Financial Report
2018

01

CONTENTS

At a glanceContents

On the road, at work and at home, millions of people around the world
rely on DEKRA’s safety expertise. This leading unlisted expert organization
is fulfilling its corporate mission of improving safety with impartiality andindependence. With a workforce of nearly 45,200, DEKRA is synonymouswith innovative services in the safety segment in more than 60 countries
across five continents. This vision to be realized by our centenary in 2025
is as follows: DEKRA is becoming the global partner for a safe world.

02

Foreword

GROUP MANAGEMENT REPORT

03

CONSOLIDATED FINANCIAL STATEMENTS

Corporate information27	
C onsolidated statement ofcomprehensive income03		Group business model04		
Vision 202528	
C onsolidated statement offinancial position05		
System of management06		
Research and development
08

Until the end of 2018, the portfolio of the Business Units DEKRA Automotive,
DEKRA Industrial and DEKRA Personnel comprised the twelve strategic businessareas Vehicle Inspection, Expertise, Automotive Solutions, Homo­logation &Type Approvals, Claims Service, Industrial & Construction Inspection, Material
Testing & Inspection, Product Testing & Certification, Business Assurance,
Insight, Training & Education and Temporary Work.

30	Consolidated statement ofchanges in equit y

Repor t on economic position

08		
General economic andindustr y-specific conditions

32	Consolidated statement ofcash flows

09		
Business performance
12		
Environmental protection and sustainability

34	Notes to the consolidated
financial statements13		
Personnel repor t

104

15		
Financial position and performance108	
R eport by the Chairman of
the Super visor y Board

19

Risk, oppor tunities and forecast repor t

19		
Risk repor t
23		
Oppor tunities repor t

From fiscal year 2019, DEKRA’s comprehensive service offering will be
distributed across eight regions worldwide and is grouped into the eight
Service Divisions Vehicle Inspection, Consulting, Claims & Expertise,
Audits, Product Testing, Industrial Inspection, Training and Temp Work.

24		
Forecast repor t

KE Y DATA DEKR A SE
2016

2017

2018

in million EUR

2.903,6

3.134,83.340,5

in %

40,1

39,3

39,3

in million EUR

220,6

236,1

242,3

in %

7,6

7,5

7,3

in million EUR

200,9

228,9

227,9

Total assets

in million EUR

2,091.3

2,090.2

2,267.0

Equityin million EUR

543.5

635.5

748.8

in %

26.0

30.4

33.0

39,35744,05745,197

Revenue and income

Total revenue
Share of international revenue
Adjusted EBIT
Adjusted EBIT margin
Adjusted EBTStatement of financial position

Equity ratio
Employees

Number as of Dec. 31

D E K R A Financial Report 2018

Independent auditor’s repor t

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FOREWORD

03

GROUP MANAGEMENT REPORT
Corporate Information

Foreword by the
Chairman of the Management Board

Dear business partners,
Dear readers,
When it comes to the safety of people on the road, at workand at home, DEKRA is a top partner on a global scale. Our
comprehensive range of testing, inspection, certification andconsulting services is valued in around 60 countries across theworld. That is why we continued to grow in fiscal year 2018.

S T E FA N K Ö L B L

We were able to increase revenue by 6.6 percent to 3.3 billion euros. Adjusted operating earnings rose by 2.6 percent
to 242 million euros. In this 15th successive year of growth, thenumber of employees also increased, by 1,140, to 45,197.

Group management reportfor the fiscal year 2018

CORPOR ATE INFOR M ATIONGroup business model
DEKR A ensures safet y

For over 90 years now, DEKRA has strived to ensure people’ssafety in all of life’s situations. What started out in 1925 with thetechnical monitoring of motor vehicles, today comprises
wide-ranging services for testing, inspecting and certifying
products, processes and plants. DEKRA is the world’s largest
non-listed expert organization in the TIC industry (testing,inspection, certification), and benefits from the lasting andglobal trend toward more safety. The Company’s mission pursuant to its articles of incorporation is just as valid today as when
it first started out.

SERVICES PORTFOLIO

Chairman of the Management Board
DEKRA e.V. and DEKRA SE

Business development was positive across all three Business Units:
DEKRA Automotive grew by 5.2 percent to 1.64 billion euros.
DEKRA Industrial generated an increase of 4.9 percent and revenue of 940 million euros.
DEKRA Personnel also achieved a sharp rise of 13.1 percent to 735 million euros.
Our successes are based in particular on organic growth through strong market positions
in established and future markets as well as on targeted acquisitions, with which we havedeveloped new potential in the area of digitalization.
At the beginning of fiscal year 2019, DEKRA also further developed its organization.
With eight Service Divisions and eight regions, we now network our expertise worldwide
and focus even more on the needs of our customers. I am therefore sure that DEKRA willcontinue to grow and thus fulfill our statutory mission to ensure technical safety.

Stuttgart-based DEKRA SE coordinated the business operationsof the Business Units DEKRA Automotive, DEKRA Industrial
and DEKRA Personnel in the fiscal year. In seven Service Units
and five Service Lines, more than 45,200 people worked in morethan 60 countries on five continents in 2018. DEKRA is theglobal market leader in vehicle inspection, and is one of the leading companies in other business segments.

AUTOMOTIVE SERVICES

INDUSTRIAL SERVICESPERSONNEL SERVICES

Vehicle Inspection

Industrial & Construction Inspection

Training & Education

Expertise

Material Testing & Inspection

Temporary Work

Automotive Solutions

Product Testing & Certification

Homologation & Type Approvals

Business Assurance

Claims Services

Insight

Sincerely,

S T E FA N KÖ L B L
Chairman of the Management Board
DEKR A e.V. and DEKR A SE

D E K R A Financial Report 2018

D E K R A Financial Report 2018

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GROUP MANAGEMENT REPORTGROUP MANAGEMENT REPORT

Corporate Information

Corporate Information

North-West Europe
South-West Europe
North America

Temp WorkD E K R A Financial Report 2018

Central East Europe & Middle East

Training

Training and education are the foundation for ensuring and promoting prosperity in Germany and Europe. Both the public andprivate sectors therefore invest in basic training and further
development. The Business Unit DEKRA Personnel, which
includes DEKRA Akademie Group and DEKRA Arbeit Group,
is one of the largest private educational institutions in Germany
and one of the leading personnel service providers with a strong
market position in the Top 10 for temporary work throughout
Germany.

Germany

AuditsDEKR A Personnel

SERVICE PERSPECTIVE

Consulting

The Business Unit DEKRA Industrial has become an importantpillar of the Company’s business since early 2005. The Company
has responded to growing international demand from businesses
for specialized service packages and consulting skills focusing
on the safety of processes, plants and entire organizations. The
portfolio covers the areas of environmental and industrial safety,
machinery, plant and building inspection, material and producttesting, certification and consulting services focusing on process
and organizational safety. Customers include medium-sized andlarge corporations in particular.

REGION PERSPECTIVE

Industrial Inspection

DEKR A Industrial

The strategy and operational management of DEKRA are guided
by the principle of stable and healthy growth. Professional expertise, innovative power and customer proximity therefore remain
our primary tasks. Through its strategic “Vision 2025” program,launched in its 90th anniversary year in 2015, with its focus on
the three relevant areas of life – on the road, at work and athome – DEKRA has mapped its course for the coming years. In
this context, DEKRA has set itself the goal of becoming the
global partner for a safe world in its centenary year of 2025. In
the reporting year 2018, DEKRA once again demonstrated its
full commitment to achieving this long-term objective.
An important step in this direction is the further expansion of the Company’s international presence. DEKRA is stillconcentrating on both organic expansion in existing markets
and also making strategic acquisitions aimed at strengthening
existing business sectors at a regional level and developing newmarkets.
As part of the Group’s strategy 2020, six specific initiatives
were launched to achieve the vision: “Thought Leadership”,“Strategic Marketing & Sales”, “Innovation Strategy &Processes”, “GLOBEX”, “Change Management Vision 2025” and“Corporate Culture & Communication”.
DEKRA developed its Target Operating Model 2020 (TOM2020) on this basis in the reporting year, and already started
implementing it at the end of the fiscal year. DEKRA has beenworking with the new organizational structure since the start of
the fiscal year 2019. TOM 2020 stands for the forward-looking
development of the entire organization in order to make betteruse of opportunities for growth in the years ahead.
The four, core goals of TOM 2020 are promoting a focus
on the customer, accelerating the process of globalization, fostering innovation and digitalization, and utilizing the Group’s
strength in order to continue expanding. These goals are to beachieved by means of eight regional clusters around the world,and by setting up a global distribution organization charged
with the focused cultivation of markets and provision of services
in the future. The existing structure of the Business Units is also

Product Testing

We will become the global par tner for a safe world

Claims & Expertise

Vision 2025

Road safety and the associated services are at the heart of theBusiness Unit DEKRA Automotive. The service portfolio
includes periodical vehicle inspection for private individuals andcommercial fleets as well as homologation and type approvals.
DEKRA prepares expertises for insurance companies andprivate vehicle owners, and also handles claims services. Automobile dealerships, vehicle manufacturers, car rental companies
and operators of business vehicle fleets benefit significantly from
DEKRA’s know-how in the Automotive Solutions Service Unit
(used car management and consulting). Besides the key European markets Germany, France, Sweden, the Czech Republic,
Portugal and Italy, markets in other European countries as wellas in the regions of North America and Asia Pacific are gaining
importance in the Business Unit DEKRA Automotive.

Vehicle Inspection

DEKR A Automotive

05

South America
East & South Asia
Southern Africa & Oceania

being scrapped. A distinction will no longer be made between
Service Units and Service Lines. DEKRA’s services will instead
be bundled in eight global service divisions in the future. These
will be responsible for developing the content of services andsafeguarding DEKRA’s standard of quality. The main purposeof this is to enhance the Company’s responsiveness and capacity
for innovation.
Systems of management
Compliance management system

DEKRA’s compliance management function is based on a senseof responsibility on the part of every employee, combined withbusiness activity based on general ethical principles. The observance and implementation of compliance is a high-profile issue
throughout the Group. In 2018, DEKRA’s compliance management function was expanded and adapted in response to changing requirements. DEKRA’s Compliance Office drew up new,strictly value-based training concepts with the involvement of
the operating units. The Compliance function is being developed
as part of the TOM 2020 project in order to put more of a focus
on interaction with the regions. The Compliance Office is working to identify new, international fields of risk and to reinforce
the international team and global teamwork.
The Chief Compliance Officer and the Compliance Office
are a confidential and neutral point of contact for employees andexternals. DEKRA has an internal system that allows potential
misconduct or violations of the law to be addressed via the Company’s website. Communication relating to the Compliance
Guidelines is found on all important digital platforms such as
the intranet, DEKRA Connect and the internet. The low numberof compliance incidents reported and processed in the reporting
year once again showed that the atmosphere at DEKRA is characterized by integrity and fairness, and that the compliance program is accepted and applied in practice.

D E K R A Financial Report 2018

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GROUP MANAGEMENT REPORTGROUP MANAGEMENT REPORT

Corporate Information

Corporate Information

Internal monitoring system

Internal monitoring makes an important contribution to generating confidence among shareholders, customers, suppliers,
employees and all other stakeholders in the management andcontrol of the Company. It forms part of DEKRA’s corporate
governance and assists the Supervisory Board with overseeing
the Company’s management and the Management Board withthe future-proof management of the Company. The internalmonitoring system (IMS) defines the standards for a uniform
reporting procedure. The IMS ensures that the companies comply with statutory requirements and internal policies, and act inaccordance with applicable standards on the market. Internal
audit and other monitoring functions implemented at the
DEKRA Group support management by ensuring the objective
and unbiased monitoring of the design and functionality of theprocesses. Audits also serve to safeguard the Company’s operating assets. The internal audit system at group level comprises
financial audits for auditing and assessing financial accounting
for informative value, reliability and compliance as well as operational audits, which are used to audit and assess the efficiency
and effectiveness of business processes. These are complemented
by compliance audits geared to ensuring adherence to statutory
requirements and internal policies, project audits for performing
process analyses and project evaluations, as well as special investigations in cases of potential misconduct. The Management
Board receives regular reports on the findings of audits and progress on the implementation of improvement measures.
Qualit y management

Integrity, reliability and impartiality are crucial to DEKRA’s success as an independent expert organization. DEKRA’s reputation
and ability to compete on the market, and our impartiality whenrendering our services and public duties, are heavily dependent
on the conduct of each and every individual. Authorities, clients,
customers and business partners can reasonably expect that all
DEKRA staff, that is employees, middle management, executives
and board members, work on the basis of these standards, andcan be relied on to fulfill their duties and conduct themselves as
fair-minded business partners. The quality management systemdefines the internal requirements and obligations. Last year too,due to the modification and updating of internationally valid
standards, such as the updating of the accreditations DIN/ISO/
EN/IEC 17011, 17021, 17024 and 17025, the modified requirements were implemented in the processes and included in a risk
assessment process.
Quality management (QM) not only sets the requirements,
but also constantly inspects and optimizes the processes andservices at DEKRA. In addition to annual external inspections
conducted by the authorities, all subsidiaries with certified or
accredited QM systems ensure the quality of their products andprocesses by means of regular and planned audits. QM also
manages and secures DEKRA’s accreditations and official permits. The number of accreditations increased from 329 to 347
due to changed regulatory requirements, new services and theacquisition of new companies within the DEKRA Group.
DEKRA Industrial has successfully completed all major
reaccreditations worldwide and has obtained numerous extensions in accreditation scopes. New accreditations were also completed in the Product Testing & Certification Service Unit, forexample in the field of cyber security for the Internet of Things.
In addition, required transitions to new standards and to modified regulatory frameworks were undertaken during the fiscal
year. One important milestone was the conversion and expansion of the Company’s accreditation as a Notified Body for testing medical devices and products to the new legal framework of
the Medical Devices Regulation (MDR) and In Vitro Devices
Regulation (IVDR). One important expansion in the field ofVehicle Inspection at the Business Unit DEKRA Automotive inthe reporting year was the accreditation process for the new
DEKRA calibration laboratory in accordance with ISO 17025.
Research and development

DEKRA has been an independent expert organization since
1925. For more than 90 years, the Company has been working
in the area of road safety – with periodical vehicle inspections,with the deployment of accident analysts and accident researchers, with crash tests, public campaigns and cooperation innational and international organizations. Crash tests and accident analyses support automobile manufacturers and system
suppliers in particular. In the reporting year 2018, DEKRA’s

D E K R A Financial Report 2018

accident investigation function marks 40 years of working to
improve road traffic safety. The function’s ongoing mandate is
to analyze real accidents on the roads in order to draw conclusions for road traffic safety. Furthermore, DEKRA uses its status
as an international expert organization to inform the public inworkshops and publications about relevant technical requirements for more road safety.
The journey to Vision Zero

The DEKRA VSR [“Verkehrssicherheitsreport”: Road Safety
Report] was presented for the eleventh time in the fiscal year
2018. The DEKRA VSR, published annually since 2008, provides
up-to-date information and advice on the ongoing developmentof road safety for decision-makers in politics, associations andcompanies. The multilingual report has met with a good
response for years, not only in Brussels and Berlin, but also inmany other cities such as Madrid, Paris, Rome and Beijing. The
DEKRA VSR 2018 looks at the question of what steps are necessary in order to achieve Vision Zero (i.e., reduce the number ofroad traffic fatalities to zero).
The DEKRA VSR is complemented by the DEKRA online
road safety portal: www.‌dekra-roadsafety.‌com. There is additional content available to supplement the printed report, suchas videos or interactive graphics. The portal is also concernedwith many other topics relating to road safety, including vehicle
technology, infrastructure or the human factor of being distracted by smart phones when driving.
In 2018, DEKRA presented the third “DEKRA Vision ZeroAward”. The award is presented to a European city that has notregistered any road traffic fatalities for several years. The city of
Bad Homburg in the German federal state of Hesse was recognized in 2018 for eight successive years without a single fatal
accident in its inner-city transport network.
The future of mobilit y

DEKRA has been accompanying the technological developmentsin the automotive sector for many years. The development
toward the mobility of the future represents a special challenge
for all players in the automotive industry. That is why DEKRA
has a team to develop services for the connected car that pools07

the whole range of knowledge gained from laboratory tests
through material testing to homologation and type approval,
across organizational and national borders.
Following the acquisition of the Lausitzring in Klettwitz,­Germany, at the end of 2017, DEKRA merged the race track withthe adjoining DEKRA Technology Center in 2018 to create
Europe’s largest independent testing center for automated andnetworked driving. Together with other DEKRA facilities in
Spain and China, the Lausitzring and the Technology Center in
Klettwitz also form part of a highly effective international testing
network. In Málaga, Spain, the current focus is on the secureconnectivity and electromagnetic compatibility of cell phones,
smart home products and Industry-4.0-applications as well as atest area for connected driving. The focus there is on producttesting, the development of early-stage test procedures and thetesting of V2X (vehicle-to-everything) technologies. The international testing network for connected and automated driving
is being expanded in Klettwitz by means of a partnership with
Deutsche Telekom that was entered into in 2018. At the Lausitzring, DEKRA and Deutsche Telekom will offer automotive manufacturers and suppliers alike a test field based on 5G technology
in the future. This will allow a wide variety of scenarios to betested involving the networked communication of vehicles witheach other and with their environment.
Measuring and reducing respirable dust pollution

As part of its development activities, in 2018 DEKRA continued
a project from the prior year involving measuring respirable dust
pollution in Stuttgart and using that data to develop effective
measures for reducing it. The project was launched in early 2017with a large-scale clean-up attempt in partnership with the cityof Stuttgart and the street-cleaning specialists from the companies Faun, Kärcher, Reuther, Oberheiden and the Stuttgart
Municipal Waste Disposal Company (AWS). A high proportionof particles can be removed by targeted, regular and intensive
street cleaning. DEKRA accompanied the trial with comprehensive measurements and laboratory analyses. Street cleaning canmake an effective contribution to reducing respirable dust pollution on busy streets in large cities.

D E K R A Financial Report 2018

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GROUP MANAGEMENT REPORTGROUP MANAGEMENT REPORT

Report on Economic Position

Report on Economic Position

Professional driver 2030 project (“FutureDRV”)

REPORT ON ECONOMIC POSITION“FutureDRV” is a three-year project supported by the European
Commission that runs until the end of August 2019 and is being
implemented by partners in six different EU countries. The aim
is to investigate the future working world for professional drivers. DEKRA Akademie GmbH is coordinating the project, andcontributing its expertise in the training of professional drivers.
As part of the research, a profile is being defined with the skills
that are expected to be necessary for professional drivers in theyear 2030, based on the existing profile. Learning solutions arebeing developed for training that take into account boththe skills that will be required in the future and also innovative(digital) applications.
Innovative materials

DEKRA’s expertise has also been incorporated into
Thyssen-Krupp’s 246-meter-high elevator testing tower in Rott­weil. Around 17,000 square meters of the glass fiber meshdesigned by Werner Sobek, which is coated with the highperformance plastic PTFE, lend the tower its unmistakable silhouette. The laboratory for technical textiles and films at
DEKRA Automobil GmbH, Stuttgart, carried out the materials
testing and prepared the expert opinion for the use of the hightech mesh that covers the tower.
EU research project “Shearios”

DEKRA is a partner of the EU’s “Shearios” research project. The
aim of the initiative is the remote-controlled inspection of windturbine rotor blades using the new measuring process of shearo­
graphy. DEKRA Visatec GmbH, Sulzberg, which specializes inrobotics, belongs to the consortium of seven partners. The plan
is for the remote-controlled inspection of wind turbine rotors tobring about significant improvements. People will no longer be
at risk as a result of inspections, and the technology also expedites the inspection process. Rotor blades are currently checkedfor damage by industrial climbers on behalf of the operators.
DEKRA Visatec GmbH’s remote-controlled inspection systems
are mainly used in power plants and the oil and gas industry. Itsapplications consist of inspection activities in areas that are inaccessible or hazardous for people.

General economic and industr y-specific conditions
Robust global economy

The global economy was once again characterized by robust
growth in 2018. According to World Bank data, global GDP grewby 3.0 %, which is roughly on a par with the prior year (3.1 %).
Developing and emerging economies generated the highest
growth at 4.2 % (prior year: 4.3 %). Advanced economies
achieved an increase of 2.2 % (prior year: 2.3 %). In the EuroArea, GDP increased by 1.9 % compared to the prior year (2.4 %).
Unemployment fell to its lowest level in years, both in theEuro Area and in the EU28 countries. In the Euro Area, at 7.9 %in December 2018, it remained below the figure of the samemonth in the prior year (8.6 %). According to calculations by thestatistical office of the European Commission (EUROSTAT), theunemployment rate in the EU28 was also down on the prior year
at 6.6 % in December 2018 (prior year: 7.2 %). Overall, around16.3 million people were unemployed in the EU28 in December
2018. The lowest figures were recorded in the Czech Republic(2.1 %), Germany (3.3 %), Poland (3.5 %) and the Netherlands(3.6 %). Unemployment was highest in Greece (18.6 %), Spain(14.3 %) and Italy (10.3 %).
According to EUROSTAT, inflation in the Euro Area rose
year-on-year from 1.4 % in the prior year to 1.6 % in December
2018. EUROSTAT also reported that consumer prices in Germany rose by 1.7 % in December 2018 compared with 1.6 % in
December 2017.
Solid framework conditions for DEKR A

2018 saw a slowdown in growth in the automotive industry,
which is an important market for DEKRA. According to data
provided by the VDA [“Verband der Automobilindustrie”: German Association of the Automotive Industry], the number ofpassenger cars sold in Western Europe was down by 0.8 % on theprior year. Of the 14.2 million units, 3.4 million units were re­gistered in Germany alone, which is on a par with the high figure
for the prior year. Unit sales in the US market were also on a parwith the prior year at 17.2 million units. The trend in China, on
the other hand, was in decline (down 3.8 %). With sales of newvehicles of 23.3 million units, however, the People’s Republic ofChina remains the world’s largest passenger car market by far.

