Annual Report 2010 Vision Key fi gures Lufthansa Group 2010 2009 Change in % Revenue and result Total revenue €m 27,324 22,283 22.6 of which traffi c revenue €m 22,268 17,604 26.5 Operating result €m 876 130 573.8 EBIT €m 1,335 191 599.0 EBITDA €m 3,049 1,838 65.9 Net profi t/loss €m 1,131 – 34 Key balance sheet and cash fl ow statement fi gures Total assets €m 29,320 26,392 11.1 Equity ratio % 28.4 23.5 4.9 pts Net indebtedness €m 1,596 2,195 – 27.3 Cash fl ow from operating activities €m 3,075 1,991 54.4 Capital expenditure (gross) €m 2,273 2,405 – 5.5 Key profi tability and value creation fi gures Adjusted operating margin1) % 4.1 1.4 2.7 pts EBITDA margin % 11.2 8.2 3.0 pts CVA €m 71 – 858 CFROI % 9.4 4.2 5.2 pts Lufthansa share Share price at year-end € 16.36 11.75 39.2 Earnings per share € 2.47 – 0.07 Suggested dividend per share € 0.60 – Traffi c fi gures 2) Passengers thousands 91,157 77,315 17.9 Freight and mail thousand tonnes 2,023 1,712 18.2 Passenger load factor % 79.3 77.9 1.3 pts Cargo load factor % 68.0 60.6 7.4 pts Flights number 1,021,266 899,928 13.5 Employees Average number of employees number 117,066 112,320 4.2 Employees as of 31.12. number 117,019 117,521 – 0.4 1) Performance indicator to enable comparison with other airlines: (operating result + write-backs of provisions) / revenue. 2) Lufthansa Group without Germanwings. Date of publication: 17 March 2011. Revenue in €m Operating result in €m 19,849 22,420 24,842 22,283 27,324 845 1,378 1,280 130 876 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 Lufthansa Group overview 2010 fi gures Key fi gures business segments Passenger Airline Group 2010 Change Passenger Airline Group The airlines in the in % Passenger Airline Group made good use of the 27.3 Revenue €m 20,912 24.5 positive demand trend. Passenger numbers Revenue of which external revenue €m 20,233 24.7 went up sharply and at the same time the airlines Operating result €m 436 – in EUR bn Adjusted operating margin % 3.0 2.2 pts continued their cost management, realising Segment result €m 572 – important synergies. Increased profi tability meant EBITDA1) €m 2,601 81.9 that a sound operating profi t was earned again, CVA €m – 198 71.4 Segment capital expenditure €m 2,047 7.9 in spite of non-recurring expenses. Employees as of 31.12. number 57,157 – 1.6 1) Before profi t/loss transfer from other shareholders. Logistics 2010 Change Logistics The earnings turnaround was even in % more pronounced in the Logistics segment. 876 Revenue €m 2,795 43.3 Lufthansa Cargo benefi ted particularly from the Operating result of which external revenue €m 2,770 43.7 global economic recovery and the boom in Operating result €m 310 – in EUR m Adjusted operating margin % 11.4 19.4 pts German exports. The measures taken in prior Segment result €m 330 – years to safeguard earnings continued to have EBITDA €m 445 – a strong effect. Following an operating loss CVA €m 233 Segment capital expenditure €m 21 – 16.0 in the previous year, Lufthansa Cargo reported Employees as of 31.12. number 4,517 0.6 record profi ts in 2010. MRO 2010 Change MRO Lufthansa Technik is a late-cycle player in % and so suffered from still hesitant demand in 1,625 Revenue €m 4,018 1.4 the MRO market in 2010. Thanks to greater pro- Free cash fl ow of which external revenue €m 2,373 3.3 duction fl exibility and a broader product portfolio Operating result €m 268 – 15.2 in EUR m Adjusted operating margin % 7.4 – 0.9 pts it was nevertheless able to continue its growth Segment result €m 319 – 3.6 path and increase revenue. Lufthansa Technik EBITDA €m 412 – 5.5 again generated a strong operating profi t, but CVA €m 172 4.9 Segment capital expenditure €m 67 – 44.6 as expected, it was below the record set the Employees as of 31.12. number 20,159 1.8 previous year. IT Services 2010 Change IT Services Lufthansa Systems offers IT solu- in % tions for the airline industry and, despite the still 71 Revenue €m 595 – 1.7 diffi cult environment for the sector, was able to Cash value added of which external revenue €m 232 – 4.9 win new customers and orders. Revenue and Operating result €m 10 – 37.5 in EUR m Adjusted operating margin % 1.8 –1.0 pts earnings nevertheless remain under pressure. Segment result €m – 6 In 2010 a programme was therefore launched EBITDA €m 45 – 16.7 to reorient the company. Steps to cut costs and CVA €m – 23 Segment capital expenditure €m 36 – 30.8 increase revenue are intended to shore up its Employees as of 31.12. number 2,935 – 3.0 competitiveness sustainably. Catering 2010 Change Catering LSG Sky Chefs increased its revenue in % and confi rmed its global market leadership 39.2 Revenue €m 2,249 7.0 in airline catering by expanding its range and Total