1.3% SLF (load factor) +0.2pts. Yield (pricing) +3.7% RASK (unit revenue) +4.1% CASK (unit costs) +6.0%

Lufthansa Group (in m EUR)

Q1 2015 Q1 2014

• vs. PY

Total revenue 6,973 6,462 +7.9%

• f which traffic revenue

5,419 5,161 +5.0% EBIT

• 144
• 217

+33.6% Adjusted EBIT

• 167
• 240

+30.4% Net income 425

• 252

Page 25

All operating segments contribute to result improvement Segment overview Q1 2015

Q1 2015 vs. Q1 2014 in m EUR

Passenger Airline Group Logistics MRO Catering Others & Consolidation Revenue

• vs. PY in %

5,157

+5.2%

614

+5.3%

1,249

+18.6%

672

+15.7%

• 719
• 9.8%
• Adj. EBIT
• vs. PY in m EUR
• 254

+78

52

+27

106

+3

• 3

+3

• 68
• 38

in m EUR

Lufthansa Passenger Airlines* SWISS Austrian Airlines Revenue

• vs. PY in %

3,732

+4.9%

1,055

+10.1%

390

• 3.2%
• Adj. EBIT
• vs. PY in m EUR
• 233

+23

51

+47

• 53

+1 Share of LH Group‘s external revenue 71.6% 1.0% 7.7% 11.0% 8.7%

* incl. Germanwings and regional airlines

Page 26

Solid traffic figures but strong regional differences Operating KPIs Passenger Airline Group

Total Q1 2015 Number of flights

• 2.4%

ASK +1.0% RPK +1.3% SLF +0.2pts. Yield +3.7% Yield ex currency

• 2.9%

RASK +4.1% RASK ex currency

• 2.5%

CASK incl. fuel +6.0% CASK ex currency ex fuel +2.8% Europe Q1 2015 ASK

• 4.1%

RPK

• 2.9%

SLF +0.9pts. Yield +3.7% Yield ex currency

• 0.4%

RASK +4.9% RASK ex currency +0.8% Asia/Pacific Q1 2015 ASK +2.7% RPK +1.7% SLF

• 0.8pts

Yield +1.3% Yield ex currency

• 6.8%

RASK +0.3% RASK ex currency

• 7.7%

Americas Q1 2015 ASK +4.6% RPK +5.5% SLF +0.6pts. Yield +9.0% Yield ex currency

• 0.3%

RASK +9.8% RASK ex currency +0.4% Mid East / Africa Q1 2015 ASK +2.1% RPK

• 0.5%

SLF

• 1,9pts.

Yield +3.1% Yield ex currency

• 5.6%

RASK +0.5% RASK ex currency

• 8.0%

Page 27

• The Lufthansa Group is the world's largest aviation group

A unique portfolio of airlines and aviation services as basis for future success

• The Lufthansa Group is based on three strong pillars

Hub airlines to improve profitability at current size; P2P airlines and aviation services to grow

• Adjusted EBIT increases by more than 30 per cent in the first quarter 2015

All operating segments improve; SWISS and Lufthansa Cargo show strongest positive development

• For 2015 the Lufthansa Group expects an Adjusted EBIT of more than 1.5 bn EUR before strikes

2015 will be year of following through: fleet optimization, CASK reduction & revenue quality improvement

Page 28

Full Year 2015 assumptions Explanation

• No. of Flights

Fleet rollover: Continued phase out of small, non-efficient aircraft

Capacity

(ASK) Capacity growth mainly achieved through more seats per

• aircraft. Growth on long-haul, short haul remains flat

Volume

(RPK)

Load Factor

(SLF)

Pricing

(Yield ex currency) High degree of uncertainty around market dynamics from lower fuel price (surcharge, yield, capacity discipline)

Unit Revenue

(RASK ex currency)

Unit Costs

(CASK ex fuel ex currency) Headwinds included: ATC charges, staff and pension cost, higher depreciation

Cargo Capacity

Reduction in freighter capacity offset by growing belly capacity of passenger aircraft

Trading assumptions for 2015 remain unchanged Trading assumptions FY 2015

• c. +3%

slightly up above capacity growth clearly negative further reduction

• verall stable

slightly reduced clearly negative

Page 29 50 60 70 80 90 100 110 120 130 50 60 70 80 90 100 110 120 130 Q4 Q3 Q2 Q1 FY 2015

Stronger US Dollar increases fuel cost expectation Fuel forecast and sensitivities FY 2015 and 2016

* incl. fuel hedging as of 20 April 2015

Lufthansa Group fuel expenses after hedging (in bn EUR)

