Notes to the segment reporting
44. Notes to the reporting segments and segment data
Notes to the reporting segments
As of 31 December 2023, the Lufthansa Group operated in three reporting segments, which constitute its Group activities. The segments are defined in line with the internal reporting and management structure. The airline activities were combined in their respective reporting segments based on the similarity between the economic characteristics of the individual airlines, such as network and sales structures, as well as customers and services. The Passenger Airlines segment comprises Lufthansa German Airlines, SWISS, Austrian Airlines, Brussels Airlines and Eurowings, including the equity interest in SunExpress. Further information about the individual airlines can be found in the Group management report ↗ Passenger Airlines segment.
The Logistics segment comprises the scheduled airfreight activities of the Lufthansa Cargo group. Lufthansa Cargo is Europe’s leading cargo airline.
The MRO segment is a leading global provider of maintenance, repair and overhaul services for civil and commercial aircraft and is represented by the Lufthansa Technik group. Aircraft Maintenance and Engineering Corporation (AMECO), which was previously presented in the MRO segment, has formed part of the Additional Businesses and Group Functions in the Company’s internal reporting since the start of the current financial year. The figures for the previous year have been adjusted accordingly.
The Catering segment sold in the reporting year, represented by the LSG Lufthansa Service/Sky Chefs group, is a leading airline caterer and also offers catering services in the retail segment as well as related services and logistics. Due to the disposal, the figures for the Catering segment are eliminated in the consolidation column of the reconciliation and are not part of the figures in the Group column, which only shows the continuing operations. The disposal of the segment also meant that the previous year’s figures were adjusted in the reconciliation column to consolidated figures in the segment reporting.
Business activities not allocated to a reporting segment are presented in table ↗ T138, in the “Additional Businesses and Group Functions” column, along with the income and expenses of central Group functions. They include the income and expenses of Lufthansa Commercial Holding GmbH, the Lufthansa AirPlus group, the Lufthansa Systems group, the Lufthansa Aviation Training group and other Group companies.
Notes to segment data and internal management
The accounting policies of the reporting segments are the same as those described in ↗ Note 3.
The Lufthansa Group measures the performance of its segments using both segment result indicators: EBIT and Adjusted EBIT. EBIT is made up of the IFRS operating result and the result from equity investments. Adjusted EBIT is obtained by correcting EBIT for gains and losses on the disposal of assets, write-downs and write-backs and earnings attributable to other periods in connection with pension obligations (plan adjustments and plan settlements), expenses for staff-related restructuring measures, material extraordinary legal costs not resulting from normal business operations, material costs in connection with company transactions and material other expenses based on extraordinary external events.
Sales and revenue between reporting segments are based on arm’s length prices. Administrative services are charged as cost allocations.
For information on external traffic revenue, see ↗ Note 4.
The result of the equity valuation for the segment’s equity investments is part of its segment result. However, from a Group perspective, it is attributed to the financial result rather than the operating result.
Capital employed largely comprises segment assets, adjusted for derivative financial instruments, cash and cash equivalents and deferred tax items less non-interest-bearing debt.
The reconciliation column includes both the effects of consolidation activities and the amounts resulting from different definitions of segment item contents compared with the corresponding Group items. Eliminated segment revenue generated with other consolidated segments is shown in the reconciliation column for revenue.
The amounts in the reconciliation column for Group EBIT include the effects of consolidation activities on profit or loss in which income and expense do not figure for two companies at the same amount, or in the same period.
