MESSAGE FROM THE BOARD OF MANAGEMENT
The Board of Management from left to right:
AXEL STEPKEN, ISHAN PALIT, MATTHIAS J. RAPP
Ladies and Gentlemen,
Nobody could have predicted the profound impact that the Covid-19 pandemic would have on the world when it was first detected in Wuhan in January 2020. As the virus spread from country to country, TÜV SÜD had to endure lockdowns, contact restrictions, office closures, and travel and border restrictions just like everyone else in the world.
From the outset, we focused our efforts on three areas: the safety of all our employees; maintaining our operations and servicing our customers wherever feasible; and safeguarding the economic wellbeing of the company and thus protecting jobs.
We had to learn to deal with the new challenges that the pandemic brought with it. We formed a global pandemic response team which was responsible for coordinating our response to Covid-19. Our IT infrastructure was enhanced so that our employees could seamlessly work remotely; split teams were formed in order to meet capacity limiting regulations; rigorous hygiene and safety concepts were implemented in all our locations; and arrangements were made for personal protective equipment for all our staff. Except for a few temporary closures of our facilities necessitated by local rules, we were largely able to continue our testing and inspection operations whilst ensuring adherence to strict hygiene guidelines. We demonstrated that customers can rely on TÜV SÜD in times of crisis.
Our dedicated engineers and employees ensured that we continued to meet our customers’ needs by implementing innovative new ways to deliver our services while minimizing the risk of infection for our staff and customers. We implemented remote audits, conducted inspections using smart glasses, and allowed customers to monitor their testing at our labs from their own sites. Since pressure systems, chemical factories, elevators, and cars continue to require regular inspection during a pandemic, TÜV SÜD continued to deliver on our core mission to protect people, the environment, and assets from technology-related risks. Our aim throughout the Covid-19 crisis has always been to continue to deliver the same quality of service to our customers.
Nevertheless, our operations did not escape completely unscathed from the limitations and restrictions imposed during the pandemic. The impact was particularly noticeable in regions where strict lockdowns were in place and in those industries dependent on complex international supply chains. We also noticed a significant reduction in our services that are provided directly to consumers, including the services from our Academy which was unable to provide in person classroom training for several months. Drivers’ license tests and medical-psychological tests in Germany were also suspended.
In view of the global economic turbulence in 2020, TÜV SÜD has endured the storm with a set of satisfactory results. With just a 4 percent drop in sales revenue to EUR 2.49 billion and an 15.2 percent reduction in EBIT to EUR 172 million, we have protected and nurtured our most important resource – our people, and needed to furlough staff or to introduce short time working in very few areas.
Our robust operational and financial performance was based on the foundation of years of good, sound management, and this allowed the Board to make targeted investments in the areas of digitalisation and sustainability, without recourse to borrowing. Two examples of this are the recent development of our Asian car battery testing laboratory for electric vehicles and our new Asian Headquarters in Singapore, which sets the standard for sustainable building and energy efficient operations. Further, we established a “New Energy & Storage” Centre of Competence which is a global hub of expertise in the renewable energy and hydrogen sector. And our involvement in the Charter of Trust, a global initiative for the advancement of cybersecurity, is enabling Industry to defend against the constant threat of bad actors.
Despite the challenges, we did see positive business developments in 2020. Demand for medical device testing grew significantly. Our “Smart Restart” offering as well as our hygiene audits and hygiene training courses delivered support to our customers in a wide variety of industries seeking to relaunch their businesses post lockdown. Another example of one of our many successful projects is our Smart Industry Readiness Index or SIRI, a joint development with the Singapore Economic Development Board. The assessment has already been completed by more than 340 companies from all over the world, a figure that is slated to double in the near future. Working with the World Economic Forum and other renowned partners from the industry and consulting sectors, we plan to establish SIRI as a global standard for the Industry 4.0 transformation and have been qualifying assessors all over the world. This will consolidate our position as global partner for this “Fourth Industrial Revolution”. 2020 also saw TÜV SÜD issue its first annual sustainability status report; transparently documenting our commitment to the sustainability of our operations to our clients and stakeholders.
TÜV SÜD continues to be committed to the ongoing investigations into the tragic accident of a tailings dam failure at an iron ore mine in Brumadinho, Brazil, in January 2019, its probable cause and the impact on the inhabitants and environment of the Brumadinho region. Despite TÜV SÜD’s active support and involvement in the investigation, the cause has yet to be identified. We remain convinced that our engineers carried out their jobs without error and we remain steadfast in our commitment to the ongoing investigations in Brazil and Germany.
In closing, we are in a world that has been living with the consequences of the Covid-19 pandemic, for over one year. No one can predict its conclusion nor can we predict a “return to normalcy”; but we can predict TÜV SÜD will be there to support its employees and our customers deal with the issues as they arise. The trust, that is the foundation of TÜV SÜD’s existence, will continue to be underpinned by our Independence, Impartiality and Expertise. We will continue to inspire trust, just as we have for the last 150 years – and we are absolutely committed to this, now and in the future.
Munich, March 26, 2021 The Board of Management of TÜV SÜD AG
Prof. Dr.-Ing. Axel Stepken Chairman of the Board of Management
Ishan Palit Member of the Board of Management
Dr. Matthias J. Rapp Member of the Board of Management