Sensitivities with deviating oil price 6.7 (+20%) 6.5 (+10%) 6.0 (-10%) 5.7 (-20%) Fuel hedging level 79% 79% 78% 78% 79% 59% Expected volume (in m tons) 9.1 2.0 2.4 2.5 2.2 slight increase Jet fuel price (USD/ton)* 734 745 722 734 735 731 EUR/USD forward

• 1.07

1.07 Brent forward (USD/bbl)

• 66

69

Lufthansa Group price curve remainder of 2015 and 2016

Market price in USD/barrel Price paid in USD/barrel Market price: 66 USD/bbl LH price: 77 USD/bbl Hedging result: -11 USD/bbl Hedging result 2014 2015e FY 2016 Hedging result LH price 2015 LH price 2016 Market price 6.8 6.2 1.5 1.3 1.7 1.6 1.9 1.8 1.6 1.5

Page 30

Almost all segments expected to increase profits above previous year Forecast 2015 per segment

Segment

• Op. profit 2014

(m EUR)

• Adj. EBIT 2014

(m EUR)

• Adj. EBIT Forecast for 2015

Lufthansa Passenger Airlines 252 399 significantly above previous year SWISS 289 278 slightly above previous year Austrian Airlines 10 9 significantly above previous year Consolidation 2 15 Passenger Airline Group 553 701 significantly above previous year Logistics 100 123 slightly above previous year MRO 392 380 slightly below previous year Catering 100 88 significantly above previous year IT Services 37 44 dissolution of segment Others

• 211
• 161

significant improvement Internal Result / Consolidation

• 17
• 4

Lufthansa Group 954 1,171 more than 1,500 m EUR before strike cost

Page 31

• Adj. EBIT FY15 expected to be more than 1.5 bn EUR before strikes

Forecast Lufthansa Group 2015

987 725 972 2015 forecast 2014 1,171 2013 2012 2011 2010 1,297

Lufthansa Group Adjusted EBIT Actual and Forecast

in m EUR

Financial Year 2015

• Profit increase in 2015 mainly driven by

passenger airlines

• Four parameters will largely determine ultimate

profit level

• development of oil price
• exchange rates of EUR,

especially towards USD and CHF

• yield development of passenger

airlines

• progress with labor negotiations at Lufthansa

Passenger Airlines

• No strike costs included in forecast
• No restructuring costs included in forecast

“more than 1.5 bn EUR"

Page 32

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

Lufthansa Investor Relations Contact

Visit our webpage: lufthansa-group.com/investor-relations

Page 33

Appendix – Financial Figures FY 14 and Q1 15 –

Page 34

Group revenue and currency influence Q1 2015 vs. Q1 2014

358 Q1 2015 1,554 5,419 Currency: +6.9% Price: -2.8%

• 144

Volume: +0.9% 44 Q1 2014 1,301 5,161 Traffic revenue (+5.0%) Other revenue (+19.4%) ∑ Group revenue (+7.9%) ∑ 6,462 ∑ 6,973 Currency impact on EBIT (in m EUR) Q1 Q2 Q3 Q4 FY (YTD) 2014

• 31

+63

• 42
• 57
• 67

2015

• 56
• 56

in m EUR

Page 35

Fuel costs Q1 2015 vs. Q1 2014

313 182 Price

• 724

Volume 20 Q1 2014

• 209

Q1 2015 1,308 Currency Hedging 1,517 in m EUR Hedging result by quarter (in m EUR) Q1 Q2 Q3 Q4 FY (YTD) 2014

• 21
• 2
• 30
• 96
• 149

2015

• 203
• 203

Cost of hedging increased yoy

Page 36

Oil price, euro and interest rates influence costs and revenues Operating costs and revenues

Lufthansa Group (in m EUR)

Q1 2015

• vs. VJ

Total revenue 6,973 +7.9% Other operating income 913 +74.9%

Total operating income 7,886 +12.9% Operating expenses 8,019 +11.5% Non-fuel operating expenses 6,711 +18.2% Cost of materials and services 3,977 +1.1%

Fuel expenses 1,308

• 13.8%

Fees and charges 1,246 +6.7%

Staff costs 1,922 +6.9% Depreciation 374 +10.0% Other operating expenses 1,746 +55.6% Result from equity investments

• 11
• 37.5%

EBIT

• 144

+33.6% Adjustments

• 23

0.0% Adjusted EBIT

• 167

+30.4%

+4.9% excl. pensions +18.0% excl. exchange rate losses

Page 37

Lufthansa Group (in m EUR)

Q1 2015

• vs. PY

EBT (earnings before income taxes) 356 +663 Depreciation & amortisation (incl. non-current assets) 395 +42 Net proceeds from disposal of non-current assets

