Deutsche Lufthansa AG (DLAKF) Q4 2024 Earnings Call Transcript

2025-03-06 16:15:04 ET

Deutsche Lufthansa AG (DLAKF)

Q4 2024 Results Conference Call

March 06, 2025 06:30 AM ET

Company Participants

Marc-Dominic Nettesheim - Head of Investor Relations

Carsten Spohr - Chief Executive Officer

Till Streichert - Chief Financial Officer

Conference Call Participants

Jarrod Castle - UBS

Ruxandra Haradau-Doser - HSBC

Jaime Rowbotham - Deutsche Bank

Harry Gowers - JPMorgan

Andrew Lobbenberg - Barclays

Muneeba Kayani - Bank of America

Alex Irving - Bernstein

Stephen Furlong - Davy

Ruairi Cullinane - RBC Capital Markets

Jaina Mistry - Jefferies

Antonio Duarte - Goodbody

Presentation

Marc-Dominic Nettesheim

Thank you very much and also from my side, a very warm welcome, ladies and gentlemen, to the presentation of our Full Year Results 2024. With me on the call today are our CEO, Carsten Spohr; and our CFO, Till Streichert. They will both present our results for last year and discuss our commercial outlook for this year. Afterwards, you will have the opportunity to ask your questions. And like always, I want to ask you to limit your questions to two so that everybody has a chance to participate in the Q&A session. Thanks in advance.

And now hand over Carsten to you.

Carsten Spohr

Yes. Thank you, Marc, and a warm welcome from my side to our analyst conference for '24, a year which you know and surely will discuss over the next hour, is a year filled with ups and downs. And it was a year ago where we presented the third best financial result ever in our history to you. And nevertheless, already at that time, though, we were facing significant labor issues, disputes, infrastructure issues in Germany. And it's not surprising probably to all of you that the economic consequences of these impacts did change or have a significant impact on the course of '24, especially on our core brand, Lufthansa Airline.

By contrast, though, the other airlines within the group and Lufthansa Technik were able to continue their positive development into '24 out of '23, some of them even finished with new record results. Ultimately, due to the disappointing performance of our core brands, we will -- we did fall short of our targets we had set ourselves for '24. Nevertheless, I'm talking with some confidence and optimism today, because we have initiated a turnaround in multiple ways, which already led to significant improvements also on the financial side in the fourth quarter of last year.

It was by far the strongest quarter in the reporting period for the first time in '24, with adjusted EBIT reaching €468 million. We were able to improve our previous year's results in Q4 by €66 million. Therefore, we look back today on a year of two distinctive halves, which is particularly evident in our earnings performance, while we had a decline of €974 million in adjusted EBIT in the first half of the year, €450 million by strikes alone. The trend improved significantly in the second half. As a result, we were able to carry the momentum from the fourth quarter of '24 into a very strong start of '25.

In mid-January, we finally completed, let's start with that, the acquisition of initially 41% stake in ITA Airways. This is the largest airline acquisition in our history and indeed a real milestone in the further development of our group. It's also another important step towards our further internationalization, which is a key strategic target. Secondly, we have significantly improved our operational stability. Last year, for various reasons, we were not always at the quality level we strive to offer our customers, particularly in Munich, Zurich, partly also in Frankfurt. However, this situation has already improved significantly in the fourth quarter of the reporting year. And now in January, in February, our teams especially our operational teams had their best operational start since the last 10 years.

At the start of the year, we made significant progress in customer satisfaction thanks to this strong operational performance. And maybe even more importantly, we see the increasing impact of our significant investments in premium quality. There's no question beyond the progress made in the fourth quarter of '24 and the strong start into '25 for our core brand, though, which, as you know, is our largest and most vital revenue driver, we urgently need an economic turnaround....

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