TÜV Rheinland^®

Continued its previous success

The TÜV Rheinland Group has continued its previous success and made 2011 the most successful year in its history.

2011 - Records were set

We set records in 2011, including:

• Revenues, including inventory changes, grew by 8.8% from €1,303 million to €1,417 million
• Earnings before interest and taxes (EBIT) rose by 10.6% to €124.0 million (previous year: €112.1 million)
• Earnings before tax (EBT) increased by 17.2% to €103.6 million (previous year: €88.4 million)
• The profit margin improved from 6.8% to 7.3%
• International sales account for 48.2% of revenue; international employees for 58.2% of the Group’s headcount

Dr. Manfred Bayerlein became CEO on September 1, 2011. As an Executive Board member and Chief Operating Officer, he was previously responsible for global business operations at TÜV Süd AG.

At the same time, a decision was made to expand the Executive Board from three to five members by creating two new areas of responsibility: technology (Chief Technology Officer) and international (Chief International Officer). On the one hand, this is a continuation of a long-term business strategy at the TÜV Rheinland Group and, on the other hand, it accounts for increasingly technology-oriented and internationally networked markets. This reorganization will allow us to achieve strategic goals more quickly, optimize growth potential, and more firmly anchor the matrix organization in the Executive Board.

Volker Klosowski, a long-time member of the TÜV Nord Executive Board, became Chief Technology Officer on January 1, 2012.

Stephan Schmitt, who was previously Chief Regional Officer for TÜV Rheinland of North America, became Chief International Officer on October 1, 2011.

Additionally, Thomas Biedermann became Chief Human Resources Officer and Director of Industrial Relations on October 1, 2011; Mr. Biedermann has previously been Chief Regional Officer at TÜV Rheinland in Western Europe. He is the successor to Dr. Christoph Hack who, after nearly 20 years of service on the TÜV Rheinland AG Executive Board, retired by his own choice.

Investments reached another record

In 2011, TÜV Rheinland’s investments reached €87.7 million, another record:

• On July 1, 2011, TÜV Rheinland acquired the highly specialized Dutch testing service provider Sonovation Holding B.V. along with its seven subsidiaries. Founded in 1988 and headquartered in Oosterhout, the company has 50 employees and specifically performs nondestructive testing (NDT) for companies in the oil and gas industry. The Sonovation Group’s revenue for the second half of 2011 was €4.7 million, contributing to our revenue growth. By acquiring Sonovation B.V., the TÜV Rheinland Group has strengthened its international NDT services beyond the United States and Germany, while significantly increasing its market share in the oil and gas sector. In the future, the company and its locations in the Netherlands, the United Kingdom, Belgium, and Germany will trade as TÜV Rheinland Sonovation.
• In December 2011, TÜV Rheinland became the majority shareholder in France’s Société Européenne de Contrôle Technique Automobile S. A. (SECTA) in Courbevoie. In 2011, SECTA will still be prorated. Established in 1990, SECTA is the licenser for over 800 inspection centers for technical vehicle inspections throughout France. SECTA has 55 employees and its revenue for the 2011 business year was nearly €13.8 million. Majority participation will permit TÜV Rheinland a targeted expansion of its engagement in one of Europe’s most significant automotive markets.
• As part of its nation-wide expansion strategy, the Mobility Business Stream acquired Prüfzentrum Kohl early in fiscal year 2011. With locations in Fürth and Nuremberg, this engineering company has annual revenues of about €4 million and employs almost 40 people. The company previously offered traditional services in vehicle inspection such as general/exhaust inspections, technical reports, and damage reports and assessments.
• In late December 2011, TÜV Rheinland also acquired the majority of AIA Services LLC’s shares so that 80% of the company’s shares now belong to the Group. Based in Houston, TÜV Rheinland AIA is a renowned inspection and testing service provider in accordance with ASME (American Society of Mechanical Engineers) standards. The company has 15 employees on average and its 2011 revenues amounted to €2.4 million.
• Likewise, in radioactive waste management, TÜV Rheinland in Korea acquired the engineering company L4S Engineering, which specializes in matters of radiation protection and safety analysis with respect to nuclear technology. The acquired company is based in Daejeon, has 14 employees, and is active internationally. Revenue of about €1.4 million is anticipated for 2012. TÜV Rheinland has been represented in Korea since 1987 and, after this acquisition, employs almost 100 people at its locations in Seoul, Daegu, Changwon, and Daejeon. The testing of telecommunications products, photovoltaic modules, electrical appliances, and consumer electronics as well as vehicle approval belongs to its most important services.

