Deutsche Lufthansa (LHA) CMD 2024 summary

Market environment and business overview

• Lufthansa Technik represents 18% of group revenues and 24% of employees, with stable growth and low earnings volatility compared to other group units.

• The global MRO market is highly fragmented, valued at $93–100 billion in 2023, with expected volume growth of 1–2% per year until 2030.

• Engine and component services account for about 70% of the MRO market, with high entry barriers due to regulatory, IP, and capital requirements.

• Lufthansa Technik is the largest OEM-independent MRO provider globally, with a strong presence in EMEA and ambitions to expand in the Americas and APAC.

• EMEA remains the largest market, APAC shows the highest growth, and LHT is active in all regions.

Strategic direction and Ambition 2030

• Ambition 2030 aims to nearly double revenues and adjusted EBIT by 2030, targeting over €10 billion in revenue, >10% EBIT margin, >50% cash conversion, and ~15% ROCE, with a >7% revenue CAGR from 2023–2030, outpacing the market by over 3 percentage points.

• Three strategic vectors: global expansion (especially in Americas and APAC), industry transformation through digitalization, and entry into new high-margin business areas, including defense and digital TechOps.

• Focuses on five imperatives: direct/local customer access, global scale, digitally enabled MRO, competitive costs, and access to price-competitive material and OEM IP.

• Digitalization is a key lever, with over 300 projects under the "Digitize the Core" program and a unique Digital Tech Ops Ecosystem (AVIATAR, AMOS, flydocs), supporting digitally enabled MRO.

• Expansion includes new facilities in Portugal and North America, doubling Tulsa capacity, new hangars in the Philippines, and M&A as a catalyst for further growth.

Financial guidance and performance

• Revenue CAGR target of >7% from 2023 to 2030, with >€10bn revenue and >10% EBIT margin by 2030.

• Cash conversion expected to exceed 50% by 2030, with €1.8 billion CapEx planned, mainly in EMEA, and value-accretive capital allocation.

• ROCE target of ~15%, with over 40% of revenues until 2028 already secured by contracts.

• Third-party revenue share to rise to 75–80% by 2030, reducing reliance on group airlines.

• Segment strategies: Engine Services drive growth, Component Services deliver high margins, Maintenance Services ensure steady cash flows, Digital and Special Services create new opportunities.