shareholder of which external revenue €m 1,716 8.0 signing new partnerships. Its operating profi t Operating result €m 76 5.6 return in per cent Adjusted operating margin % 3.4 – 0.1 pts was even higher than the previous year’s, which Segment result €m 87 16.0 had been buoyed by non-recurring factors. EBITDA €m 174 45.0 The business segment benefi ted from higher CVA €m – 28 58.8 Segment capital expenditure €m 38 – 34.5 passenger numbers and the recovery in the Employees as of 31.12. number 28,499 0.4 premium segment. LufthansaContents GroupGroup overview 20102 fi gures KeyKey fi gures businessbusiness segments Passenger Airline GroupGroup 2010 Change PassengerPassenger Airline GroupGroup TThehe airlinesairlines in thethe in % PassengerPassenger Airline GGrouproup made ggoodood use of the 27.32 1 To our shareholders positivepositive demand trend. PassengerPassenger numbers RevenueRevenu e 2 Letter to the€m€m shareholders20,91220,912 24.5 RevenueR of which external revenue €m€m 20,23320,233 24.7 went up sharplysharply and at the same time the airlines OperatingOperatin g resultresult 4 Executive€m Board of4364 36Deutsche– Lufthansa AG ini EUR bn continuedcontinued their cost management,management, realisirealisingng Adjusted operatingoperating6 marginmar gInterviewin % 3.03.0 2.2 ptspts SegmentSegment result €m 572572 – importantimportant synergies.synergies. Increased pprorofi tability meant EBITDAEBITDA 1) 8 Vision €m€m 2,6012,601 81.981.9 thatthat a sound operatingoperating proprofi t was earned again,again, CVACVA 34 Annual review€m – 198198 71.471.4 SegmentSegment capital expenditureexpenditure €m€m 2,0472,047 7.97.9 inin spite of non-recurringnon-recurring expenses.expenses. Employees as of36 31.12.31.1 2. Lufthansanumbernumb shareer 57,157 – 1.61.6 1) BeforeBefore profi t/loss40 transfertrans Reportfer fromfrom ofother the shareholders. Supervisory Board 42 Corporate Governance LogisticsLogistics 20102010 ChangeChange LogisticsLogistics TheThe earningsearnings turnaroundturnaround was even in % moremore pronounced in the LogisticsLogistics segment.segment. 8768 RevenueRevenue 45 Group management€m 2,7952,795 report43.343.3 Lufthansa CargoCargo benefi ted particularly from the OperatingO result of whichwhich externalexternal revenuerevenue €m€m 2,7702,770 43.743.7 globalglobal economic recovery and the boom in OperatingOperating result €m€m 310310 – ini EUR m Adjusted operatingoperating marginmargin % 11.4 19.4 ptspts German exports. The measures taken in prior SegmentSegment 149 result Consolidated€m€m fi nancial330 statements– yearsyears to safeguardsafeguard earningsearnings continued to have EBITDAEBITDA €m 445445 – a strongstrong effect.effect. FollowingFollowing an operatingoperating loss CVACVA €m 233 SegmentSegment capital expenditureexpenditure €m 2121 – 16.016.0 inin the previous year, Lufthansa CargoCargo reported Employees 230 as of 31.12.31.1 2. Furthernumbernu minformationber 4,5174,517 0.60.6 recordrecord profi ts in 2010. 230 Ten-year overview MROMRO 234 Glossary 2010 ChangeChange MROMRO Lufthansa Technik is a late-cyclelate-cycle playerplayer in % and so suffered from still hesitant demand in 1,6251 236 Credits/contact RevenueRevenue €m€m 4,0184,018 1.41.4 thethe MROMRO market in 2010.2010. Thanks to greatergreater pro-pro- Financial calendar 2011/2012 FreeF cash fl ow ofof which external revenue €m€m 2,3732,373 3.33.3 ductionduction fl exibilityexibility and a broader productproduct portfolioportfolio OperatingOperating result €m 268268 – 15.2 ini EUR m Adjusted operating margin % 7.47.4 – 0.9 pts itit was neverthelessnevertheless ableable to continuecontinue itsits growthgrowth SegmentSegment result €m 319319 – 3.6 pathpath and increase revenue. LufthansaLufthansa Technik EBITDAEBITDA €m 412412 – 5.55.5 againagain generatedgenerated a strongstrong operatingoperating proprofi t, but CVACVA €m€m 172 4.94.9 Segment capital expenditureexpenditure €m€m 6767 – 44.6 as expected,expected, itit was belowbelow thethe recordrecord set thethe Employees as of 31.12.31.12. numbernumber 20,15920,159 1.81.8 previousprevious year.year. IT ServicesServices 20102010 ChangeChange IT ServicesServices Lufthansa SystemsSystems offers IT solu-solu- in % tionstions forfor the airline industryindustry and, despite the still 717 RevenueRevenue €m 595595 – 1.7 difdiffi cult environment for the sector,sector, was able to CashC value added ofof whichwhich externalexternal revenuerevenue €m 232232 – 4.94.9 win newnew customerscustomers andand oorders.rders. RevenueRevenue aandnd OperatingOperating resultresult €m€m 1010 – 37.537.5 ini EUR m AdjustedAdjusted operatingoperating marginmargin % 1.81.8 –1.0–1.0 pts earningsearnings nevertheless remain under pressure.