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Research Tree provides access to ongoing research coverage, media content and regulatory news on DEUTSCHE LUFTHANSA-REG. We currently have 42 research reports from 1 professional analysts.
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December was a good month in volume terms
10 Jan 17
The number of passengers was up by 5.9% to 7.79m in the last month (+1.8% to 109.7m in the full-year). As demand growth (+7.3%) outpaced the offer (+5.4%), the SLF improved by 1.3pp to 77.7%. The respective full-year numbers were +2.8%, +4.6% thus leading to an SLF of 79.1% (-1.4pp). Simultaneously, cargo demand increased by 8.3% while the offer was up by only 3.5% in December, i.e. the FLF improved by 3.1pp to 70.3%. The respective full-year numbers were +1.4% and +1.0% thus leading to an FLF of 66.6% (+0.3pp). The hub airlines’ (i.e. Lufthansa, SWISS, and AUA) traffic to/from APAC was only moderately up (the passenger number increased by 1.3% in December and was down by 2.7% in the full-year), it rose strongly to/from the Middle East/Africa (+10.5% but -1.7%, respectively) and to/from the Americas (+6.2% and +4.1%). Demand growth was slightly more subdued within Europe (+4.8% and +0.5%). The SLFs increased to/from all regions in December and to the Middle East/Africa in the full-year. However, all other destinations experienced falling full-year SLFs. Lufthansa’s budget airline Eurowings attracted a total of 18.43m passengers in 2016 (c. 17% of the total). Compared to 2015, this was an increase of 8.8%. However, Eurowings continued suffering falling SLFs in the last month and in the full-year and on both short- and long-haul flights.
Management continues to sit between two stools
18 Dec 16
The company and the pilots have agreed to a mediation process to solve finally their dispute on pay and pensions. This process is scheduled up to the end of January, i.e. the pilots will not strike during the mediation. On the other hand, the conflict has escalated with Eurowings crew members and their Ufo union. While other Eurowings employees, members of the Verdi union, have settled their dispute earlier this month, this second union has not agreed to these terms. Ufo believes that the Verdi contract is unfavourable. Consequently, Ufo threatens with new strike action.
November was a good month, in volume terms
09 Dec 16
Although Lufthansa suffered from strike action in the last month (as it did in November 2015), the number of passengers increased by 5.9% to 7.63m, which brought the ytd number to 101.9m, an increase of 1.6%. As demand increased by 10.1% while the offer was up by ‘only’ 9.3%, last month’s SLF improved by 0.5pp to 75.8%. The respective ytd numbers were +2.5%, +4.5%, and -1.6pp to 79.2%. However, management continues to complain about ‘significantly falling’ yields on a currency-adjusted basis. The development was similar in the Logistics division. Demand was up by 2.8% while the offer was increased by only 0.4%. As a result, the November FLF improved by 1.7pp to 71.0%. The ytd FLF was unchanged at 66.2% as both demand and offer were up by 0.8%. Lufthansa’s November SLFs improved to/from European and Middle Eastern/African destinations but fell to/from the Americas and APAC and for the first eleven months it was only up to/from the Middle East/Africa.
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.
The Slide Rule
12 Jan 17
What is The Slide Rule? The Slide Rule has been designed to dramatically simplify the identification of the best companies in the UK small/mid-cap sector by making a quantitative assessment of the relative potential of each company. At its core, The Slide Rule aims to identify those companies that create genuine shareholder value through strong returns on capital and solid growth, but also present a value opportunity with the potential tailwind of earnings momentum. Companies are assessed within a Quality, Value, Growth and Momentum (QVGM) framework.
N+1 Singer - Best Ideas 2017 - Top picks
04 Jan 17
Today we publish our Best Ideas for 2017 - 12 stocks that we believe have excellent prospects in the current year together with a detailed discussion of what we see as the key sector and market themes for 2017. Our top picks are Cineworld, Elementis, Herald Investment Trust, Hill & Smith, IQE, MySale, Redde, ReNeuron, RhythmOne, SDL, Servelec and Severfield.
N+1 Singer - Morning Song 12-01-2017
12 Jan 17
As anticipated, the second half has again been stronger than H1 and results will be broadly in line with expectations. In line with this, the order book has continued to grow and is at record levels. This confirms that significant progress has been made in the Group’s shift towards its Technology Products division which, as targeted, contributed c.60% of group revenue in FY16. The small acquisition of Cable Power also gives a complementary boost to the product range. It is also worth noting the significant reduction in net debt, £1.0m ahead of our forecast. We remain supportive of the Group’s strategy and continue to see a bright future as this transition towards a design led technology solutions business continues. We look forward to more detail in March at the final results.
The Monthly January 2017
09 Jan 17
Despite all the hullaballoo of the Brexit vote and the subsequent election of Donald Trump as the next US President, the UK stock market prospered last year, especially in the latter few months of 2016. The combination of a depreciating currency – making $ earnings more valuable in relative terms - and the Trump emphasis on infrastructure expenditure drove the stock market higher
11 Jan 17
Joules Group (JOU): Strong festive trading (BUY) | Shoe Zone (SHOE): Tough FY16 could be just the beginning (HOLD) | H&T (HAT): Alternative lender emerging (BUY) | Omega Diagnostics* (ODX): ISO accreditation received for Pune, India (CORP) | Redcentric* (RCN): Interims – restoring forecasts (CORP)
55% headline sales growth, strong trading through key period lifts FY guidance yet again
10 Jan 17
boohoo has traded strongly across all regions in the four months to 31 December, including the Black Friday weekend and key peak season Christmas period. Headline sales growth was 55% (52% CER), with the USA delivering standout growth of 230% (188% CER) to £19.6m. UK growth at 31% is in line with previous quarters adjusting for the wholesale business (annualising the start of this business). As a result, management have increased FY17 guidance for boohoo sales growth to between 43% and 45%, against previous guidance of between 38% and 42%. Overall group revenue growth, including the two month contribution of PLT, is expected to be 46% to 48% with group EBITDA margin between 11% and 12%. The continued investment in price and promotions, the broadening product range (e.g. launch of kids wear) and success of the boohoo brand at offering the latest fashion trends, continues to drive significant improvements in customer loyalty and lifetime value. All of this is reflected in the continued impressive increase in active customers of 31% YoY to 5.1m. Since the period end, the PLT acquisition has completed and there remains the proposed acquisition of Nasty Gal in the US which will be governed by a court-approved bidding process, expected to complete in February.