- Records in 2013: revenue of EUR 1.94 billion and earnings of EUR 171 million (adjusted EBIT)
- Healthy financial base: EUR 120 million spent on investments in the future and company acquisitions
- Consumer goods, rail transport, construction projects: growing need for safety worldwide
- Regulatory changes in Germany: TÜV SÜD warns against risks in lifts and tank farms
- Data security / Industry 4.0: minimising risks for companies and consumers
Munich. The job machine is still in full swing. Showing strongly in 2013, TÜV SÜD created over 1,400 new jobs throughout the world last year. The technical services provider has thus welcomed over 1,000 new employees on board in almost every year since 2005 – an achievement made possible by sustained strong growth. In 2013, the international company increased its revenue by 6.5 per cent to EUR 1.94 billion (2012: EUR 1.82 billion). Earnings before interest and taxes (adjusted EBIT) in the period covered by this report rose to EUR 171 million (2012: EUR 163 million).
"2013 was an excellent year for TÜV SÜD. The number of employees working in over 60 countries to reduce the number of accidents and protect people and the environment overtook the 20,000 mark for the first time", said Dr Axel Stepken, Chairman of the Board of Management of TÜV SÜD AG, at today's annual results press conference in Munich. According to Stepken, TÜV SÜD aims to continue its growth at the same rate in 2014. By the end of the year, the company will once more add over 1,000 new safety and quality experts to its headcount. International employees will already account for around half of the workforce in this year.
Well prepared: TÜV SÜD spends around EUR 120 million on company acquisitions and investments in the future
Presenting the financial statement, Dr Matthias J. Rapp, CFO of TÜV SÜD AG, emphasised that our growth would have been even higher on the basis of 2012 exchange rates. Adjusted for foreign exchange effects, our revenue grew by over 8 per cent in 2013 to just under EUR 2 billion.
According to Rapp, all regions and all business segments contributed to the increase in revenue – an impressive demonstration of our company's health and dynamism.
To be precise, revenue in 2013 rose to EUR 790 million in the INDUSTRY segment (+ 8.9 per cent), EUR 501 million in the CERTIFICATION segment (+7.4 per cent) and EUR 647 million in the MOBILITY SEGMENT (+3.4 per cent).
Acquisitions also play a role in growth in revenue. In 2013 TÜV SÜD acquired nine companies and invested heavily in its existing business. Total investments in the future and in acquisitions amounted to EUR 120 million – the highest in the company's history.
Strategic expansion: services for infrastructure projects in strong demand
The acquisitions enabled TÜV SÜD to further expand its suite of services in areas including complex construction and infrastructure projects, which have been an integral part of the Real Estate & Infrastructure Division since 2010. "Between 2010 and 2013, the division's revenue grew by 50 per cent from EUR 147 million to over EUR 220 million", reported Karsten Xander, Member of the Board of Management of TÜV SÜD.
The two drivers behind its growth are the continuous development of new services and targeted acquisitions. For example, TÜV SÜD has acquired six companies in this field – in Germany, the UK, Brazil and Singapore – in the last three years alone. "There is growing global demand for support with complex infrastructure projects", explains Xander. "Given this, we will continue our active acquisitions policy in the future."
The integration of TÜV SÜD's rail subsidiary early this year will further accelerate growth in the
Real Estate & Infrastructure Division. "Over the last four years, TÜV SÜD Rail has succeeded in nearly doubling its revenue to reach EUR 60 million in 2013“, underlined Xander. Testing and certification of infrastructural measures make up the largest part of the rail business. In addition, the experts test locomotives and rolling stock and accompany rail projects throughout their entire lifecycle on behalf of manufacturers, operators and authorities.
Tank farms and lifts: potential hazards in the revision of Germany's Ordinance on Industrial Safety and Health (Betriebssicherheitsverordnung)
While demand for safety services is on the rise worldwide, Germany is now actually tending towards the reverse. "The revision of Germany's Ordinance on Industrial Safety and Health driven by the Federal Ministry for Labour and Social Affairs will partially erode third-party testing and inspection of installations subject to monitoring, and in many cases water it down dramatically", warned Karsten Xander, Member of the Board of Management of TÜV SÜD.