D E K R A Financial Report 2018

DEKRA Industrial business is influenced by the German andinternational industrial economy. Despite rising geopoliticaltrade conflicts between the US, Europe and China, German
industry and DEKRA benefited from favorable conditions on thewhole. According to the BDI [“Bundesverband der deutschen
Industrie”: Federation of German Industries], manufacturing
output in Germany is expected to increase by 2.5 % in 2018. The
BDI expects industrial output to rise by around 2.0 % in the
EU28 and 3.5 % globally.
The factors most relevant for DEKRA Personnel are theaward of public sector contracts and above all the demand for
temporary workers. According to the latest data provided by theGerman Federal Employment Agency [“Bundesagentur für
Arbeit”], the moving average number of temporary workers inGermany from July 2017 to June 2018 was approximately one
million. The number of temporary employment agencies fell by
400 compared to the prior year to 52,300. In light of the changing demands on the qualifications of employees, the Bundesagentur für Arbeit also invested around 2.1 billion euros in the
promotion of vocational training in 2019.
Business performanceGroup
Improved global positioning ensures growth

In the fiscal year 2018, DEKRA benefited from people’s longterm need for more safety on the road, at work and at home, as
well as its global position. Revenue increased by 6.6 % to 3.3 billion euros. Headcount increased by 1,140 to 45,197 (prior year:
44,057) through strong organic growth and acquisitions.
DEKRA further improved its earnings before interest and taxes(EBIT) from 203.0 million euros in the prior year to 212.4 million euros in the reporting year.
DEKR A Automotive
Consistent internationalization drive

As one of the world’s leading providers of automotive services in
the TIC-industry, the Business Unit DEKRA Automotive
increased its revenue by 5.2 % to 1,638.6 million euros. The business of the Vehicle Inspection Service Line in particular grew,both nationally and internationally. The Business Unit’s otherService Lines also experienced growth.

09

In the fiscal year 2018, 31.0 % (507.8 million euros) of revenue inthe automotive sector was generated abroad compared to 30.8 %(479.4 million euros) in the prior year.
REVENUE DEKRA AUTOMOTIVE
worldwide in million euros

1,558

2017

1,639
+5.2 %
Revenue increase2018

As in prior years, DEKRA Automobil GmbH in Germany contributed a significant portion of the total revenue of the Business
Unit Automotive.
The Company’s position as market leader in the core business of vehicle inspection in Germany was maintained, withmore than 11.3 million inspections (prior year: 11.3 million
inspections) and a market share of approximately 33.4 % (prioryear: 33.5 %). In order to continue to be a leader in this importantbusiness field, investments in new and modern test centers andmeasuring equipment were again made throughout Germany in2018. For example, DEKRA developed a dynamic process for calibrating brake dynamometers in vehicle workshops. The patented
procedure can be used to quickly and simply calibrate most vehicle dynamometers irrespective of manufacturer and type.
DEKRA is the market leader, testing some 26 million vehicles worldwide. The Company continued its international expansion drive in 2018. DEKRA now also inspects vehicles in Denmark following the acquisition of a local provider. It also
increased the number of its testing stations in European countries
including Sweden, Bulgaria, Austria, Slovakia and the Czech
Republic. The acquisition of Jiffy Smog in Nevada with 24 emissions testing stations reinforced the Company’s position in North
America, where DEKRA now has a presence in six US states.

D E K R A Financial Report 2018

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GROUP MANAGEMENT REPORTGROUP MANAGEMENT REPORT

Report on Economic Position

Report on Economic Position

Success was also achieved in the business with other automotive
services. Gain Solutions, a specialist for vehicle condition
inspections and fleet management, was acquired in the UK for
example. In 2018 and January 2019 DEKRA opened three of its
own testing facilities in Brazil in order to promote fleet management services in South America. There are plans to open two
more facilities in the first quarter of 2019. One major achievement was also expanding the business relationship with the PSA
Group (Peugeot-Citroën). Following PSA’s acquisition of Opel,
DEKRA is now assisting the automotive manufacturer with theentire vehicle return process involving more than 200,000 fleet
vehicles a year, for all of the Group’s brands and in ten European countries.
In New Zealand DEKRA has developed the digital inspection platform INSPEKT and introduced it at around 200 facilities across the country on its journey toward the digitalizationof vehicle inspection processes. DEKRA is also working with a
Swiss start-up on a software solution for more innovative claims
management.
DEKR A Industrial
High market acceptance

The Business Unit DEKRA Industrial has performed well thanks
to its strong position on the market and its range of digital services, despite at times challenging economic conditions in certain
regions and markets. Revenue increased by 4.9 % to 940.0 million euros. This included periodic industry testing services inGermany rendered by DEKRA Automobil GmbH via its Germany-wide network of branches. The strong market position isreflected, for example, in elevator and pressure tank inspections.
Several new lines of business were tapped into in 2018 in order tosecure future growth. In total, the Industrial & Construction
Inspection Service Line generated a revenue increase of 5.9 % to429.6 million euros (prior year: 405.8 million euros). In addition
to Germany, the important French market also contributed to
growth, generating revenue of 251.3 million euros (prior year:
240.9 million euros).

REVENUE DEKRA INDUSTRIAL
worldwide in million euros

896

2017

940
+4.9 %
Revenue increase

2018

The Product Testing & Certification Service Unit is exploiting
the opportunities presented by the Internet of Things and thedigitalization of mobility, and has a global network of test laboratories. The services it offers include a wide variety of high-tech
testing services with a particular focus on the sharply rising
requirements of the automotive industry. This includes chemical
analyses, material testing, safety tests and certifications, electromagnetic compatibility tests, reliability tests, error analyses andconnectivity tests. In 2018, a new laboratory was opened in
China specifically for the testing of WiFi connections.
The Company’s global position allowed it to move into new
sectors in 2018. As a result, DEKRA now operates in all important
markets, from medical equipment and energy infrastructure andfacilities through to e-mobility and network technology. For
example, the Company now also assists medical equipment manufacturers with the certification of their products in accordancewith the Medical Device Single Audit Program (MDSAP) organization’s standard. This certification is important for example inorder to gain access to the important markets Australia, Japan,
Brazil, Canada and the US. DEKRA’s high level of acceptance in
the international industrial inspection markets is also reflected

D E K R A Financial Report 2018by other accreditations. In Japan, for example, DEKRA has beenrecognized as a certifying body for products used in areas where
there is a high risk of explosion.
The international expansion of the Insight Service Unit wascharacterized by strategic acquisitions and the targeted expansionof expertise. The acquisition of the Industrial Safety Group in the
Netherlands enabled the Company to improve its position as asafety consultant for companies in the oil and gas, chemicals, andpharmaceuticals sectors. The approximately 100 specialists inworkplace and fire protection as well as health and prevention
assist international corporations with construction and assembly
projects, change processes and inspection turnarounds. A laboratory was also opened in Shanghai that is dedicated to the testingof dangers arising from chemical processes. DEKRA’s new Chemical Reaction Hazard (CRH) laboratory means that it now offers
this expertise on three separate continents.
DEKRA has enhanced its digital security expertise by refining its portfolio of behavior-based solutions. Exposure-Based
Safety technology, for example, enhances the reliability of organizations and processes at industrial companies. The solution canbe used to record data on behavior at the workplace, which canthen be used to improve safety. Human behavior also plays animportant part in the future field of cyber security. DEKRA has
developed a “360° Cyber Safe” solution that takes this into
account.

11

DEKR A Personnel
Recognized exper t for education and temporar y work

The revenue of the Business Unit DEKRA Personnel rose sharply
in 2018 by 13.1 % to 735.2 million euros, following a 24.8 %increase in revenue in the prior year. Both the Temporary Work
Service Unit of DEKRA Arbeit Group and the Training & Education Service Unit of DEKRA Akademie Group contributed tothis development in fiscal year 2018.
REVENUE DEKRA PERSONNEL
worldwide in million euros

735
650

2017

+13.1 %
Revenue increase

2018

DEKRA Arbeit Group climbed from seventh to sixth place inthe list of Germany’s biggest HR services companies in 2018.
There was a sharp, 14.6 % increase in revenue to 455.0 million euros (prior year: 396.9 million euros). In addition to theGerman market, the Company is maintaining its focus on international expansion. DEKRA Arbeit Group now operates in 17
different countries after expanding into France and Austria in
2018. There are plans to open more international branches in
2019. A peak of around 19,500 temporary workers were employedin 2018. This is a 14.7 % increase on the prior year. Business withlarge clients in particular set new records. At the same time,
DEKRA is developing into a service provider for young mobility
companies with new services relating to recruitment and themonitoring of driver safety.

D E K R A Financial Report 2018

12

GROUP MANAGEMENT REPORTGROUP MANAGEMENT REPORT

Report on Economic Position

Report on Economic Position

As one of Germany’s biggest private educational institutions,
DEKRA Akademie Group doubled the number of users of
DEKRA Safety Web, its digital workplace safety instruction portal. The new “DEKRA Tag.it” software also makes it possible tocall up location-specific content on smart phones or tablets. Thisenhances safety at the workplace, because many workplaces
require employees to observe information regarding risk situations and safety measures.
DEKRA Akademie GmbH has supported the integrationof immigrants throughout Germany since 2016 through language and integration courses. Many immigrants now havegood German language skills, which allow them to complete
professional training. These people are trained and placed
directly in partnership with the German Federal Employment
Agency, the Job Centers and a number of companies. DEKRA
Akademie GmbH offers innovative training measures aimed at
helping people achieve partial qualifications with the potential
to lead to a vocational qualification. DEKRA Akademie GmbH’s
revenue was down slightly year-on-year in the fiscal year. Thisdecline was offset by the international revenue of DEKRA
Akademie Group.
Employees are now trained for around 75 clients in Eastern
Europe in order to combat the shortage of specialists in Germany, for example in the nursing professions and in IT security.
They are given specialist and language training in order to beable to come to Germany with a firm offer of a job. Currently
more than 3,000 participants are receiving training. Around
1,300 specialists were placed at German hospitals and nursing
facilities in 2018.
Overall statement by management

In 2018, DEKRA recorded growth for the fifteenth year in a row.
In the fiscal year 2018, the increase in revenue was largely the
result of organic growth. The Company’s large footprint in termsof expertise and geographies makes it easier for it to compensate
for economic and regulatory challenges in individual businesssegments through growth in others. Thanks to its global pres-ence, DEKRA will participate in the global trend toward more
technical and organizational security. The chances of sustainable
and stable growth remain good. The evolution of the organization through TOM 2020 has prepared DEKRA to make full useof opportunities on the market.
Environmental protection and sustainabilit y
Sustainabilit y management

The development of DEKRA’s sustainability management wascontinued in the fiscal year 2018. The Company’s direction in
the field of sustainability is still based on DEKRA’s corporate
values as well as the requirements of the German and international sustainability codes. DEKRA has complied with the internationally recognized German sustainability code since May
2017. The ongoing dialog with the Company’s internal and external stakeholders was further intensified. In initiatives, and in a
dialog with its customers, DEKRA is working to achieve sustainability even outside the Company. DEKRA’s sustainability magazine provides information on the Company’s direction andachievements in the field of sustainability, and highlights theconcrete link between sustainability and safety. DEKRA mainly
contributes to a sustainable trend for the economy, environmentand society through its know-how and expert services with afocus on safety, as well as by specifically supporting customers
in matters of sustainability and corporate social responsibility.

Personnel repor t

Declaration of compliance

Headcount has been increasing for the last 15 years

Targets were set for the number of women represented on themost important corporate bodies in first- and second-tier management. The target figure for the composition of the Supervisory
Board of DEKRA SE is 16.7 %. This quota has been reached. A
target figure has yet to be set for the Management Board. A quotaof 15 % and 20 % has been set for the first management level(Executive Committee/Operational Committee) and second
management level (Management Committee), respectively. The
target figure for the Executive Committee/Operational Committee was not reached (11.1 %). The target figure remains in placeand efforts are constantly being made to achieve this. The target
figure for the Management Committee was reached (20.8 %).

The number of employees working for the Company reached a
new record level of 45,197 at the end of 2018 (prior year: 44,057).
This is an increase of 1,140 (prior year: 4,700) or 2.6 % (prior year:
11.9 %). In Germany, the core workforce increased by 4.9 % compared to the prior year (prior year: 5.0 %) from 12,515 to 13,122.
This was boosted by the generally good state of employment in
the automotive and industrial sectors. The number of temporary
employees fell 11.5 % year-on-year as of the end of 2018 (prioryear: up 25.2 %), from 10,178 to 9,008. In Europe (excluding Germany), the total headcount rose from 15,709 to 17,853 (up 13.6 %,prior year: up 11.9 %). This was very positively influenced by thegrowth of the core workforce in countries such as the Netherlands (up 92), Sweden (up 60) and the Czech Republic (up 54), as
well as the increase in temporary employees in North Macedonia(up 959) and Montenegro (up 475). Outside Europe, the increasein headcount in East Asia continued, from 1,349 to 1,460 employees (up 8.2 %; prior year: up 7.3 %). In the power plant businessin South Africa, with the associated contract term limitations,and in the employee leasing business in Morocco, there were far
fewer employees on board in a 2018 year-end comparison. On
the whole, the number of employees outside Europe fell from5,655 in the prior year to 5,214 (down 7.8 %; prior year: up 7.2 %).

Environmental protection

Protecting the environment is a priority for DEKRA. Internal
environmental management is managed by the Environment,
Health and Safety (EHS) corporate unit and works worldwide tofurther optimize environmental protection and resource efficiency at DEKRA. DEKRA employees receive regular training
in environmentally friendly behavior and their awareness forenvironmental protection issues is sharpened. What is more,
DEKRA offers expert services in the areas of environment andenergy, thus also contributing to environmental protection outside the Company.

D E K R A Financial Report 201813

D E K R A Financial Report 2018

14

GROUP MANAGEMENT REPORTGROUP MANAGEMENT REPORT

Report on Economic Position

Report on Economic Position

Global management and junior talent development

Dialog and exchange with employees and managers

Financial position and performance

DEKRA has implemented a global management development
program for the first time in the Company’s history. In thereporting year, the Managerial Foundation Programme (MFP)
was completed for around 400 mid-level managers, with a totalof around 2,000 days of participation. The training modules were
held in eight different countries, in the relevant national
languages. This concept was complemented by international participant groups, who communicated in English. With MFP,
DEKRA has created a uniform concept of management and the
management culture that is required in order to implement theCompany’s strategy. Efforts to enable managers to implement
the necessary changes in a targeted manner are being expanded.
The implementation of the program also contributes to ongoing
integration at all levels, as well as improved collaboration in the
countries in question. Following the training of all mid-level
managers in the first wave, the program is being continued in2019 for newly appointed or hired managers, making it a key
component of a globally managed onboarding process.
For years, DEKRA has used the International Advancement
Programme (IAP) to promote junior talents who are working inor are to be prepared for international functions. In this multi-modular program with international participants, specific business cases for digital business models were prepared and presented
to the Management Board as a final task in 2018. The outputs ofthe projects are incorporated into ongoing work by the relevant
specialist departments.
In addition to the centrally managed development measures
mentioned above, various event series were held in Germany,
France and China under local responsibility.

The year 2018 was characterized, among other things, by the
implementation of findings from the global employee survey
conducted in the prior year. In almost 1,000 team dialogs, managers analyzed the statistical results of the survey together with
their teams and derived targeted measures. This process also
made it possible to define and implement measures in adjacentmanagement levels. The survey and the implementation processes also provided important input for the relevant specialist
departments. Web-based learning programs were made available
to managers in order to support and manage the implementation
processes.
Intensive communication with managers across all levelsof the hierarchy is required in order to ensure a common andeffective alignment, particularly in times of change. All managers
at levels 1 through 3 were invited to a joint conference for thethird time since 2011. The Global Management Meeting in June2018 brought together around 500 managers from around theworld in Dresden. In addition to the Management Board’s reporton the current business situation, the focus of the two-day event
was on a dialog to prepare and implement the Company’s realignment through “TOM 2020”. The Global DEKRA Day washeld at the end of June for the third time at many of DEKRA’s
facilities. While the last two years’ events were all about “Safety”
and “Partnership”, the focus this year was on “Winning by
Collaboration” and the ongoing development of the organizational structure. Around 9,000 participants around the world
prepared a total of almost 1,500 contributions.

Financial performance

D E K R A Financial Report 2018

The DEKRA Group increased its revenue by 205.7 million euros
in the fiscal year 2018 (prior year: 231.2 million euros) to
3,340.5 million euros (prior year: 3,134.8 million euros), whichis equivalent to a revenue increase of 6.6 % (prior year: 8.0 %).
This means that the 2018 target for revenue was met in full.
GROUP REVENUE
worldwide in million euros

3,135

2017

3,341
+6.6 %
Revenue increase

2018

Of this growth 6.0 % (prior year: 7.7 %) was achieved throughorganic growth and first-time consolidations while 1.3 % of thisrevenue growth in 2018 (prior year: 0.3 %) stems from the acquisitions in the fiscal year and full consolidation of entities
acquired during the prior year. Changes in exchange rates
reduced revenue by 0.7 % (prior year: negative effect of 0.1 %).
The increase in revenue in the Business Unit DEKRA
Automotive was primarily due to revenue generated in Germany
where the volume in vehicle inspection in particular developed
positively compared to the prior year. In the Business Unit

15

DEKRA Industrial, significant revenue increases were reported
in the Industrial & Construction Service Line, especially in Germany and France, as well as in the Service Units Product Testing& Certification and Business Assurance. In the Business Unit
DEKRA Personnel, revenue in the Temporary Work Service Linewas increased by a further increase in market share and the continued good economic situation. The training and education
business was also increased internationally.
Of the revenue, 2,027.7 million euros (prior year: 1,901.3 million euros) are attributable to Germany, 408.0 million euros (prioryear: 396.2 million euros) to France and 904.8 million euros (prioryear: 837.3 million euros) to other countries.
Other operating income increased by 1.4 million euros to33.3 million euros (prior year: 31.9 million euros).
At 3.0 %, the increase in the cost of materials was significantly below that in revenue. The ratio of cost of materials torevenue thus decreased to 9.5 % (prior year: 9.8 %). Personnel
expenses increased by 8.3 % to 2,189.4 million euros (prior year:
2,021.6 million euros). Personnel expenses as a percentage of revenue increased from 64.5 % to 65.5 % in the fiscal year 2018. The
disproportionately weak respectively strong changes in these
expense ratios can mainly be attributed to the strong growth of
the temporary employment business.
Other operating expenses grew more slowly than revenue(3.5 %), corresponding to a decrease in the ratio of expenses torevenue of 0.5 percentage points to 17.2 % (prior year: 17.7 %).
This was due in part to the disproportionately small increase intravel expenses, as well as a fall in other personnel costs and legal
and consulting costs. IT expenses, on the other hand, increased
to 77.1 million euros (prior year: 71.0 million euros).
The volume of write-downs rose at a slightly slower rate
than revenue, by 2.5 million euros to 90.8 million euros in thefiscal year 2018 (prior year: 88.2 million euros).

D E K R A Financial Report 2018

16

GROUP MANAGEMENT REPORTGROUP MANAGEMENT REPORT

Report on Economic Position

Report on Economic Position

Operating profit – calculated as earnings before taxes and thefinancial result – improved by 4.6 % to a total of 212.4 million euros (prior year: 203.0 million euros). This was fully in linewith the expectation for the fiscal year that the Group’s operating
profit would again improve in comparison to the prior year. The
return on sales calculated in relation to operating profit fellslightly by 0.1 percentage points year-on-year to 6.4 %.
The reduction of the financial result by 7.1 million euros
to –17.6 million euros mainly stems from income of 6.5 million euros generated in the prior year from the disposal of financial assets. This was offset by a reduction in net financing frompension obligations in comparison to the prior year amounting
to 2.3 million euros.
Earnings before taxes rose 1.2 % to 194.8 million euros(prior year: 192.5 million euros). The return on sales, calculated
in relation to income before taxes, fell to 5.8 % (prior year: 6.1 %).
The Group tax rate fell 0.6 percentage points on the prioryear to 30.4 % (prior year: 31.0 %). This decline is largely attributable to the capitalization of tax losses at individual subsidiaries that have been carried forward and can be used in the future.
The consolidated net income for the fiscal year 2018
increased by 2.7 million euros to 135.5 million euros (prior year:
132.8 million euros).
Other comprehensive income increased by 11.9 million euros to –5.2 million euros (prior year: –17.2 million euros).
This positive trend can mainly be attributed to the adjustmentof the carrying amounts of non-consolidated subsidiaries to fairvalue through other comprehensive income due to the application of IFRS 9 for the first time, amounting to 20.4 million euros.
The currency translation reserve declined by 6.1 million euros(prior year: 19.0 million euros), mainly due to the subsidiaries
in South Africa, Sweden and Brazil. This was countered by thecurrency translation effects of subsidiaries in the US. Changes
to the actuarial parameters for pension obligations resulted in a

decline of 19.8 million euros in other comprehensive income(prior year: increase of 4.6 million euros). These mainly stemfrom changes to demographic assumptions as well as adjustments based on experience. The interest rate remained at 1.75 %(prior year: 1.75 %) in the fiscal year. This results in total comprehensive income, taking into account expenses and income
recognized directly in equity, of 130.3 million euros (prior year:
115.7 million euros).
To aid comparison of the operating result, the operating resultand earnings before taxes for 2018 and 2017 were adjusted forthe following non-operating (special) effects:– a mortization of intangible assets identified as part of a purchase price allocation (PPA amortization),– project costs for the significant improvement of the IT infrastructure, as well as for market entry in new countries or business segments,– r estructuring expenses, M&A costs and integration costs,– earnings from the sale of entities and individual items of property, plant and equipment, as well as from the subsequent
measurement of purchase price components (earn-out agreements) and from purchase price reimbursements,– exchange rate effects in relation to loans within the Group(effect on the financial result),– special effects from the measurement of put and call options(effect on the financial result).
Adjusted operating profit rose by 2.6 % to 242.3 million euros(prior year: 236.1 million euros). As a result, the margin for the
adjusted operating profit fell by 0.2 percentage points to 7.3 %.
Adjusted earnings before taxes amounted to 227.9 million euros
in the fiscal year (prior year: 228.9 million euros). This represents
a margin of 6.8 % (prior year: 7.3 %).

