Dividend policy adjusted and aims for continuous distributions

Shareholders should participate directly in the Company’s success. The Executive Board of the Lufthansa Group decided in 2019 to in future distribute 20% to 40% of the Group’s net profit, adjusted for non-recurring gains and losses. The previous dividend policy provided for a dividend of 10% to 25% of consolidated EBIT. With this adjustment to its dividend policy, the Group has committed to the aim of generating an attractive return for its shareholders. The new distribution range gives the Group greater flexibility to enable continuous dividend payments than the previous policy. The new dividend policy also allows for shareholders to participate in a particularly positive performance of the Company by means of a special dividend or share buy-back.

In view of the impact of the coronavirus crisis on the course of business and to further strengthen the balance sheet, the Executive Board and Supervisory Board will table a proposal at the Annual General Meeting on 5 May 2020 not to pay a dividend for financial year 2019.

Primary, secondary and financial investments in mio. EUR 1)

1) Excluding acquisition of shares.

Cashflow and capital expenditure in mio. EUR

1) Capital expenditure shown without pro rata profit/loss from the equity valuation.
2) Since 2018: Adjusted free cash flow.

Balanced investment to modernise the fleet

A balanced level of investment is very important for the Lufthansa Group. Investments are directed to projects with the highest expected returns. Going forward, the Lufthansa Group will continue to invest steadily in the renewal of its fleet, in-flight and ground products and infrastructure. The aircraft ordered for the period until 2025 serve mainly to replace older, less efficient models. Growth opportunities arising in the short and medium term can nonetheless be exploited by activating reserve aircraft or procuring used aircraft. The allocation of new aircraft to the different airlines and bases is constantly optimised according to value-based criteria. This makes the investment profile more balanced and increases focus on the deployment of capital. It also increasingly creates greater room for manoeuvre regarding any further consolidation activity. Capital expenditure should be financed from the company’s own cash flow. Adjusted free cash flow is planned to exceed EUR 1bn again in the medium term.

Gross capital expenditure (without expenditure on equity investments) fell by 5% to EUR 3,559m in 2019 and was mainly on down payments and final payments for aircraft, aircraft components, and aircraft and engine overhauls.