Automotive News Europe - September 2011 - 74

AUTOMOTIVE NEWS EUROPE

SUPPLIERS

BIG BUSINESS WITH SAFETY
German service provider expands its sales globally; wants to grow organically and from acquisitions
HARALD HAMPRECHT

GROWING SALES
Where Dekra’s automotive unit makes its money; 2009 vs. 2010 revenue in million euros
2009 2010

hhamprecht@crain.com

As the number of people using the automobile has grown rapidly since its birth 125 years ago, so has the need to make sure that the vehicles on the road are safe. One of the world’s biggest vehicle-testing providers – with 22 million car tests a year – is Stuttgartbased Dekra. Today, no German-registered vehicle may be operated on public roads without a certificate from Dekra or one of its rivals. In most cases, the certificate has to be renewed every two years. Dekra is looking to expand it vehicle-testing and other services around the world. Founded 1925 in Berlin, Dekra, which is short for Deutscher Kraftfahrueberwachungsverein or the German Motor Transport Inspection Association in English, has ambitious plans. “Our strategy for 2015 is clear,” Dekra Chairman Stefan Koelbl told Automotive News Europe. “We want to accelerate and push ahead with our international expansion, significantly increase sales and profit within the next five years.” Last year, the company’s total sales rose 9 percent to almost 1.86 billion euros. This year, Koelbl wants to reach the 2-billioneuro milestone. The company’s 2010 earnings before interest and taxes were up 33 percent to 121.6 million euros

compared with 2009. Dekra is made up of three business units: automotive, industrial and personnel. Of the three, the automotive division is the group’s leading source of sales with revenue up 4 percent to more than 1 billion euros last year. “This year’s aim is 1.1 billion euros,” Koelbl said. “By 2015, the automotive unit should provide more than 1.5 billion euros sales.” Vehicle testing accounts for more than 60 percent of the auto division’s annual sales, followed by vehicle appraisals at 24 percent. The unit also experienced strong growth in its used car management services as acquisitions have pushed up sales to nearly 53 million euros last year from about 46 million in 2009 (see box). Getting bigger A significant portion of Dekra’s growth – its annual sales have nearly doubled in the last six years – has come through its more than 30 acquisitions since 2004. “With seven automotive and industrial acquisitions in 2010 alone, we have further expanded our global network,” Koelbl said. “We are currently world market leader with our automotive services. And with our portfolio, we are one of the three largest providers of expert services worldwide.” Some of its recent takeovers include Coorevits Group, Belgium’s leading car appraisal organization, and France’s AutoContact Holding, which is one of Europe’s top providers of used car management. “Together with our new French subsidiary, we are now European market leader” in used car management, Koelbl said. More acquisitions are planned. The average yearly sales growth of 10 percent by 2015 will be generated organically and through acquisitions. “We will invest 60 million to 100 million euros per year in identified targets as well as in our organic growth,” Koelbl said without sharing more details on the target. “Beyond that, we are well prepared for bigger transactions if an interesting opportunity should arise.” Dekra plans a big increase in headcount to secure its growth. Said Koelbl: “We will create more than 10,000 new jobs in our group within the next five years.” Worldwide, Dekra has about

❙ Vehicle testing ❙ Expertise ❙ Used Car Management ❙ Homologation ❙ Consulting ❙ Claims ❙ Other ❙ Total
Source: Company

637.4 241.4

650.5 251.2

46.1 53.9 17.1 17.0 8.9 13.1 25.1 28.5 10.6 13.8 986.6 1,028.0

Dekra Chairman Stefan Koelbl wants his firm to increase sales 10 percent a year through 2015.

25,000 employees, of which 10,600 work for the automotive unit. The majority of the company’s total employees – 60 percent – are based in Germany. France is Dekra’s second-biggest market, but it has a presence in a total of 50 countries. Koelbl said the company plans to boost its global footprint most in China, North America and South America. In China, Dekra is focused on expanding its homologation services. “Outside Europe, we want to increase our automotive unit’s sales from about 36 million euros last year to 250 million euros by 2015,” Koelbl said. The competition is tough – especially in vehicle testing: In Dekra’s home country, the company synonymous with safety inspections is still TUEV, which stands for Technischer Ueberwachsungsverein or Technical Inspection Association in English. Dekra’s main competitor in Germany was established more than 140 years ago as a result of public and workplace safety initiatives in the late 19th century. Until the early 1990s, TUEV had a monopoly when it came to vehicle testing in Germany. Outside of Germany, Dekra’s rivals include the Societe Generale de Surveillance of Switzerland and Veritas of France. All of those companies are looking to grow outside their borders in places such as Sweden, where the market was opened to competition early last year. By July of this year, Dekra opened its first testing center near Gothenburg. One area of concern at vehicle-testing firms is the European Commission’s desire to harmonize testing standards throughout the EU. A possible negative effect is that such a move could lower car-testing standards as well as the qualifications needed by testing personnel. “On the other hand,” Koelbl said, “we would then be able to carry out vehicle inspections in countries that so far have been inaccessible for us.” ■

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SEPTEMBER 2011

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