3RD INTERIM REPORT
January - September 2021
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The Lufthansa Group
KEY FIGURES | ||||||||||||||
Jan - Sep | Jan - Sep | Change | Jul - Sep | Jul - Sep | Change | |||||||||
2021 | 2020 | in % | 2021 | 2020 | in % | |||||||||
Revenue and result | ||||||||||||||
Total revenue | €m | 10,978 | 10,995 | 0 | 5,207 | 2,660 | 96 | |||||||
of which traffic revenue | €m | 7,550 | 7,404 | 2 | 3,913 | 1,763 | 122 | |||||||
Operating expenses | €m | 14,139 | 16,345 | -13 | 5,649 | 4,276 | 32 | |||||||
Adjusted EBITDA1) | €m | -394 | -2,227 | 82 | 576 | -649 | ||||||||
Adjusted EBIT1) | €m | -2,078 | -4,161 | 50 | 17 | -1,262 | ||||||||
EBIT | €m | -2,123 | -5,857 | 64 | -9 | -2,389 | 100 | |||||||
Net profit/loss | €m | -1,877 | -5,584 | 66 | -72 | -1,967 | 96 | |||||||
Key balance sheet and cash flow statement | ||||||||||||||
figures | ||||||||||||||
Total assets | €m | 41,903 | 39,010 | 7 | - | - | ||||||||
Equity | €m | 3,694 | 3,347 | 10 | - | - | ||||||||
Equity ratio | % | 8.8 | 8.6 | 0.2 pts | - | - | ||||||||
Net indebtedness | €m | 9,006 | 8,930 | 1 | - | - | ||||||||
Pension provision | €m | 7,210 | 8,073 | -11 | - | - | ||||||||
Cash flow from operating activities | €m | 460 | -1,598 | 442 | -1,961 | |||||||||
Capital expenditures (gross)2) | €m | 967 | 1,023 | -5 | 355 | 126 | 182 | |||||||
Adjusted free cash flow1) | €m | -594 | -2,579 | 77 | 13 | -2,069 | ||||||||
Key profitability and value creation figures | ||||||||||||||
Adjusted EBITDA margin1) | % | -3.6 | -20.3 | 16.7 pts | 11.1 | -24.4 | 35.5 pts | |||||||
Adjusted EBIT margin1) | % | -18.9 | -37.8 | 18.8 pts | 0.3 | -47.4 | 47.7 pts | |||||||
EBIT margin | % | -19.3 | -53.3 | 34.0 pts | -0.2 | -89.8 | 89.6 pts | |||||||
Lufthansa share | ||||||||||||||
Share price as of 30 September3) | € | 5.94 | 5.25 | 13 | - | - | ||||||||
Earnings per share | € | -3.17 | -10.79 | 71 | -0.15 | -3.80 | 96 | |||||||
Traffic figures4) | ||||||||||||||
Flights | number | 291,326 | 327,279 | -11 | 170,553 | 97,345 | 75 | |||||||
Passengers | thousands | 29,664 | 32,157 | -8 | 19,623 | 8,681 | 126 | |||||||
Available seat-kilometres | millions | 94,073 | 90,936 | 3 | 49,883 | 22,333 | 123 | |||||||
Revenue seat-kilometres | millions | 55,967 | 61,345 | -9 | 34,341 | 11,833 | 190 | |||||||
Passenger load factor | % | 59.5 | 67.5 | -8.0 pts | 68.8 | 53.0 | 15.8 pts | |||||||
Available cargo tonne-kilometres | millions | 8,472 | 7,886 | 7 | 3,092 | 2,417 | 28 | |||||||
Revenue cargo tonne-kilometres | millions | 6,140 | 5,361 | 15 | 2,065 | 1,762 | 17 | |||||||
Cargo load factor | % | 72.5 | 68.0 | 4.5 pts | 66.8 | 72.9 | -6.1 pts | |||||||
Employees | ||||||||||||||
Employees as of 30 September | number | 106,684 | 124,534 | -14 | - | - | ||||||||
- Derivation ↗ Financial performance, p. 5.
- Without acquisition of equity investments.
- Share price development adjusted for the effects of the issue of new shares in connection with the capital increase in September 2021.
- Previous year's figures have been adjusted.
Date of publication: 3 November 2021.
