LSG Sky Chefs Increases Revenues and Earnings

Neu-Isenburg, Germany – In 2012, LSG Sky Chefs was able to increase its operating result for the fifth year in a row. Despite a number of unforeseen developments within the airline catering industry and the economy at large, consolidated group revenues rose by almost 9 percent to 2.5 billion Euros. The company’s operating profit amounted to 97 million Euros, which is an increase of 14.5 percent over the previous year’s figure.

“Our success is based on a solid foundation that has enabled our company to quickly respond to the ever-changing market requirements”, said CEO Walter Gehl. “Our measures include restructuring in the mature markets, the rigid execution of worldwide excellence initiatives in the company’s key areas and the proactive pursuit of growth opportunities in emerging countries.”

In 2012, LSG Sky Chefs signed a number of strategic agreements in order to strengthen its global business objectives. The targeted expansion in Russia was successfully continued by entering the airline catering markets in St. Petersburg and Vladivostok within the framework of LSG Sky Chefs’ joint venture with Aeroflot, Aeromar. LSG Sky Chefs also signed a new joint venture agreement in Novosibirsk, Russia. In Luanda, Angola, a new joint venture facility began operations during the summer. In August, LSG Sky Chefs signed an agreement with Finnair for the management of its catering activities at the airline’s hub in Helsinki. Furthermore, the planned joint venture with Alpha in Great Britain was implemented in October.

LSG Sky Chefs was also able to increase its airline catering related sales in all regions and extend agreements with strategic customers. These include worldwide contracts with American Airlines, United Airlines, US Airways and Alaska Airlines. Contracts were also renewed with Thomson Airways in Great Britain and Ireland and with Alitalia in Italy. Furthermore, business relationships with growing airlines in the Middle East were strengthened. In addition, more and more airline customers are opting for innovative and environmentally-friendly equipment solutions and logistics services the company offers.

The company’s activities to penetrate near-core adjacent markets also paid off. Business with retail chains in the United States grew as a result of an expansion targeting existing and potential customers. The train catering team developed a complete portfolio of innovative products and services which were unveiled at the leading international trade fair for transport technology, Innotrans. In addition, the school catering team in Hong Kong continuously grew the number of clients.

For 2013, LSG Sky Chefs expects moderate growth for its core business. The company will intensify its innovation and sustainability approach in order to generate added customer benefits and enrich existing business relationships, in addition to acquiring new customers. Activities planned for the adjacent markets will be expanded further so as to continue to grow and compensate for fluctuations within the airline business. A strong focus will also remain on consistent cost management by means of standardization and optimization of process flows and business models.

“We will proceed with our ambitious business strategy to achieve profitable growth while improving our cost competitiveness. At the same time we will emphasize our differentiation by applying our leading quality claim, while maintaining our reach for excellence in our day-to-day activities,” Walter Gehl added.

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