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Research Tree provides access to ongoing research coverage, media content and regulatory news on DEUTSCHE LUFTHANSA-REG. We currently have 39 research reports from 1 professional analysts.
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In-house fighting starts today
30 Nov 16
Not only the pilots will demonstrate in front of Lufthansa’s headquarters but crew members as well. However, they have opposite intentions. While the pilots continue to strike for their goals (i.e. pay, pension, etc.), crew members have settled their negotiations and will demonstrate against the pilots. This is something new in German corporate history. Whether this will bring the pilots back to the negotiation table remains to be seen.
Passenger number up by 3.1% in October
09 Nov 16
This number reached almost 10.5m in the last month which brought the ytd number to 94.9m, an increase of 1.1%. We expect a growth rate of 0.7% for the full-year, i.e. the number can fall by 1.6% to 13.52m in the last two months and our projection will still be reached. However, the strongest growth rate was achieved by Eurowings (the budget airline). Its numbers were up by 12% to 1.84m in the last month and by 8.7% to 15.8m ytd. In addition, the passenger numbers were down to/from both APAC (-5.1% to 569,000) and the Middle East/Africa (-1.1% to 369,000). On one hand, we believe that Eurowings is not generating high profits (if at all) while, on the other, these two destinations are believed to be disproportionately profitable. As in the previous months, management’s capacity management continues to be insufficient. Offered seat-kilometres were up by 4.5% in the last month (+4.1% ytd) while demand increased by 3.6% (and 1.9%). As a result, the SLF fell by 0.7pp to 80.7% in October and by 1.7pp to 79.4% ytd. However, capacity management is clearly improving in the Logistics division. Demand increased by 4.8% while the offer was up by only 0.2%. Consequently, the FLF improved by 3.0pp to 69.3% in October. The respective ytd numbers were 0.3%, +0.8%, and -0.3pp to 65.6%.
€713m gain from the pension settlement with Ufo
02 Nov 16
Lufthansa’s revenue continued to fall in Q3 (-1.2% to €8.83bn) bringing the 9M number to €23.9bn, a decrease of 1.8%. Simultaneously, EBIT increased by 51% to €1.81bn in the last quarter and by 40% to €2.33bn ytd. The respective net profit numbers were +79% to €1.42bn and +5.9% to €1.85bn. At a glance, the revenue number was very much in-line with our expectation while the profit numbers were considerably higher. However, the latter benefited from the wage and pension settlement Lufthansa has achieved with its own but not with Eurowing’s cabin crews. This has translated into a one-time benefit of €713m in Q3.
Ufo threatens with new strike action
20 Oct 16
Lufthansa and its cabin crew union Ufo had settled their dispute in July. However, the negotiations for the Eurowings crew members were still continuing. As these have not resulted in a mutual agreement, the union is now threatening with strike action. Eurowings is Lufthansa’s budget airline for short- and medium- and a few long-haul flight destinations. Its employees are not part of the Lufthansa collective agreement and their contract terms are different from the parent company’s. It remains to be seen how many aircraft will be grounded during the next days and weeks.
9M16 numbers slightly better than expected
20 Oct 16
After releasing a profit warning for Q3 16 on 21 July, management’s preliminary numbers are better. As short-term bookings by business passengers were higher than anticipated then, Lufthansa’s 9M revenue came in at €23.9bn (-1.7%), whereas we had expected €23.72bn. According to the ad-hoc release, adjusted EBIT fell by 1% to €1.69bn.