Contents
3 | Interim management report | 22 Interim financial statements | 40 | Further information | |
3 | Course of business | 22 | Consolidated income statement | 40 | Declaration by the |
4 | Significant events | 23 | Consolidated statement of | legal representatives | |
4 | Events after the reporting period | comprehensive income | 41 | Credits/Contact | |
5 | Financial performance | 24 | Consolidated statement of | Financial calendar 2022 | |
10 | Business segments | financial position | |||
20 | Opportunities and risk report | 26 | Consolidated statement of | ||
21 | Forecast | changes in shareholders' equity | |||
27 | Consolidated cash flow statement | ||||
28 | Notes |
3 | INTERIM MANAGEMENT REPORT | LUFTHANSA GROUP 3RD INTERIM REPORT JANUARY - SEPTEMBER 2021 |
Course of business, Significant events |
Course of business
Performance of the Lufthansa Group improves over the course of the financial year
- The ongoing effects of the coronavirus crisis are still put- ting pressure on business performance at the Lufthansa Group; overall, however, clear signs of recovery have been seen since the spring of 2021.
- Faster progress with vaccinations worldwide and the re- sulting gradual relaxation of travel restrictions enabled bookings at the passenger airlines in the Lufthansa Group to rise significantly over the course of the 2021 financial year; after demand for European holiday flights and long- haul tourist destinations rose sharply in the summer as travel restrictions were relaxed or lifted altogether, de- mand recently increased significantly on routes to North America, particularly following the announcement that travel restrictions were to be lifted in the USA; demand for business travel also rose noticeably.
- The Lufthansa Group also made significant progress with the implementation of its restructuring programme in the first nine months of the reporting year; measures imple- mented to date are responsible for more than 70% of the total EUR 3.5bn in annual savings that are planned from 2024 onwards; the restructuring costs required to adapt the company to the new market environment emerging from the crisis came to EUR 520m in the first nine months of the year (previous year: EUR 190m).
- Available capacity in the passenger business, as meas- ured in available seat-kilometres, was increased over the course of 2021; in the first quarter, it came to around 21% of the 2019 pre-crisis level, a figure that rose to 29% in the second quarter and 50% in the third quarter.
- The expansion of flight capacities, the positive develop- ment at Aviation Services and progress with the restruc- turing programme were also reflected in earnings; Adjusted EBIT in the first quarter came to EUR -1,143m (previous year: EUR -1,220m) and EUR -952m in the second quarter (previous year: EUR -1,679m); in the third quarter of 2021, the Lufthansa Group returned to profita- bility with Adjusted EBIT of EUR 17m (previous year: EUR -1,262m), despite restructuring expenses of EUR 255m (previous year: EUR 58m).
- A comparison of figures for the first nine months of 2021 with the corresponding prior-year figures is distorted by the fact that revenue and earnings in January and Febru- ary 2020 were largely unaffected by the coronavirus crisis.
- Available capacity at the passenger airlines in the first nine months of 2021 was 3% up on the year; traffic reve- nue for the Lufthansa Group airlines rose year-on-year by 2% to EUR 7,550m (previous year: EUR 7,404m); Group revenue of EUR 10,978m was on the same level as the previous year (previous year: EUR 10,995m).
- Supported by stringent cost management and record earnings in the cargo business, the operating loss was reduced significantly in a year-on-year comparison; Adjusted EBIT in the reporting period came to EUR -2,078m (previous year: EUR -4,161m); this figure in- cludes restructuring expenses of EUR 520m (previous year: EUR 190m); the Adjusted EBIT margin was -18.9% (previous year: -37.8%); EBIT amounted to EUR -2,123m (previous year: EUR -5,857m).
- The net loss for the period came to EUR -1,877m (previ- ous year: EUR -5,584m).
- Adjusted free cash flow came to EUR -594m (previous year: EUR -2,579m).
- The equity ratio increased as against the end of 2020, largely due to the drawdown of EUR 1.5bn from Silent Participation I, which is recognised as equity, rising by
5.3 percentage points to 8.8% (31 December 2020:
3.5%). - Supported by these funds, Net debt of EUR 9,006m was
9% lower than at year-end 2020 (31 December 2020: EUR 9,922m); at the end of September 2021 the Group had total liquidity of EUR 11.9bn; this includes EUR 4.0bn in state stabilisation funds and loans which have not yet been utilised; this does not include the effects of the capital increase completed in October 2021 or the subse- quent repayment of EUR 1.5bn of Silent Participation I.
↗ Events after the reporting period, p. 4.
