DEKRA records excellent financial year 2023

 

Record sales exceed own expectations  

• Sales rise to all-time high of € 4.1 billion (+8% compared to 2022) 
• Adjusted EBITDA grows by 7.8%, adjusted EBIT by 12.8% 
• “Strategy 2025” gains momentum: further growth expected based on strong core business and the focus areas of mobility of the future, cybersecurity, sustainability and artificial intelligence 

2023 was an excellent financial year for DEKRA. Global sales rose significantly to an all-time high of 4.1 billion euros (+8% compared to 2022: 3.8 billion euros). With this strong growth compared to the industry as a whole, the company exceeded its own expectations. Earnings increased significantly to an adjusted EBITDA of EUR 455.5 million (+7.8% compared to 2022) and an adjusted EBIT of EUR 255.3 million (+12.8% compared to 2022). 

On this basis, DEKRA intends to fully exploit its “early mover” advantage in future technologies and newly established regulations in 2024. As the “Strategy 2025” gains momentum, sales growth is expected to be in the mid single-digit percentage range. In 2025, the year of the company's 100th anniversary, DEKRA aims to establish itself as the partner of choice for first-class TIC (Testing, Inspection, Certification) services in the growing business areas of mobility of the future, cyber security, sustainability and artificial intelligence (AI). 

“DEKRA has once again improved its business performance in 2023 - despite a tense economic and geopolitical environment,” said DEKRA CEO Stan Zurkiewicz at the company's annual press conference. “All six regions and all business segments contributed to our strong growth and our all-time sales high. Our strong core business and our lead in future topics make us very confident that we will grow both in terms of sales and margin and achieve our strategic goals.” 

While the DEKRA regions Americas (+27%) and Central Eastern Europe and Middle East (+13%) recorded the highest growth rates in 2023, the highest sales in absolute terms were achieved in the GSA region (Germany, Switzerland, Austria: EUR 2.6 billion). 

From a business segment perspective, vehicle-related services continued to be the most important sales driver. DEKRA once again confirmed its role as the global market leader in vehicle inspections with 31.6 million inspections carried out. 

In 2023, DEKRA's adjusted EBIT margin rose slightly by 0.2 percentage points to 6.2%, despite the negative impact of higher provisions and inflation-related increases in operating costs. The equity ratio remained at a very high level of 39.3% (2022: 41%). 

DEKRA's “Strategy 2025” is proving successful: last year, DEKRA continued to invest in its service portfolio in the focus areas of mobility of the future, cybersecurity, sustainability and AI. “In total, investments reached a record level of 143.5 million euros,” explained DEKRA CFO Wolfgang Linsenmaier. “DEKRA has also optimized its results, for example by streamlining the organization. And we have further expanded our workforce.” By the end of 2023, around 49,000 experts will be working for DEKRA in around 60 countries. 

“Our investments were fundamental to the successful introduction of new services in future technologies,” added Zurkiewicz. “In 2024, we will also increase our investments in order to expand our service portfolio even further.”

 

Optimistic outlook for 2024  

Against the backdrop of geopolitical and economic crises, DEKRA expects global growth to remain subdued in 2024. Nevertheless, DEKRA has made a solid start to the 2024 financial year with revenue of just over one billion euros in the first quarter of 2024 (+2.5% compared to Q1 2023). Due to its strong position in current and future markets, DEKRA expects the upward trend to continue: Revenue growth in the mid-single-digit percentage range is expected for the 2024 financial year, primarily through organic growth, supplemented by selected strategic acquisitions. DEKRA also expects a further increase in EBIT. 

DEKRA also intends to strengthen its profitability beyond 2024 through the further development of a forward-looking service portfolio and the use of digitalization and AI in both internal processes and customer solutions. Accordingly, DEKRA plans to achieve a margin in the region of 8% to 9% in the second half of this decade.

 

Strategic growth areas: Sales with future mobility will triple by 2025  

DEKRA already benefited in its strategic growth areas in 2023. 

DEKRA has successfully introduced a wide range of new services in the area of future mobility. One example is the patented battery test, which addresses a key issue in the market for used electric vehicles: uncertainty about the remaining service life and performance of car batteries. The test uses high-precision measurements to provide clarity within a few minutes and facilitates transparent price negotiations. The DEKRA test covers 12 European countries and over 100 vehicle models, including Tesla. The test volume is to be significantly increased in the future.
 

DEKRA is also focusing on growth opportunities in automated and connected driving. One special service is the range of highly complex test scenarios for driver assistance systems and automated driving functions, which use digital twins to compare the real world with the digital world. DEKRA carries out these tests at its Klettwitz site, which is set to become the world's most comprehensive independent test center for automated and connected driving. The DEKRA proving ground in Málaga, Spain, also plays a key role with regard to connected vehicle functions. 

