TÜV SÜD starts its anniversary year with a major acquisition
New records in 2015: Revenue of EUR 2.2 billion and earnings of EUR 190 million (adjusted EBIT)
Global player: TÜV SÜD now employs more people abroad than in Germany
Major investment: The purchase of 100 % of the shares in Spanish ATISAE marks the largest acquisition in TÜV SÜD's history.
Digital expertise: Center of Excellence Digital Service inaugurated in Singapore
Passionate about safety since 1866: TÜV SÜD celebrates its 150th anniversary
TÜV SÜD continued its growth course in 2015, setting new records for revenue, earnings and headcount. The globally operating technical services group increased its revenue by around 8 per cent last year to EUR 2.2bn (2014: EUR 2.1bn). Earnings before interest and taxes (adjusted EBIT) rose to approx. EUR 190m (2014: approx. EUR 187m), while earnings after taxes (EAT) increased by over 9 per cent to EUR 114m (2014: approx. EUR 104m). TÜV SÜD started into its anniversary year of 2016 – the 150th year of its history – by purchasing the Spanish ATISAE Group. This acquisition, the largest in the company's history to date, brings the number of employees up to 24,000.
“By acquiring ATISAE we have strengthened not only our business operations in Spain, but also our position in western Europe”, said Prof. Dr.-Ing. Axel Stepken, Chairman of the Board of Management of TÜV SÜD AG, at the group's annual results press conference in Munich. Besides being the fifth largest national economy in the European Union, Spain is the second largest car manufacturer in the EU and ranks fourth worldwide in terms of installed wind-power capacity. Involving a workforce of 1,300-plus and revenue of over EUR 80m, the acquisition will be the largest in the 150-year history of the international service corporation. With a broad portfolio of services, ATISAE operates in many sectors of industry and thus integrates perfectly into TÜV SÜD Group.
The acquisition of ATISAE is a further milestone in TÜV SÜD's continued commitment to growth and internationalisation. “Our company has once again delivered profitable growth in 2015”, explained the Chairman of the Board of Management. Revenue grew by around 8 per cent to over EUR 2.2bn – a new record. Year-on-year, adjusted EBIT rose by a further 2 per cent to almost EUR 190m; earnings after taxes increased by over 9 per cent to EUR 114m. After the acquisition of ATISAE Group early this year, TÜV SÜD now employs approximately 24,000 staff, more than half of them outside Germany.
Broad success: Growth across all segments and regions
“TÜV SÜD's development has proved highly resilient in the face of challenging economic framework conditions”, said Dr Matthias J. Rapp, CFO of TÜV SÜD AG. Presenting TÜV SÜD's annual financial statement, Rapp highlighted the fact that all segments had once again experienced growth in revenue, contributing to the group's profitable growth. The INDUSTRY segment recorded an increase in revenue of more than 7 per cent to EUR 945m, in the MOBILITY segment revenue rose by roughly 5 per cent to EUR 639m, and the CERTIFICATION segment recorded a year-on-year increase in revenue of almost 14 per cent to EUR 557m.
“Within the scope of our internationalisation strategy, we had set ourselves the target of generating at least 40 per cent of our revenue outside Germany by 2015”, reported Rapp. "Last year we generated over 42 per cent of our consolidated revenue abroad, and thus clearly outperformed this target." Once again, the strongest impetus for growth came from Asia, where revenue rose by around 22 per cent, and from the Americas, which recorded growth of around 15 per cent. On its domestic market of Germany, TÜV SÜD also succeeded in increasing its revenue by a further 3.6 per cent in 2015, with the German legal entities generating revenue of around EUR 1.4bn. “This growth in revenue across all regions demonstrates that we are a strong competitor and emphasises our objective to be one of the leaders on the global TIC – testing, inspection and consulting – market”, explained the CFO.
TÜV SÜD also confirms this objective by investing in the further expansion and continuous modernisation of its testing capabilities throughout the world. In 2015 total capital expenditure amounted to over EUR 80m, of which more than half was spent in Germany.