4 | INTERIM MANAGEMENT REPORT | LUFTHANSA GROUP 3RD INTERIM REPORT JANUARY - SEPTEMBER 2021 |
Course of business, Significant events |
Significant events | Events after the reporting period |
Lufthansa Group successfully secures further liquidity on the capital market
- The Lufthansa Group again successfully issued a bond for a total volume of EUR 1.0bn on 7 July 2021.
- The bond issue, with a denomination of EUR 100,000, was placed in two tranches, each with a volume of EUR 500m; the tranche with a term of three years pays inter- est of 2.0% p.a., while the second tranche with a term of eight years pays interest of 3.5% p.a.
European Commission presents "Fit for 55" legislative package
- On 14 July 2021 the European Commission presented its "Fit for 55" legislation; the EU proposal comprises a total of twelve legislative instruments for discussion and reso- lution by the 27 member states and the European Parlia- ment.
- The European Commission's proposals include a faster reduction in the number of certificates issued in the avia- tion sector and discontinuing the free allocation of certifi- cates by 2027; in addition, a kerosene tax is to be gradu- ally introduced, along with an obligation to use an in- creasingly higher level of sustainable aviation fuels.
-
The Lufthansa Group welcomes the ambitious climate targets, but has put forward concrete proposals to im- prove the measures in order to avoid the risk of putting EU airlines at a disadvantage in international competition and to avoid carbon leakage.
↗ Opportunities and risk report, p. 20.
European Commission makes decision on extension of and amendment to regulations on slot use
- On 23 July 2021, the European Commission made the decision to reduce the required slot use rate from the standard 80% to 50% in the 2021/22 winter flight timeta- ble; this means that airlines must use 50% of each of their slot series at slot-regulated airports so as not to lose these slot series in subsequent periods; the regulation was still fully suspended for the summer flight timetable.
Deutsche Lufthansa AG approves capital increase
-
The Executive Board of Deutsche Lufthansa AG, with the approval of the Supervisory Board, agreed to increase capital from Authorised Capital C with subscription rights for shareholders on 19 September 2021; the capital in- crease will strengthen the Group's equity base and was carried out on 6 October 2021.
↗ Events after the reporting period.
Lufthansa Group leases additional A350-900long-haul aircraft
- The Lufthansa Group is accelerating the modernisation of its long-haul fleet; in early October 2021 the Lufthansa Group signed leases for four of state-of-the-art,fuel-effi- cient Airbus A350-900 aircraft; this will take the Lufthansa Group's A350 fleet to 21 aircraft at the start of 2022.
- The aircraft are scheduled for service at Lufthansa Ger- man Airlines from the first half-year of 2022, which will strengthen the premium product of the five-star airline.
Deutsche Lufthansa AG successfully completes capital increase and repays Silent Participation I to ESF
- Deutsche Lufthansa AG completed its capital increase successfully on 6 October 2021; the gross proceeds of the capital increase came to EUR 2,162m; as part of the capital increase the Company issued 597,742,822 new registered shares at a subscription ratio of 1:1; this takes share capital to EUR 3,060,433,248.64; shareholders of Deutsche Lufthansa AG had the option to buy the new shares at the subscription price of EUR 3.58.
- Following the capital increase on 11 October 2021, Deutsche Lufthansa AG repaid in full the EUR 1.5bn re- ceived under Silent Participation I from the Economic Stabilisation Fund of the Federal Republic of Germany (ESF); this repayment was significantly earlier than origi- nally planned.
- The Company also intends to repay Silent Participation II of EUR 1bn in full by the end of 2021 and to cancel the unused portion of Silent Participation I, also by the end of 2021.
- Including the effects of the capital increase, the repay- ment of Silent Participation I, the planned repayment of Silent Participation II and the planned cancellation of the unused portion of Silent Participation I, available liquidity as of 31 September 2021 came pro forma to EUR 8.5bn.
ESF reduces equity investment in Deutsche Lufthansa AG
-
The ESF has reduced its stake in Deutsche Lufthansa AG to 14.09% according to its notification of voting rights on 7 October 2021.
In the context of its participation in the capital increase, the ESF is obliged to sell its remaining equity interest no later than 24 months after the capital increase was com- pleted, provided that the Company had repaid Silent Par- ticipation I and Silent Participation II as intended and the relevant contractual conditions were met.