Two major amendments concern the abolition of third-party inspection of explosion protection measures in tank farms for flammable fluids (such as petrol or kerosene) and the cancellation without replacement of interim inspections for lift systems.
Only recently the Association of German TÜV Organisations (VdTÜV) presented its current Installation Safety Report, which includes comprehensive – and, in some cases, shocking – fault statistics for installations subject to monitoring. In 2013, the experts found that a total of 17 per cent of all tank farms (equalling 2,900 installations in Germany) had one or several technical faults. In lifts, the fault rate amounted to as much as 51 per cent (equalling 245,000 installations in Germany). "If the revision of the Ordinance on Industrial Safety and Health is realised in the form suggested by the Federal Ministry of Labour and Social Affairs, the level of safety in Germany, which has been exemplary so far, will drop drastically", said Xander. "In the future, tank farms, refineries and lifts will pose significantly higher risks for the people in Germany!"
Rise in sabotage and espionage: improving data security for industry and consumers
The NSA affair is another urgent reminder of the risks involved in our increasingly digital and networked world. In industry, digitalisation and networking mean that machinery, installations and workpieces can communicate with each other and control production. "However, the new opportunities of Industry 4.0 are accompanied by new risks, including industrial espionage and sabotage", said TÜV SÜD Chairman of the Board of Management Dr Axel Stepken. Industry and other business sectors must step up their efforts and develop effective defence strategies and protection mechanisms enabling them to successfully ward off these attacks.
TÜV SÜD supports companies in managing these challenges by offering a broad service portfolio; for example, the company further expanded its IT security services by establishing TÜV SÜD Sec IT GmbH early this year. "Since our company's inception, it has been our responsibility to make the world a safer place", said Dr Stepken. "Today, this particularly applies to our work and life in an increasingly digital and networked world."
Dangerous products: global sourcing calls for global product testing
Consumer goods, too, do not always offer the safety that is rightly expected by consumers. Products that are not in conformity with the legal requirements in the country of destination must be recalled. Last year, 2,364 dangerous products were taken off the market via RAPEX, the European rapid alert system, marking a negative record in the system's 10-year history.
"To avoid product recalls and protect consumers effectively, manufacturers, importers and retailers rely on testing and certification organisations like TÜV SÜD", explained Dirk Eilers, Member of the Board of Management of TÜV SÜD. "Our experts are not only familiar with the applicable national and international regulations and standards; they also carry out compliance testing in our testing laboratories."
The increase in global trade and the shifts in global production and supply chains have resulted in a continuous rise in global demand for testing and certification of consumer products, medical devices and industrial products. To cater to this demand, TÜV SÜD will continue to expand its global network of testing laboratories. Only recently, the technical services provider opened a new test centre for electrical and electronic products in Bangalore, India, bringing the total number of TÜV SÜD's product testing laboratories worldwide up to 196. 92 of these laboratories are located in Asia.
Safe mobility: active and passive vehicle safety capable of saving human lives
Protecting people, preventing accidents – this in brief is TÜV SÜD's mission in road transport. In Germany the number of road fatalities has decreased significantly in recent decades, not least due to the firm and consistent activities of motor vehicle inspection organisations. Now, the transport sector is facing new challenges: "Adopting the 'Vision Zero' approach, the European transport policy aims to halve the number of road fatalities in Europe by 2020 and bring it down towards virtually zero by 2050", said Horst Schneider, Member of the Board of Management of TÜV SÜD.
In this context, experts are increasingly focusing on active safety and accident-prevention systems. "Even though on-board sensor systems, car-to-x communication and automated driving contribute significantly towards making driving safer, we must not stand still in the field of passive safety – particularly in view of the weight reduction of vehicles", emphasised Schneider. In this context, electromobility and its high-voltage systems impose new and especially high requirements on crash safety. TÜV SÜD has a network of battery testing laboratories that is permanently expanded.
With its global commitment to road safety, the technical services company is also responding to increasing internationalisation in the automotive industry. In countries of emerging national economies, including Brazil and China, individual transport is becoming increasingly important.
"From TÜV SÜD's point of view, we have the duty to support automotive developers in newly industrialised countries right from the start, providing our technological know-how and our long experience. After all, our commitment can contribute to saving lives all over the world", emphasised Schneider.