“2014 was a successful year for the TÜV NORD GROUP, with new records achieved in turnover and operating profit. All the business units delivered positive results, thereby contributing to this good result,” said the Chairman of the Board Guido Rettig at the annual press conference on the financial statement in Hanover, Germany. Rettig expects business performance to be solid in the current year. With the strategy process 2020plus the Group is preparing itself to meet the challenges of the coming years.
The driver for the successful business year was the industrial business segment, which recorded a 5.9 percent growth in turnover (€ 503.7 million) compared with the previous year. Guido Rettig: “In the industrial business segment our strengths came to the fore in emphatic style. We see great potential in the engineering area, which we are currently reorganising. We want to use our engineering expertise in this international growth segment to significantly boost our market share in the medium term.”
The Mobility business unit also underwent a very positive development, with an increase in turnover of 2.1% (€ 304.9 million). This was achieved in spite of a statutory change to the framework of general vehicle inspections (elimination of backdating), which resulted in loss of revenue to the tune of millions of Euro. “Mobility remains an important pillar of our business,” said Guido Rettig. "We’re now focusing on offering our vehicle-related services nationwide and also abroad. Promising projects are currently being implemented in Europe, China and Southeast Asia.”
The Natural Resources (turnover: € 112.1 million)and Training (€ 115.9 million) business units, which have struggled in recent years, have both stabilised and presented positive financial ratios for 2014. TÜV NORD Akademie, with its training products for specialists and managers, and TÜV NORD Transfer (qualification and placement in work of redundant Opel staff in Bochum) made a significant contribution to bringing this about. The ongoing restructuring recorded its first successes in the publicly-funded further education business.
In 2014 the Aerospace business unit (turnover: € 40.1 million) fell short of its turnover of the previous year. This was due to the postponement of aerospace projects in South America, China, and South Korea. With a pleasing order backlog and the expectation of activities on the part of the European Space Agency ESA in 2016, the capacity of the Aerospace business unit is well utilised.
The IT division grew. Our subsidiary TÜV Informationstechnik (TÜViT) increased its turnover (€12.8 million) by 12 percent thanks to its high level of expertise in the field of information security.
Notwithstanding the record figures the aim is to further improve the results
Chief Financial Officer Elmar Legge stressed that, notwithstanding the record figures, the Board of Management will continue to work hard on improving the results. "We held our own very well in our markets in 2014. We also succeeded in identifying savings potential and reducing costs across the Group. This process will continue in 2015. We are doing everything we can to increase our returns and to invest the money we earn to the benefit of our customers.” Legge added that a considerable part of the consolidated net profit in the year under review was once again required to shore up the occupational pension fund. The background to this was the strain on pension funds caused by declining interest rates on the capital market.
Targeted M & A activities
Last year the portfolio of services was enriched by targeted acquisitions and purchases of majority holdings in other companies. With the acquisition of ACPRO (Asesoría y Control en Protección Radiológica) the TÜV NORD GROUP has expanded its expertise in the field of medical technology and radiography. The Barcelona-based company tests X-ray equipment and nuclear medicine systems and trains specialist personnel in radiation protection.
With the acquisition of TUV NORD Bautechnik (formerly Germanischer Lloyd Bautechnik) in Hamburg, the Group expanded its technological expertise in the field of fire protection for nuclear installations.
The WPL Werkstatt-Prüf-Labor company in Moers was also taken over. This has enabled us to offer new services in the field of mechanical/technical testing and analysis technology.
International business expanded
The proportion of services provided outside Germany rose again slightly in the year under review to 25.5% (2013: 24.9%). In European states the industrial business was characterised by a significant upswing. The turnover rose to € 81.3 million (2013: € 73.5 million). In addition to the general improvement in the order book situation, the economic recovery in many European countries helped the Group to win some larger contracts, among other places in Spain (refinery inspection), Sweden (nuclear technology) and Turkey (railway technology). The turnover also increased moderately in the India, Greater China, Middle East, Southeast Asia and Americas regions.
Exploiting the opportunities presented by TTIP - preserving proven standards
The increase in global flows of goods is strengthening demand for the certification of products and processes. The TÜV NORD GROUP continues to work across the world in support the cause of high safety standards and conformity regulations. It supports the efforts to conclude a trade agreement with the United States (TTIP, Transatlantic Trade and Investment Partnership) with the aim of dismantling barriers to trade and jointly implementing high safety standards. Guido Rettig: “In the industrial sector, but especially among consumers, TTIP will meet with acceptance only if the standards, accreditations and regulations that have proved their worth in Europe over the course of decades are preserved. We’ve joined forces with the other TÜV companies to make specific and viable proposals for the preservation of standards for products, in health and in occupational health and safety. We can see that Brussels is developing an ever clearer grasp of our position and expect this to be expressed in the difficult negotiations with the American partners.”
Innovations
Innovations are key drivers of growth in the TÜV NORD GROUP. In 2014, with the “Game Changer” initiative, the Group focused its attention on new testing methods in the industrial sector. Thus, for instance, specially programmed data glasses are being tested for lift inspections, and TÜV NORD drones might in future have a supporting role in the inspection of wind turbines. Testing robots will in future be able with ease to reach pipelines and plant that are otherwise virtually inaccessible. TÜV NORD engineers are working intensively on these and other activities. In addition, an innovative testing method is being developed for the service life of pipelines (LOOP). In the Mobility field TÜV NORD already boasts a reliable measuring method for the soon-to-be-imposed CO2 emission limits in heavy commercial vehicles and, with the introduction of the general vehicle inspections adapter, is adapting to the increasing digitisation of vehicle inspections.
Challenges to business expected in 2015
Despite subdued forecasts for the global economy, Rettig and Legge expect a solid business performance for the current year. The development of the political and military conflicts in Ukraine and the Middle East is hard to predict, as is the further impact of the Greek financial crisis on the Eurozone. With regard to the Natural Resources business unit Rettig expressed concern about the situation in the declining natural resources markets. He said that low prices would result in the postponement of global natural resources exploration projects. In addition, he went on, power plant operators were holding back with investments for the modernisation of their facilities. No reversal in the trend was in sight in the short term, Rettig said.
Strategy 2020plus sets course for future
With the 2020plus strategy, the TÜV NORD GROUP is positioning itself for the coming years in the top flight of technical services groups. This strategy is based on the conviction that global megatrends will bring about dramatic changes in the work processes of the Group. Rettig: “Digitisation, the demographic factor, urbanisation, mobility and, in particular, the fusion of IT and production in Industry 4.0 are leading to new global requirements for our engineers. We’re preparing ourselves for this with the 2020plus strategy. Our goal is to continue to offer our customers excellent service quality up to 2020 and beyond. All our work is geared toward bringing this about.”
About TÜV NORD GROUP
With over 10,000 employees, TÜV NORD GROUP is one of the largest technical service providers, offering its advisory, service and inspection expertise in over 70 countries throughout the world. Areas of activity include Industrial Services, Mobility, IT and Training. TÜV NORD GROUP occupies a unique position in the sector based on its work in the fields of natural resources and aerospace and is firmly committed to its guiding principle and watchword: “Excellence for your business”.