R E C O N C I L I AT I O N O F A D J U S T E D E B I T A N D E B T F O R 2 018
in million euros

+7.7

+1.6

+1.3

+0.7
242.3

+18.6

+3.2
227.9

–17.6

212.4

EBIT 2018
unadjusted

PPA
impairment

Project costs

Restructuring
expensesOthereliminations

Integration andtransaction costs

EBIT 2018adjusted

Financial result
unadjusted

Eliminations fromfinancial result

EBT 2018
adjusted

R E C O N C I L I A T I O N O F A D J U S T E D E B I T A N D E B T F O R 2 017
in million euros

+6.0

+4.3

+1.0

+0.8
+3.3

236.1

+21.0

228.9

–10.5

203.0

EBIT 2017
unadjusted

D E K R A Financial Report 2018

17

PPA
impairment

Project costs

Restructuring
expensesOthereliminations

Integration andtransaction costs

D E K R A Financial Report 2018

EBIT 2017adjusted

Financial result
unadjusted

Eliminations fromfinancial result

EBT 2017
adjusted

18

GROUP MANAGEMENT REPORTGROUP MANAGEMENT REPORT

Report on Economic Position

Risk, Opportunities and Forecast Report

Financial Position
Financial management

The significant principles and goals of the DEKRA Group’s
financial management are described in the notes.
Capital expenditure

Capital expenditure on property, plant and equipment andintangible assets in the fiscal year 2018, excluding business combinations, amounted to 123.7 million euros (prior year: 89.2 million euros). Spending mainly related to land and buildings, technical and other equipment, furniture and fixtures as well as
intangible assets. Most capital expenditure was carried out by
DEKRA Automotive and DEKRA Industrial.
Liquidit y analysis

The development of the DEKRA Group’s liquidity in the fiscal
year 2018 was mainly influenced by the improved operating
result and the contribution of cash and cash equivalents tosecure pension obligations.
At 94.0 million euros (prior year: 104.3 million euros),
cash flow from operating activities does not fully reflect the goodbusiness development in the course of the reporting year. The
reduction of non-current provisions in the amount of 45.8 million euros (prior year: 66.8 million euros) is characterized by thepension liability insurance payments made in the fiscal year inconnection with the transfer of pension commitments to the
DEKRA company pension. In the fiscal year, cash and cash
equivalents amounting to 41.4 million euros (prior year:
59.0 million euros) were used to build up the Company’s plan
assets. In addition, net working capital recorded a cash outflow
of 77.0 million euros (prior year: 41.7 million euros) due to cutoff effects. These are primarily attributable to increased tradereceivables, mainly as a result of the increase in revenue of theBusiness Unit DEKRA Personnel. In contrast, the improved
operating result adjusted for non-cash income and expenses had
a positive effect on the cash flow from operating activities.
The net cash outflow from investing activities came to174.9 million euros (prior year: 130.1 million euros). The increaseis influenced by the continuing high level of investment in property, plant and equipment and intangible assets. Investment inacquisitions and equity investments was down year-on-year to40.1 million euros (prior year: 53.6 million euros).

Cash flow from financing activities saw a cash inflow of 79.1 million euros (prior year: cash outflow of 31.9 million euros), andwas influenced by the utilization of lines of credit and borrowings. There was also a cash inflow resulting from the cut-offrelated change in the cash pool with DEKRA e. V., Stuttgart,amounting to 33.5 million euros (prior year: outflow of 22.0 million euros), as well as a contribution to equity amounting to10.0 million euros (prior year: 30.0 million euros). This was offset by a transfer of profits to DEKRA e. V., Stuttgart, amounting
to 54.0 million euros (prior year: 37.3 million euros), as well as
cash outflows relating to the payment of interest and installments on financial loans.
Cash and cash equivalents (consisting of checks, cash in
hand, bank balances and other cash equivalents) rose by a totalof 2.1 million euros to 78.5 million euros (prior year: 76.4 million euros).
Composition of assets, equit y and liabilities

Total assets rose by 176.8 million euros (prior year: reduction of
1.1 million euros) from 2,090.2 million euros to 2,267.0 million euros in the past fiscal year. This represents a change of 8.5 %(prior year: –0.1 %).
The growth consists of an increase in non-current assets of
111.5 million euros to 1,350.9 million euros (prior year: 1,239.4 million euros) as well as an increase in current assets of 65.3 million euros to 916.0 million euros (prior year: 850.7 million euros).
Of the non-current assets property, plant and equipment
increased by 19.4 % to 376.1 million euros (prior year: 314.8 million euros). This increase is largely due to the acquisition, construction and modernization of properties for the Group’s own
use as well as the acquisition of land.
The increase in current assets mainly stems from theincrease in trade receivables of 39.5 million euros to 523.8 million euros after adjusting for the change in the reporting of contract assets. The maturities of trade receivables at the overall
Group level increased by about a day to 57 days (prior year: 56days) due to cut-off-related effects and individual increases incertain lines of business and regions. The increase in other current financial assets of 12.1 million euros (prior year: 31.3 million euros) to 185.4 million euros also had an impact on current
assets. Cash and cash equivalents also increased by 2.0 million euros (prior year: decrease of 59.4 million euros).

D E K R A Financial Report 2018

Equity increased by 113.3 million euros to 748.8 million euros(prior year: 635.5 million euros). This is largely attributable tothe consolidated net income for the year of 135.5 million euros(prior year: 132.8 million euros). The transfer of profits to
DEKRA e.V., Stuttgart, and the addition to the capital reserves
by DEKRA e.V., Stuttgart, in the fiscal year came to 37.4 million euros (prior year: 54.0 million euros) and 10.0 million euros(prior year: 30.0 million euros) respectively. The measurementof non-consolidated subsidiaries through other comprehensive
income at the time of the transition to IFRS 9 (17.3 million euros)
and in the ongoing fiscal year (20.4 million euros) also had apositive impact on the Group’s equity. This was partially offset
by the recognition of the remeasurement of pension obligations
through other comprehensive income (less deferred tax assets)
amounting to 19.8 million euros (net) (prior year: increase of
4.6 million euros), as well as the effects of 6.1 million euros fromcurrency translation (prior year: reduction of 19.0 million euros),which reduced equity. The equity ratio increased to 33.0 % from30.4 % in the prior year.
Non-current liabilities increased by 8.7 million euros to789.4 million euros (prior year: 780.7 million euros), largely due
to the increase in liabilities to banks of 33.6 million euros to261.7 million euros. By contrast, provisions for pensions decreased
by 22.9 million euros (prior year: decrease of 136.7 million euros). This can largely be attributed to the additional
increase of 54.0 million euros in plan assets to secure pension
obligations, and the offsetting increase in pension obligations
amounting to 31.1 million euros (prior year: 11.7 million euros).
Current liabilities rose 8.1 %, from 674.0 million euros to728.7 million euros, due to the borrowing reported in loan liabilities, used in some cases to repay existing loans, and also due
to a cut-off-related increase in personnel liabilities. The current
and non-current liabilities are mainly denominated in euros.
The DEKRA Group requires sufficient liquidity for future
investments, which is ensured by promissory notes and by
longer-term loan commitments. As of December 31, 2018, there
are lines of credit of 226.2 million euros pledged in writing thathave not yet been drawn.

19

Summar y assessment of financial position and performance

The DEKRA Group’s performance in the fiscal year 2018 wasgood, exceeding both expectations and the trend for the prioryear. The financial position and cash flows allow sufficient headroom for the Group to pursue its goals.
RISK, OPPORTUNITIES AND FORECAST REPORT

Risk repor t
Systematic management of transparent risks

As part of its planning and control process, DEKRA leverages
an established risk management system in order to systematically identify potential risks and to rate the probability as high,moderate or low.
QUANTIFIC ATION OF RISKS

Loss potential in million euros
Going concern risk
>100 million euros
Severe loss
20–100 million euros
Medium loss
5–20 million euros
Low loss
1–5 million euros
Unlikely
0–10 %

Possible
11–25 %

Probability in %Low risk  

D E K R A Financial Report 2018

Medium risk  

High risk

Probable
26–50 %

Highlyprobable
51–100 %20

GROUP MANAGEMENT REPORTGROUP MANAGEMENT REPORT

Risk, Opportunities and Forecast Report

Risk, Opportunities and Forecast Report

On this basis, the responsible management levels promptly
develop countermeasures. The Management Board is regularly
informed through defined reporting channels. DEKRA communicates particularly urgent issues at short notice via internal ad
hoc announcements. DEKRA’s risk management system, which
again proved its worth in 2018, is continuously amended in
response to changes in legal and economic conditions. In thefollowing, we outline and assess the risks that, from today’s perspective, could have a significant influence on DEKRA’s financial
position and performance. The total potential risk has fallenslightly in comparison to the prior year.
Environment and industr y risks

Disruptive technologies and political, regulatory and economic
conditions are very important to DEKRA’s success as an expert
organization with global operations. Changes in circumstances
may give rise to risks relating to revenue and income. DEKRA
therefore closely and continuously monitors markets andsectors – particularly with respect to whether and how thedevelopment of technology could cast doubt on existing business models.
The Business Unit DEKRA Automotive is exposed to thegeneral regulatory risk of changes to the law for vehicle inspection in the EU. Following the organizational realignment underTOM 2020, the regions Germany, South-West Europe, NorthWest Europe and Central East Europe & Middle East are potentially affected. This risk is currently deemed to be low. However,fierce competition and changing technologies in the important
Vehicle Inspection Service Line pose a moderate risk as cost
increases can only be passed on to the customers to a limited
extent. DEKRA reduces this risk by constantly improving productivity by means of optimized processes and new technologies
to ensure more road safety and fewer traffic fatalities.

The economic outlook also determines the willingness to investof customers of the Business Unit DEKRA Industrial. The riskof a drop in orders grows with real or suspected economic uncertainty. This affects the Material Testing & Inspection and Insight
Service Units, for example, and the regions North-West Europe,
Germany, Southern Africa & Oceania and North America.
DEKRA mitigates these risks, which it classifies as low, by
expanding its service offering and increasing the globalizationof its business.
The Business Unit DEKRA Personnel is particularly
dependent on cyclical developments. This applies to both theemployee leasing activities of the Temporary Work Service Line
as well as training opportunities in the Training & Education
Service Line. In both these areas, revenue and earnings may beaffected by fluctuations in orders caused by cyclical developments. As part of TOM 2020, this particularly affects the regions
Germany and Central East Europe & Middle East. DEKRA combats these risks, which it classifies as moderate, by moving into
new markets, broadening its portfolio of services and making
customized offers. New statutory regulations may lead to highrisks in the Temporary Work Service Unit. In accordance with
the AÜG [“Arbeitnehmerüberlassungsgesetz”: German Employee
Leasing Act], the legal requirement of equal pay applies fromJanuary 1, 2018, and the limitation of temporary work to
18 months, with a few exceptions, applies from October 1, 2018.
DEKRA is responding to these regulatory interventions in theemployee leasing markets by expanding its business with key
accounts and by investing in its position as a quality provider.
Business strategy risks

DEKRA hopes that the new TOM 2020 organizational model
introduced on January 1, 2019 will allow it to take better advantage of growth opportunities. DEKRA considers the potential
failure of the stronger focus on internal networking and greater
proximity to the customer to be one of the biggest risks to its

D E K R A Financial Report 2018

income at present. The Group is combating this by means of professional project management in connection with the introduction of the new organization. DEKRA will also continue its policy of organic growth supplemented by targeted acquisitions.
DEKRA broadens its footprint in terms of both expertise andgeography by means of strategic acquisitions. However, the integration of acquired companies may fail or be delayed. Budgets
may be unrealistic and synergy effects unattainable. These risks
are also classified as medium, as is the resulting risk that could
arise for the portfolio of services and the Group’s general performance on the market. There are also measurement risks forcapitalized assets. Such risks are considered moderate overall
under the new organizational model for the regions. Overall,
DEKRA counters business strategy risks with professional project and integration management.
The regulatory frameworks in other non-European countries differ from the conditions in Germany and Europe. As aresult, the ongoing business internationalization entails – albeit
low – liability risks and risks to the Group’s reputation. That is
why DEKRA is constantly working to enhance its risk and compliance management activities. This includes the ongoing adjustment of the liability protection offered by insurance policies tochanging circumstances.
Operating risks

Accreditations and official authorizations are important factors
on which DEKRA’s success depends. With its internal monitoring system for safeguarding service quality and by means of
insurance, DEKRA reduces risks arising from liability for its
inspections, expertises, certifications and seals. Risks arisingfrom missing or amended government authorizations are mitigated by targeted committee work. This allows changes to laws
and standards to be identified in time and DEKRA services tobe rapidly adapted. Particularly important in this context is theoften time-consuming training and education of the examiners

21

and inspectors as well as the timely planning and provision of
the necessary equipment.
The adjustments to the national regulations in Germany
demanded by DAkkS [“Deutsche Akkreditierungsstelle”:
Germany´s national accreditation body] in recent years specifically concerned the handling of test and measurement
equipment. In Germany, national requirements for the main
inspection previously required that test and measurement
equipment be regularly gauged, calibrated and individuallytested in accordance with various different standards.
The standard to be audited by DAkkS requires consistentISO-compliant calibration. A certification procedure was therefore introduced in 2016 that prescribes a mandatory step-bystep program for the universal implementation of the ISO 17020
standard and the respective necessary ISO-compliant calibration for all test and measurement equipment. This also concerns
the test and measurement equipment used in test centers.
DEKRA has developed the necessary calibration procedures tosuch an extent that all accreditations by DAkkS have so far been
completed successfully. DAkkS carried out additional audits in2018 in order to test the proof of calibration. The measuresneeded to adjust and implement the calibration procedure havebeen initiated. There are no discernible risks on DEKRA’s sidethat the assessment procedure will not be successfully completed by 2020.
One element for the identification and assessment of risks
worldwide from accreditations, and from internal process risks aswell as for monitoring the compliance of internal basic processes
is the Control Self Assessment. This is carried out in parallel withrisk management surveys and results in a risk inventory that lists
and evaluates internal process risks and market risks.
Overall, the risk of approvals based on accreditations being
revoked is classified as low due to extensive precautionary andrisk mitigation measures.

D E K R A Financial Report 2018

22

GROUP MANAGEMENT REPORTGROUP MANAGEMENT REPORT

Risk, Opportunities and Forecast Report

Risk, Opportunities and Forecast Report

Personnel risks

Financial risks

In the area of personnel, there is a moderate risk in the form ofdependency on individual employees who, with their know-how,play a key role in the success of individual business segments.
This risk is minimized, among other things, by a globally-integrated talent and performance process. Attractive personnel
development programs also help retain know-how and top performers within the Group. Moderate personnel risks can also
arise if the Group fails to integrate the employees of acquired
businesses, which is why quick and systematic post-merger integration takes top priority. To continue its growth trajectory, it isalso important to attract ambitious professional and qualified
young employees. This is why DEKRA invests regularly in its
employer branding, thereby further reducing the low risk of nothaving the personnel necessary for further expansion.

Although there is a certain risk of bad debts and late payments,
it is deemed to be low. DEKRA protects itself from defaults bymeans of active customer and contract management, global key
account management and thorough creditworthiness checks. Byplanning ahead and systematically taking preventive measures,
DEKRA is also able to reduce interest rate risk. As most of
DEKRA’s transactions are conducted in euros, the exchange raterisk is low. Debt financing of the Group is primarily provided byloans against a promissory note as well as through approvedbank loans. Interest derivatives are used for floating rate loans
in order to minimize the interest rate risk inherent in the financing of the Group. The portfolio of interest derivatives as of thereporting date amounts to 14.0 million euros (prior year:
28.5 million euros).
The liquidity headroom required for the operating business is secured by means of cash and cash equivalents, as well as
via approved lines of credit at DEKRA SE. The central cash poolis used to control the liquidity of and supply liquidity to both thenational and increasingly also the international subsidiaries. The
resulting transparency prevents possible risks. Short-term
investments of cash and cash equivalents are only made with
top-rated financial institutions and on the basis of current ratings by rating agencies as well as taking into account current
CDS spreads.
The risk of DEKRA being unable to fulfill its payment
obligations in connection with financial instruments in the
future is also classed as low.

IT risks

For a company that operates in around 60 countries, IT security
and data protection is of utmost importance. DEKRA mitigatesthe medium risks associated with the reliability and security of
its IT security systems by investing in a modern IT infrastructure. DEKRA counters the risk of critical data getting damaged,
lost or getting into the hands of unauthorized third parties byconstantly monitoring and assessing IT risks as part of its internal control system, risk management and compliance management. Risks of penalty payments and damage to the Company’s
reputation, which have arisen in the field of data protection
following the entry into force of the General Data Protection
Regulation (GDPR), are classed as low thanks to the Company’s
adequate data protection processes.

D E K R A Financial Report 2018

Overall assessment of the Management Board on risks to
the Group’s abilit y to continue as a going concern

The total potential risk has fallen slightly. Both the structure anddistribution of risk remain stable. The overall risk situation is
acceptable in relation to the Group’s annual results and operating cash flow. The total volume of individual risks is within thenormal range for the business, and does not pose an existential
threat to DEKRA. There are no identifiable risks that jeopardize
the Group’s ability to continue as a going concern. The Management Board ensures the long-term existence of the Groupthrough sustainable business management based on soundfinances and a proven business model.
Oppor tunities repor t
Oppor tunities relating to conditions and sectors

Safety is a basic necessity for people across the entire globe. This
is why demand for corresponding services is not only growing
in western industrial nations, but also in the developing andemerging economies. This applies, for example, on the road, atwork and at home: three aspects of life where DEKRA is positioned for further growth.
Based on its wide range of automotive services, DEKRA does
not only have further growth potential in Germany, it also expects
further mid-term growth potential primarily in growth regions
such as North America and Asia. DEKRA also expects further
growth in the regions of North-West Europe (Scandinavia), SouthWest Europe (Portugal) and Southern Africa & Oceania (South
Africa) in the years ahead.
The strength of the German industry, for instance in exports,
and the potential in the North American and Asian growth markets
promise to boost business development in the industrial segment.
Given the stability of Germany’s economy, it is also assumed
that demand for qualified specialists and temporary employees
will continue to grow.

23

Strategic oppor tunities

Promoting safety has been DEKRA’s mission pursuant to its articles of incorporation since its foundation in 1925. The strategicorientation towards this important socio-political concern was
strengthened further. With its “Vision 2025”, DEKRA will continue to expand its position as a global partner for safety in years
to come. This strategic and operational focus of the Group offers
considerable growth opportunities. Safety pays off – for individuals and society as a whole as well as for DEKRA’s customers andthus for the Company.
The organizational development of “TOM 2020”, the redefinition of the matrix, sales activities, improved collaboration andthe exploitation of the Group’s strengths will enable DEKRA tocontinue developing into an innovative, global solution provider.
In so doing, DEKRA is enhancing its ability to compete and facing up to the changing demands of the market – particularly
with respect to digitalization. The ongoing development of theorganization concerns the entire “Target Operating Model(TOM)”.
As part of the new organization, the Service Divisions will
focus on service development and quality. Operating responsibilities are being consistently organized on a regional basis, tailored to the markets and customers. The responsibilities of theregions are being focused on sales and the provision of services.
One important aspect of this task is the implementation of an
overarching and shared sales organization.
Operating oppor tunities

Through its strategic acquisitions and globalization in recent
years, DEKRA is set for further growth. The facts that the Groupis highly diversified both geographically and in terms of expertise with respect to the issue of safety as well as the new Company structure, are expected to lead to considerable businessgrowth, especially outside Germany.

D E K R A Financial Report 2018

24

GROUP MANAGEMENT REPORTGROUP MANAGEMENT REPORT

Risk, Opportunities and Forecast Report

Risk, Opportunities and Forecast Report

Forecast repor t
Challenging conditions

The economic environment is expected to remain positive in thecurrent year. According to estimates by the World Bank, global
GDP is to increase by 2.9 %. The developing and emerging economies are expected to record growth of 4.2 %, the advanced
economies of 2.0 %. The World Bank anticipates the highest
growth rates in individual countries in India (7.5 %) and China(6.2 %).
At the same time, economic conditions are becoming moredemanding. Geopolitical challenges are increasing: protectionist
aspirations and the resulting barriers to trade are not yet precisely
foreseeable. Brexit and possible political instability with resulting
economic impact also weigh on the development of the global
economy. DEKRA is not completely immune to these develop-

ments. Thanks to its good international positioning and thestrong basic human need for safety, DEKRA expects further
growth. Revenue is expected to increase by 4 % to 6 % in the fiscal
year 2019. Organic growth is expected to be higher than external
growth driven by acquisitions. The planning for 2019 also
includes a slight increase in EBIT. To achieve this, DEKRA will
expand its activities in high-margin business activities, exploit
synergies within and between its business units and continue to
optimize the global structures in sales and the Service Divisons
as well as its processes. Headcount is also expected to continue
to rise in line with revenue growth. DEKRA expects the numberof its employees to increase by between 1,000 and 2,000 as of yearend 2019. Following a successful fiscal year 2018, the Management Board of DEKRA expects the strategic alignment of theGroup and TOM 2020 to create further impetus for growth.

