News

Balance Sheet Press Conference

17 May 2011

TÜV SÜD on growth course: significant rise in revenue and earnings

• 2010 balance sheet: EUR 1.55 billion in revenue and earnings before taxes of EUR 123 million
• Around EUR 133 million in investments & acquisitions / 1,600 new employees
• Clear objective: market leader in electromobility / energy transition providing significant impetus for business.

Munich. TÜV SÜD significantly stepped up its pace of growth in 2010. In the past year, the international service corporation increased its revenue by 10.1 per cent to over EUR 1.55 billion (2009: EUR 1.41 billion), while earnings before taxes even show a year-on-year increase of 21 per cent to EUR 123 million (2009: EUR 102 million).

The TÜV SÜD headcount rose by 1,600 to over 16,000 employees. The company reported growth throughout all divisions and regions and also got off to an excellent start in the current fiscal 2011. Chairman of the Board Dr Axel Stepken thus summarized the group's favourable situation at today's annual balance sheet press conference, held at the corporate headquarters in Munich. Stepken emphasized, "We expect further dynamic growth in 2011, driven by factors including numerous international acquisitions." TÜV SÜD also expects strong impetus from innovative growth areas such as energy from renewable sources and electromobility.

TÜV SÜD's excellent business development in 2010 enabled the company to invest extensively in its future: last year, the company spent around EUR 133 million on expanding its business (EUR 52.2 million) and on acquisitions (EUR 80.5 million). In addition to building up several new legal entities in various countries in 2010, TÜV SÜD acquired eight large-scale companies, almost all of them located overseas; the two largest acquisitions, for example, are headquartered in the USA and South Korea. The change in the breakdown of revenue also reflects the company's successful international strategy: in 2010, TÜV SÜD generated 33 per cent of its revenue abroad – a year-on-year increase of 3 percentage points. Dr Peter Klein, Chief Financial Officer of TÜV SÜD AG, explained, "Revenue growth was strongest in the AMERICAS region at around 40 per cent and in the ASIA-PACIFIC region at almost 30 per cent. However, even on our fiercely competitive domestic market here in Germany, we succeeded in achieving growth of 3.5 per cent in 2010." The company's objective is to raise its revenue generated abroad to 40 per cent in the medium term.

Safe electromobility: TÜV SÜD aims to become the market leader

The company is also continuing at full power along the road of electromobility. Horst Schneider, Member of the Board of Management of TÜV SÜD AG, believes the group is well on the way to its goal of becoming the world's number one provider of battery testing and certification services for electric vehicles. To this end, TÜV SÜD is currently further expanding its global network of testing facilities by adding new laboratories in North America, Singapore and Germany. According to Schneider, the acquisition of Innovative Testing Solutions in Canada early this year was a significant step towards consolidating this leading position.

Construction of the new battery testing laboratory in Garching near Munich is on schedule: "We anticipate that we can start to test individual components in the new laboratory this summer", said Schneider. In Germany, TÜV SÜD is already conducting battery tests jointly with partner companies until the laboratory in Garching, in which the company invested several million euros, is ready to be taken into service.

Strategic expansion of the automobile business

With respect to the automotive business, one of TÜV SÜD's core areas, Horst Schneider announced that the company plans to significantly expand and strengthen further automotive services in addition to its "classic pillars" of roadworthiness testing and driving tests. Here, the company is basing its strategy on the areas of fleet management, used-car strategy, vehicle reconditioning and registration services. In this context, Schneider announced that the TÜV SÜD subsidiary FleetCompany has embarked on a strategic partnership with Belgium-based Fleet Logistics and that these two companies in combination will strive to become the European market leader in unbundled fleet management services.

Schneider also provided information about the establishment of a joint venture with car rental company Sixt, to be called TÜV SÜD Car Registration und Services GmbH (CRS). The core service of the new company will be efficient and cost-effective vehicle registration on behalf of large vehicle fleets and private customers. An important aspect of this service is the execution of the registration process, making personal appearance at the registration authority a thing of the past.

Energy transition provides significant impetus for business

In the area of future energy supply, too, important decisions which will determine the course of future development are currently being made. "In the wake of Fukushima, the theme of energy transition is dominating public discussions", said Stepken. The primary goal of energy transition, he warned, must be to ensure safe, reliable and, not least, also affordable energy supply. To reach this goal, renewables and their associated infrastructure need to be expanded rapidly, the use of fossil resources in coal- and natural gas-fired power stations optimized further, safe and reliable operation of existing power stations ensured and the efficiency of energy input significantly improved. "At TÜV SÜD, we provide services in all of the above areas", explained the Chairman of the Board of Management. "By providing our expertise and experience, we make a major contribution to ensuring the safety and reliability of all types of energy production and transfer." Given this, he described the energy transition as a major opportunity for the further successful development of TÜV SÜD.

Consistent expansion of renewables

TÜV SÜD sees major growth opportunities in the field of renewables, particularly in the field of wind power. "We will continuously further expand our capacities and expertise in this area", declared Stepken. In Hamburg, the new offshore wind-power department was established in January 2011. As early as April, the offshore experts reported that they had won their first major contract: on behalf of Strabag Offshore Wind GmbH, the team will carry out certification of the planned Albatros 1 offshore project in the North Sea, scheduled to operate twelve wind turbines.

In March 2011, TÜV SÜD presented the wind atlas for Baden-Wuerttemberg, which it had drawn up on behalf of Baden Wuerttemberg's State Ministry of the Economy. "The wind atlas provides an excellent dataset for the harnessing of wind power in this federal state", noted Stepken. This is important for raising the public acceptance of further wind farms. The use of wind energy is also attracting increasing attention in other German states: TÜV SÜD already has enquiries for similar projects from other German federal states.

Investments in the future: denser global laboratory network across the world

In addition to further expanding its network of testing laboratories for electric vehicle batteries, TÜV SÜD is also strengthening its global network of laboratories and partner laboratories in other areas. Over the last three years, for example, TÜV SÜD invested a total of EUR 10 million in establishing and expanding its softlines testing facilities for textiles, clothing and shoes across the world. In 2010 alone, two new testing laboratories were opened in Vietnam and Bangladesh. Today, the Group employs 300-plus staff in 18 testing laboratories in this area, 14 of which are located in the Asia-Pacific region alone. "The further expansion of our global testing infrastructure is a key element of our corporate strategy", underlined Stepken. "In this context, we focus on industries with sustainable growth forecasts."

Stepken: "Pace of growth will increase further"

TÜV SÜD plans to grow further across all divisions and regions this year.

"In 2011, TÜV SÜD will again step up its pace of growth, and will do so thanks to our targeted commitment to future-oriented areas of operation, our defence of our strong market position, our successful international expansion and, last but not least, our acquisitions in key markets", said Chairman of the Board of Management Dr Axel Stepken, announcing that TÜV SÜD will continue its upward momentum over the coming years, creating a large number of jobs. The company also continues its aim of raising revenue to EUR 2.4 billion by 2014.

Detailed information and photos are available at www.tuev-sued.de/balancesheetpressconference