Continuing its international expansion

TÜV Rheinland is also continuing its international expansion in growth markets by making targeted investments in testing centers:

• Since October 2011, TÜV Rheinland has been testing electromagnetic compatibility and electrical products’ interference resistance in the modern Electronics City technology park in Bangalore, India. Our investment for the test chamber – nearly 1,900 square meters in size – is €2.2 million. In two years, TÜV Rheinland has established a photovoltaics testing center, several labs for pollutant analysis and materials testing, as well as a chamber for measuring electromagnetic compatibility (EMC). This means that TÜV Rheinland in India has access to state-of-the-art lab facilities and can offer manufacturers various solutions for product testing not only for the Indian market, but also for markets around the world.
• We opened a testing lab for automotive component testing and certification in November 2011 in collaboration with the EDAG Group, the third-largest automotive technology and design company in the world. This automotive component test center in Shanghai –17,000 square meters in size – is the first in China to earn the seal of approval from Western car manufacturers like Volkswagen, BMW, Daimler, and GM. In the first phase of the project, €2.4 million will be invested in state-of-the-art instruments and testing equipment. The Shanghai location, which employs 300 people, will be expanded further in 2012.
• The first internationally independent testing center for the growing Turkish furniture industry has opened in Inegöl. TÜV Rheinland is investing about €2 million in a furniture lab – initially 450 square meters in size – although it is expected to expand to up to 1,500 square meters in the coming year.
• The first textile and toy testing lab has opened in Bentonville, Arkansas. This brings North America into the worldwide consumer product testing network.

Further Highlights

Since April 2011, TÜV Rheinland has once again been a full member of the Association of TÜV e. V. – meaning that now all of the large TÜV companies in Germany are part of the association, which represents its members’ interests in politics, administration, and finance. It also coordinates and links the member companies’ expertise and is an important contact for technical safety, environmental protection, and sustainability in the decision-making centers of Berlin and Brussels.

Environmental protection and the growing importance of renewable energy are increasingly prioritized in the TÜV Rheinland business strategy:

• On November 11, 2011, TÜV Rheinland organized the first environmental protection event focusing on CO2 emissions on the occasion of the opening of a new office in Shenzhen with the title »On the Path to a Green Future«. The event was an important occasion in TÜV Rheinland’s 25-year presence in Greater China, and it moreover signaled our support for China’s ecological strategy of producing less CO2. On that particular occasion, TÜV Rheinland Greater China received the Asset Recovery Services (ARS) Greenmark certificate from Lenovo. Other businesses and the public will be encouraged to get involved in environmental protection as well.
• On November 18, 2011, the Green Manufacturing Summit was organized by the German Chamber of Commerce in Shanghai. TÜV Rheinland supported the conference, which was attended by more than 140 high-ranking production company managers to exchange their views on sustainability.

TÜV Rheinland successfully concluded the project that it had started in July 2009 to build a new, earthquake-proof school building for 1,200 students in the village of Renija. On 12 May, 2008, a magnitude 8 earthquake in Sichuan Province in southwestern China caused tremendous damage.

• To support the local population in the areas that needed it, TÜV Rheinland initiated two reconstruction projects. They involved two schools in Yunnan Province; these were damaged by landslides and considered unstable, so that students had to be taught in temporary structures. TÜV will cover the costs of reconstruction, hardware, and educational materials including a library.

TÜV Rheinland was recognized twice at the League of American Communications Professionals (LACP) Vision Awards, the biggest international business report competition, for our Corporate Report 2010: the Silver Award within the industry and the TOP 50 German Annual Reports of 2010. The jury gave the award to the Corporate Report for its concept, design, frontispiece, and finance section.

For the fourth time in a row, TÜV Rheinland is one of Germany’s top employers. The company was recognized for outstanding and modern personnel management in the current study Top-Arbeitgeber Deutschland (Top Employers in Germany) 2011. TÜV Rheinland was convincing based on career opportunities criteria and training and development.

• This image is confirmed by TÜV Rheinland’s first global employee survey. The survey included several categories such as communication, promotion and development, motivation and work satisfaction, leadership and change culture, as well as customer orientation and image.
• The employees’ high level of motivation in the motivation and work satisfaction area was particularly unusual. Work satisfaction and fairness of workload also received positive assessments. The company’s customer orientation and image had similar results: the work focuses on external and internal customers.
• The Executive Board will analyze the survey results in greater detail in order to define additional steps together with the employees in 2012.

On January 17, 2011, Rhineland-Palatinate Minister-President Kurt Beck awarded the state enterprise medal for outstanding service to the Rhineland-Palatinate economy and worldwide voluntary engagement to Prof. Dr.-Ing. Bruno O. Braun, TÜV Rheinland Berlin Brandenburg Pfalz e. V. CEO. Moreover, Minister-President Beck praised TÜV Rheinland’s leading role in the social and ecological spheres.

Prof. Dr.-Ing. Bruno O. Braun has been the CEO of TÜV Rheinland Berlin Brandenburg Pfalz e. V. since 1993 and was CEO of TÜV Rheinland AG until 2009. Apart from his professional work as CEO of TÜV Rheinland Berlin-Brandenburg Pfalz e. V. and Chairman of the Supervisory Board of TÜV Rheinland AG, he also sits on numerous honorary committees. Furthermore, he is president of the Association of German Engineers (VDI) and Chairman of the German-Chinese Dialog Forum, an advisory body of the German federal government.