LSG Group

50 percent drop in sales

The Corona crisis is having a drastic effect on the worldwide catering business of LSG Group.
LSG Group
The Corona crisis is having a drastic effect on the worldwide catering business of LSG Group.

The ongoing corona crisis and the resulting widespread cessation of global air traffic are having a drastic impact on LSG Group's worldwide catering business and thus on the first half of 2020.

According to LSG, sales revenues fell by 50 percent year-on-year to 814 million euros due to a sharp decline in the number of flights and passengers of airline customers worldwide. EBIT (earnings before interest and taxes) fell accordingly to -195 million euros (previous year: 33 million euros). As short-term measures to limit the financial impact, the company implemented project and hiring freezes, short-time work and temporary plant closures right at the beginning of the crisis.
"The Corona crisis poses extremely great challenges for us, the like of which has never been seen before in the history of our company," says Chief Financial Officer Dr. Kristin Neumann. "Thanks to our solid liquidity position and the measures we implemented at short notice to safeguard liquidity, we were able to cushion the initial slump in sales and earnings. However, none of us knows how long this crisis will last, and it is obvious that only long-term solutions will help us to reduce our costs sustainably while giving the company more flexibility - and a future".

Lower overall costs

LSG Group has announced that it intends to reduce its total costs worldwide by at least 30 percent. This is part of the 'Levante' project, which is designed to navigate LSG Group through the Corona crisis while continuing to develop its business strategy.

"The aim of the project is to optimize our company in the medium term in terms of the size of its organization and network and to adapt it to the changed market conditions - with fewer flights and lower passenger and service volumes," says Chief Executive Officer Erdmann Rauer. "In the long term, we are also changing our range of products and services with a view to the 'new normality' and we want to actively bring about a change in the airline catering industry. We can see that our customers are ready for change - and we are ready to support them with our employees.

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