Insights from the BLT Conference

A recent BLT Conference provided valuable insights into the performance and future outlook of key companies, according to analysts at Stifel.

Air France-KLM (EPA:AIRF)

Air France-KLM expressed cautious optimism regarding its future, despite some underlying challenges. The airline is hopeful about modest growth in unit revenues, especially as KLM saw slight yield improvements over the summer. However, Air France’s yields were impacted by the Olympic Games, resulting in a mixed performance. Concerns about cost management linger, particularly if capacity growth falls short of expectations.

On the M&A front, Air France-KLM is interested in acquiring TAP Portugal and possibly Air Europa, depending on the pricing and deal structure.

DHL Group (VIE:DHL)

DHL conveyed a cautiously optimistic outlook, supported by steady trends in core businesses. Moderate growth in B2B Express volumes and strong demand in Ocean and Air Freight, particularly in Asia, were noted. A demand surcharge for Express customers is expected to significantly boost EBIT in H2 2023, alongside an anticipated letter price increase in Germany, helping DHL meet its full-year guidance.

DSV A/S (CSE:DSV)

DSV reported robust demand, especially on the Transpacific trade lane, with no immediate signs of a US recession. They are optimistic about improving Free Cash Flow in H2 2024, driven by lower net working capital and stabilized freight rates. Despite no new updates on the NEOM project or developments with DB Schenker, DSV’s positive trading environment suggests a solid financial outlook.

Fraport AG (ETR:FRAG)

Fraport focused on addressing challenges from reduced passenger traffic at Frankfurt Airport due to supply constraints, mainly from Lufthansa’s delayed aircraft deliveries. Despite this, demand remains strong, leading to record load factors. Significant fee increases are expected in 2025, enhancing revenue potential. Fraport aims for a Free Cash Flow turnaround by 2025, though the timing for dividend resumption is uncertain.

Hapag-Lloyd (F:HLAG)

Hapag-Lloyd presented a stable outlook, with healthy demand on the Transpacific trade lane, although European exports lag. Concerns about profitability post-Red Sea resolution persist, but management believes actions like scrapping older vessels and reducing speeds could mitigate impacts.

Kühne + Nagel (K+N)

Kühne + Nagel indicated positive trends in ocean and air freight volumes with expectations for improved yields in H2 2024. While the impact on Q4 is uncertain, improvements in Free Cash Flow are anticipated as freight rates stabilize.

Lufthansa AG (ETR:LHAG)

Lufthansa presented a mixed outlook across regions, facing challenges on Asian routes but resilience in transatlantic travel, especially in premium segments. Reduced EBIT guidance appears achievable, although inefficiencies from delayed deliveries and labor disputes add complexity.

Zurich Airport

Zurich Airport is contending with cost inflation impacting profitability but expresses optimism regarding future fee increases and the Noida airport project in India. A potential new dividend policy signals returns to shareholders as part of its strategy for managing current challenges and pursuing long-term growth.