TÜV SÜD continues its expansion course in spite of the economice crisis
Munich. Against the backdrop of the global financial and economic crisis, TÜV SÜD AG continued its expansion course in 2008. The revenue of the international service corporation increased to almost EUR 1.4 billion, while EBT remained roughly at the prior-year level, at EUR 107 million. Return on sales improved from 8.0 to 8.7 per cent. Globally, TÜV SÜD recruited approx. 1,000 new employees. Through targeted investments, the service group will further strengthen its international and national competitiveness and thus secure jobs in the long term.
"We operate a stable company", explained Dr.-Ing. Axel Stepken, CEO and President of TÜV SÜD AG, at the company's annual press conference in Munich. "Over recent years, we have succeeded in clearly improving enterprise value." In times of crises in particular, he continued, it pays off that the international corporation has always pursued long-term and sustainable perspectives in its services and corporate strategy and will also continue to do so in the future. "We will continue our targeted investments in the current year, to consolidate our strong position among competitors in Germany and further expand our international business based on our core products," stated Stepken.
Solid growth creates the basis for further investments
In 2008, all strategic business segments of TÜV SÜD contributed to the company's positive economic development. Approximately EUR 655 million of consolidated sales (a year-on-year increase of 6.5 %) were generated by our INDUSTRY strategic business segment, comprising TÜV SÜD Industry Services, TÜV SÜD Chemical Services, TÜV SÜD Product Services and TÜV SÜD Rail divisions. The MOBILITY strategic business segment, including TÜV SÜD Auto Services and TÜV SÜD Automotive divisions, generated revenue of EUR 477 million (a plus of 6.6 per cent). Revenue in the PEOPLE strategic business segment, including TÜV SÜD Management Services, TÜV SÜD Academy, TÜV SÜD Life Services and the newly established TÜV SÜD Life Science divisions, amounted to almost EUR 220 million (a plus of 15.1 per cent). Development was also positive in the Group's strategic regions. Growth was strongest in the AMERICAS region, rising by 13.5 per cent to EUR 86.5 million, followed by the ASIA PACIFIC region with an increase of 8.8 per cent to EUR 139.8 million and the EUROPE region (including Germany), with revenue growth from 6.8 per cent to EUR 1,136 million. "All divisions of our company thus contributed positively to our stable and sustainable growth in revenue", emphasized Dr. Peter Klein, Chief Financial Officer of TÜV SÜD. Compared to 2007, the adjusted return on sales improved from 8.0 per cent to 8.7 per cent. The equity ratio increased to 32.5 per cent and thus clearly exceeded the set target of 25 per cent. In addition, cash flow improved from EUR 55 million to 179 million. "This development shows that TÜV SÜD operates on a sound footing", explained Dr. Klein. "Our company is virtually free from financial debts and is able to finance even major investments from its own funds."
Over four million vehicle inspections in Turkey
Even though TÜV SÜD's markets are also hit by the financial and economic crisis, Dr.-Ing. Axel Stepken anticipates moderate growth in the current business year. "Of course, we are also feeling the impacts of the crisis, shown for example in the drastic drop in demand for our automotive services or our product tests in China", explained the Chairman of the Board of Management. "Nevertheless, we are confident about the current business year." The group of companies operates in a broad range of markets and has a relatively stable basis of business in the field of statutory tests and inspections. "In addition, we are making targeted investments in the expansion of our international activities, in strengthening our position on the German market, in strategic additions to our business segments and in the continuous improvement of our services", emphasized Stepken. The key international project in 2008 was the establishment of a nationwide vehicle inspection system in Turkey based on the German example. Together with its two consortium partners, TÜV SÜD has now successfully completed the establishment of TÜVTURK. "The realization of such a complex vehicle inspection project in such a short time is unprecedented", noted Stepken. "After one million vehicle inspections in 2008, we will conduct over four million roadworthiness tests in 2009, our first year of regular operations. We will be able to use our positive experiences in Turkey for similar projects in other countries."