- INTERIM MANAGEMENT REPORT Financial performance
Financial performance
EARNINGS POSITION
- The Lufthansa Group's revenue performance improved |
over the course of the reporting year due to faster vac- |
cination progress worldwide, the gradual easing of travel |
restrictions and the associated rise in demand for air |
travel; all in all, however, the volume of business contin- |
ued to lag far behind the pre-crisis level. |
- Stronger demand and progress made in implementing |
the restructuring programme enabled the Lufthansa |
Group to report positive Adjusted EBIT in the third quar- |
ter 2021. |
LUFTHANSA GROUP 3RD INTERIM REPORT JANUARY - SEPTEMBER 2021
-
Overall, traffic revenue for the Lufthansa Group airlines fell year-on-year by 2% to EUR 7,550m in the first nine months of the 2021 financial year (previous year:
EUR 7,404m).
Revenue on par with previous year
- Other revenue fell by 5% to EUR 3,428m (previous year: EUR 3,591m), mainly due to lower income in the Catering segment as a result of the crisis and the sale of the Euro- pean business of the LSG group; revenue in the MRO segment recovered over the course of the year and was the same as the previous year in the reporting period.
- Revenue of EUR 10,978m was on par with last year (pre- vious year: EUR 10,995m); operating income fell by 2% to EUR 12,064m (previous year: EUR 12,346m).
- The comparison of the key figures for the first nine |
months of 2021 against the prior-year period is largely |
influenced by the fact that the impact of the coronavirus |
crisis in the previous year first arose in the month of |
March. |
Traffic revenue up year-on-year by 2%
- Sales by the passenger airlines in the Lufthansa Group (revenue seat-kilometres) were down by 9% year-on-year in the first nine months of 2021, capacity (available seat- kilometres) was expanded by 3%, and the passenger load factor fell by 8.0 percentage points to 59.5%; traffic revenue in the passenger business fell by 12% to EUR 4,718m (previous year: EUR 5,335m); compared with the pre-crisis level, i.e. the first nine months of 2019, capacity came to 34%.
- The Lufthansa Group's cargo business performed well in the reporting period due to the global reduction in capac- ity caused by the loss of belly capacities on passenger aircraft; this also had an impact on yield development; capacity (available cargo tonne-kilometres) increased by 7% year-on-year, sales (revenue cargo tonne-kilometres) rose by 15%; the cargo load factor of 72.5% was 4.5 per- centage points higher than last year; traffic revenue went up by 37% to EUR 2,832m in the cargo business due to much higher yields (previous year: EUR 2,069m).
REVENUE, INCOME AND EXPENSES
in €m
Traffic revenue
Other revenue
Total revenue
Other operating income
Total operating income
Cost of materials and services
of which fuel
of which other raw materials, consumables and supplies and purchased goods
of which fees and charges
of which external services MRO
Staff costs
Depreciation
Other operating expenses
Total operating expenses
Result from equity investments
Adjusted EBIT
Total reconciliation EBIT
EBIT
Net interest
Other financial items
Profit/loss before income taxes
Income taxes
Profit/loss after income taxes
Profit/loss attributable to minority interests
Net profit/loss attributable to shareholders of Deutsche Lufthansa AG
Jan - Sep | Jan - Sep | Change | ||
2021 | 2020 | in % | ||
7,550 | 7,404 | 2 | ||
3,428 | 3,591 | -5 | ||
10,978 | 10,995 | 0 | ||
1,086 | 1,351 | -20 | ||
12,064 | 12,346 | -2 | ||
5,830 | 6,728 | -13 | ||
1,444 | 1,610 | -10 | ||
1,190 | 1,743 | -32 | ||
1,390 | 1,446 | -4 | ||
794 | 867 | -8 | ||
4,654 | 5,026 | -7 | ||
1,684 | 1,934 | -13 | ||
1,971 | 2,657 | -26 | ||
14,139 | 16,345 | -13 | ||
-3 | -162 | 98 | ||
-2,078 | -4,161 | 50 | ||
-45 | -1,696 | 97 | ||
-2,123 | -5,857 | 64 | ||
-332 | -239 | -39 | ||
137 | -816 | |||
-2,318 | -6,912 | 66 | ||
431 | 1,312 | -67 | ||
-1,887 | -5,600 | 66 | ||
10 | 16 | -38 | ||
-1,877 | -5,584 | 66 | ||
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Deutsche Lufthansa AG published this content on 02 January 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 January 2022 10:10:03 UTC.