GERMANY. Inflight services specialist LSG Group has reported consolidated revenues for 2017 of €3.2 billion, a marginal +0.8% increase compared to the previous year. Without a negative foreign exchange effect, as well as the impact of withdrawal from certain markets and contracts, LSG Group said revenues would have risen by +3% year-on-year.
The company, which specialises in the airline, railway and convenience retail industries, had an Adjusted EBIT of €66 million, down by €36.5 million on a year earlier, mainly due to the costs of continuing transformation and restructure.
Looking ahead, major areas of growth will be onboard retail (led by the Retail inMotion division) and convenience retail, said LSG, “because of the considerable global market potential of those segments”.
“We have made great progress in many important aspects of our transformation,” said Chief Executive Officer Erdmann Rauer. “On the one hand, we have started the streamlining of our own production landscape in Europe and confirmed the viability of a network-oriented production approach for our classic catering services. This has increased our flexibility and given us more opportunities to establish a market presence in additional locations through partnerships and asset-light points of delivery. On the other hand, we have re-affirmed our leading position as a holistic onboard-retail provider by improving our technological capabilities and acquiring new customers on all continents as a result.”
The company’s onboard retail technology, marketed under the Retail inMotion brand (which also acts as an inflight concessionaire and supplier), is used by more than 25 airlines worldwide. Additionally, the company said it has continued to strengthen its position in the train services market.
“Looking ahead, we will keep on pursuing three strategic goals – Market Leadership, Transformation and Profitable Growth – in all of our regions and divisions,” added Rauer. “Digitalisation will be a crucial enabler in this endeavour. We are evaluating multiple opportunities to intensify the use of digital solutions in both our operational and administrative processes. This will make us more consistent and able to make the quality and efficiency of our products and services even better.”
For 2018, the LSG Group expects a slight decrease in revenues, primarily due to a substantial negative impact from exchange rates and a few contract withdrawals. The Adjusted EBIT is forecast to increase due to lower transformation costs and further productivity improvements.
*Watch out for an interview with Retail inMotion Chief Executive Officer Stefan Patermann, coming soon.