• 23
• 13

Result from equity investments 11 +3 Net interest result

• 2
• 63

Income tax payments/reimbursements

• 65

+1 Measurement of financial derivatives through profit or loss

• 646
• 687

Change in working capital 1,368 +593 Operating cash flow 1,394 +539 Capital expenditure (net)

• 862
• 202

Free cash flow 532 +337 Cash and cash equivalents as of 31.03.15* 825 +63 Current securities 2,216

• 601

Total Group liquidity 3,041

• 538

Cash flow increases significantly, liquidity above minimum target Cash flow statement

* Excluding fixed-term deposits with terms from three to twelve months (92 m EUR) FY 2011 2.4 Q1 2015 1.4 FY 2014 2.0 FY 2013 3.3 FY 2012 2.8 Operating Cash Flow Q1 2015 0.9 0.8 GJ 2014 2.3 2.8 GJ 2013 2.0 2.5 GJ 2012 1.4 2.4 GJ 2011 1.6 2.6 Net Invest Gross Invest FY 2011 0.7 Q1 2015 0.5 FY 2014

• 0.3

FY 2013 1.3 FY 2012 1.4 Free Cash Flow

Page 38

Adjusted EBIT margins Q1 2015 vs. Q1 2014

• 4.0
• 6.0
• 10.0
• 12.0
• 14.0
• 8.0

10.0 8.0 6.0 4.0 2.0 0.0

• 2.0

Logistics 4.3 8.5 Passenger Airline Group

• 6.8
• 4.9

Austrian Airlines

• 13.4
• 13.6

SWISS 0.4 4.8 Lufthansa Passenger Airlines

• 7.2
• 6.3
• 2.4

Catering

• 1.0
• 0.4

MRO 9.8 8.5

• 3.7

Lufthansa Group

all figures in %

Q1 2014 Q1 2015

Page 39

Adjusted EBIT margins FY 2014 vs. FY 2013

11.0 12.0 10.0 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 Passenger Airline Group 2.7 3.0 Austrian Airlines 0.4 1.3 3.3 4.9 6.6 Lufthansa Passenger Airlines 2.5 3.9 IT Services 6.3 6.8 Catering 4.4 3.3 MRO 11.3 8.8 Logistics 4.3 5.1 Lufthansa Group 2.3 SWISS

all numbers in %

FY 2013 FY 2014

Page 40

in m EUR Q1 Q2 Q3 Q4 6M 9M Full Year

Adjusted EBIT 2014

• 240

418 810 183 178 988 1,171

• incl. strikes
• 10
• 60
• 35
• 127
• 70
• 105
• 232
• incl. Venezuela
• 38
• 23

+7

• 5
• 61
• 54
• 59

Adjusted EBIT ex one-off factors

• 192

501 838 315 309 1,147 1,462 Adjusted EBIT 2015

• 167
• incl. strikes
• 42
• 58
• incl. Venezuela
• 60

Adjusted EBIT ex one-off factors

• 65
• vs. PY

+127

Adjusted EBIT and one-off factors Quarterly results 2014-2015

Page 41

Appendix – New set of financial KPIs –

Page 42

New system directly links profit figures and value creation metric EBIT, EACC and ROCE are transparent and can be calculated easily

ROCE = (EBIT + Interest on Liquidity – Tax) Average Capital Employed

EBIT

Balance Sheet Total Capital Employed Current Year WACC

EACC

./. operating costs + Interest on Liquidity ./. Tax (assumed tax rate 25%) ./. Cost of Capital ./. non-interest bearing liabilities +/- pension changes: past service costs,… +/- book gains/losses

• n asset disposal

+/- impairments

• Adj. EBIT

+ Income from Subsidiaries Total Op. Income

(Rev.+ Oth. Op. Income)

50 : 50

Capital Employed Last Year

X

Page 43

New system directly links profit figures and value creation metric Calculation for financial year 2014

ROCE = (1,000 + 84 - 271) 17,565

EBIT: 1,000

30,474 17,584 5.9%

EACC: -223

./. 31,235 + 84 ./. 271 ./. 1,036 ./. 12,980

• 48

+77 +142

• Adj. EBIT: 1,171

+ 121 32,114

50 : 50

17,545

X

= 4.6%

in m EUR

Page 44

EBIT is a structurally higher number than operating result Main difference is that income from subsidiaries is included

1,171 986 725 972 1,000 936 1,645 864 954 699 839 820

2014 2013* 2012 2011

Operating profit EBIT

• Adj. EBIT

Total Operating Income 31,070 32,947 32,149 32,114 ./. Operating Expenses

• 30,277
• 31,396
• 31,337
• 31,235

+ Income from Subsidiaries 71 94 124 121 EBIT 864 1,645 936 1,000 ./. Delta to Operating Result