Stuttgart, March 21, 2019
DEKRA SEThe Management Board  Kölbl, Chairman  Klinke  Linsenmaier  Rauh

D E K R A Financial Report 2018

D E K R A Financial Report 2018

25

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C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S

C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S﻿﻿Consolidated financial statements

DEKRA SE
Consolidated statement of comprehensive
income for fiscal year 2018
Notes

2018

2017

5.1

3,340,549

3,134,827

Increase in inventories of work in process

1,101

267

Own work capitalized

8,371

7,850

IN THOUSAND EUR

CONTENTS

Revenue

2 7 		 C O N S O L I D A T E D S T A T E M E N T O F C O M P R E H E N S I V E I N C O M E
2 8 		 C O N S O L I D A T E D S T A T E M E N T O F F I N A N C I A L P O S I T I O N
3 0 		 C O N S O L I D A T E D S T A T E M E N T O F C H A N G E S I N E Q U I T Y
3 2 		 C O N S O L I D A T E D S T A T E M E N T O F C A S H F L O W S
3 4 		 N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S

27

Other operating income

5.2

33,29331,923

Cost of materials

5.3–316,865–307,612

Personnel expenses

5.4–2,189,391–2,021,636

Other operating expenses

5.5–573,912–554,338

Depreciation, amortization and impairment losses on property,
plant and equipment and intangible assets

5.6–90,770–88,236

Profit/loss from financial assets accounted for using the equity method

5.7

782

1,353

Interest income

5.7

6,004

6,170

5.7

–21,723–23,78134

1 General comments

34

2 Accounting principles

Interest expense

34

3 Accounting policies

Other financial result

5.7–2,672

5,753

50

4 Business combinations

Financial result

5.7–17,609–10,50551

5 Statement of comprehensive income / income statement

57

6 Statement of financial position

Earnings before taxes

194,767

192,54076

7 Statement of cash flows

Income taxes

5.8–59,250–59,697

78

8 Other disclosures in the notes

Net income for the year

5.9

135,517

132,84379

9 Capital management

thereof attributable to owners of DEKRA SE

6.12

133,886

131,41879

10 Financial management

thereof attributable to non-controlling interests

6.13

1,631

1,425

92

11 Related par t y disclosures

94

12 Disclosures on the Management Board and Super visor y Board

95

13 Subsequent events

Available-for-sale assets at fair value through othercomprehensive income

6.9

0–4,50995

14 Other disclosures

Hedging instruments at fair value through othercomprehensive income

6.16

444

492

1 0 4 		INDEPENDENT AUDITOR’S REPORT

Deferred taxes recognized through othercomprehensive income

5.8

–135

1,262

1 0 8 		REPORT BY THE CHAIR M AN OF THE SUPERVISORY BOARD

Translation reserve–6,108–18,999

Items that can be recycled through profit or loss in future–5,799–21,754

Net loss/gain on

Net loss/gain on
Remeasurement of defined benefit plans

6.14–27,859

5,865

Equity instruments at fair value through othercomprehensive income

6.5

20,351

0

Deferred taxes recognized through othercomprehensive income

5.8

8,069

–1,290561

4,575

Other comprehensive income–5,238–17,179

Total comprehensive income

130,279

115,664

128,648

114,239

1,631

1,425

Items that will not be recycled through profit or loss in the future

thereof attributable to
Owners of DEKRA SE
Non-controlling interests

D E K R A Financial Report 2018

D E K R A Financial Report 2018

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C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S

﻿

﻿

29

DEKRA SE
Consolidated statement of financial
position as of December 31, 2018ASSETS

Notes

IN THOUSAND EUR

Dec. 31, 2018

Dec. 31, 2017

Non-current assets

EQUITY AND LIABILITIES

Notes

IN THOUSAND EUR

Dec. 31, 2018

Dec. 31, 2017

EquityIntangible assets

6.1/6.2

727,135

698,493

Issued capital

6.12

25,56525,565

Property, plant and equipment

6.3

376,083

314,849

Capital reserve

6.12

560,529

550,529

Financial assets accounted for using the equity method

6.4

11,755

10,974

Revenue reserves

6.12

398,299

308,823

Other non-current financial assets

6.5

77,14760,254

Accumulated other comprehensive income

6.12–247,933–260,020

Other non-current assets

6.6

7,341

5,777

Total equity of the owner736,460

624,897

Deferred income tax assets

5.8

151,481

149,095

Non-controlling interests

12,348

10,562

1,350,942

1,239,442

748,808

635,459

Current assets

6.13

Liabilities

Inventories

6.7

8,908

7,529

Contract assets

6.8

44,7670

Trade receivables

6.8

523,789

Other current financial assets

6.9

Other current assets

6.10

Current income tax receivables
Cash and cash equivalents

Total assets

Provisions for pensions and similar obligations

6.14

469,473492,415

526,577

Other non-current provisions

6.15

19,77518,853

185,406

173,313

Non-current financial liabilities

6.16

265,104

232,196

33,79929,359Other non-current liabilities

6.18

3,549

2,945

5.8

40,89437,510

Deferred income tax liabilities

5.8

31,52834,334

6.11

78,45076,442

789,429

780,743916,013

850,730

2,266,955

D E K R A Financial Report 2018

Non-current liabilities

2,090,172

Current liabilities

Other current provisions

6.15

15,663

20,902

Trade payables

6.17

93,767

98,350Contract liabilities

6.17

46,8520

Current financial liabilities

6.16

238,315

182,868

Other current liabilities

6.18

328,000

362,485

Current income tax liabilities

5.8

6,121

9,365

728,718

673,970

Total liabilities

1,518,147

1,454,713

Total equity and liabilities

2,266,955

2,090,172

D E K R A Financial Report 2018

30

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C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S

﻿

﻿

31

DEKRA SE
Consolidated statement ofchanges in equity 2018
IN THOUSAND EUR

Accumulated other comprehensive income

EquityGroup equity

Issued capital

Capital reserve

Revenue reserves

Translation reserve

Available-for-saleassets at fair value
through othercomprehensive
incomeEquity instruments
at fair value
through othercomprehensive
incomeHedging instruments at fair value
through othercomprehensive
incomeRemeasurementof defined
benefit plans

OwnersNon-controllinginterests

25,565

520,529

230,859

7,849

3,100

0

–738

–253,052

534,112

9,395

543,507–53,984–536–54,520

As of Dec. 31, 2016

Profit and loss transfer agreement/dividend distribution–53,984

Capital increase

30,000921

30,921Other changes

30,000
544

544

–643

–99

Changes to the consolidated group

–14

–14

0

–14

131,418

131,418

1,425

132,843

Consolidated net income for the year
Other comprehensive income for the period
Total comprehensive income
As of Dec. 31, 2017–18,999–3,097342

4,575–17,1790–17,17900131,418–18,999–3,097

0

342

4,575

114,239

1,425

115,664

25,565550,529

308,823–11,150

3

0

–396

–248,477

624,897

10,562

635,459–3

17,32817,3280

17,328–3,210–18–3,228639,015

10,544

649,559–37,402–31–37,433

10,0000

10,000Change of measurement category upon first-time
application of IFRS 9

3

Change in loss allowance upon first-time application of IFRS 9
As of Jan. 1, 2018 – adjusted–3,21025,565550,529

Profit and loss transfer agreement/dividend distribution

305,616–11,150

017,328–396–248,477–37,402

Capital increase

10,000

Other changes

–77

–77

152

75

Changes to the consolidated group–3,724–3,72452–3,672

Consolidated net income for the year

133,886

133,886

1,631

135,517–5,2380–5,238Other comprehensive income for the period–6,108

Total comprehensive income
As of Dec. 31, 2018

D E K R A Financial Report 2018

20,351

309–19,79000133,886–6,1080

20,351

309–19,790

128,648

1,631

130,279

25,565560,529398,299–17,258

037,679–87–268,267

736,460

12,348748,808

D E K R A Financial Report 2018

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C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S

C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S

﻿

﻿

33

DEKRA SE
Consolidated statement of cash flows
for fiscal year 2018
OPER ATING ACTIVITIESFINANCING ACTIVITIES

2018

2017

Consolidated net income for the year

135,517

132,843

Cash received from equity contributions from owners

Depreciation/amortization/impairment losses/reversals of impairment losses

94,022

89,107

Cash received from equity contributions from non-controlling interests

IN THOUSAND EUR

Gain/loss from the disposal of financial and intangible assets and property,
plant and equipment–784–3,609Interest income/expenses and dividends

7,121

6,565

Current income taxes

59,25059,697

Change in non-current provisions–4,481–7,774Contribution of cash and cash equivalents to cover pension assets–41,353–59,000

Other non-cash expenses/income–4,255–17,804

Change in inventories, receivables and other assets–63,347–74,972

Change in liabilities and current provisions–15,10333,277–904–1,491

Profit or loss from associates
Interest received

IN THOUSAND EUR

2018

2017

10,00030,0000921

Cash paid to owners and non-controlling interests from profit transfers/dividends–54,051–37,801

Cash received/paid in relation to loans to owners

33,474–22,006

Cash repayments of loans–10,500–14,434

Cash received from borrowing

109,201

19,482

Cash repayments of liabilities from finance leases–1,380–892

Interest paid

–7,653–7,151

Cash flow from financing activities

79,091–31,881

2018

2017

3,412

2,900

–75,475–56,097

Taxes received

132

254

Changes in cash and cash equivalents–1,802–57,710

Dividends received

258

408

94,010104,304

Changes in cash and cash equivalents due to exchange rates and changes in the
consolidated group

3,853–1,614

Cash and cash equivalents at the beginning of the period

76,442

135,766

Cash and cash equivalents at the end of the period

78,49376,442

Taxes paid

Cash flow from operating activities

INVESTING ACTIVITIES

2018

2017

Intangible assets and property, plant and equipment–132,470–101,386

Financial assets and other assets–13,003–14,454

Subsidiaries and other business entities–40,147–53,620

8,782

12,210IN THOUSAND EUR

C A S H A N D C A S H E Q U I VA L E N T S

IN THOUSAND EUR

Cash paid for investments in

Cash received from disposals ofIntangible assets and property, plant and equipment
Financial assets and other assets
Cash flow from investing activities

D E K R A Financial Report 2018

1,935

27,117–174,903–130,133

D E K R A Financial Report 2018

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C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S

C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S

Notes

Notes

35

Notes to the consolidated financial
statements of DEKRA SE, Stuttgart,
for fiscal year 2018
1

GENERAL COMMENTS

2

DEKRA SE has its registered office at Handwerkstrasse 15 in
Stuttgart, Germany, and is entered in the commercial register at
Stuttgart local court under HRB no. 734316.
DEKRA is an international, independent expert organization operating in the areas of Automotive, Industrial and Personnel.
The consolidated financial statements as of December 31,
2018 include DEKRA SE and its consolidated subsidiaries.
The Management Board authorized the issue of the consolidated financial statements of DEKRA SE for the fiscal year
from January 1 to December 31, 2018 on March 21, 2019 andpresented them to the Supervisory Board for review andapproval.
The prior-year financial statements and management
report were filed for publication in the Bundesanzeiger [German
Federal Gazette] in the reporting year.
All shares in DEKRA SE are held by DEKRA e.V., Stuttgart. DEKRA e.V., Stuttgart, is also the ultimate parent of theCompany.

ACCOUNTING PRINCIPLESThe Company has prepared its consolidated financial statementsin accordance with the International Financial Reporting Standards (IFRS) as adopted by the EU as of the reporting date.
The principles of the Framework and the IFRS of the International Accounting Standards Board (IASB) as well as the interpretations of the IFRS Interpretations Committee (formerly:
IFRIC) effective as of the reporting date were applied.
Information on the adoption of specific IFRS is provided
in the comments on the individual items of the statement offinancial position later on in these notes.
The consolidated financial statements are presented
in euros. Unless otherwise stated, all amounts have beenrounded up or down to the nearest thousand euros in accordance with customary commercial practice.
The consolidated financial statements comply with therequirements of Sec. 315e (3) HGB [“Handelsgesetzbuch”: German Commercial Code].
3

IMPAC T O N T H E CO NSO L I DAT E D FI N A N C I A L S TAT EME N T S
OF DEKRA SEIFRS 4
Insurance Contracts;
January 1, 2018

The amendment clarifies how entities that issue insurance contracts within the scope of
IFRS 4 are to recognize certain income and expenses after the effective date of IFRS 9.
The amendment does not have any effect on the consolidated financial statements.

IFRS 9Financial Instruments;
January 1, 2018

In July 2014, the IASB published the standard IFRS 9 replacing IAS 39. Application of
IFRS 9 is mandatory for fiscal years beginning on or after January 1, 2018.

IMPAC T O N T H E CO NSO L I DAT E D FI N A N C I A L S TAT EME N T S
OF DEKRA SE

The following IFRS standards and interpretations were subject to mandatory application
for the first time in the fiscal year:

IAS 40Investment Property;
January 1, 2018

Clarification that reclassification from or to investment property can only occur if thereis evidence and not just the intention of a change in use. The list of evidence of a change
in use of Paragraphs 57a to 57d is declared as non-exhaustive. The amendment does nothave any effect on the consolidated financial statements.

IFRS 2
Share-based Payment;
January 1, 2018

The amendments to IFRS 2 relate to the inclusion of guidelines on the effect of vesting
conditions on the fair value of cash-settled share-based payments as well as on accounting for a reclassification from a cash-settled share-based payment to a equity-stettled
share-based payment. Furthermore, clarification of the recognition of share-based payments with withholding tax. The amendment does not have any effect on the consolidated
financial statements.

D E K R A Financial Report 2018

The standard includes the classification and measurement of financial instruments using
the contractually agreed cash flows and the business model. It also implements a new
impairment model as well as new requirements for hedge accounting. Refer to notes 3
and 10.
DEKRA is applying IFRS 9 for the first time as of January 1, 2018 and exercises the option
not to restate comparative figures for 2017. Any differences between the previous carrying amount and the carrying amount at the beginning of the fiscal year are recognizedin equity. The effects can be seen in the consolidated statement of changes in equity.

IFRS 15
Revenue from Contracts with Customers;
January 1, 2018

IFRS 15 was issued by the IASB in May 2014. It replaces existing guidelines on recognizing revenue, including IAS 18 Revenue Recognition, IAS 11 Construction Contracts and
IFRIC 13 Customer Loyalty Programmes. The objective of IFRS 15 is to establish principles
that provide the users of financial statements with useful information on revenue and cash
flows arising from contracts with customers.
The standard provides a uniform principles-based five-step model for calculating and recognizing revenue that must be applied to all contracts with customers. The standard also
contains a number of other rules on details and expands the required disclosures in thenotes. The application of the new regulations does not have any significant effects on the
consolidated financial statements. The effects are presented in note 3, note 5 and note 6.

ACCOUNTING POLICIESThe accounting policies adopted are consistent with those of theprevious reporting period. In addition, the new or revised standards that were subject to mandatory adoption for the first timein the fiscal year 2018 in accordance with the respective transitional provisions are presented below.

S TA N DA R D/ I N T E R P R E TAT I O N;
EFFECTIVE DATES TA N DA R D/ I N T E R P R E TAT I O N;
EFFECTIVE DATEIFRIC Interpretation 22
Foreign Currency Transactions andAdvance Consideration;
January 1, 2018

It was clarified that prepayments and other non-monetary assets and liabilities denominated in a foreign currency must be translated at the date of initial recognition. The
amendment does not have any significant effects on the consolidated financial statements.

Improvements to IFRS (2014–2016 Cycle);
January 1, 2018

The Annual Improvements to IFRSs 2014–2016 Cycle relate to an omnibus of standards.
The resulting amendments effective as of January 1, 2018 relate to IFRS 1: First-time Adoption of International Financial Reporting Standards and IAS 28 Investments in Associates
and Joint Ventures. IAS 28 clarifies that the option to measure investments in associates
held by a qualifying entity at fair value can be exercised differently per investment. The
amendment does not have any effect on the consolidated financial statements.

D E K R A Financial Report 2018

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C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S

C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S

Notes

Notes

The IASB and the IFRS IC have issued the standards, interpretations and amendments listed below that were not yet mandatory asof December 31, 2018. There are no plans to early adopt these new pronouncements.
S TA N DA R D/ I N T E R P R E TAT I O N;
EFFECTIVE DATEADOP TED BY THE
EU COMMISSIONA N T I C I PAT E D IMPAC T O N T H E CO NSO L I DAT E D FI N A N C I A L
STATEMENTS OF DEKR A SE

IAS 1
Presentation of Financial Statements;
January 1, 2020

No

Currently being assessed

IAS 8
Accounting Policies, Changes in
Accounting Estimates and Errors;
January 1, 2020

No

Currently being assessed

IAS 19
Employee Benefits;
January 1, 2019

No

Immaterial

IAS 28Investments in Associates and Joint
Ventures; January 1, 2019

No

None

IFRS 3Business Combinations;January 1, 2020

No

Currently being assessed

IFRS 9 (changes)
Financial Instruments;
January 1, 2019

Yes

None

Amended standards and interpretations

S TA N DA R D/ I N T E R P R E TAT I O N;
EFFECTIVE DATE37ADOP TED BY THE
EU COMMISSIONA N T I C I PAT E D IMPAC T O N T H E CO NSO L I DAT E D FI N A N C I A L
STATEMENTS OF DEKR A SE

Yes

IFRS 16 was published in January 2016 and provides new regulations
for the recognition, measurement, presentation and disclosure requirements for leases for fiscal years beginning on or after January 1, 2019.

New standards

IFRS 16
Leases;January 1, 2019

IFRS 16 will primarily affect lease accounting for lessees and lead to
all leases being recognized in the statement of financial position.
Pursuant to IFRS 16, a lease exists when the concluded contract grants
the lessee the right to control the use of an identified asset over a
fixed period of time in exchange for consideration. The lease components of a contract must be accounted for separately from the nonlease components of the contract. DEKRA has analyzed and digitized
the contracts within the scope of the IFRS 16 project. DEKRA will makeuse of the exceptions of IFRS 16 and not recognize any assets andliabilities from leases in the statement of financial position, whichhave an expected life of 12 months or less or for which the underlying asset is of low value.
The distinction between finance and operating leases required todate will no longer apply with respect to the lessee. A right-of-use
asset as well as a lease liability must now be recognized on the assets
and the liabilities side.
The lease liability is measured as the present value of the payments
to be made over the lease term and includes fixed payments, indexlinked variable payments, residual value guarantees, purchase
options that will be exercised with reasonable certainty and penalty
payments that will be incurred with reasonable certainty.
The right of use is measured at cost. This includes the value on initialrecognition of the lease liability, the initial direct costs of the conclusion of the lease, the present value of dismantling cost and, a negative component, all incentives the lessee receives prior to or at the
beginning of the use.
The initial application of IFRS 16 is expected to result in an increase
in total assets of 400 - 600 million euros.
In subsequent periods, the lease liabilities accrue interest according
to the the effective interest method and are reduced by the principal
payments made. DEKRA will perform subsequent measurement of theright-of-use assets at amortized cost and depreciate them over theuseful life, taking into account any residual value.

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Notes

Notes

S TA N DA R D/ I N T E R P R E TAT I O N;
EFFECTIVE DATEADOP TED BY THE
EU COMMISSIONA N T I C I PAT E D IMPAC T O N T H E CO NSO L I DAT E D FI N A N C I A L
STATEMENTS OF DEKR A SEIFRS 17
Insurance Contracts;
January 1, 2021

No

None

IFRIC Interpretation 23
Uncertainty over Income Tax
Treatments; January 1, 2019

Yes

Immaterial

Improvements to IFRS (2015–2017);
January 1, 2019

No

None

Amendments to references to theconceptual framework;
January 1, 2020

No

Currently being assessed

D E K R A Financial Report 2018

3.1 Principles of consolidation

All companies over which the Group’s ultimate parent exercises
direct or indirect control are included in full in the consolidated
financial statements. Control is assumed as soon as the parent
company has decision-making power over the subsidiary due tovoting or other rights, is exposed to, or has rights to, variable
returns from the subsidiary and has the ability to affect those
returns through its power over the investee. First-time consolidation is carried out as of the date on which DEKRA SE obtains
control of the subsidiary. The subsidiary is removed from theconsolidated group as soon as control ends.
During the reporting period and as of the reporting date,there were no joint ventures or joint operations which would have
had to be consolidated using the equity method or with their pro
rata assets and liabilities as well as income and expenses.
Associates are accounted for using the equity method. An
associate is an entity over which the owner exercises significant
influence, but that is neither a subsidiary nor a joint venture orjoint operation. In the consolidated financial statements of
DEKRA SE, a total of two German (prior year: two) companies
were consolidated using the equity method. These companies
were capitalized at cost. Subsequently, the carrying amounts ofthe equity investments are increased or reduced each year by the
proportionate share of profit or loss, dividends distributed orother changes in equity. The principles of purchase price allocation for full consolidation apply in the same way to the initial
measurement of investments. Goodwill relating to the associate
is included in the carrying amount of the investment and is notamortized. As of each reporting date, DEKRA tests whether the
carrying amount is impaired pursuant to IAS 36.
Since January 1, 2018, subsidiaries, joint ventures, joint
operations and associates that, on account of their low level ofbusiness activity, are immaterial for the Group and the presentation of a true and fair view of the financial position and performance, have generally been included in the consolidated financial statements at fair value. Until December 31, 2017, they had
been included at amortized cost.