T138 | SEGMENT INFORMATION FOR THE 2023 REPORTING SEGMENTS | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Passenger Airlines | Logistics | MRO | Catering | Total reportable operating segments | Additional Businesses and Group Functions | Reconciliation | Group6) | |||
in €m | Not allocated | Consolidation5) | ||||||||
External revenue | 27,632 | 2,927 | 4,389 | 1,888 | 36,836 | 485 | – | -1,879 | 35,442 | |
of which traffic revenue | 26,701 | 2,775 | – | – | 29,476 | – | 450 | – | 29,926 | |
Inter-segment revenue | 705 | 50 | 2,158 | 66 | 2,979 | 435 | – | -3,414 | – | |
Total revenue | 28,337 | 2,977 | 6,547 | 1,954 | 39,815 | 920 | – | -5,293 | 35,442 | |
Other operating income | 1,306 | 113 | 481 | 37 | 1,937 | 2,325 | – | -1,275 | 2,987 | |
Total operating income | 29,643 | 3,090 | 7,028 | 1,991 | 41,752 | 3,245 | – | -6,568 | 38,429 | |
Operating expenses | 27,730 | 2,933 | 6,383 | 1,945 | 38,991 | 3,499 | – | -6,530 | 35,960 | |
of which cost of materials and services | 16,687 | 2,063 | 3,844 | 770 | 23,364 | 428 | – | -3,429 | 20,363 | |
of which staff costs | 5,426 | 419 | 1,559 | 811 | 8,215 | 906 | – | -811 | 8,310 | |
of which depreciation and amortisation | 1,725 | 182 | 157 | 62 | 2,126 | 113 | – | -11 | 2,228 | |
of which other operating expenses | 3,892 | 269 | 823 | 302 | 5,286 | 2,052 | – | -2,279 | 5,059 | |
Results of equity investments 1) | 120 | 62 | -17 | 9 | 174 | 48 | – | -9 | 213 | |
of which result of investments accounted for using the equity method | 125 | 11 | -24 | 9 | 121 | 9 | – | -9 | 121 | |
Adjusted EBIT 2) | 2,033 | 219 | 628 | 55 | 2,935 | -206 | – | -47 | 2,682 | |
Reconciliation items | 31 | -5 | – | -2 | 24 | -46 | – | 9 | -13 | |
Impairment losses/gains | -38 | – | 1 | -40 | -77 | -4 | – | 42 | -39 | |
Effects from pension provisions and restructuring | -13 | -4 | 3 | -1 | -15 | -7 | – | – | -22 | |
Earnings from asset disposal | 81 | -2 | 12 | 39 | 130 | 4 | – | -33 | 101 | |
Other reconciliation items | 1 | 1 | -16 | – | -14 | -39 | – | – | -53 | |
EBIT | 2,064 | 214 | 628 | 53 | 2,959 | -252 | – | -38 | 2,669 | |
Other financial result | -352 | |||||||||
Profit/loss before income taxes | 2,317 | |||||||||
Capital employed 3) | 8,496 | 2,335 | 4,056 | 267 | 15,154 | 1,445 | – | -399 | 16,200 | |
of which from investments accounted for using the equity method | 256 | 43 | 150 | – | 449 | 29 | – | -13 | 465 | |
Segment capital expenditure 4) | 3,095 | 191 | 137 | 35 | 3,458 | 30 | – | 121 | 3,609 | |
of which from investments accounted for using the equity method | – | – | 19 | – | 19 | – | – | – | 19 | |
Employees at end of period | 60,924 | 4,152 | 22,870 | 50 | 87,996 | 8,681 | – | – | 96,677 | |
Average number of employees | 59,331 | 4,122 | 21,925 | 16,475 | 101,853 | 8,411 | – | – | 110,264 | |
1) The result from equity investments does not include any impairment losses on investments accounted for using the equity method. 2) For reconciliation from Adjusted EBIT to EBIT ↗ T023, in the Group management report. 3) The capital employed results from total assets adjusted for non-operating items (deferred taxes, positive market values, derivatives), less non-interest bearing liabilities (including trade payables and liabilities from unused flight documents) and, as of the reporting year, less cash and cash equivalents. 4) Investment in intangible assets and property, plant and equipment, as well as in loans to and shares in companies. Investment is shown without capitalised borrowing costs. 5) Consolidation includes elimination of discontinued Catering segment. 6) Figures show continuing operations (except average number of employees). |
T138 | SEGMENT INFORMATION FOR THE 2022 REPORTING SEGMENTS | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
in €m | Passenger Airlines | Logistics | MRO | Catering | Total reportable operating segments | Additional Businesses and Group Functions | Reconciliation | Group7) | ||
Not allocated | Consolidation5) | |||||||||
