Press release
Despite Headwinds: Lufthansa Technik continues to target earnings at previous year's level
- 319 million euros Adjusted EBIT means best first half-year in the company's history
- Yet the company is also experiencing the pressure on the aviation industry
- Successful recruitment measures: Number of employees rises to over 23,400
Lufthansa Technik had a mixed economic picture after the first half of the year. While the global market leader in aircraft maintenance, repair and overhaul (MRO) once again achieved a record result for the period from January to the end of June thanks to a very strong second quarter, the company is also experiencing the strong pressure on the aviation industry as a whole.
"Of course we are always pleased to see record figures," says Dr. William Willms, CFO of Lufthansa Technik. But part of the truth is that non-operational special factors and one-off effects were significant contributors. We still expect to deliver results at the previous year’s level for the year as a whole." By 2023, Lufthansa Technik had achieved a total Adjusted EBIT of 628 million euros.
After the first half of 2024, earnings now amount to 319 million euros. Lufthansa Technik saw a further 9.6 percent increase compared to the previous record figure of 291 million euros from the previous year - despite the strike costs that significantly impacted the first quarter. Revenue at the end of June amounted to 3.6 billion euros (previous year: 3.1 billion euros, +16.5%). The adjusted EBIT margin dropped accordingly, from 9.3% to 8.8%. This trend must be reversed in order to achieve the goal of the "Ambition 2030" corporate strategy, namely a sustained double-digit margin.
"We are still on course to grow further from a strong position," says William Willms. "However, it won't be a walk in the park. We are negatively impacted by the disproportionately high cost increases and the ongoing difficulties in the supply of materials across the industry." Both of Lufthansa Technik's traditional core segments, Engine and Aircraft Component Services, are feeling the effects of this in particular. "On the positive side, there is definitely no lack of demand," says William Willms. The company concluded some 320 new contracts in the first half of the year.
Digital activities, for example, are also developing very well with regard to the expansion of the product portfolio, customer base and revenue. The AMOS software developed by Lufthansa Technik subsidiary Swiss-AS is used extensively by airlines around the world - and those who are not yet using AMOS are still very interested in it. AVIATAR, the platform for airline operations with a wide range of digital products and services, is also continuing its positive trend. The corresponding contracts now include nearly 4,000 aircraft from paying customers.
The expansion of the defense business is attracting a lot of attention. Lufthansa Technik has been servicing the aircraft of the German government's fleet for more than 60 years, and in the past quarter the third modern Airbus A350 government aircraft was handed over to the air force. The expansion of the defense business segment should help the company to remain a key player in the MRO sector in the future. At the same time, Lufthansa Technik can use its technical expertise to contribute to the security of Germany and its partners. In this context, an extended cooperation was agreed a few days ago between Lufthansa Technik and the US Lockheed Martin Group.
There is also good news on the recruitment front: the recruitment measures continue to be effective. By the end of June, the number of employees was over 23,400, compared to 21,500 at the same time last year. Lufthansa Technik also remains strongly committed to promoting young talent. In early August, more than 300 young people will begin their training at the German locations.