39

Non-controlling interests in the total comprehensive income andequity of subsidiaries are presented separately in the statement ofcomprehensive income and in equity. On acquisition of control,
non-controlling interests are generally recognized at their proportionate share of the identifiable net assets measured at fair value.
The consolidated group included DEKRA SE and the otherentities listed in “Other Disclosures” accordingly as of December
31, 2018. The financial statements of the individual subsidiaries
are included in the consolidated financial statements as ofDecember 31, 2018 using the uniform accounting policies stipulated by DEKRA SE. In addition to DEKRA SE, Stuttgart, a
total of 25 German (prior year: 25) and 136 foreign (prior year:123) entities are included.
Effects of first-time inclusion of previously immaterial subsidiaries and associates are recognized in the statement ofchanges in equity under changes to the consolidated group.
Business combinations are accounted for using the acquisition method on the basis of carrying amounts as of the dateof transfer of control (IFRS 3). Where there are non-controllinginterests, a proportionate share of goodwill in accordance withIFRS 3 (purchased goodwill method) has always been recorded
to date.
In the course of business combinations, sometimes
arrangements are made concerning contingent consideration,and call and put options are sometimes agreed with non-controlling interests with respect to those interests. These obligations are included in the purchase price calculation at their estimated fair value. On the equity and liabilities side, a financial
liability is recognized pursuant to IAS 32. Changes in fair value
in subsequent periods are recognized with an effect on profit orloss. In the case of call and put options, the acquiree is includedin the consolidated financial statements in full and no non-controlling interests are presented.
Transactions between the consolidated entities are netted.
Profits from intercompany transactions are eliminated. Effectsof consolidation on income taxes are accounted for by recognizing deferred taxes.

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Notes

Notes

Currency translation

The consolidated financial statements of DEKRA SE are presented in euros. The concept of a functional currency is applied
when translating financial statements of consolidated entities
prepared in foreign currencies. The functional currency is generally the local currency of the respective subsidiary. Assets andliabilities are translated at the closing rate, expenses and income
at the annual average rate. The items within equity are carriedat historical rates. The resulting difference is recognized directlyin equity and presented separately in the statement of comprehensive income.
In the separate financial statements of the subsidiaries,
business transactions in foreign currencies are translated using
the exchange rate on the date of the transaction. Pursuant to

IFRIC 22, assets as well as expenses and income arising fromthe payment or receipt of advance consideration, and which are
not measured at fair value upon initial recognition, are translated at the exchange rate at which the payment or receipt ofadvance consideration has been recognized for the first time. In
subsequent periods, monetary assets and liabilities in foreign
currencies are translated at the exchange rate as of the reporting
date. Translation differences are generally recorded in the statement of comprehensive income under “Other operating income”
or “Other operating expenses”. In the case of financial receivables and liabilities, exchange rate effects are disclosed in thefinancial result. Non-monetary assets and liabilities are not generally remeasured in subsequent periods.

The following table shows the exchange rates of material entities listed in foreign currencies.
1 EURO =RATE AS OF REPORTING DATE
Dec. 31, 2018

Dec. 31, 2017

2017

Brazilian real (BRL)

4.44403.97294.30873.6041

Czech koruna (CZK)

25.7240

25.5350

25.6432

26.3272

Chinese renminbi (CNY)7.87517.80447.80747.6264

Danish krone (DKK)

7.46737.44497.45327.4387

Pound sterling (GBP)

0.89450.88720.88470.8761

Croatian kuna (HRK)

7.41257.44007.4182

7.4644

Hungarian forint (HUF)

320.9800

310.3300

318.8250

309.2725

Moroccan dirham (MAD)10.9476

11.2239

11.0524

10.9439

New Zealand dollar (NZD)

1.70561.68501.70591.5895Hong Kong dollar (HKD)

8.96759.37209.25998.8012Polish zloty (PLN)

4.30144.17704.26064.2563

Swedish krona (SEK)

10.25489.843810.2567

9.6369US dollar (USD)

1.14501.19931.18151.1293

South African rand (ZAR)

16.459414.8054

15.613415.0434

Taiwan dollar (TWD)

35.182735.750235.6551

34.3752

Swiss franc (CHF)

1.12691.1702

1.15491.1116

Japanese yen (JPY)125.8500n/a130.4100n/a

D E K R A Financial Report 2018

3.2 Significant accounting policies

Proper t y, plant and equipment

The financial statements have been prepared on a cost basis,
except for financial instruments classified as “at fair value
through profit and loss or other comprehensive income” pursuant to IFRS 9 as well as derivative financial instruments designated as part of an effective hedge. At the DEKRA Group, thisprimarily includes investments in non-consolidated subsidiaries,
securities, obligations from options and contingent purchaseprice elements as well as interest derivatives.

Pursuant to IAS 16, property, plant and equipment are recognized at cost less accumulated depreciation and accumulated
impairment losses. If there are indications of impairment andthe recoverable amount is below the cost less any accumulated
depreciation and impairment losses, then an impairment loss isrecognized.
Costs of conversion include direct materials and laborcosts as well as production overheads. Subsequent costs are capitalized when it is probable that future economic benefits, inexcess of the originally assessed standard of performance of theasset, will flow to the Company. All other subsequent expenditure is recognized directly as an expense. Maintenance expenses
are recognized through profit or loss in the statement of comprehensive income.
Property, plant and equipment are depreciated on astraight-line basis over the economic useful lives of the individual components. The useful lives of buildings and their individual components are between ten and 50 years, plant and machinery between ten and 25 years, and furniture and fixtures between
three and 20 years. There were no significant residual values
within the meaning of IAS 16.53 to be taken into account in thecalculation of the depreciation charge.
Leased assets for which both the economic risk and theeconomic benefit lie with DEKRA (finance lease) are recognizedin the statement of financial position pursuant to IAS 17 anddepreciation expense and impairment losses are charged. The
useful lives are measured using the shorter of lease term and theeconomic useful life. The payment obligation is recognized at
the fair value of the asset or the lower present value of all futurelease payments. Interest expenses are recognized through profit
or loss in the statement of comprehensive income.
Lease payments for operating leases are recognized throughprofit or loss on a straight-line basis over the lease term.
Gains and losses from the disposal of non-current assets
are determined as the difference between the net disposal proceeds and the carrying amount of the asset and are recognizedin the statement of comprehensive income under other operating
income or other operating expenses.

Goodwill

The amount by which the purchase price of a business combination exceeds the fair value of the individually identifiableacquired net assets is recognized as goodwill. Incidental acquisition costs are recognized in profit of loss.
Under IAS 38, goodwill from acquisition accounting is notamortized. Where necessary, impairment losses are recognizedin accordance with IAS 36 (impairment only approach).

ANNUAL AVERAGE RATE
2018

41

Intangible assets

Acquired intangible assets are recognized at cost less any accumulated amortization. The useful lives of all intangible assets areclassified as finite and are generally between three and eight
years. Useful lives of trademarks or customer relationships of ten
to 15 years are used for purchase price allocations. Intangible
assets are amortized using the straight-line method. Where necessary, impairment losses are recognized, and then reversed if
the reasons for the impairment cease to apply at a later date.
Internally generated intangible assets such as software arestated at cost if they meet the recognition criteria under IAS 38.
Cost includes directly and indirectly allocable costs. Researchcosts are treated as period expenses and were immaterial in thepast fiscal year. Borrowing costs are capitalized if they relate toa qualifying asset.

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Notes

Notes

Pursuant to the revised IAS 23, borrowing costs are capitalized
only if they are incurred for the financing of the acquisition,
construction or production of a qualifying asset. A qualifying
asset is an asset that necessarily takes a substantial period of timeto get ready for its intended use or sale.

IFRS 9 replaces the recognition, measurement and impairment
requirements for financial instruments as well as the hedge
accounting requerements of IAS 39. DEKRA has applied therequirements in IFRS 9 since January 1, 2018. In accordance withthe transitional provisions of IFRS 9.7.2.15 f, comparative figures
were not restated retrospectively.

Inventories

Inventories are measured at the lower of cost and net realizablevalue pursuant to IAS 2. Cost is calculated according to theweighted average cost method. Net realizable value is the estimated selling price in the ordinary course of business less theestimated costs of completion and the estimated costs necessary
to make the sale that have yet to be incurred.

Financial assets

IFRS 9 introduces principle-based classification of financial
assets. Under IFRS 9, financial assets are divided into three categories: financial assets at amortized cost, financial assets at fairvalue through other comprehensive income and financial assets
at fair value through profit or loss.

Financial assets and financial liabilities

Financial assets at amortized cost

A financial instrument is a contract that gives rise to a financial
asset of one entity and a financial liability or equity instrumentof another entity.
Financial assets are contractual rights to receive cash orother financial assets from another entity or to exchange financial assets or liabilities with another entity at potentially favorable terms. They primarily consist of trade receivables, securities
and shares in subsidiaries, which are not included in the consolidated financial statements for reasons of materiality. Moreover,loans to non-consolidated subsidiaries and investees areincluded. At DEKRA, the financial instruments are reported on
the settlement date.
Financial liabilities comprise contractual obligations todeliver cash or other financial assets to another entity or toexchange financial assets or obligations with another entity atpotentially unfavorable terms. These primarily include liabilities
to banks and trade payables as well as other financial liabilities.

This category includes debt instruments with contractual
cash flows that are solely payments of principal and interest on the principal amount outstanding. Furthermore, thedebt instruments in this category are held within a business model whose objective is to hold financial assets inorder to collect contractual cash flows.
They are initially recognized at fair value, which generally matches the acquisition cost, plus any directly attributable transaction costs. Subsequent measurement is atamortized cost using the effective interest rate method.
Impairment losses are recognized through profit or loss.
At the DEKRA Group, this category includes loans
to not consolidated subsidiaries and other loans, tradereceivables, cash and cash equivalents, receivables fromaffiliates and other financial assets.

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43

Financial assets at fair value throughother comprehensive income

Accounting policies for financial assets
applied until December 31, 2017

Debt instruments that, although satisfying the cash flow
criterion, are held in a business model for collecting contractual cash flows and selling financial assets are classified
as “at fair value through other comprehensive income”.
Furthermore, there is an irrevocable option to allocate equity instruments not held for trading to this category when being classified for the first time. The cumulative changes in fair value are not reclassified to profit orloss even when these equity instruments are derecognized.
Both the initial recognition and subsequent measurement of the assets is at fair value. Transaction costs arerecognized through profit or loss. Changes in value are
generally recognized in the statement of comprehensive
income. By contrast, information on the collection of contractual cash flows, such as interest income for debt instruments and dividends for equity instruments are recognized through profit and loss.
The DEKRA Group uses this category to account forshares in affiliates and investees. These shares are held as
long-term, strategic investments that are not expected tobe sold in the short to medium term.

Pursuant to IAS 39, financial assets were allocated using thefollowing categories:

Financial assets at fair value through profit or loss

This category includes debt instruments that do not satisfy
the cash flow and/or business model conditions. There isalso the option for debt instruments to be allocated to thiscategory upon initial recognition in order to overcome orsignificantly reduce an accounting mismatch.
This category also includes equity instruments forwhich the option for measurement at fair value throughother comprehensive income is not exercised as well asderivatives that are not recognized as part of an effective
hedge.
The assets are initially recognized at fair value.
Transaction costs are recognized through profit or loss.
Subsequent measurement is also at fair value. Changes invalue in this category are recognized through profit or loss.
The DEKRA Group allocates the securities held tothis category.

Financial assets at fair value through profit or loss

Under the standard, this category includes assets that had
to be measured at fair value through profit or loss (tradingbook) and assets that could be optionally assigned to thiscategory. The trading book comprised assets that were held
for speculative purposes or were part of a trading portfolio.
Under the standard, derivatives were assigned to the trading book, unless they were recognized as part of an effective hedge. Other financial assets could also be assigned tothis category under certain circumstances.
Under the standard, the assets were initially recognized at cost. Transaction costs had to be recognizedthrough profit or loss. Subsequent measurement had to be
at fair value. This corresponded to the amount that could
be recovered if the asset were traded under current market conditions. If the financial asset was traded on an
active market, this generally meant the market price.
Changes in value in this category were recognizedthrough profit or loss.
The DEKRA Group did not use this category.
Loans issued and receivables at amortized cost

Loans and receivables were non-derivative financial assets
with fixed or determinable payments that were not quoted
on an active market.
They were initially recognized at cost plus directly
attributable transaction costs. Subsequent measurement
was at amortized cost using the effective interest method.
Valuation allowances, for example due to the counterparty’s inability to pay, were recognized through profit or loss.
The DEKRA Group used this category for some of its
financial assets.

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Notes

Notes

Held-to-maturity investments

Financial liabilities

As a requirement for classification in this category, thestandard provided the Company’s intention or ability tohold the financial instrument until maturity. In addition,
the assets had to have fixed or determinable payments, andfixed terms, and be quoted on an active market.
Under the standard, initial recognition had to be
performed at cost plus transaction costs. Subsequent measurement had to be at amortized cost. Permanent impairment losses had to be recognized through profit or loss.
The DEKRA Group did not use this category.

Pursuant to IFRS 9, financial liabilities are classified into two categories: financial liabilities at amortized cost and financial liabilities at fair value through profit or loss.

Available-for-sale assets at fair value
not through profit or loss

Financial instruments that could not be allocated to theother categories were classified as available-for-sale.
They were initially recognized at cost plus transaction costs. Subsequent measurement was at fair value.
Changes in value were recognized in the statement of comprehensive income until the item was disposed of. If there
was objective evidence of permanent or significant impairment, i.e., a decrease in the fair values of more than ninemonths or 20 % lower than cost, the impairment loss wasrecognized through profit or loss. In addition to durationand extent of the decline in value, all information available, such as market conditions, market prices andasset-specific factors were taken into account.
The DEKRA Group used this category for some of its
financial assets.

Accounting policies for financial liabilities
applied until December 31, 2017

Trade receivables, contract assets and other financial assets

Pursuant to IAS 39, financial liabilities were allocated using thefollowing categories:

Financial liabilities at amortized cost

Financial liabilities at fair value through profit or loss

Financial liabilities are allocated to this category with the
exception of derivatives, liabilities held for trading andwhen exercising the fair value option.
They are initially recognized at fair value plus any
directly attributable transaction costs. Subsequent remeasurement is at amortized cost using the effective interest
rate method.
The DEKRA Group uses this category for most of its
financial liabilities. Participation capital was measured
using the effective interest rate method due to the guaranteed interest payments.

Derivatives with negative fair values had to be assigned
to this category, unless they were recognized as part ofan effective hedge. All liabilities held for speculative purposes also belonged to this category. Other liabilities
could optionally be assigned to this category, in the same
way as “Financial assets at fair value through profit orloss” under IAS 39.
Measurement was the same as for “Financial assets
at fair value through profit or loss”.
The DEKRA Group only used this category for liabilities from business combinations.

Financial liabilities at fair value through profit or loss

Financial liabilities at amortized cost

Derivatives with negative fair values must be
assigned to this category, unless they are recognized aspart of an effective hedge. This category also includes all
liabilities held for speculative purposes and all contingent
liabilities recognized by an acquirer in a business combination pursuant to IFRS 3. Other liabilities can optionallybe assigned to this category, in the same way as “Financial
assets at fair value through profit or loss”.
With the exception of the fair value option, measurement is the same as for “Financial assets at fair value
through profit or loss”.
At the DEKRA Group, liabilities from business combinations are allocated to this category.

All other financial liabilities were measured at amortizedcost using the effective interest rate method and assigned
to this category. Participation capital was measured using
the effective interest rate method due to the guaranteedinterest payments.
The DEKRA Group used this category for most of its
financial liabilities.

D E K R A Financial Report 201845

Derivative financial instruments and hedge accounting

The DEKRA Group uses derivative financial instruments in theform of cash flow hedges. These serve to control and secure
future cash flows. Derivative financial instruments are recognized at fair value in the statement of financial position andreported under financial assets or under financial liabilities. The
fair values are calculated on the basis of corresponding market
prices or using appropriate valuation techniques.
The effective portion of the change in the fair value is recognized in other comprehensive income, taking into account therelated tax effect. The ineffective part is recognized throughprofit or loss. When the hedged transaction occurs, the cumulative “other income” is reclassified through profit or loss. For
further information, we refer to the comments on financial management in “Financial instruments and hedging activities”.

Trade receivables and other financial assets are recognized atnominal value less impairment losses. Non-current non-interest
bearing receivables are stated at present value using a matchinginterest rate.
Contract assets contain receivables from unbilled service
contracts. In the prior year, these had been included under tradereceivables and were recognized using the percentage-of-completion method in accordance with IAS 18.20 et seq. Since January 1, 2018, their recognition has been governed by IFRS 15“Revenue from Contracts with Customers”.
DEKRA recognizes revenue over time, when there is a continuous flow of benefits to the customer or an asset is createdwith no alternative use. In both cases, an ordinary terminationright by the customer gives rise to a reimbursement claim for therespective proportionate selling price. DEKRA therefore recognizes revenue based on the respective degree of completion of
the performance obligation. Selecting the method to determine
the percentage of completion requires judgment and depends on
the type of service being rendered. To determine the stage ofcompletion for the respective contract, the cost-to-cost method
is generally used as the ratio of costs incurred to the estimatedtotal costs. Payments received for unbilled service contracts aredisclosed net of contract assets on a contract-by-contract basis.
If the prepayments received exceed the contract assets, they arereported on a net basis under contract liabilities.
As of January 1, 2018, trade receivables, contract assets andother financial assets are subject to the impairment model of
IFRS 9. See section “Impairment or reversal pursuant to IFRS 9”.

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Notes

Notes

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, bank balances and short-term deposits and are recognized at nominal
value less any expected credit losses. The expected credit losses
are also determined using the impairment model pursuant to
IFRS 9. This is described in more detail in the section “Impairment or reversal pursuant to IFRS 9”.

Deferred tax assets and liabilities are disclosed net in the consolidated statement of financial position, if there is a legally
enforceable right to offset current tax liabilities and the deferredtaxes relate to the same taxable entity and the same taxation
authority. Accordingly, offsetting is carried out at entity and tax
group level.
Impairment losses and reversals of impairment losses

Deferred taxes and income taxes

Income taxes include expenses and income from current anddeferred taxes as well as tax allocations to the parent DEKRA
e.V., Stuttgart, with which the Company forms a tax group forincome tax purposes.
Current income tax liabilities/income tax assets are measured at the amount expected to be paid to/recovered from thetax authorities. The calculation is based on the tax rates enacted
or substantively enacted as of the reporting date.
Deferred taxes are recognized in accordance with the liability method pursuant to IAS 12 for temporary differences
between the tax accounts and the consolidated financial statements – with the exception of goodwill resulting from acquisition accounting that cannot be recognized for tax purposes –and for unused tax losses. Deferred tax assets are only considered
to the extent that it is sufficiently probable that they will be realized. Probable usability is based on a multi-year plan for therespective entity. Deferred taxes are calculated using the respective local tax rates on the basis of the tax rates that are expected
to apply for the period of reversal of the difference. Changes totax rates adopted by the reporting date are taken into accountwhen calculating deferred taxes.
Deferred taxes are recorded as tax income or expense
through profit or loss unless they relate to items recorded inother comprehensive income; in this case, the deferred taxes are
likewise recorded in other comprehensive income.
Deferred tax assets for unused tax losses are only recognized to the extent that it is probable that future taxable profit
will be available against which they can be utilized.

Impairment losses and reversals of impairment losses
pursuant to IAS 36

The carrying amounts of the assets that fall under the scope of
IAS 36 are tested on each reporting date for indications that an
asset may be impaired. If such indications are found to exist, therecoverable amount of the asset concerned is estimated. The
recoverable amount is the higher of an asset’s net realizable value
and its value in use (present value of future cash flows). If therecoverable amount is lower than its carrying amount, an
impairment loss must be recognized to reduce the carrying
amount to the recoverable amount. Impairment losses recognized in prior years must be reversed when there is a change inestimate and the recoverable amount is higher than the carrying
amount.
In addition, annual impairment tests must be carried out
for goodwill, intangible assets with indefinite useful lives andintangible assets that are not yet available for use. As goodwill
and other intangible assets cannot generally be sold independently and cannot generate cash flows independently of otherassets, impairment tests can only be carried out in connection
with a cash-generating unit.
The cash-generating units relevant for the goodwill
impairment tests are defined at business unit level. The Business
Units Automotive, Industrial and Personnel were identified as
the smallest cash-generating units. This is due to single management, shared customer service and uniform product policy, ajoint advertising strategy, as well as joint management and monitoring of the respective units.
As a result of the organizational realignment under theTargeting Operating Model 2020 (TOM 2020), management andmonitoring is performed by eight regional clusters as well as theglobally operating Temporary Work Service Unit as of January
1, 2019. As a result, there is a change in the reporting structure
pursuant to IAS 36.87 such that goodwill is reallocated to the

D E K R A Financial Report 2018

new cash-generating units. The reallocation is performed as of
fiscal year 2019 pursuant to IAS 36.87 using the relative value
approach of the business value of the allocated units in relation
to the business value of the former Business Units.
In the course of the impairment test of a cash-generating
unit, the carrying amount of the cash-generating unit is compared to the recoverable amount. The cash-generating unit
includes those assets that can be allocated directly or indirectly
on a reasonable and consistent basis to the cash-generating unit
and will generate the future cash inflows. If the net sales proceeds and the present value of the cash flows of a cash-generating
unit are lower than its carrying amount, the impairment expense
recognized through profit or loss is allocated to the individual
assets of the cash-generating unit. This allocation is made inproportion to the individual assets’ share in the cash-generating
unit’s carrying amount. If goodwill is assigned to the cash-generating unit, any identified impairment expense is first assigned
to goodwill and then allocated proportionately to the otherassets of the cash-generating unit.
Impairment or reversal pursuant to IFRS 9

The impairment model introduced by IFRS 9 is based on future
expected credit losses and is applicable for all financial assets(debt instruments) that are not measured at fair value throughprofit or loss. The impairment approach provides a three-stage
model for the allocation of impairment losses.
Stage 1: 12-month expected credit losses

Stage 1 comprises all instruments, for which there has notbeen a significant increase in credit risk since initial recognition. The expected default within the next 12 months
is taken into account as an impairment loss.
Stage 2: lifetime expected credit losses –credit standing not impaired

Stage 2 comprises allinstruments, for which there has
been a significant increase in credit risk on the reporting
date compared to the date of initial recognition, but there
is no evidence of impairment. The expected losses over
the residual term of the instrument are recognized as
impairment. A past due status of more than 30 days isused as objective evidence for a significant increase incredit risk.

