Posted on: 22 March 2012 by Mark Howells
Lufthansa Technik Group reported a slight revenue increase of 1.9% for fiscal year 2011 with a figure of €4.1 billion.
The company’s result fell only slightly below the impressive result for FY2010, the annual report of the 21 consolidated Lufthansa Technik Group companies showing an operating result of €257 million.
“Considering the tense economic situation of many airlines, the revenue decline in some markets, and the negative effect on growth in customer business brought about by the valuation of the dollar, Lufthansa Technik maintained its course well in 2011,” stated August Wilhelm Henningsen, CEO of Lufthansa Technik (pictured).
“However, the decline in the company’s operating result also makes it clear that additional steps to improve our result are unavoidable given the growing price, cost and competitive pressures,” explained Henningsen. He stressed that the company has already improved productivity and efficiency for customers with a wide variety of measures and programmes.
“But that is not enough. We need additional cost reductions to be sure of winning sales projects. It is our goal to improve our result by more than €110 million by 2014, and to achieve this we will rethink existing structures and examine resources very closely.”
According to Henningsen, the product portfolio is being developed and expanded flexibly. “A high level of customer loyalty and outstanding quality will continue to be the values by which we live. Our position in the global MRO competition is very solid, and with our international structure we will be able to satisfy the demands of the market in the future as well as today.”
The revenue growth owed much to large modification programmes undertaken by Lufthansa and new contracts with Group companies (8.7%). Revenues from business with external customers, however, dropped by 2.9%, reducing the share of external business in total revenues to 56.3%%. The company’s earnings before tax (EBT) declined by 14.5% to €241 million with an operating margin of 6.7%.
“Our key profit indicators have been sinking since 2007,” noted Dr Peter Jansen, chief financial officer of Lufthansa Technik. “This is not a positive trend, and it does not adequately secure our competitive position.” The company says it was able to reduce both material and project costs in 2011 as a result of ESP@LHT, its programme for securing sustainable results. Jansen thus stressed, “We must greatly intensify our strict cost and efficiency management and the measures we have introduced to improve our result. We intend to accomplish this by 2014 within the framework of our Group program SCORE.”