External revenue | 21,8925) | 4,582 | 4,004 | 1,903 | 32,381 | 409 | – | -1,895 | 30,895 | |
of which traffic revenue | 20,7055) | 4,430 | – | – | 25,135 | – | 729 | – | 25,864 | |
Inter-segment revenue | 8685) | 45 | 1,546 | 57 | 2,516 | 242 | – | -2,758 | – | |
Total revenue | 22,760 | 4,627 | 5,550 | 1,960 | 34,897 | 651 | – | -4,653 | 30,895 | |
Other operating income | 1,025 | 106 | 401 | 51 | 1,583 | 2,117 | – | -1,327 | 2,373 | |
Total operating income | 23,785 | 4,733 | 5,951 | 2,011 | 36,480 | 2,768 | – | -5,980 | 33,268 | |
Operating expenses | 24,100 | 3,171 | 5,383 | 2,015 | 34,669 | 3,050 | – | -5,948 | 31,771 | |
of which cost of materials and services | 14,492 | 2,295 | 3,066 | 784 | 20,637 | 298 | – | -3,005 | 17,930 | |
of which staff costs | 4,584 | 425 | 1,379 | 833 | 7,221 | 835 | – | -833 | 7,223 | |
of which depreciation and amortisation | 1,766 | 170 | 178 | 77 | 2,191 | 117 | – | -109 | 2,199 | |
of which other operating expenses | 3,258 | 281 | 760 | 321 | 4,620 | 1,800 | – | -2,001 | 4,419 | |
Results of equity investments 1) | 15 | 386) | -14 | -7 | 326) | -16 | – | 7 | 23 | |
of which result of investments accounted for using the equity method | 33 | 86) | -14 | -9 | 186) | -42 | – | 9 | -15 | |
Adjusted EBIT 2) | -300 | 1,6006) | 554 | -11 | 1,8436) | -298 | – | -25 | 1,520 | |
Reconciliation items | 21 | -25 | -56 | -171 | -231 | -46 | – | 176 | -101 | |
Impairment losses/gains | -29 | – | -15 | -174 | -218 | -15 | – | 177 | -56 | |
Effects from pension provisions and restructuring5) | 51 | -20 | 19 | -1 | 49 | -7 | – | 2 | 44 | |
Earnings from asset disposal | 2 | -1 | 11 | 6 | 18 | 20 | – | -5 | 33 | |
Other reconciliation items | -3 | -4 | -71 | -2 | -80 | -44 | – | 2 | -122 | |
EBIT | -279 | 1,5756) | 498 | -182 | 1,6126) | -344 | – | 151 | 1,419 | |
Other financial result | -170 | |||||||||
Profit/loss before income taxes | 1,249 | |||||||||
Capital employed 3) | 7,230 | 2,1726) | 3,825 | 435 | 13,6626) | 1,381 | – | -138 | 14,905 | |
of which from investments accounted for using the equity method | 125 | 446) | 161 | 41 | 3716) | 21 | – | – | 392 | |
Segment capital expenditure 4) | 2,032 | 254 | 99 | 40 | 2,425 | 45 | – | -45 | 2,425 | |
of which from investments accounted for using the equity method | – | – | 37 | – | 37 | – | – | – | 37 | |
Employees at end of period | 56,762 | 4,085 | 20,411 | 20,218 | 101,476 | 8,033 | – | – | 109,509 | |
Average number of employees | 56,054 | 4,088 | 20,116 | 18,709 | 98,967 | 7,922 | – | – | 106,889 | |
1) The result from equity investments does not include any impairment losses on investments accounted for using the equity method. 2) For reconciliation from Adjusted EBIT to EBIT ↗ T023, in the Group management report. 3) The capital employed results from total assets adjusted for non-operating items (deferred taxes, positive market values, derivatives), less non-interest bearing liabilities (including trade payables and liabilities from unused flight documents) and, as of the reporting year, less cash and cash equivalents. 4) Investment in intangible assets and property, plant and equipment, as well as in loans to and shares in companies. Investment is shown without capitalised borrowing costs. 5) Figures adjusted due to the reclassification of the Catering segment to discontinued operations. Consolidation column includes elimination of discontinued operations. 6) Figures adjusted due to segment reassignment of Aircraft Maintenance and Engineering Corporation. 7) Group column only includes continuing operations (except average number of employees at end of period). Figures adjusted due to the reclassification of the Catering segment to discontinued operations. |
Notes on geographical regions in 2023
The allocation of traffic revenue to geographical regions is based on the original location of sale. Non-current assets are allocated according to the location of the relevant asset. The allocation of other revenue to the individual regions is based on the geographical location of the customer.