47

Stage 3: lifetime expected credit losses –credit standing impaired

If there is also objective evidence of impairment in addition to a significant increase the credit risk as of the reporting date, the expected losses over the entire lifetime of the
instrument are recognized as impairment. A past due status of more than 90 days is used as objective evidence ofimpairment as well as further indications of financial difficulties on the part of the debtor.
The assessment as to whether the credit risk of a financial asset
has increased significantly is performed at regular intervals, atleast once a year, based on internally or externally available
information on the counterparty (e.g., rating information). Past
due information is also used to assess the probability of default
especially for trade receivables and other financial assets.
For trade receivables and contract assets, DEKRA uses a
simplified approach to determine the expected credit losses
based on the lifetime expected credit losses. A review as towhether there has been a significant increase in the credit risk
is, therefore, not necessary. Portfolio allowances for the expectedcredit losses are calculated on the basis of historical data adjusted
for supportable, forward-looking macroeconomic factors. For
example, this involves analyzing and weighting GDP growth
rates published by the OECD for the regions in which DEKRA
operates. In addition, the volume of receivables is regularly analyzed (without undue cost or effort) for any new findings that
could have an impact on the expected loss. The findings areaccounted for using adequate specific bad debt allowances. For
further information, we refer to the comments on impairment
in section 6.8.
For bank balances and short-term deposits loans and otherfinancial assets, the expected credit losses pursuant to IFRS 9 are
determined annually on the basis of probabilities of default
derived from the respective rating of the contractual partner, theloss given default and the amount at risk of default.
A financial asset is derecognized if it is assumed after thorough analysis that it can no longer be realized, for example after
the end of insolvency proceedings or after court rulings.

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Notes

Notes

Pensions and other post- employment benefits

Provisions for pensions and similar obligations are calculated
according to the projected unit credit method prescribed by IAS
19. In addition to biometric bases of calculation, this method
primarily takes into account current assumptions regarding
future increases in salaries and pensions as well as the relevant
long-term capital market interest rate, which is determined on
the basis of the market yields of high-quality fixed interest corporate bonds as of the reporting date. The provision is recognized at an amount equivalent to the defined benefit obligation.
Plan assets that are invested in order to cover defined benefit pension plans and other similar benefits are measured at fairvalue and offset against the corresponding obligations.
The return on plan assets and the interest charged on thedefined benefit obligation use the same interest rate. It is presented net in the financial result.
Actuarial gains and losses, which result primarily fromchanges in the assumptions made, are recorded in other comprehensive income in the period in which they occur. Past service cost from plan amendments is immediately recognized inpersonnel expenses in the fiscal year, in which the amendments
are made.
Actuarial reports are obtained for the calculation of thepension provisions.
Other provisions

Provisions are recognized in the amount required, based on abest estimate, to cover all present obligations as of the reporting
date. Future events, which may have an effect on the amountneeded to satisfy the obligation are considered in the provisions,provided that they can be forecast with an adequate, objective
degree of certainty and that the obligation results from past
events. In addition, provisions for potential losses from onerous
contracts are recognized in accordance with IAS 37.
A provision is measured as the most probable amount of arange of expected values. Where possible, it is determined andmeasured using contractual agreements; otherwise calculations
are based on past experience and estimates by the Management
Board.

Non-current provisions are recognized at present value and discounted at market interest rates that match the risk and theperiod to realization.
Contract liabilities

DEKRA recognizes contract liabilities for obligations to transfer
goods or services to a customer for which it has received consideration. If a customer pays consideration before the Group has
transferred the goods or services, a contract liability is recognized when the payment is made or is due. Contract liabilities
are recognized as revenue as soon as the Group has satisfied its
contractual obligations.

DEKRA uses the following practical expedients:–	Contracts concluded before the date of transition inaccordance with IAS 11 and IAS 18 were not restated–	Using the practical expedient in paragraph 121 of IFRS
15, DEKRA does not disclose any information onremaining performance obligations with an original
expected duration of one year or less or performanceobligations recognized in accordance with IFRS 15.B16.
Dividends are recognized when the right to receive payment
arises.
Government grants

Revenue recognition

In the current fiscal year, DEKRA applied IFRS 15 “Revenue
from Contracts with Customers” for the first time. IFRS 15 provides a uniform, principles-based five-step model for calculating
revenue that must be applied to all contracts with customers.
DEKRA recognizes revenue over time, when there is a continuous flow of benefits to the customer or an asset is created withno alternative use. In both cases, an ordinary termination rightby the customer gives rise to a reimbursement claim for therespective proportionate selling price. DEKRA therefore recognizes revenue based on the respective degree of completion of
the performance obligation.
DEKRA uses the option for simplified first-time application, limiting the retrospective application of IFRS 15 to contracts that had not yet been fulfilled as of the date of first-time
application January 1, 2018. They are recognized as if they had
been presented in accordance with IFRS 15 from the outset.
Aside from a change in presentation as well as more detailed
disclosures on revenue recognition in the notes to the financial
statements, the application of IFRS 15 did not have any significant
effects on the consolidated financial statements. It does not haveany effect on equity. Comparative figures from prior-year periods
are not restated but instead presented in section 6.8.

D E K R A Financial Report 2018

In accordance with IAS 20, government grants are only recognized where there is reasonable assurance that all attaching conditions will be complied with and the grant will be received.
They are recognized through profit or loss at the date the subsidized expenses are incurred, unless they relate to subsidies foran asset. Government grants are disclosed without offsetting
under other operating income.
Accounting judgments and estimates

In applying the accounting policies, the Management Board has
made the following judgments, which have a significant effect on
the amounts recognized in the consolidated financial statements.
The consolidated financial statements include assumptions
and estimates, which have an effect on the carrying amounts andrecognition of assets and liabilities as well as income andexpenses. Actual amounts may differ from the amounts basedon these estimates and assumptions.
In particular, assumptions and estimates were made concerning the useful lives of non-current assets, the recoverabilityof goodwill and other intangible assets, the recoverability ofreceivables, the adequate valuation of securities, the parameters
for measuring pension and other provisions, and the recoverability of deferred tax assets. In addition, we refer to the above
explanations and to the comments in note 6 on the individual
items in the statement of financial position.

49

The Group tests goodwill for impairment at least once a year. The
impairment tests carried out are mainly based on estimates. Various scenarios were, therefore, worked out for the individual
cash-generating units. The main estimates were the future net
cash flows, based on market developments, as well as assumptions
about the economic development and an estimate of increases inpersonnel costs, the growth rates and the weighted average costof capital. Even if the estimates should change, the recoverable
amount is currently expected to exceed the carrying amount of
goodwill. Especially with regard to the assumptions concerning
goodwill impairment or the expected future cash flows andweighted average of cost of capital, we refer to note 6.2.
Loss allowances on trade receivables relate to assumptions
regarding the credit risk and the expected loss given default.
DEKRA makes these assumptions based on past experience,existing market conditions as well as estimates concerning thefuture as of the end of the reporting period.
Selecting the method to determine the degree of completion of customer contracts requires judgment and depends on
the type of service being rendered. To determine the stage ofcompletion for the respective contract, the cost-to-cost method
is generally used as the ratio of costs incurred to the estimatedtotal costs.
The obligation from defined benefit pension plans and thepension benefit payments of the subsequent year are determinedbased on actuarial parameters such as interest rate, future salaryand pension increases, and age. Changes in parameters can havea significant effect on the benefit obligation. For further explanations, we refer to note 6.14.

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Notes

Notes

In some business combinations, contingent consideration has
been arranged or call or put options for non-controlling interests
have been agreed with the seller. The resulting purchase priceliabilities are subject to estimates as to whether future targets
can be achieved and in terms of assumptions regarding the present value of future purchase price payments. For further explanations, we refer to note 3.1.
Deferred tax assets are recognized to the extent that they
are likely to be used. The probability of their being used in the
future is assessed taking into account various factors such as
future taxable profits in the planning periods. DEKRA uses aplanning horizon of three years. The actual amounts may differ
from the estimates. These are then adjusted in other comprehensive income or through profit or loss, depending on how they
were initially recognized.
4

BUSINESS COMBINATIONS

Presentation of significant businesscombinations in the fiscal year

Effective July 16, 2018, 100 % of the shares in Industrial Safety
Group B.V., Rotterdam, Netherlands, and its subsidiaries wereacquired for a purchase price of 9.5 million euros.
The acquired net assets amounted to 0.8 million euros. Asof the date of acquisition, the carrying amounts of the acquired
assets and liabilities totaled 2.6 million euros and 1.8 million euros respectively.
An amount of 2.2 million euros in assets relates to tradereceivables, while an amount of 0.3 million euros relates toother assets and 0.1 million euros relate to property, plant andequipment and cash and cash equivalents. The carrying amountof the receivables corresponds to their fair value. All liabilities
are current.
In the course of the purchase price allocation, intangible
assets (customer list) of a total of 3.0 million euros and deferredtaxes of 0.7 million euros were recognized. The resulting goodwill on the acquisition date amounted to 6.4 million euros. In
addition to synergy effects within the Service Unit, the goodwill
arising includes intangible assets that cannot be measured separately from goodwill such as the permanent workforce andknow-how. Under local law, goodwill is not tax deductible.

The main purpose of the transaction was to expand the service
portfolio of the Insight Service Unit. Accordingly, the entities
were allocated to the Business Unit DEKRA Industrial. As aresult of the organizational realignment under TOM 2020, thecompany has been allocated to the North-West Europe region
as of January 1, 2019.
The purchase price for this business combination was paidin cash. The directly allocable incidental costs of 0.1 million euros incurred in the transaction were recognized in otheroperating expenses.
Furthermore, the assets of Jiffy Smog, LLC, Henderson,
USA, were acquired effective as of April 17, 2018 for a purchaseprice of 9.1 million euros.
The acquired net assets amounted to –0.01 million euros
and consist of property, plant and equipment and non-current
liabilities.
In the course of the purchase price allocation, intangible
assets (customer list) totaling 2.7 million euros were recognized.
The resulting goodwill on the acquisition date amounted to
6.4 million euros. In addition to synergy effects in the Service
Line, the goodwill arising includes intangible assets that cannot
be measured separately from goodwill such as the permanent
workforce and know-how. Under local law, goodwill is tax
deductible.
The transaction was carried out mainly in order to expand
the service portfolio of the Vehicle Inspection Service Line.
Accordingly, the company was allocated to the Business Unit
DEKRA Automotive. As of fiscal year 2019, the company is allocated to the North America region.
The purchase price was paid in cash. The directly allocableincidental costs of 0.3 million euros incurred in the transaction
were recognized in other operating expenses.
Fur ther Business Combinations

Furthermore, 100 % of the shares in HESPO s.r.o., Zlin-Malenovice, Czech Republic, were acquired effective as of January 1,
2018. Likewise effective as of January 1, 2018, the company wasmerged into DEKRA CZ a.s., Prague, Czech Republic. In addition, 100 % of the shares in Gain Solutions Ltd., Chippenham,UK, and 100 % of the shares in SINISTRAUTO Gabinete Tecnico
de Regulaçao de Sinistros Automove Lda., Linda-a-Velha, Portugal, were acquired effective as of July 1, 2018 and August 1,
2018, respectively. The total purchase prices of 8.3 million euros
were paid in cash.

D E K R A Financial Report 2018

The acquired net assets amounted to 2.9 million euros. As of thedate of acquisition, the carrying amounts of the acquired assets
and liabilities totaled 3.7 million euros and 0.8 million euros
respectively.
An amount of 1.9 million euros in assets relates to cash
and cash equivalents, while an amount of 1.3 million euros
relates to property, plant and equipment and 0.5 million euros
to trade receivables and other assets. The carrying amount of thereceivables corresponds to their fair value.
Of the liabilities, 0.2 million euros relate to non-current
liabilities and 0.6 million euros relate to current liabilities.
In the course of the purchase price allocation, intangible
assets (customer list) of 1.2 million euros and deferred taxes of
0.3 million euros were recognized. The resulting goodwill on theacquisition date amounted to 4.5 million euros. In addition tosynergy effects within the Service Lines, the goodwill arising
includes intangible assets that cannot be measured separatelyfrom goodwill such as the permanent workforce and know-how.
Under local law, goodwill is not tax deductible for any of theacquisitions.
The transactions were carried out mainly in order toexpand the service portfolio of the Vehicle Inspection andExpertise Service Lines. Accordingly, the entities were allocatedto the Business Unit DEKRA Automotive. As of fiscal year 2019,the companies are allocated to the regions Central East Europe& Middle East, North-West Europe and South-West Europe. The
directly allocable incidental costs of 0.1 million euros incurredin the transactions were recognized in other operating expenses.
The entities acquired during the fiscal year are included in
the consolidated financial statements with revenue of 12.2 million euros and operating profit before taxes taking into consideration depreciation, amortization and impairment in the courseof the purchase price allocation of 1.2 million euros. If the entities had been included in the consolidation for the entire year,
they would have contributed 20.9 million euros to group revenue
and 2.3 million euros to the Group’s earnings before taxes.

51

Korlátolt Felelősségü Társaság, Budapest, Hungary. These acquisitions resulted in goodwill totaling 25.8 million euros.
Master Test, SGPS, S.A. and its subsidiaries were includedin the consolidated financial statements from July 31, 2017.
VEIKI-VNL Villamos Nagylaboratόriumok Korlátolt Felelősségü
Társaság was included in the consolidated financial statementsfrom March 31, 2017. The companies contributed 13.7 million euros (prior year: 6.6 million euros) to group revenue.
5

STATEMENT OF COMPREHENSIVE INCOME/
INCOME STATEMENT

The statement of comprehensive income has been prepared using
the nature of expense method. Income and expenses attributable
to the fiscal year are recognized through profit or loss. Non-ownerbased transactions reported as other comprehensive income arepresented after the income statement (one statement approach).

Presentation of significant businesscombinations in the prior year

In 2017, the significant business combinations were theacquisition of 100 % of the shares in Master Test, SGPS, S.A.;
Lisbon, Portugal, as well as their respective subsidiaries, and 100 %of the shares in VEIKI-VNL Villamos Nagylaboratόriumok

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Notes

Notes

5.1 Revenue

5.4 Personnel expenses

Revenue by Ser vice LineIN THOUSAND EUR

Vehicle Inspection
Expertise
Automotive Solutions

2018

2017

IN THOUSAND EUR

2018

2017

Wages and salaries

1,813,230

1,676,352

The composition of depreciation, amortization and impairment
losses is presented in the statements of changes in intangible
assets and property, plant and equipment. See notes 6.1 and 6.3.

955,189

322,819

318,085

Social security costs(excl. pension insurance premiums)

243,965

219,091

5.7 Financial result

188,852

Pension costs

132,196

126,193

The financial result breaks down as follows:

2,189,391

2,021,636

197,966
37,841

29,696Claims Services

43,11736,428Other Automotive income

29,87929,277

1,638,640

1,557,527

Industrial & Construction Inspection

429,599405,756

Materials Testing & Inspection

159,753

160,353

Product Testing & Certification

188,309

177,028

Business Assurance

91,01082,213

Insight

71,33471,023

Industrial Services

940,005

896,373

Training & Education

205,660

197,260

Temporary Work529,570

452,830

Personnel Services

735,230

650,090

Other

5.6 D epreciation, amor tization and impairment losses onproper t y, plant and equipment and intangible assets

1,007,018

Homologation & Type Approvals

Automotive Services

For customer contracts that have an original expected durationof more than one year or performance obligations not recognizedin accordance with IFRS 15.B16, the transaction price for theremaining unsatisfied or partially unsatisfied performance obligations can be broken down as of December 31, 2018 as follows:

53

26,67430,8373,340,549

3,134,827

IN THOUSAND EUR

2018Within one year
More than one year

848

8,210

5.2 Other operating income

Other operating income of 33.3 million euros (prior year:
31.9 million euros) chiefly includes current income of 23.4 million euros (prior year: 19.4 million euros). This includes income
from compensation of 4.3 million euros (prior year: 1.8 million euros) as well as reintegration and wage subsidies totaling
3.3 million euros (prior year: 2.6 million euros). Other operating
income also includes income from disposal of assets of 3.1 million euros (prior year: 6.3 million euros), exchange gains of
2.7 million euros (prior year: 2.0 million euros) as well as income
from the reversal of allowances of 2.2 million euros (prior year:
1.5 million euros).

Pension costs also include employer contributions to the statutory pension insurance fund of 100.6 million euros (prior year:
91.9 million euros). The majority of group employees are salaried
employees.
The Group’s employees are distributed as follows (annual
average):
A N N UA L AV E R AG E

2018

2017

Cost of materials breaks down as follows:
2018

2017

Cost of purchased services

287,153

279,305

Cost of purchased merchandise

29,712

28,258

Expenses from the write-downof inventories

049

316,865

307,612IN THOUSAND EUR

D E K R A Financial Report 2018

2018

2017

Investment result from companies
accounted for using the equity method

782

1,353

Dividends from equity instruments
at fair value through other comprehensive income

258

0

0

721

–2,135–1,370

Other investment result
Expenses from loans to affiliates
and investees *)Result from securities

50

6,402

–845

0

Business Unit DEKRA Automotive

16,46015,579Result from loans

Business Unit DEKRA Industrial

8,330

8,134

Other financial result–2,672

5,753

Business Unit DEKRA Personnel

16,97916,756

Interest income

6,004

6,170

884

780

42,653

41,249DEKRA SE/Regional central units

5.5 Other operating expenses
5.3 Cost of materials

Within the business units, revenue is broken down by services
that exist regionally and internationally throughout the Group.
The revenue results from ordinary activities.
Revenue also includes income from unbilled service contracts (over time) as of year-end of 39,123 thousand euros (prioryear: 38,375 thousand euros), which are recognized proportionately over the performance period.
DEKRA’s performance obligations are generally satisfied
when the service has been rendered (e.g., training, consulting)or completed (e.g., vehicle inspection, certification cycle).
At DEKRA, the terms of payment differ according toregion and service. Across the Group, the terms of payment generally range between 30 and 90 days and do not contain any significant financing components.

IN THOUSAND EUR

7,362

Other operating expenses of 573.9 million euros (prior year:
554.3 million euros) chiefly include rent and rent incidentals of
130.7 million euros (prior year: 124.7 million euros), travel
expenses of 104.5 million euros (prior year: 103.3 million euros),
administrative expenses of 85.8 million euros (prior year:
79.4 million euros), IT and telephone costs of 77.1 million euros(prior year: 71.0 million euros) and vehicle costs of 46.3 million euros (prior year: 44.5 million euros). Other operating
expenses contain exchange differences of 2.9 million euros (prioryear: 2.8 million euros).

Interest expenses–21,723–23,781–13,383–13,1444

15–8,344–10,652

Interest result–15,719–17,611

Financial result–17,609–10,505

thereof other interest expenses
thereof net lending from
German phased retirement
scheme obligations
thereof net lending frompension provisions*) P rior year: Expenses from investments and shares in affiliates

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Notes

Notes

The investment result from companies accounted for using theequity method of 782 thousand euros (prior year: 1,353 thousand euros) relates to the recognition of profit shares of FSD
Fahrzeugsystemdaten GmbH, Dresden, Germany and EuroTransport Media Verlags- und Veranstaltungsgesellschaft mbH,
Stuttgart, Germany.
Other financial result mainly comprises impairments ofloans to non-consolidated subsidiaries and of other loans. The
decrease in other financial result is attributable to the fact that
income from the reclassification without affecting income of
remeasurement effects of AfS securities from other comprehensive income to the income statement due to the contribution ofthese securities to the Contractual Trust Arrangement (CTA)
was included in the prior year.
Interest income primarily stems from interest income fromloans and receivables of 3,026 thousand euros (prior year:
2,531 thousand euros). Measurements in foreign currencies had
an effect of 1,846 thousand euros (prior year: 2,520 thousand euros) on interest income.
Other interest expenses of 13,383 thousand euros (prioryear: 13,144 thousand euros) chiefly stem from short-term andlong-term loans. Moreover, this includes expenses from theincrease in liabilities from put and call options in connection
with subsidiaries acquired in prior years of 2,518 thousand euros(prior year: 3,750 thousand euros) as well expenses from currency effects of 2,404 thousand euros (prior year: 2,023 thousand euros) in the fiscal year.
Net lending from pension provisions results from interest
expenses arising from pension obligations of 16,556 thousand euros (prior year: 16,356 thousand euros) less the expected
return on plan assets of 8,212 thousand euros (prior year:
5,704 thousand euros).