Passenger number up by 5.2% in September
11 Oct 16
The number reached almost 10.8m in the last month which brought the ytd number to 83.9m, an increase of 1.1%. However, as the offer of seat-kilometres was raised by 6.6% but demand was up by only 5.7%, the SLF fell by 0.8pp to 82.4%. The respective ytd numbers were +4.1%, +1.8%, and -1.8pp to 79.3%. The passenger and sold seat-kilometre growth rates are higher than our projected numbers for the full-year (-3.4% and -0.3%). However, our expected full-year ticket price is ‘only’ 2.9% lower than in 2015 whereas it fell by 3.6% in H1 16. The Logistics division is clearly seeing some improvement. After a H1 16 fall of 3.0% for sold ton-kilometres, it has increased in each of the last three months (+1.6% in July, +0.7% in August, +8.2% in September) and now translates into a marginal ytd fall of only 0.4%. Our full-year volume sales projection is -2.2% and the price per sold ton-kilometre is expected to fall by a good 9%. However, the yield fell by 17% in H1 16, i.e. our volume might be too low but we might be too optimistic on the price development. The number of passengers continued falling to/from APAC (-1.8%) in the last month, but was up to/from all other destinations. The sharpest rise was experienced on trans-Atlantic flights (+8.2%). The ytd passenger numbers, however, continue to be down to all destinations except for the Americas.
05 Dec 16
These interims show LPEs by is ahead of its plan to recruit 360 LPEs by April 2017 and is making impressive progress in Australia. The statement (and we expect the results presentation) provide considerable evidence of Purplebricks’ progress in building its brand, increasing its LPE footprint, developing its technology, creating engaging marketing and selling properties. We leave our forecasts unchanged. Investor confidence in Purplebricks’ ability to deliver sustainable profitable growth should result in share price appreciation towards a valuation based on its results for the year ended April 2019.
Successfully engaging players
06 Dec 16
Stride has a clear focus on online bingo and soft gaming and is growing rapidly, with FY16 l-f-l revenue up 22%. The acquisitions of Tarco and 8Ball at the end of FY16 doubled its share of the UK bingo-led market from 5% to 10% and should deliver material synergies from FY17. Our unchanged FY17 estimates are for 11% EPS growth and strong cash generation. We expect organic growth to be augmented by further accretive acquisitions in due course. Stride’s FY17 P/E is 10.3x and the calendarised EV/EBITDA is only 7.1x, implying considerable share price upside potential.
Joy of Techs
21 Nov 16
ICT evolution is driven by technological development as advances are made which both meet and shape customer requirements. Our 2011 note No such thing as a telco described the modern reality in that former ‘telcos’ now deliver varying elements of a range of managed services. We built on this theme last year, exploring in further detail their evolutionary paths, operating fundamentals, and cashflow yield similarities. In the consumer environment, demand for bundles of technology is complemented by demand for content. Across the pond, the mooted combination of AT&T and Time Warner typifies the bundled need of ‘pipe’ and content, since unbundled alternatives such as FaceTime and WhatsApp can be easier and clearer to chat over, and Amazon and Netflix are easier to watch anywhere. In the UK, BT’s defensive actions cover delivery, content and capabilities, acquiring EE yet also buying football rights. While TV was long ago added to triple play to become quad play, voice is now merely an app, and fixed and mobile seen as just dumb pipes: it's the content that will influence consumer choices. Growth of TV and film as well as music and gaming over IP leads to UK small cap opportunities. In context of the drive to maximise value from pipes and access by offering content and data, we look at some amongst the potential tech small cap beneficiaries: Amino*, Keyword Studios, ZOO Digital*, 7digital*, KCOM* and CityFibre*.
Dominant, defensive and highly cash generative
24 Nov 16
Pets at Home have reported a strong set of interims for the 28 week period to 13th October which highlight the investment strengths. This is a high quality retail business that enjoys a dominant position in an attractive and highly defensive subsector. The company has a pipeline of profitable store openings, reports consistently positive like-for-like growth and is highly cash generative. We therefore reiterate our Buy recommendation and price target of 271p.
Small Cap Breakfast
07 Dec 16
Creo Medical group—Schedule 1 update.. £20m raise. Expected market cap £61.2m, admission expected 9 December. ECSC—Schedule 1 from provider of cyber security services. Raising £5m. Vendor sale £0.8m. Target date 14 Dec. Expected market cap £15m. RM Secured Direct Lending - The secured direct lending fund intends to float on the Main Market on 15 December raising up to £100m