Future-focused strategy: Ensuring security for Industry 4.0
The spread of digitisation and interconnectivity throughout virtually all areas of the economy and society is an important growth segment for the international technical services group. “While offering enormous opportunities, this area also involves significant risks”, underlined Stepken. A research and development project at TÜV SÜD which attracted potential attacks and investigated their approaches showed how dangerous the situation has become. Known as a ‘honeynet’, the project used real hard- and software to simulate the environment of a small-scale water works in a provincial town in Germany. Throughout the eight-month project, the experts recorded over 60,000 attempted attacks launched from servers all over the world, often using spoofed IP addresses.
“We regard ourselves as one of the key players in the development of measures to protect systems against unauthorised access and cyber attacks”, stressed TÜV SÜD's Chairman of the Board. “We bring our experience to the table in an array of projects and initiatives, such as SmartFactory KL and the PEGASUS research project launched by the German Ministry for Economic Affairs and Energy”. SmartFactory KL tests the practical use of innovative information and communication technologies in industrial production. To this end, TÜV SÜD's experts have developed a new certification scheme for flexible plant structures. The objective of the PEGASUS project is to define new test and approval methods for highly automated driving, particularly on motorways and up to speeds of 130 km/h, within the course of the next three years.
Digital capabilities: Digital Units in Munich and Singapore
Expanding its digital capabilities, TÜV SÜD is establishing new Digital Units as essential elements of the group's digitisation strategy. “Only two weeks ago, we inaugurated our new Center of Excellence Digital Service in Singapore”, reported Stepken. TÜV SÜD has pledged investments in the double-digit millions over the next three years and will expand the Digital Service Team to a headcount of 50 in its drive to further enhance the company’s capabilities in functional safety and industrial cybersecurity and develop innovative solutions for promising future segments, such as smart infrastructures and Industry 4.0.
Singapore and Munich are the two locations at which TÜV SÜD is expanding its capabilities by establishing Digital Service Units. Singapore’s Smart Nation initiative has made the Asian city-state an important pace-setter for digital transformation. Singapore's government is supporting the city's transformation into a smart nation by funding a number of innovation projects.
“Our engagement in a number of these projects gives us the opportunity to develop innovative services that we can deploy in other markets”, explained the Chairman of the Board of Management. The first example of such projects involves solutions for smart homes where TÜV SÜD tests functional safety, IT security and the reliability and interoperability of components and installations.
Germany’s first TÜV organisation: Special responsibility for people and the environment
“2016 is a very special year for TÜV SÜD”, affirmed Stepken. “The foundations for our company's sustained success were laid in 1866 – exactly 150 years ago.” After a huge steam boiler explosion at Mannheim's Aktienbrauerei, 22 local industrialists founded the Mannheim-based Association for the Inspection and Insurance of Steam Boilers (Gesellschaft zur Ueberwachung und Versicherung von Dampfkesseln mit dem Sitze in Mannheim) – the predecessor of today's TÜV SÜD and the cradle of technical testing and inspection in Germany. “Although technologies have evolved and changed continuously in the 150 years of our existence, TÜV SÜD's mission has essentially remained the same”, the Chairman of the Board of Management explained. “By making sure that technologies are safe, reliable and sustainable, we also assume significant responsibility for people and the environment.”
In the year of its anniversary, TÜV SÜD has chosen a special way to demonstrate their social responsibility. “We will donate a total of EUR 5m to support the education and training of young people who could not otherwise afford such qualifications”, announced Stepken. “For this purpose, we will launch a number of projects managed by the TÜV SÜD Foundation.” These projects include the development and implementation of special study concepts for children and young people from migrant backgrounds, landmark initiatives that provide socially disadvantaged young people with the possibility to train for technical careers, and an innovation award for small- and medium-sized companies which work with scientific institutions to realise and launch innovative product ideas. The TÜV SÜD Foundation is thus continuing on its chosen path. Since its foundation in 2009, it has funded extensive projects helping to generate enthusiasm for technology and natural science and focusing on young people in particular.