LSG Group sees strong revenue growth in 1H 2022 -Runway Girl
LSG Group revenue increased in the first half of 2022. This was driven by positive business development in all regions, particularly in North America and Latin America. The increase amounted to €410 million, or 92% compared to last year (2021: €447 million), bringing total revenue to €857 million. The LSG Group thus reached 77% of its pre-pandemic revenue level (2019: 1,113.7 million euros). During the first six months, the company signed new contracts, renewed existing contracts and formed innovative partnerships.
“Our industry continues to go through difficult economic times,” says Wilken Bormann, CFO of LSG Group. “The current pandemic is compounded by supply chain disruptions, flight cancellations due to capacity constraints and high fuel costs and inflation in much of the world. The LSG group nevertheless recorded stable growth figures and succeeded in maintainingits strategic realignment and strict cost management. I would like to thank all of our employees around the world who, in line with our vision, give their best every day to drive this wonderful company forward and provide our customers with a service we can be proud of.
The revenue growth is reflected in the number of employees as of June 30, 2022, which was 18,659 (previous year: 15,288, up 22%). Adjusted EBIT decreased to €13 million in the first half of 2022 (prior year: €19 million) due to the elimination of subsidies under the US Cares Act. Without the subsidies, the adjusted EBIT would have exceeded the figure for the previous year.
Focus on strategic partnerships and innovations
In the first half, the LSG Group focused on the implementation of its strategic realignment and, in this context, entered into strategic partnerships with NotCo, Kaelis and Cuisine Solutions. The aim is to expand the offer in the areas of food technology and sustainable food and equipment solutions. At the same time, the company is launching its “next” tailor-made innovation program. This aims to anchor an approach of continuous and rapid innovation as a central element of the mission “We connect food and people. Everywhere.” mission. All employees can participate and innovate with the help of “next”. such as Consumption Analytics, Inflight Management Suite, other product developments and innovations in the field of in-flight sales such as pre-order and pre-choose technology.
“We are seeing more and more how our strategy is becoming a reality and creating more growth and new opportunities in all areas of the business. The excellent feedback and interest from our customers at the WTCE encourages us and inspires us to act even faster and more innovatively,” says Erdmann Rauer, CEO of the LSG Group. “Looking back, we have accomplished a lot over the past six months and demonstrated our market leadership, despite all the market volatility. We can be proud of this and draw the necessary energy for the months to come. We are on the right track, I am sure.
New contracts and contract extensions in traditional inflight catering and in-flight sales activities
In its core business, airline catering LSG Sky Chefs renewed major contracts with international airlines and signed new ones in the first half. These included Delta Air Lines (23 sites in the United States, 2 hubs, 5 international sites), Air France/KLM (7 sites in Latin America), Condor (11 new sites in the United States) as well as Vietnam Airlines in Los Angeles/USA, Saudi Arabian Airlines to Bangkok/Thailand and Incheon/Korea. Thai Air Asia X in Thailand, Greater Bay Airlines in Hong Kong, UPS Cargo-Catering in Anchorage/USA and Turkish Airlines in Seattle and Dulles/USA.
Retail inMotion, LSG Group’s in-flight sales experts, also signed contracts in the first six months with Spirit Airlines (5-year extension), Eurowings Discover (several new US locations, last mile via LSG Sky Chefs), easyJet (onboard retail technology, last mile through dnata) and Greater Bay Airlines in Hong Kong (onboard retail management). The company also won four onboard hospitality awards and developed and implemented Condor’s new online home delivery store.
New sites and contracts in the food trade
Food trading (business with retailers and home delivery services) is the second pillar of LSG Group’s business which has gained in importance and revenue growth during the pandemic. The Ghost Kitchen network was extended to four new locations during the period under review (Sao Paulo/Brazil, Denver and Chicago/USA, Helsinki/Finland). The restaurant operation in Chile now supplies all baked goods to one of the largest cafe chains. The operation in Pittsburgh/USA won the fifth season as a new client.
Sustainability at the center of all regions and all business sectors
The LSG Group’s sustainability strategy, based on the three pillars People – Planet – Prosperity, was further developed in regional working groups on the subject. Concrete projects with measurable objectives have been jointly developed. Retail inMotion has launched its “Prism” sustainability strategy, which aims to have a long-term impact across all IT solutions and divisions. All initiatives are grouped under the aegis of the global sustainable development strategy with the aim of anchoring the subject at the heart of all the company’s activities.
The LSG group is the qualitative and technological leader in airline catering and related markets. It has two strong and independent expert brands: LSG Sky Chefs, global catering specialist with the highest hygiene and quality standards for airlines, the home delivery market and retail. Retail inMotion, which specializes in in-flight sales, product development and technology solutions, sets standards with its understanding of partnership and its power of innovation.
LSG Group (International) is headquartered in Neu-Isenburg, near Frankfurt, Germany, and has an extensive network of joint ventures and partnerships around the world. In pandemic year 2021, its 15,500 employees at 140 locations in 40 countries around the world generated consolidated revenue of €1,113 million. LSG Sky Chefs produced 131 million meals (excluding minority interests) over this period.
Featured image credited to LSG Group