• 44
• 806
• 237
• 46

Operating Result 820 839 699 954

• Adj. EBIT

972 725 986 1,171 ./. Delta to Operating Result

• 152
• 114
• 287
• 217

Operating Result 820 839 699 954 * Restatement due to IFRS11: Aerologic GmbH has been proportionately consolidated as a joint operation since 1 January 2014

Page 45

in m EUR Q1 Q2 Q3 Q4 6M 9M Full Year Operating result

• 245

359 735 105 114 849 954

• Adj. EBIT
• 240

418 810 183 178 988 1,171

pension changes +15 +33 +15 +48 book gains / losses on asset disposals +13 +8

• 100

+13 +21

• 79

impairments +10 +15

• 1
• 164

25 24

• 140

EBIT

• 217

433 832

• 48

216 1,048 1,000

interest on liquidity +84 taxes (25% lump sum)

• 271

cost of capital

• 1,036

EACC

• 223

average capital employed 17,565 WACC 5.9%

ROCE 4.6%

Adjusted EBIT and EBIT per Quarter 2014

Page 46

WACC is based on a target capital structure of 50:50 Current WACC is 5.9%

Cost of Debt1 Cost of Equity2 3.4% (FY 2014) 8.4% (FY 2014) Target Capital Structure 50 : 50 WACC: 5.9%

1 Currently no consideration of tax shield 2 Cost of Equity FY2014 = Risk-free market interest rate of 2.6% + (Market risk premium of 5.2% x Beta Factor 1.1)

Page 47

Current capital employed is ca. 17.6 bn EUR Weighted average cost of capital is 5.9%

Balance Sheet Total 28,081 28,559 29,108 30,474 ./. Non-Interest Bearing Liabilities 10,649 10,940 11,563 12,890

• liabilities from unused flight documents

2,359 2,612 2,635 2,848

• trade payables, other fin. liabillites, other provisions

4,758 4,887 5,113 5,151

• adv. payments, deferred income, other non-fin. liabilities

2,095 2,096 2,151 2,103

• others

1,437 1,345 1,664 2,798 Capital Employed at year-end 17,432 17,619 17,545 17,584 Average Capital Employed 18,101 17,526 17,582 17,565 WACC 7.0% 7.0% 6.2% 5.9% EBIT 864 1.645 936 1,000 Interest on liquidity 62 75 67 84 Taxes

• 232
• 430
• 251
• 271

Cost of capital

• 1,267
• 1,227
• 1,090
• 1,036

EACC

• 573

63

• 338
• 223

ROCE 3.8% 7.4% 4.3% 4.6%

17,565 17,545 17,526 18,101

2014 2013* 2012 2011 7.0% 7.0% 6.2 % 5.9% WACC

Average Capital Employed

* Restatement due to IFRS11: Aerologic GmbH has been proportionately consolidated as a joint operation since 1 January 2014

Page 48

Appendix – Fuel hedging policy –

Page 49

Unchanged rolling approach reduces fuel cost volatility Lufthansa Group's fuel hedging strategy

# months before actual date of consumption

• Lufthansa Group's hedging strategy is designed to

reduce volatility

• Rolling approach with 24 months lead time

before actual consumption

• Hedging level increases month-by-month

until 85% is hedged

• Mainly options, not fixed contracts

in order to still benefit from falling oil prices

• Lufthansa Cargo (not hedged) and Germanwings (twelve month

hedging horizon) with differing approaches due to competition reasons

• Strategic hedging (in Q4 2014 / Q1 2015):

Extension of hedging horizon to up to 36 month in order to take advantage of current low oil prices

FY2015 FY2016 79% 59%

Current hedging level status

Page 50

Appendix – Distribution Cost Charge –

Page 51

Distribution and content presentation outside of airline control

Only 3 major ticket distributors (GDS) Thousands of Points of Sale

• Offer creation
• Aggregation
• Distribution
• Offer creation
• Aggregation
• Distribution
• Offer creation
• Aggregation
• Distribution

Standardization Standardization

Page 52

External trends and developments in the airline industry force LHG to change its distribution strategy

Page 53

Future revenue leverage: dynamic offer creation under consideration of customer needs

Page 54

Depending on which technology is used and which services are

• ffered, different ways of booking lead to various distribution costs

Page 55

To achieve a fair allocation of distribution costs the Lufthansa Group Airlines adjust their allocation model for distribution costs

Page 56

The DCC is based on the extra costs incurred through GDS bookings compared with bookings made directly with LH Group

Page 57

The Distribution Cost Charge (DCC) will be applied on all indirect distribution channels* from 1 September 2015

Page 58

Calculating and billing the DCC takes place automatically and does not entail any process changes for customers or travel agencies

Page 59

Customers who book directly via the Lufthansa Group airlines sales channels will not incur any Distribution Cost Charge