5.8 Income taxes

Income taxes include taxes paid or owed on income as well asdeferred taxes.
Tax allocations to DEKRA e.V., Stuttgart, of 35.8 million euros (prior year: 48.8 million euros) are also recognizedunder income taxes. The tax allocation corresponds to the actual
tax incurred up to the level of DEKRA SE. The resulting receivables and liabilities are included under receivables and liabilities
to affiliates.
2018

2017

58,35572,831

Temporary differences

4,390–13,858

Unused tax losses–3,495724

59,25059,697

IN THOUSAND EUR

Current taxes
Deferred taxes

Current taxes contain tax expenses of –787 thousand euros(prior year: –262 thousand euros) relating to other periods.
As of the reporting date, the DEKRA Group disclosed
33,070 thousand euros in total of unused tax losses (prior year:
16,090 thousand euros), which resulted in deferred tax assets of
9,183 thousand euros (prior year: 5,108 thousand euros). The
Group considers it probable that future taxable profit will beavailable against which they can be utilized. The respective local
tax rate was used in each case.

D E K R A Financial Report 2018

Deferred taxes from temporary measurement differences were
determined using future anticipated local tax rates, e.g., 30.5 %(prior year: 30.5 %) for Germany, 28.0 % (prior year: 28.0 %) forFrance and 25.0 % (prior year: 25.0 %) for the Netherlands.

55

No deferred taxes were recognized on retained earnings fromsubsidiaries, since the profits are to remain invested in the subsidiaries for the time being.

The deferred taxes as of December 31, 2018 break down as follows:
IN THOUSAND EUR

DEFERRED TAX ASSETSDEFERRED TAX LIABILITIES

Dec. 31, 2018

Dec. 31, 2017

Dec. 31, 2018

Dec. 31, 201782,23561,66934,82329,936

4,294

8,704

4,903

4,150

137,810

128,006

79,19757,011

1,479

3,485

1,900

8,364

Non-current assets
Current assets
Non-current liabilities
Pension provisions
Other non-current liabilities
Current liabilities

6,002

8,094

227

844

231,820

209,958

121,050

100,305

9,183

5,108

0

0

Total deferred taxes

241,003

215,066

121,050

100,305

Offsetting at tax group level–89,522–65,971–89,522–65,971

Disclosure

151,481

149,095

31,52834,334

Deferred taxes on temporary measurement differences

Deferred taxes on unused tax losses

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Notes

Notes

The following tax reconciliation clarifies the difference between
the effective tax expense according to the statement of comprehensive income and the tax expense that would theoreticallyarise if the tax rate of DEKRA SE were to be applied to consolidated earnings before taxes. As in the prior year, the DEKRA
Group’s tax rate is 30.525 %.
2018

2017

Consolidated earnings before tax

194,767

192,540

Expected tax expense (30.525 %)

59,45358,773Losses for which no deferred taxes
were recognized

604

1,253

Differences from foreign tax rates–2,974–1,569Tax-free income–2,506–4,164

7,809

4,748

–3,334

611

198

45

59,25059,697

IN THOUSAND EUR

Non-deductible expenses
Tax items relating to other periods
Other tax effects
Effective tax expense

Deferred income tax assets andcurrent income tax assets

The Group has unused tax losses that can be carried forward
indefinitely of 20,749 thousand euros (prior year: 30,908 thousand euros), for which no deferred taxes were recognized, since
it is not yet sufficiently certain that they will be usable for tax
purposes.
Deferred tax assets and liabilities were offset at tax grouplevel provided the requirements for offsetting pursuant to IAS
12.74 were met.
Of the change in deferred taxes, an amount of 7,934 thousand euros (prior year: –28 thousand euros) was reported inother comprehensive income. There were also changes in thedeferred taxes from first-time consolidations as well as from currency translation effects.
The current income tax receivables primarily pertain toclaims for tax credits to promote competitiveness and employment in France.
Deferred income tax liabilities andcurrent income tax liabilities

Besides those from effective tax obligations, tax liabilities arise
mainly from deferred tax liabilities. The recognition and measurement differences determined from adjustments of the statements of financial position of the consolidated companies
according to local GAAP to IFRSs and consolidation entries recognized through profit or loss, which resulted in deferred tax
assets or liabilities, are presented in the table above. Deferredtaxes of 2.3 million euros (prior year: 2.8 million euros) wererecognized in the first-time consolidations.
Current tax liabilities mainly relate to income tax liabilities
of foreign entities. Of the liabilities from tax allocations to
DEKRA e.V., Stuttgart, an amount of 35.8 million euros has been
offset against receivables from affiliates.

D E K R A Financial Report 2018

5.9 Statement of comprehensive income

6

The consolidated net income for the year under IFRS stands at
135.5 million euros (prior year: 132.8 million euros). This serves
as a basis for developing the income statement into the statementof comprehensive income. Items affecting other comprehensive
income, which will not be recycled through profit or loss in the
future, include the remeasurement of defined benefit pension
plans of –27.9 million euros (prior year: 5.9 million euros), lessassociated deferred taxes of 8.1 million euros (prior year:–1.3 million euros), as well as the change in the fair value ofequity instruments at fair value through other comprehensive
income of 20.4 million euros (prior year: 0 million euros). Other
items affecting other comprehensive income are the remeasurement of hedging instruments of 0.4 million euros (prior year:
0.5 million euros). In the prior year, this item also included
effects from the remeasurement of available-for-sale securitiesof –4.5 million euros. It is possible that these items will be recycled through profit and loss in the future together with the associated deferred taxes of –0.1 million euros (prior year: 1.3 million euros).
Reclassification adjustments from other comprehensive
income to profit or loss in the fiscal year are explained in note 10.
In addition, expenses from currency translation of
6.1 million euros (prior year: 19.0 million euros) were recognized in other comprehensive expenses. The effects of foreign
currency translation are primarily due to translation of items
from the South African rand, the Swedish krona and the Brazilian real. This was mainly countered by the effects from thetranslation of items from the US dollar. These items could also
be recycled through profit and loss in the future if certain conditions are met.

57

STATEMENT OF FINANCIAL POSITION

Non - current assets
6.1 Intangible assets

In addition to goodwill, items include customer lists acquired
for a consideration, franchises, industrial and similar rights
and assets, and internally generated intangible assets (IT developments).
Internally generated intangible assets of 4,384 thousand euros (prior year: 6,442 thousand euros) were recognized
for software developments in the reporting year.
No impairments were necessary for goodwill and for internally generated intangible assets in the reporting year.

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C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S

Notes

Notes

6.2 Goodwill

INTANGIBLE ASSETSIN THOUSAND EUR

Goodwill

Franchises,industrial
andsimilar rights

Other
intangible
assetsInternallygeneratedintangible
assets

Prepayments
and intangible
assets underdevelopment

Total

Cost as of Jan. 1, 2017534,083

134,475

216,445

31,243

10,968927,214

Exchange difference on opening balance–14,521–69–5,157–274–2–20,023

–280

–18

–61

–157

1

–515

313

9,397

2,330

6,442

7,662

26,144

Additions to the consolidated group32,18451

10,7760043,011

Disposals–1,915–416–1,546–53–296–4,226–18

10,839–1,923

1,116–8,024

1,990

549,846

154,259

220,864

38,317

10,309973,595–3,15723–1,195–194

0–4,523

Exchange difference in current year
Additions

Reclassifications
As of Dec. 31, 2017 / Jan. 1, 2018

Exchange difference on opening balance
Exchange difference in current year
Additions
Additions to the consolidated group
Disposals

167

5

36

43

6

257

0

7,102

2,164

4,384

10,37924,02935,37321

11,3340046,728–936–284–1,951–883–79–4,133

Reclassifications

32

6,436

–4,634–132–2,669–967

As of Dec. 31, 2018581,325

167,562

226,618

41,535

17,946

1,034,986

Amortization and impairment losses
As of Jan. 1, 2017

–516

–96,432–127,209–15,146

0–239,303

Exchange difference on opening balance

62

35

2,837

49

0

2,983

Exchange difference in current year

–28

16

315

43

0

346

Additions0–14,175–23,276–3,264

0–40,715

Disposals

482

373

1,415

39

0

2,309

Reclassifications

0–3,123

2,401

0

0

–722

As of Dec. 31, 2017 / Jan. 1, 2018

0

–113,306–143,517–18,2790–275,102

Exchange difference on opening balance

0

–12

1,052

40

0

1,080

Exchange difference in current year

0

–4

–32

–3

0

–39

Additions0–12,972–20,932–4,1240–38,028

Disposals

0

283

1,976

609

0

2,868

–72

–2,390

2,556

1,276

0

1,370

Reclassifications
As of Dec. 31, 2018

–72

–128,401–158,897–20,4810–307,851

Carrying amount as of Dec. 31, 2018581,253

39,161

67,72121,054

17,946727,135

Carrying amount as of Dec. 31, 2017

549,846

40,95377,347

20,03810,309698,493

Carrying amount as of Jan. 1, 2017

533,567

38,04389,236

16,097

10,968687,911D E K R A Financial Report 2018

Of the goodwill, 213.7 million euros (prior year: 198.6 million euros) relates to Business Unit DEKRA Automotive,
321.2 million euros (prior year: 308.9 million euros) to Business
Unit DEKRA Industrial and 46.4 million euros (prior year:
42.3 million euros) to Business Unit DEKRA Personnel.
Additions of 35.4 million euros to goodwill are attributableto business combinations and asset deals that took place in 2018as well as the inclusion in the consolidated group of entities previously considered to be immaterial. In contrast, goodwill
decreased by 3.0 million euros (prior year: 14.8 million euros)
due to currency translation differences.
The recoverable amount of each cash-generating unit wasdetermined using the value in use of the relevant unit. Cash flow
forecasts are based on detailed plans by management, coveringa three-year planning period. Management’s plans reflect past

59

experience and expectations of future market and corporate
developments. Cash flows after the three-year period wereextrapolated taking into account estimated growth rates of 0.5 %(prior year: 0.5 %). The estimated growth rates came from forecasts by the Company. For Business Units DEKRA Automotiveand DEKRA Industrial, cash flows were discounted using arisk-adjusted interest rate after tax as in the prior year of 7.0 %.
For Business Unit DEKRA Personnel, a risk-adjusted interest
rate after tax of 7.6 % (prior year: 8.5 %) was used.
A 10 % decrease in the expected cash flows as well as a 1 %increase in the discount rate underlying the value in use calculation for the cash-generating unit, either individually or in combination, would not result in any impairment losses.
For more information, please refer to the explanations in
the descriptive section of the notes on impairment losses.

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C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S

Notes

Notes

6.3 Proper t y, plant and equipment

6.4 Financial assets accounted for using the equit y method

IN THOUSAND EUR

The separate financial statements of entities accounted for using
the equity method provide the following financial information,
which has not been adjusted to the share held by the Group:

Land andbuildings

Technical
equipment andmachines

Other equipment,
furniture andfixturesPrepayments
and assets underconstruction

Total

IN THOUSAND EUR

Dec. 31, 2018

Dec. 31, 201712,087

608,930

Aggregated non-current assets

20,92918,555–1,043–261–6,777Aggregated current assets

38,08037,487

–20

–221

–419

Aggregated non-current liabilities

20,511

19,39521,07633,706

11,34478,500Aggregated current liabilities

5,426

6,357

6,277

1,880

473

201

8,831

–3,964–7,675–14,225–61–25,925

2,122

2,756

1,176

–8,249–2,19520182017

200,840

209,621235,644

14,840660,945

Aggregated revenue

39,75340,343

Exchange difference on opening balance–290–1,182–222

165–1,529Aggregated net income for the year

2,773

3,301

Exchange difference in current year

–134

201

95

–79

83

36,447

23,97432,825

14,442

107,688

Cost as of Jan. 1, 2017

185,243

196,023

215,577

Exchange difference on opening balance–1,285–4,18873–251

Additions

12,374

Additions to the consolidated group
Disposals

Exchange difference in current year

Reclassifications
As of Dec. 31, 2017 / Jan. 1, 2018

Additions
Additions to the consolidated group
Disposals
Reclassifications

7,953

2,206

457

2,543

13,159–3,953–6,103–16,472–675–27,203

911

–255

6,661

–12,478–5,161

As of Dec. 31, 2018

241,774

228,462

258,988

18,758

747,982

Depreciation and impairment losses as of Jan. 1, 2017–61,792–116,278–140,27722–318,325

Exchange difference on opening balance

427

2,365

366

–1

3,157

Exchange difference in current year

50

51

4

133

238

Additions–7,228–18,400–24,1870–49,815

Disposals

–97

7,224

10,5960

Reclassifications

1,611

2,965

–193

–3,457

IN THOUSAND EUR

As in the prior year, the majority of assets, liabilities, revenue
and net income for the year is attributable to FSD Fahrzeugsystemdaten GmbH, Dresden.
6.5 Other non - current financial assets
Dec. 31, 2018

Dec. 31, 2017

Shares in affiliates 1)

51,15025,513

17,723

Other investments 1)

1,661

1,662

926

Loans to affiliates

10,40921,968IN THOUSAND EUR–67,029–122,073–153,691–3,303–346,096

Other loans

410

1,558

Exchange difference on opening balance

37

550

76

–55

608

Securities

6,942

5,349

Exchange difference in current year

68

27

–68

0

27

Additions–6,961–19,570–26,211

0–52,742

Sundry other non-current financial
assets

6,575

4,204

Disposals

2,203

6,213

13,160021,576

77,14760,254

Reclassifications

2,564

4,126

–1,9620

4,728

As of Dec. 31, 2018

–69,118–130,727–168,696–3,358–371,899

Carrying amount as of Dec. 31, 2018

172,656

97,73590,292

15,400376,083

As of Dec. 31, 2017 / Jan. 1, 2018

Carrying amount as of Dec. 31, 2017

133,81187,54881,953

11,537

314,849

Carrying amount as of Jan. 1, 2017

123,451

79,74575,30012,109290,605

D E K R A Financial Report 2018

1)
2)

2)

2017: at cost; 2018: at fair value through other comprehensive income
2 017: available for sale; 2018: at fair value through profit or loss

61

Other non-current financial assets contain accumulated reversalsof impairments of 34,694 thousand euros. This was counterbalanced by accumulated impairments of 4,599 thousand euros(prior year: impairments of 6,109 thousand euros (net)).
The development of the impairments resulted from thefirst-time application of IFRS 9 in fiscal year 2018, as did theincrease in shares in affiliates not included in the consolidated
financial statements. Since January 1, 2018, DEKRA has measured equity instruments at fair value through other comprehensive income. The accumulated reversals of impairments of theshares in affiliates amount to 34.4 million euros. Of this,20.4 million euros had a positive effect on other comprehensive
income in the fiscal year. This is counterbalanced by the firsttime consolidation of entities in fiscal year 2018. The fair valuesof the shares in affiliates not included in the consolidated financial statements break down by region as follows:
Fair value
IN MILLION
EUROS

Number ofentities

Fair value spread
IN MILLIONEUROSGermany

2.6

6

0.1 – 2.4

Central East Europe& Middle East

25.4

46

0.0 – 5.1

North-West Europe

8.6

11

0.0 – 3.7

South-West Europe

4.4

11

0.0 – 1.6

North America

0.6

1

0.6

South America

2.5

20.0 – 2.5

East & South Asia

8.72

1.9 – 6.8

Southern Africa &Oceania

0.0

1

0.0

RegionThe decrease in loans to affiliates is mainly due to the first-time
consolidation of companies in 2018.
The increase in securities primarily results from the acquisition of securities as well as from marking them to market as of
the reporting date, with an overall positive effect. Net reversalsof impairments of 389 thousand euros (prior year: 1,556 thousand euros) were recognized in 2018. The accumulated reversalsof impairments of the securities amount to 261 thousand euros.

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C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S

Notes

Notes

Risk provisioning for the loans to affiliates and other loans developed in the reporting period as follows:

Current assets
6.7 Inventories

Level 1

Level 2

Level 3
Dec. 31, 2018

Dec. 31, 2017

Materials and supplies

1,463

1,759

Work in progress

2,484

1,465

Merchandise

4,961

4,305

8,908

7,529

IN THOUSAND EUR

Loss allowances as ofDecember 31 prior year

–1,656

Effect of first-time
application of IFRS 9

0

0

–14

0

0

Loss allowances
as of January 1–1,67000Additions–2,76400

Utilization

345

0

0

Reversal

600–4,08300

Loss allowances
as of December 31

The risk provisioning for the other non-current financial assets
amounts to –245 thousand euros (prior year: –314 thousand euros).
There is no significant effect from first-time application of IFRS 9.
6.6 Other non - current assets

Other non-current assets break down as follows:
IN THOUSAND EUR

Dec. 31, 2018

Dec. 31, 2017

Reimbursement claims in accordancewith IAS 19.104a

1.229

1.125

Other non-current assets

6.112

4.652

7.341

5.777

6.8 C ontract assets and trade receivables

Foreign currency receivables are initially translated at theexchange rate on the transaction date in accordance with IAS
21.21; they are measured at the closing rate in accordance withIAS 21.23. The difference is recognized through profit or loss.
IN THOUSAND EUR

Dec. 31, 2018

Contract assets are recognized for unbilled services as of thereporting date. These services are largely allocated to the Industrial & Construction Service Line as well as the Product Testing& Certification, Materials Testing & Inspection and Business
Assurance and Insight Service Units. Amounts recognizedunder contract assets are reclassified to trade receivables after
defined invoicing dates or after the service has been concluded
and inspected by the customer. Any remaining performanceobligations from contracts included under contract assets areusually satisfied and invoiced within the following fiscal year.
Trade receivables do not bear interest and are usually due
for payment between 30 and 90 days.
The first-time application of IFRS 15 results in the following changes in the recognition of trade receivables, contract
assets and receivables from percentage of completion.
IN THOUSAND EUR

Reclassi­
ficationJan. 1,
2018

Dec. 31, 2017

Contract assets(prior year: receivables frompercentage of completion)

46,251

42,277

Trade receivables, gross544,003502,318

Loss allowances on contract assets
and trade receivables–21,698–18,018

568,556

526,577

Trade receivables, gross502,318–1,181

501,137

Receivables from percentage of completion

42,277–42,2770040,081

40,081–18,0180–18,018

042,73442,734

Prepayments received

31,114–31,1140

Deferred revenue

14,997–14,9970Sundry other current
provisions

12,994–832

12,162

0

832

832

Contract assets
Portfolio-based specificvaluation allowances on
trade receivables
Contract liabilities

Liabilities from refunds

D E K R A Financial Report 2018

Dec. 31,2017

63

The maturities of trade receivables and contract assets break
down as follows:
Gross amount
Dec. 31, 2018

Loss
allowance
Dec. 31, 2018

Not past due – 180 days past due

564,600–7,986

Past due between 181 – 240 days

7,338

–1,013

Past due between 241 – 360 days

5,623

–1,821

Past due more than 360 days

12,693–10,878590,254–21,698

IN THOUSAND EUR

Loss allowances on trade receivables and contract assets developed as follows:
2018

2017

Loss allowances as of December 31
prior year

–18,018–19,864

Effect of first-time application of
IFRS 9–3,229n/aLoss allowances as of January 1–21,247–19,864

Additions–6,680–3,868IN THOUSAND EUR

Utilization

4,136

2,449

Reversal

2,093

3,265

–21,698–18,018

Loss allowances as of December 31

Loss allowances on contract assets amount to 1,484 thousand euros as of the reporting date (prior year: 0 thousand euros).
The effect from first-time application of IFRS 9 on valuation
allowances of contract assets amounts to 52 thousand euros.
Expenses incurred for the allocation to loss allowances areincluded under other operating expenses.

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C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S

Notes

Notes

Impairment of other current financial assets developed as follows:

6.9 Other current financial assets
Dec. 31, 2018

Dec. 31, 2017

171

503

Receivables from affiliates andother investees and investors

99,609108,737

Sundry other current financial assets

85,62664,073

185,406

173,313

IN THOUSAND EUR

IN THOUSAND EUR

2018

Bad debt allowances on cash and cash equivalents developed asfollows:

2017
IN THOUSAND EUR

Securities *)* 2 017: available for sale; 2018: at fair value through profit or loss)

Loss allowances as of December 31
prior year

2017

0

0

–3,359–3,531

Effect of first-time applicationof IFRS 9

–312

n/a

Loss allowances as of January 1–3,671–3,531

Effect of first-time application of
IFRS 9–37n/aAdditions

–372

–188

Loss allowances as of January 1–37

0

Utilization

2,193

350

Additions

–6

0

0

10

Loss allowances as of December 31–43

0–1,850–3,359

ReversalReceivables from affiliates and other investees and investors
contain liabilities from income tax and VAT, profit transfersfrom DEKRA SE and other cost allocations to the owner totaling 72,050 thousand euros, which are offset against receivablesfrom the cash pool and other cost allocations of 162,639 thousand euros. The decrease in this item is primarily attributable
to the lower receivables from the cash pool compared to theprior year.
The increase in other financial assets is primarily attributable to an increase in reimbursement claims from loss adjustments.

2018

Loss allowances as of December 31

6.10 Other current assets

This item principally contains prepaid expenses and other current tax receivables.
6.11 Cash and cash equivalents

The development of cash and cash equivalents as defined by IAS
7 is presented in the statement of cash flows.
Cash and cash equivalents break down as follows:
Dec. 31, 2018

Dec. 31, 2017

Cash at banks

76,64374,098Cash on hand

1,222

1,249

585

1,095

78,45076,442

IN THOUSAND EUR

Cash equivalents less than 3 months

Cash at banks includes short-term deposits with terms of up to
three months.

