LSG Group

Corona is still depressing the numbers

The signs are pointing to recovery. Adjusted EBIT, which fell by EUR 195m last year, has risen again, LSG Group reports.
LSG Group
The signs are pointing to recovery. Adjusted EBIT, which fell by EUR 195m last year, has risen again, LSG Group reports.

The COVID 19 pandemic weighed on LSG Group's business results in the first half of 2021. The company is fighting the crisis with cost-cutting measures and staff reductions. Recovery is now in sight. Adjusted EBIT rose to €17m (previous year: €-195m).

During Q2, the continued recovery of the North American airline catering market had a positive impact. Nevertheless, fewer long-haul flights and declining passenger numbers from airline customers worldwide brought a drop in revenue for the LSG group to €447m (previous year: €814m). This corresponds to a drop of 45 per cent compared with 2020, the company said. Excluding the divested European business, the minus amounts to 23 percent, it added. LSG also points out that the effects of the Corona crisis in the previous year only became apparent from March onwards.

Saving against the crisis

"The pandemic continues to affect not only our company's results, but those of the entire airline and travel industry," says Dr Kristin Neumann, CFO of LSG Group.Our growth strategy based on our core business Airline Catering and our strict cost management are beginning to pay off. My thanks go to all employees who are actively supporting and helping to shape our transformation into a leaner, more efficient and more attractive company."

The number of employees as of June 30, 2021, had fallen by 46 percent compared with the previous year, he said. 15,300 people are still employed by LSG Group, with 8,600 employees having left the company with the sale of its European business, it said. Adjusted EBIT rose to €17m (previous year: €-195m) and EBIT was €-5m (previous year: €-306m). The sale of the European business and government aid contributed to the improvement in the financial situation. 62 million meals produced in the first half-year by the fully consolidated operations of LSG Group International represented a 61 per cent drop on the pre-pandemic 2019 figure.

New business areas developed

New catering contracts with international airlines and the launch of new catering concepts such as "Onboard Delights", "SWISS Saveurs" and "Austrian Melangerie" shaped Q2 2021. In Chengdu, China, LSG Sky Chefs opened a new operation and entered into partnerships with Swolefoods in New Zealand and Home Chef and Hello Fresh in the USA. Numerous virtual brands emerged in Ghost Kitchen pilot projects around the globe. Having seen promising results in Miami, there are plans to expand operations.
"We are seeing our new strategy take hold and generate growth. This gives us confidence. With its first half-year results, our expert brand Retail inMotion shows the importance that in-flight sales and technology already enjoy in the industry andwill enjoy in the future," explains Erdmann Rauer, CEO of LSG Group, optimistic about the Group's ability to innovate.

In line with the six Sustainable Development Goals (SDGs) prioritized by LSG Group, the company engaged socially, especially for "Good Health and Wellbeing" - supporting local vaccination campaigns and disinfecting homeless shelters free of charge. Sustainability ambassadors:inside were also appointed.

About the LSG Group
The LSG Group defines itself as a quality and technology leader in airline catering and related markets. With the independent brands LSG Sky Chefs as a globally active caterer for airlines, the home delivery market and retail, and Retail inMotion. The second brand specialises in in-flight sales, product development and technology solutions. LSG Group (International) is headquartered in Neu-Isenburg near Frankfurt and has an extensive network of joint ventures and partnerships around the globe. In the pandemic year 2020, the 12,500 employees at 140 locations in 40 countries worldwide generated consolidated revenue of 945 million euros. LSG Sky Chefs produced 244 million meals (including minority interests) in this period.