By 2025, DEKRA expects its future mobility business to grow by around 200% compared to 2022, consolidating its position as the clear market leader in the global TIC automotive market, which is expected to reach 18 billion euros annually by 2025. 

“Vehicle safety has been our mission since our foundation, which now dates back almost a century. As technological development accelerates and artificial intelligence plays an increasingly central role in new generations of vehicles, we are continuously expanding our services,” says Zurkiewicz.

 

Cybersecurity and artificial intelligence: new innovative services to increase revenue by 2025 

Over the past seven years, DEKRA has successfully built up its cyber security business with a strong global presence in Asia, Europe and America. Its renowned customers include leading technology companies such as Amazon, Apple, Google, BYD, BMW and Continental. In the past year, DEKRA has doubled the number of employees and tripled sales in this area, achieving double-digit margins. 

“The threat of cyber attacks continues to increase. Bitkom estimates that damage in Germany amounts to 206 billion euros per year. Our customers choose DEKRA because we are able to identify vulnerabilities in their future products as early as the development phase and define reliable test scenarios,” explains Zurkiewicz. 

One example is the DEKRA “Cyber Security Certification Program” for drones. This enables critical risks associated with wireless and networked technologies to be addressed. A second example is DEKRA's unique certification for the security and reliability of digital car keys, which is supported by more than 330 industry partners such as BMW, Toyota, Ford, Apple and Samsung. With four accredited laboratories worldwide, DEKRA is well equipped to support industry leaders with rigorous testing procedures and unparalleled cybersecurity expertise. 

The rapid introduction of AI will require additional cybersecurity measures in the future. For this reason, DEKRA has introduced a first set of AI training and testing services in 2023, focusing on high-risk AI applications such as those found in aircraft, vehicles, medical devices and other products covered by EU safety regulations. 

In connection with the current strategy for safeguarding AI, DEKRA has introduced comprehensive services for its customers to train them in dealing with EU regulations. In a pilot project for Migros Bank and Gowago, the largest online car leasing company in Switzerland, DEKRA, together with its partner LatticeFlow, successfully ensured the accuracy and reliability of an underlying AI model by assessing data quality, model robustness and compliance with future EU regulations. 

Building on its strong market position in cybersecurity services and its early mover advantage in AI, DEKRA plans to quintuple its AI revenue and more than double its cybersecurity revenue by 2025.

 

Sustainability services: Ambition to achieve a 40% share of sales by 2025  

Sustainability will remain a clear strategic focus in 2023. DEKRA has more than 500 sustainability services, which corresponds to a third of the service portfolio. In addition to ESG management (environmental, social, governance), this portfolio includes circular economy and product sustainability initiatives as well as decarbonization and the energy transition. 

In the latter, hydrogen has emerged as an important focus topic. “DEKRA is now one of the first organizations to be accredited for the comprehensive testing of hydrogen,” says Zurkiewicz. “and we expect to become one of the first TIC companies recognized by the EU Commission to certify green hydrogen.” 

Against the backdrop of a growing number of complex regulatory frameworks, such as the CSDD (Corporate Sustainability Due Diligence) Directive, DEKRA is increasingly helping companies to navigate these frameworks and develop appropriate ESG strategies. 

DEKRA is aiming for a 40 percent share of sales in sustainability-related services in this growth area by 2025.

Further progress in sustainability performance confirmed by CDP B-Score 

DEKRA remains strongly committed to sustainability and transparency with regard to its own activities. This is why DEKRA disclosed its environmental data to the non-profit organization Carbon Disclosure Project (CDP) for the second time in 2023. “Our B-score certifies that we have good environmental management. This is of great value to us, as CDP has a good reputation in the market. We will take further measures in the future to create incentives for even greater reductions in emissions,” says Linsenmaier, who is also responsible for sustainability on the DEKRA Board of Management. DEKRA is also currently preparing for the next assessment by EcoVadis, the leading provider of sustainability assessments for global value chains. DEKRA has already been awarded a platinum rating by EcoVadis three times in a row.

DEKRA Annual Report 2023/24: https://report.dekra.com/

 

About DEKRA 

DEKRA was originally founded in 1925 with the aim of ensuring road safety through vehicle testing. Today, with a much broader range of activities, DEKRA is the world's largest independent, non-listed expert organization in the field of testing, inspection and certification. As a global provider of comprehensive services and solutions, we help our customers improve their safety and sustainability outcomes. In 2023, DEKRA achieved a turnover of 4.1 billion euros. Around 49,000 employees provide qualified and independent expert services in around 60 countries on five continents. With a Platinum rating from EcoVadis, DEKRA is among the top 1 percent of sustainable companies in the ranking.