Ladies and Gentlemen,

As is tradition, a review of the year typically begins with a few financial indicators which show that 2018 was a successful year. Our sales increased to approximately 2.5 billion euros, resulting in an organic growth of 5.5 percent. At the end of 2018, there were more than 24,000 employees in over 1,000 locations.

2018 was a very special year for TÜV SÜD because our new corporate strategy 2025 was finalized for Group-wide implementation in mid-2018, setting a decisive course for the future. Under the slogan “The Next Level. Together.”, we have engaged all employees, from top management to technical experts, in the strategy process. Our corporate strategy acts as a guiding principle for all of us at TÜV SÜD. Our goal is to make our company fit for the future and to bring it to “the next level” together. This annual report is titled “Together” to reflect this resolve.

For over 150 years, we have contributed to making the world a safer place. Our strategy 2025 will help TÜV SÜD to fulfill its mission of protecting people, the environment, and property from technology-related risks as the world transforms in the digital age.

Digitalization is transforming our world at an unprecedented pace. We will invest our resources into seven key trends and challenges as well as six critical technological areas. In 2018, we have already achieved significant headway: In the automotive field, artificial intelligence is being applied to automatically detect and evaluate damage to cars; in the arena of additive manufacturing, we built a team of experts to develop standards for 3D printing with one of the largest European infrastructure companies; and we are taking training and continuous education to a new level by introducing online training programs at our Digital Academy.

IT security is one of the most important topics for us. Over 80 cyber security experts located across Asia, Germany, and the United States test programs and systems for vulnerabilities to cyberattacks and examine their interoperability with other systems. By joining the “Charter of Trust,” an international alliance for cyber security founded in 2018, we are actively contributing to address this important societal issue.

“The Next Level. Together.” also signifies the evolution of existing services in line with current developments and requirements of society. In 2018, for example, we inaugurated a new “state-of-the-art” test center for electromagnetic compatibility in Minnesota, USA. The construction of two new battery test centers in China is progressing rapidly, as well as a new test and development center for subsea pipelines in Scotland. At the end of 2018, construction work began in our exhaust gas testing laboratory for motor vehicles in Heimsheim, Germany. With the expansion of our global network of testing facilities, our aim is to provide value to our customers globally.

In our pursuit of innovation, we have not lost sight of the guiding principles and values that shaped us over the last century and a half: Independence, neutrality, quality, and a high degree of expert knowledge. Our comprehensive “Code of Ethics”, outlines the values of independence, integrity, and lawfulness. Our employees are regularly trained on this code and we continuously monitor our adherence to it. Ongoing training and further education of our employees in both quality and compliance is of utmost importance to us.

“Trust” is the foundation upon which TÜV SÜD has been built. For over 150 years, we inspired trust in technology by creating greater safety and security for our customers. Our new corporate claim “Add value. Inspire trust.” emphasizes this, representing the high standard we have set for ourselves.

As “Trust” is so important to TÜV SÜD, a current event outside the reporting period deeply concerns us. It was the end of January 2019 when the dam of a retention reservoir in an iron ore mine collapsed in the Brazilian state of Minas Gerais. A subsidiary of TÜV SÜD in Brazil, Bureau de Projetos e Consultoria of São Paulo, acquired in 2013, previously inspected the dam on behalf of the operator. We are deeply saddened by this tragedy, and the victims and their families are in our thoughts. In immediate aftermath, TÜV SÜD’s Board of Management initiated extensive measures to investigate the matter. Since then, we have been working relentlessly with the aid of several independent external experts and consultants, to assess and clarify the complex technical issues around the incident.

All of this resonates with the theme “Together” in which we firmly believe. Acting together not only means looking forward with courage and confidence to develop TÜV SÜD further, it is also about standing together and acting with transparency and openness in difficult times. We do this as a company with thousands of technical experts; in the service of society, and as a partner to our customers.

Munich, July 12, 2019
The Board of Management of TÜV SÜD AG