Increasing profitability

Sustainable value creation in the Company

The Lufthansa Group applies a value-based system of management. At its centre is the profitability of the Company. This is measured by reference to Adjusted EBIT. In order to embed profitability in all decision-making processes, performance- related pay for managers is tied to the financial performance of the Company. Remuneration report, p. 84ff.

The adjusted return on capital employed (Adjusted ROCE) is measured for the Lufthansa Group and the individual companies. If Adjusted ROCE exceeds the weighted average cost of capital (WACC), the Company is creating value.

Development of revenue, adjusted EBIT in €m and adjusted EBIT margin in %

Improved cost management contributes to structural increase in profitability

Greater cost discipline, increasing process simplification and productivity improvements are intended to lift structural profitability. Unit costs at the passenger airlines, adjusted for fuel costs and exchange rates, are to be reduced by 1% to 2% per year. Cost-cutting measures are also implemented on a continuous basis in Aviation Services.