Lufthansa Technik last year grew revenue 5% to €5.4 billion ($6.7 billion) – a record level – but the German MRO provider's adjusted EBIT improved only 1%, to €415 million.
During a results briefing at LHT's Hamburg headquarters on 19 March, finance chief Constanze Hufenbecher said that increased investment – particularly for the development of digital services – had put pressure on operating profit, which she nonetheless describes as "very decent".
Restructuring costs were incurred when LHT ending airframe overhauls in Hamburg last year. Half of the approximately 400 affected staff were transferred to other operations.
LHT raised investment to €233 million in 2017, from €217 million the previous year. This includes investment in new engine overhaul joint ventures with GE Aviation and MTU, the acquisition of spare powerplants, development of new services, and growth projects.
"Since 2014, we have almost doubled our annual investments," says Hufenbecher, "and we plan to pursue this approach further." LHT has budgeted €260 million for 2018 investments.
Chief executive Johannes Bussmann describes 2017 as a "year of sales", as the volume of new contracts reached €13.2 billion.
Revenue increased by 9% in Europe, the Middle East and Africa – partly due to favourable exchange rate effects – and by 6% in the Asia-Pacific region.
In the Americas region, revenue declined 2%, a performance LHT is "slightly discontented" with, Hufenbecher admits. But she notes that LHT previously invested in its US component repair facility in Tulsa as well as a base maintenance site in Puerto Rico, and that the company intends to "massively" increase sales efforts in the region.
Bussmann says Germany remains central to LHT's business and that it invested more than €90 million in its home country in 2017. However, he thinks growth opportunities lie outside its home market.
"Never before have we generated so much revenue, supported so many aircraft or employed so many people. With this foundation, we will stick to our course [of] growing throughout the world and driving the entire industry forward," says Bussmann.