The regions are defined on a geographical basis. As an exception to this rule, traffic revenue generated in Turkey is attributed to Europe.
The Lufthansa Group controls its air traffic operations on the basis of network results and not on the basis of regional earnings contributions. Consequently, the presentation of regional segment results is of no informational value for the Lufthansa Group.
A presentation of traffic revenue generated in the Passenger Airlines and Logistics segments by traffic region, rather than by original location of sale, is included in the information on the respective segments in the management report.
External revenue, non-current assets and capital expenditure are as follows:
T139 | EXTERNAL REVENUE AND NON-CURRENT ASSETS BY REGION | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2023 | 2022 | ||||||||||||||
in €m | Europe | North America | Central and South America | Asia / Pacific | Middle East | Africa | Group | Europe | North America | Central and South America | Asia / Pacific | Middle East | Africa | Group | |
Traffic revenue 1) | 20,173 | 5,482 | 612 | 2,694 | 450 | 515 | 29,926 | 17,131 | 4,588 | 640 | 2,514 | 498 | 493 | 25,864 | |
Other revenue | 2,403 | 1,511 | 223 | 984 | 270 | 125 | 5,516 | 2,211 | 1,561 | 146 | 791 | 239 | 83 | 5,031 | |
Non-current assets 2) 3) 4) | 21,455 | 151 | 19 | 102 | 2 | 2 | 21,731 | 19,919 | 460 | 51 | 208 | 2 | 8 | 20,648 | |
Capital expenditure on non-current assets 3) | 3,593 | 25 | 3 | 17 | – | – | 3,638 | 2,367 | 31 | 3 | 7 | – | 1 | 2,409 | |
1) Traffic revenue is allocated according to the original location of sale. 2) Non-current assets include property, plant and equipment and intangible assets with the exception of repairable spare parts for aircraft. 3) Aircraft are allocated according to their location of registration. 4) Including right-of-use assets in accordance with first-time application of IFRS 16. |
The figures for the main countries are as follows:
T140 | EXTERNAL REVENUE AND NON-CURRENT ASSETS BY COUNTRIES | ||||
---|---|---|---|---|---|
2023 | 2022 | ||||
in €m | Germany | USA | Germany | USA | |
Traffic revenue 1) | 8,915 | 4,842 | 7,674 | 4,092 | |
Other revenue | 894 | 1,190 | 916 | 1,326 | |
Non-current assets 2) 3) | 14,956 | 92 | 14,271 | 382 | |
Capital expenditure on non-current assets 3) | 2,505 | 15 | 1,877 | 25 | |
1) Traffic revenue is allocated according to the original location of sale. 2) Non-current assets include property, plant and equipment and intangible assets with the exception of repairable spare parts for aircraft. 3) Aircraft are allocated according to their location of registration. |
In the 2023 financial year and in the previous year, no more than 10% of Lufthansa Group revenue was generated with any one customer.