Strengthening the position on the German market
On the German market, the Group focuses on its success with demand- and future-oriented products and services. One example is the construction of TÜV SÜD Automotive's new exhaust-gas laboratory in Heimsheim, Baden-Württemberg, which involved investments totalling EUR five million. "We built up the largest independent exhaust-gas laboratory in Germany ", explained Stepken. "Our modern test facilities in Heimsheim enable us to provide expert technical support to automotive manufacturers on their way to curbing emissions."In November 2008 TÜV SÜD took over SENTON GmbH, a company specializing in EMC (electromagnetic compatibility) measurements, in Straubing, Lower Bavaria. "This takeover and our current investments in the extension of our technical testing infrastructure are important steps for strengthening our position in Germany and strategically expanding our service portfolio on the European market for the EMC testing of industrial and consumer products and medical devices." Expanding Germany-wide presence in vehicle inspections and in testing and inspection in the industry sector is also of strategic significance. After establishing its subsidiary TÜV SÜD Auto Partner, TÜV SÜD is the first testing and inspection organization to make use of the relaxation of authorization restrictions for periodic roadworthiness testing in Germany. "Through TÜV SÜD Auto Partner, we can become active in regions that had been closed to us so far", stressed Stepken. "We assume that by extending our activities, we can succeed in clearly increasing our market shares in periodic roadworthiness testing." In the industry sector too, TÜV SÜD also pursues the strategy of further strengthening its network of branch offices in Germany. Recently, the international service provider opened a new branch office in Saarland which, according to the Chairman of the Board of Management, is the ideal complement – also in geographical terms – to TÜV SÜD's service offerings for industrial clients and close customer relationships.
Conquering promising markets, satisfying customer needs
When complementing or expanding its business segments and developing new services, TÜV SÜD pursues the target of entering promising markets. "The entire field of Life Sciences, for example, offers excellent long-term perspectives for our company", explained Dr.-Ing. Stepken. Life expectancy is increasing and our society aging, so that the quality of medical care is subject to higher and higher demands. "By acquiring Msource Medical Development in Brussels in 2008, we made the first step towards establishing ourselves on this market", continued the Chairman. The renowned clinical research institute is the core of the new Life Sciences division, which rounds off and expands TÜV SÜD's expertise.
Competitive edge through sustainable business operations
TÜV SÜD focuses on market requirements and customer needs not only when it comes to acquiring companies and organizational units, but also in the development of new services. "Sustainability is increasingly called for against the background of impending climate-change and the financial and economic crisis", reported Dr.-Ing. Manfred Bayerlein, Chief Operating Officer at TÜV SÜD. Sustainable economic activity, he explained, means striking a balance between economic, ecological and social goals and maintaining this balance on a permanent basis. "As a provider of testing and certification services, we support our clients in implementing their sustainability goals", explained Dr.-Ing. Bayerlein, pointing out that this also applies to energy efficiency, for example, both in energy generation and energy use. According to Dr Bayerlein, only one-tenth of all coal-fired power stations in the European Union achieve thermal efficiency of over 40 per cent and can therefore be regarded as adequately efficient in line with today's state of the art. TÜV SÜD supports the owners/operators of power stations in implementing retrofit measures which permit clear improvement of the efficiency of these power stations and the use of resources. Efficiency in the use of energy can also be significantly enhanced. There is a wide range of potential for optimization in this area – from improved thermal insulation of buildings to streamlining of production processes and the use of smart grids. "We have developed a whole range of services to support companies in the manufacturing sector, particularly in improving their use of energy and resources", noted Dr.-Ing. Bayerlein. These include complex energy consultancy, energy and material flow analysis or the "energy-efficient enterprise" certificate and "energy-efficient system" certification. "Optimized use of energy enables emissions and costs to be curbed, which benefits the environment and our clients' competitive strength", emphasized the TÜV SÜD Management Board member. "We are convinced that companies geared to sustainability will emerge as the winners of the current crisis."
Secure jobs and long-term perspectives
By making targeted investments in promising markets and services, TÜV SÜD will continue to pursue its growth strategy of the past years. "Our investments and our growth are vital to ensure that the jobs of our staff are secure and to offer our employees a long-term perspective", emphasized Dr.-Ing. Axel Stepken. In 2008 alone, TÜV SÜD recruited approx. 1,000 new employees and is continuing to look for highly qualified experts in the current business year. In this context, the company not only seeks engineers across all disciplines, but also young professionals from completely different fields, from psychology to forestry consultants and from nutritional scientists to experts on China. In the context of active promotion of young talent, the company is continuously expanding its international cooperation with universities of applied sciences and general universities. In 2008, for example, TÜV SÜD developed the "Risk and Compliance Management" course of studies jointly with Deggendorf University of Applied Sciences and funded an endowed chair in “Reliability and Safety of Technological Systems“ at the Sino-German College of Tongji University (Chinesisch-Deutsches Hochschulkolleg, CDHK) at Shanghai. "For a service company like TÜV SÜD, people are of key significance", emphasized Dr.-Ing. Stepken. "Given this, sustainable operations for our company primarily involve investing in our staff, promoting their initial and advanced training on a continuous basis and offering them long-term perspectives in an attractive environment."
Further information about TÜV SÜD's annual press conference on 19 May 2009 and photos are available at www.tuev-sued.de/balancesheetpressconference. |