Consolidated financial statement 2015: Well set up for the digital future with solid annual results

• Group sales up to € 1,116.6 million (+ 2.5%)
• Operating profit (EBIT) climbs to € 62.3 million (+ 6%)
• Significant improvements in foreign business (+ 10.8%)
• Number of full-time positions rises slightly to 9,861
• Investment, at € 42.1 million, above the level of the previous year

Hanover: The TÜV NORD GROUP in Germany and abroad can look back on a successful fiscal year in 2015. Sales rose to € 1,116.6 million operating profit amounted to € 62.3 million. "Our Group continues to develop very satisfactorily. A glance at the key figures on the balance sheet makes this very clear,” said the Chairman of the Board Guido Rettig at the annual financial press conference in Hanover, Germany. “All the business units are working intensively on the digitalisation of their services. In this way we are setting ourselves up specifically to meet the future requirements on global technical service companies. We are in the process gearing our various business models to return sustainable growth.” Rettig stressed that, in this age of ongoing digitalisation, the onus is on the politicians to swiftly create the legal basis for the security requirements of this new ‘technological revolution’. If they should fail, he went on, the principle of independent testing, which has proved its worth for the last 150 years, would be in jeopardy as it would no longer be possible to test all aspects of product safety. "Our main focus in 2016 is on still more robust growth, on setting ourselves up as a digital TÜV and helping to create the conditions to ensure that companies maintain sovereignty over their data,” Rettig said.

Industry 4.0 requires independent tests

Particularly in an increasingly technology-dominated and networked world, he went on, the human need for security and trust will continue to grow apace. “This is why independent tests will remain essential in the future,” Rettig continued. He pointed out that new technological developments, such as Industry 4.0 and autonomous driving, are giving rise to new tasks: “Over the past decades we have protected people from the dangers of technology, for example with lift inspections. This is something our engineers will continue to do. But they will also increasingly need to protect technology from people.” For instance, he said, the digital assistance systems for autonomous driving will not only have to work smoothly but will also require protection from hacker attacks. It will also be necessary to prevent attacks on IT infrastructure and corporate data: “Every company must now find solutions to the challenges of digitalisation. And it’s here, with all our many years of experience in IT, industry and mobility, that we want to support them.”

Independent tests need insights into control software

Rettig appealed to the policymakers to create the legal framework for effective independent inspections in the digital age: “We’re already seeing that independent tests only make sense if, for instance, the testers are granted access to the control software of engines and equipment. This is the only way that the TÜV will be able to fulfil its responsibilities in the future.” As a success story Rettig cited the introduction of the adapter for general vehicle inspections in the summer of 2015. This device is connected to an interface on the vehicle and reads, among other things, the data from assistance systems. In this form, he said, the industry had presented a compelling solution for the digitalisation of technical vehicle monitoring. By the end of March 2016, TÜV NORD had already put the adapter to work in more than 500,000 general inspections.

The systems testing of the future: the digital TÜV

In the industrial sector, the engineers are working intensively on the systems testing of the future. TÜV NORD engineers in the Netherlands are already making use of an app to submit the results of lift inspections. Networked sensors transmit measuring data directly via the Internet, and, in this way, lifts are “taught to speak”. In order to ensure that the evaluation of sensor data takes place independently of manufacturers, TÜV NORD will in the coming months equip lifts with sensors for testing purposes and evaluate the data delivered. Under the banner of “Security4Safety”, some 150 employees are currently working Group-wide on digital services.

Sovereignty over data

TÜV NORD has joined forces with companies such as Bayer, Thyssen-Krupp and Salzgitter to launch the “Industrial Data Space”. The initiative started by the Fraunhofer-Gesellschaft is committed to the goal of comprehensive, cross-industry networking in an open data space. “Sovereign data handling on a basis of trust is thus inextricably linked with the secure exchange of data. In the Industrial Data Space we have found partners from all industrial sectors who want to develop new business models and maintain control over their data,” said Guido Rettig.

Using good financial figures to invest in digitalisation

CFO Jürgen Himmelsbach was satisfied overall with the key financial ratios. “In the year under review we managed to increase the EBIT margin from 5.4 to 5.6 per cent. We want to continue down this path in 2016. We have launched a programme to reduce internal costs and optimise purchases across the world. We are spending the achieved return on, for example, digital testing equipment and innovation projects.” Last year the TÜV NORD GROUP invested a total of € 42.1 million (2014: € 31.1 million). In 2016 the starting pistol will be fired for extensive new construction work at the Hamburg site. Among other things, a new office building and laboratories will be built. For this purpose TÜV NORD is going to invest more than € 15 million at the Hamburg site in the Große Bahnstraße over the coming years. The overall investment volume of the Group will pass the € 50 million mark in 2016. Jürgen Himmelsbach: “The Group will carry on with its solid financial strategy. We had a positive net financial position of € 32.3 million at the end of 2015. These figures are giving our employees the tailwind they need for new ideas and innovations.”

The number of employees actually increased slightly to the equivalent of 9,861 full-time positions; the total number of people employed by the Group worldwide on the sampling date of 31.12.2015 was 12,652. 29 per cent of all the Group employees were women.

Significant improvements in foreign business

Thanks to favourable business developments in Europe and Asia, particularly in India, international sales increased at an above-average rate (+10.8%). The overall proportion of services provided outside Germany totalled 26.1 percent. Around the world the international companies have implemented initiatives for the further development of customer-oriented services. In the Indonesian metropolis of Jakarta, for example, the TÜV NORD food laboratory was expanded at a new site in order to make it possible to use tests to counteract hazards to human health.

All business units are contributing to the strength of the company

In 2015, Industrial Services and Mobility proved once again to be the cornerstones of the corporate success. The industrial sector generated a turnover of € 520.8 million and grew by 3.4 percent over the previous year.

The turnover of the Mobility business unit once again increased significantly in 2015. The figure of € 319.3 million represents an increase of 4.7 percent. The car dealership and workshop business segments proved particularly successful, as did the Institut für Fahrzeugtechnik und Mobilität (IFM) - Institute for Vehicle Technology and Mobility- , which tests and improves the safety and environmental performance of vehicle technology.

Weak global commodity markets once again impacted on the development of the Natural Resources business unit in 2015, resulting in a slight decrease in turnover to € 103.6 million. The Training business unit ended last year at a level slightly below that of the previous year, with a turnover of € 111.1 million. The reason for this decline in revenue was the planned closure of two vocational colleges in North Rhine-Westphalia.

Due to increased demand in Europe, Russia and Asia, the Aerospace business unit returned an increase of 18.5 percent to € 47.6 million.

Services in all aspects of IT security are increasingly in demand, and the IT business unit of the Group has further strengthened its position. TÜViT grew in sales terms to € 14.2 million (2014: € 12.8 million).

Guido Rettig concluded with the following remarks: "The global testing and certification industry continues to chart a course of sustained growth. Services in safety and quality assurance are particularly in demand in spite of muted international economic forecasts. There’s no room for euphoria, but in the current year 2016 we expect a positive business development and moderate growth in all company segments.”

TÜV NORD at the Hanover Trade Fair

At the industrial trade fair starts on Monday in Hanover, Germany, the TÜV NORD GROUP will be joining forces with Krohne to present Industry 4.0 technologies, using the particular example of a model for leak monitoring on pipelines. The exhibit shows the sensors, communication interfaces, visualisation systems and inspection equipment required for remote control operations. The use of intelligent inspection robots to track down corrosion, cracks and leaks in pipelines will also be illustrated. TÜV NORD uses realistic 3D simulation models to assess localised damage.