D E K R A Financial Report 2018

Loss allowances as of December 31
prior year

6.12 Equit y

For information on the development of equity, refer to the statement of changes in equity. Effects of the first-time application of
new accounting standards are also presented in the statement ofchanges in equity.
The capital stock of DEKRA SE remains unchanged at
25,565 thousand euros. It is divided into 10,000,000 no-par value
bearer shares.
The capital reserves of 560,529 thousand euros (prior year:
550,529 thousand euros) mainly include contributions from
DEKRA e.V., Stuttgart. A contribution of 10,000 thousand euros
was made to the capital reserves in the reporting year.
Revenue reserves contain the group profit for the period
and the profits of consolidated companies generated in prioryears to the extent these have not been distributed or transferred.
There is a profit and loss transfer agreement in place between
DEKRA SE and the parent. The profit transfer is reported inother comprehensive income as a transaction with the equity
investor. The difference between the profit transfer in accordancewith German commercial law and the IFRS result is recorded in
the revenue reserves. Changes in actuarial gains and losses from65

defined benefit plans, the gains or losses from the fair value
measurement of hedging instruments and shares in non-consolidated subsidiaries, and deferred taxes not recognized throughprofit or loss, and the translation reserve are contained in accumulated other comprehensive income.
As of the reporting date, issued shares had all been fully
paid in.
6.13 Non - controlling interests

For the change in non-controlling interests, please refer to thestatement of changes in equity.
There are non-controlling interests in those entities thatare shown in the list of shareholdings (note 14) with a share incapital of less than 100 %, unless options to the non-controllinginterests were arranged in the course of the business combination. A purchase price liability is recognized for these interestsin accordance with IAS 32 and non-controlling interests are
therefore not presented.
Pursuant to the revised IAS 27, the profit or loss for theyear attributable to non-controlling interests must be allocatedto non-controlling interests even if the losses exceed the shareof non-controlling interests in capital. Negative non-controllinginterests are not reported for those non-controlling interests towhich IFRS 3 (old version) applies.
The information below presents the required pro rata
financial information of the significant entities with non-controlling interests (DEKRA iST Reliability Services Inc., Hsinchu,
Taiwan, DEKRA iST Reliability Services Limited, Kunshan,
China, and DEKRA Testing Services (Zhejiang) Ltd., Zhejiang,
China).

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C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S

Notes

Notes

Dec. 31, 2018

Dec. 31, 2017

Aggregated non-current assets

9,979

7,392

Aggregated current assets

8,524

8,543

498

232

4,871

3,486

IN THOUSAND EUR

2018

2017

Aggregated revenue

9,411

8,814

Aggregated profit for the year

1,335

1,137

IN THOUSAND EUR

Aggregated non-current liabilities
Aggregated current liabilities

Of these amounts, non-current assets of 8,275 thousand euros,
current assets of 3,366 thousand euros, non-current liabilities of
417 thousand euros, current liabilities of 3,018 thousand euros,
revenue of 4,846 thousand euros and net income for the year of
516 thousand euros are attributable to DEKRA iST Reliability
Services Inc., Hsinchu, Taiwan.
6.14 P ensions and other post- employment benefits
IN THOUSAND EUR

Pension provisions in Germany
Pension provisions in other countries

Dec. 31, 2018

Dec. 31, 2017455,540

478,232

13,933

14,183

469,473492,415

The Group has both defined benefit and defined contributionplans for commitments for retirement, invalidity and surviving
dependants’ pensions based on works agreements and individual
contractual agreements.
These pension plans grant pension benefits, the level ofwhich depends on the length of service and eligible income. The
age limit is the respective legal retirement age for the statutory
pension insurance. The pension is paid in part directly by thecompanies that make the pension commitments and in part bya legally independent welfare fund (DEKRA Unterstützungskasse e.V., Stuttgart).
The obligations relating to the consolidated member companies are included in full in these consolidated financial statements. The benefits are partly financed internally by systematic
accumulation of provisions and partly by contribution payments to employer’s pension liability insurance. The direct andindirect commitments are defined benefit obligations for whichassets (among other things through the conclusion of employer’s pension liability insurance policies) have been set aside
within DEKRA Unterstützungskasse e.V., Stuttgart. In addition, DEKRA implemented the setting up of a Contractual
Trust Arrangement (CTA) effective October 24, 2017 to safeguard the pension obligations from these pension plans. A trust
agreement to safeguard pension entitlements was entered intowith Allianz Treuhand GmbH, Stuttgart, which acts as thetrustee in a two-tier trust arrangement (administrative trustand collateral trust). The funds transferred to fund the pension
obligations are managed in trust by Allianz Treuhand GmbH,
Stuttgart, and are earmarked for use solely for the settlementof pension obligations.

D E K R A Financial Report 2018

The company pension scheme was reorganized with effect as ofJanuary 1, 2012 (DEKRA company pension). Claims vested prior
to this date were not affected. Within the scope of the reorganization, direct commitments were made as defined contributionplans in accordance with the rules of separately concluded works
agreements. The pension plan is described as a defined contribution plan, as the amount of the benefit is derived from anddetermined by previously defined pension contributions. In
addition to the pension contribution paid by the employer,
employees can increase this amount by converting salary components (deferred compensation).
The employer’s pension liability insurance and assets of
DEKRA Unterstützungskasse e.V., Stuttgart, and the legally separate funds of the CTA are treated as plan assets in accordancewith IAS 19.113. DEKRA Unterstützungskasse e.V., Stuttgart,has an advisory board which is regularly informed about thesituation of the assets in the fund.
In the reporting year, the DEKRA Group transferred partof the pension commitments to its employees from DEKRA
Unterstützungskasse e.V., Stuttgart, to the DEKRA company
pension with the aim of bundling existing pension plan components into one pension fund. This did not affect existing vested
claims. To finance the transfer, employer’s pension liability
insurance policies were taken out with Allianz Lebensversicherungs-AG, Stuttgart in the reporting year, in return for paying one-off premiums of 41,353 thousand euros, which were classified as covering assets. In the future, only retirement benefits
from the DEKRA company pension will therefore be granted forthese employees.

67

The pension provisions in other countries mainly relate to pension plans and one-off termination benefits when employees
commence retirement.
The defined benefit obligations are generally calculated
annually by independent actuaries using the projected unit
credit method. The 2018 G mortality tables (prior year: 2005 G)
of Prof. Dr. Klaus Heubeck are used for the German pension
obligations while generally accepted mortality tables are used
for the foreign obligations.
At some foreign entities, there are multi-employer plansfor defined benefit plans. The volume of these plans is immaterial
for the DEKRA Group.
Apart from the general interest, inflation, longevity andjurisdiction risks, there are no particular company-specific risks
for the existing plans. The longevity risk is taken into consideration by using mortality tables when calculating the obligation.
In particular, the mortality tables take into account the expected
continued increase in life expectancy by means of appropriate
assumptions. When calculating the obligation, the inflation risk
is adequately taken into account at 1.75 % p.a. using a long-term
approach and according to information currently available. It
also has an effect on the review of current pensions. No employment-law related risks due to Supreme Court rulings that could
affect the plans are currently known.

D E K R A Financial Report 2018

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C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S

Notes

Notes

69

Defined benefit plans

Details of the carrying amount posted to the statement of financial position for provisions for pensions and similar obligations
are as follows:
IN THOUSAND EUR

Benefitobligation

Plan assets (–)

Total

As of Jan. 1, 2018

981,963–489,548

492,415

Current service cost

20,340020,340

562

0

562

Net interest cost (standard interest)

16,556–8,212

8,344

Net pension cost according to the income statement

37,458–8,212

29,246

Actual return on plan assets less “net interest cost”

0

6,300

6,300

IN THOUSAND EUR

Benefitobligation

Plan assets (–)

Total

As of Jan. 1, 2017

970,221–341,152

629,069

Current service cost

20,7790

20,779

Past service cost

Past service cost/plan curtailment

854

0

854

Net interest cost (standard interest)

16,356–5,704

10,652

Net pension cost

37,989–5,70432,2850–1,101–1,101

Actuarial gain/loss from changes in demographic assumptions

11,167

0

11,167

1,195

0

1,195

Actuarial gain/loss from changes in assumptions based on experience

4,346

4,828

9,174

0

0

0

778

0

778

–6,8480–6,848

889

0

889

Remeasurement of defined benefit pension plans–4,764–1,101–5,865

Benefits paid

–27,294

14,796–12,498

521

–374

147

0

0

0

Employer contributions

0–66,981–66,981

Employer contributions–402–150,189–150,591

Employee contributions

5,931–5,401

530

Employee contributions

6,185–6,1850–23,084–56,922–80,006–21,511–141,578–163,089

–30

–11

–41

28

–13

15

1,013,059–543,586

469,473

As of Dec. 31, 2017

981,963–489,548

492,415

thereof funded

932,247

thereof unfunded

49,716

Actual return on plan assets less “net interest cost”
Actuarial gain/loss from changes in demographic assumptions
Actuarial gain/loss from changes in assumptions based on experience
Actuarial gain/loss from changes in financial assumptions
Change from asset ceiling unless contained in net interest expense

Plan settlements

Total payments
Changes in the consolidated group

Actuarial gain/loss from changes in financial assumptions
Change from asset ceiling unless contained in net interest expense
Remeasurement of defined benefit pension plans
Benefits paid
Plan settlements

Total payments
Changes in the consolidated group
As of Dec. 31, 2018

D E K R A Financial Report 2018

461

–21

440

16,752

11,107

27,859–29,536

15,834–13,702

thereof funded

962,225

thereof unfunded

50,834

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Notes

Notes

Plan settlements are attributable to the settlement of obligations
due to the termination of employment relationships.
The weighted average term of the remainder of benefit obligations is 14.26 years (prior year: 15.31 years).
The expected future pension payments for the coming fivefiscal years are as follows:
IN THOUSAND EUR

Expected pension
benefit payments

2019

2020

2021

2022

Key parameters

Sensitivit y analysis

When calculating the benefit obligation according to the projected unit credit method, the following key parameters apply
for the DEKRA Group:

The table below shows the effects on the benefit obligation as aresult of any change in the parameters. The analysis relates toparameters where a change was considered possible as of thereporting date. Any correlation between the parameters was nottaken into account in the calculation.

IN %

2023

Interest rate
33,09934,66136,146

37,84638,503The benefit obligation in proportion to plan assets reflects thefunded status of the benefit plan in question, with any excess ofthe benefit obligation over plan assets constituting a plan deficit.
Both the benefit obligation and plan assets can vary over time,leading to an increase/decrease in the plan deficit. Reasons forsuch fluctuation can include changes in market interest rates
and thus in the discount rate, or adjustments to actuarial
assumptions.
The DEKRA Group’s plan assets mostly comprise employer’s pension liability insurance policies and are subject to only
limited fluctuation on account of the existing minimum returns.
The CTA was primarily funded by the contribution of specialized funds and cash and cash equivalents. In principle, the separate trust assets of the CTA are subject to the same risks asdirect capital investments. We refer in this respect to our explanations in note 10. The recognized plan deficit is mostly coveredby cash flow from operating activities.
It is the long-term goal of the DEKRA Group to gradually
increase plan assets in order to cover the deficit.

GERMANYOTHER COUNTRIES

Dec. 31, 2018

Dec. 31, 2017

Dec. 31, 2018

Dec. 31, 2017

1.75

1.75

1.67

1.18

Changes inassumptions

Increase inassumption

Decrease inassumption

6.6 %increase

Increase insalaries

2.00

2.00

1.00

1.00

Interest rate

0.5 %

5.9 %
decrease

Increase inpensions

1.75

1.75

1.50

1.50

Increase insalaries

0.5 %

0.1 %
increase

0.1 %decrease

Increase inpensions

0.5 %

5.6 %
increase

5.1 %decrease

Employeeturnover

0. 5%

0. 1%
decrease

0. 1%
increase

One year

4. 5%
increase

4.6 %decrease

The figures given are averages weighted with the present valueof the benefit obligation in question. The obligations in othercountries, which are determined taking into account country-specific measurement bases and parameters, are immaterial.
German pension commitments are partly financed
through DEKRA Unterstützungskasse e.V., Stuttgart. The assetsof DEKRA Unterstützungskasse e.V., Stuttgart, met the criteria
necessary to qualify as plan assets in accordance with IAS 19.
For individual entities, pension commitments are financed
through payments to an insurance company. The resulting plan
assets include qualifying insurance policies only.

Age

Defined contribution plans

Part of the pension costs relating to the majority of employees,
especially in Germany, is the statutory pension. For several German and foreign entities, there are voluntary defined contribution plans for post-employment benefits. Expenses related todefined contribution plans, including pension insurance contributions, amounted to 108.9 million euros in the reporting year
(prior year: 101.4 million euros). The future amount of these
expenses essentially depends on the development of the underlying pension insurance systems.

The fair value of plan assets breaks down as follows by asset class:Dec. 31,2017

thereofmarket pricequoted onan active
marketDec. 31,2018

Employer’s
pension liability insurance

360,179

0297,245

0Securities

175,5170

178,542

0

7,890

0

13,761

0543,586

0489,548

0

Other

D E K R A Financial Report 2018

The employer contributions to plan assets are expected to amountto 12.6 million euros in the next fiscal year (prior year: 11.1 million euros). In addition, it was decided in the prior year that theGroup would contribute an additional 60.0 million to 65.0 million euros to finance plan assets with a view to reducing the existing deficit further. In this regard, 41.4 million euros was paid infiscal year 2018 in connection with transferring the vested benefit claims to the employer’s pension liability insurance.

Plan assets

IN THOUSAND
EUR

thereofmarket pricequoted onan active
market71

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Notes

Notes

73

6.15 Non - current and current provisions
IN THOUSAND EUR

IN THOUSAND EUR

As ofJan. 1, 2018

Allocation

Additions tothe consolidated group

Utilization

Reversal

Reclassi­
fications

As ofDec. 31, 2018

As ofJan. 1, 2017

Allocation

Additions tothe consolidated group

Utilization

Reversal

Reclassi­
fications

As ofDec. 31, 2017

Non-current provisions

Non-current provisions

Other personnel provisions

4,835

1,347

0

–937

–602

0

4,644

Other personnel provisions

5.194

1.664

0

–1.086

–343

–594

4.835

Phased retirement

216

17

0

–36

0

0

197

Phased retirement

177

747

0

–114

0

–594

216

thereof from phased
retirement obligation

1,505

264

0

–169

0

0

1,600

thereof from phased
retirement obligation

1.488

298

0

–281

0

0

1.505

thereof from phased
retirement plan assets–1,289

–247

0

133

0

0

–1,403

thereof from phased
retirement plan assets–1.311

449

0

167

0

–594

–1.289Long-service award

3,377

405

0

–258

0

–836

2,688

Long-service award

3.279

783

0

–685

0

0

3.377

Sundry other personnel
provisions

1,243

925

0

–643

–602

836

1,759

Sundry other personnel
provisions

1.738

134

0

–287

–343

0

1.243

Other non-personnel provisions

14,0183,019

3–1,042–827–40

15,131Other non-personnel provisions

13.527

1.958

0

–756

–711

0

14.018Warranty provisions

6,057

1,040

0

0

0

0

7,097

Warranty provisions

0

459

0

0

0

5.598

6.057

Litigation, warranty andsimilar obligation provisions

5,513

1,696

0

–682

–800

0

5,727

Litigation, warranty andsimilar obligation provisions

144

1.316

0

–725

–622

5.400

5.513

Other provisions

2,448

283

3

–360

–27

–40

2,307

Other provisions

13.383

183

0

–31

–89

–10.998

2.448

18,8534,366

3–1,979–1,429–40

19,77518.7213.622

0–1.842–1.054–594

18.853

Other personnel provisions

4.471

2.825

0

–2.988–564–1.397

2.347

Restructuring provision

1.108

–5

0

–886

–217

0

0

15.4246.138

0–3.234–1.2181.445

18.555

364

128

0

–296

0

0

196

1.449

944

0

–636

–440

0

1.317

46

1.810

0

–30

–576

2.798

4.048

13.5653.256

0–2.272–202–1.35312.99421.0038.958

0–7.108–1.99948

20.902Current provisions

Current provisions

Other personnel provisions
Restructuring provision
Other non-personnel provisions
Other restructuring
Potential losses

2,347

3,700

0

–2,999

–702

–164

2,182

0

0

0

0

0

0

0

17,723

4,998

468–3,926–5,089–693

13,481

196

133

0

–172

0

0

157

1,317

364

0

–452

–38

0

1,191

Potential losses

Other non-personnel provisions
Other restructuring

Litigation, warranty andsimilar obligation provisions

4,048

1,529

0

–254

–622

299

5,000

Litigation, warranty andsimilar obligation provisions

Other provisions *12,162

2,972

468–3,048–4,429

–992

7,133

Other provisions)

20,0708,698

468– 6,925*) T he opening balance was reduced by the effect of first-time application of IFRS 15 of 832 thousand euros. Refer to note 6.8.

D E K R A Financial Report 2018

–5,791–857

15,663In France, there are non-current obligations relating to warranties of 12,746 thousand euros (prior year: 11,403 thousand euros),
the risks of which exceed the insurance cover. There are also
long-term obligations based on country-specific dues. As in theprior year, non-current provisions do not include significant
effects of unwinding the discount.

The provisions cover all identifiable obligations to third parties
in accordance with IAS 37. They are recognized in the amountthat will probably be required.

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Notes

Notes

6.16 Non - current and current financial liabilities
Non - current financial liabilities
IN THOUSAND EUR

Dec. 31, 2018

Dec. 31, 2017

Liabilities to banks

261,739

228,159

125

105

1,521

2,275

0

41

Derivative financial instruments
Lease liabilities
Other financial liabilities
Liabilities from businesscombinations

1,719

1,616

265,104

232,196

Current financial liabilities
IN THOUSAND EUR

Dec. 31, 2018

Dec. 31, 2017

Liabilities to banks

132,593

65,439Profit participation rights

14,197

14,883Financial liabilities to affiliates

23,622

26,350Financial liabilities to associates

1,059

921

Financial liabilities to investees
and investors

92

0

Derivative financial instruments

0

465

1,180

1,219

Liabilities from businesscombinations

19,43819,916

Liabilities to employees

30,10433,049Lease liabilities

Other financial liabilities

The overall increase in liabilities to banks of 100,734 thousand euros is mainly due to borrowing non-current and current
loans. This is counterbalanced by the repayment of promissory
notes that fall due in the fourth quarter of the fiscal year.
Financial liabilities to affiliates include liabilities from the
cash pool, income tax and VAT as well as other cost allocations,some of which were netted with receivables from affiliates. The
decrease of 2,728 thousand euros is mainly due to lower trade
payables.
The decrease in current liabilities to employees by
2,945 thousand euros is mainly cut-off related.
The decrease in other financial liabilities by 4,637 thousand euros is primarily attributable to the decrease in liabilities
to DEKRA Unterstützungskasse e.V.
DEKRA SE granted its managers and employees the optionof subscribing to profit participation rights of up to 10,737 thousand euros (4.2 million profit participation rights at
2.55645 euros each). Of this total, 2,700,281 (prior year:
2,825,536) profit participation rights were subscribed. The subscribed participation capital ensures participation in the adjusted
consolidated earnings of DEKRA SE with a minimum return of
4 % p.a. and a maximum return of 30 % p.a. Subscribed profit
participation rights can be terminated unilaterally by the recipient at short notice at any time.

Contract liabilities include prepayments received from customers for uncompleted services. Prepayments are generally current.
Prepayments received were recognized under other current liabilities in the prior year. The changes in recognition as a resultof the first-time application of IFRS 15 are presented in note 6.8.
DEKRA receives payments from customers based on a settlement schedule that is an integral part of the contracts. Contract assets relate to the conditional right to consideration for
the full satisfaction of the contractual obligations. Receivables
are recognized as soon as DEKRA fulfills its contractual obligations. Contract liabilities relate to payments that are received
prematurely, i.e., before the contractual obligations have beensatisfied. Contract liabilities are recognized as income as soon
as the contractual service has been rendered. In fiscal year 2018,
revenue included in contract liabilities as of January 1, 2018 wasrecognized as follows:
IN THOUSAND EUR

2018

Revenue recognized in the fiscal year:
Amounts recognized in the contract liability
at the beginning of the period

34,695

Performance obligations satisfied in previous
periods

1,110

35,805

Other current liabilities break down as follows:
Dec. 31, 2018

Dec. 31, 2017

205,898

198,458

0

14,997

Other liabilities for taxes

56,92953,966

Prepayments received fromloss adjustments

6,867

6,717

IN THOUSAND EUR

Personnel-related liabilities
Deferred revenue

Prepayments received

0

31,114Social security

37,96436,721

Sundry other

20,342

20,512

328,000

362,485

Personnel-related liabilities chiefly relate to outstanding variablesalary components and accrued vacation.
Liabilities from taxes principally relate to VAT and wage tax.
On account of the first-time application of IFRS 15 as ofJanuary 1, 2018, deferred revenue and billings in excess of costs
on uncompleted contracts are no longer recognized under othercurrent liabilities. The changes in recognition due to IFRS 15 arepresented in note 6.8.
The liabilities are carried at fair value.

6.17 Trade payables and contract liabilities

In the fiscal year, trade payables and contract liabilities come tothe following amounts:
IN THOUSAND EUR

Dec. 31, 2018

Dec. 31, 201716,03020,626

Trade payables

93,767

98,350238,315

182,868

Contract liabilities

46,8520140,619

98,350D E K R A Financial Report 201875

6.18 Other non - current and current liabilities

Other non-current non-financial liabilities primarily include liabilities to the pension guarantee association and security deposits received.

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Notes

Notes

STATEMENT OF CASH FLOWS

The statement of cash flows shows how the cash and cash equivalents changed in the course of the reporting year as a result ofcash inflows and outflows. In accordance with IAS 7, a distinction is made between cash flows from operating, investing andfinancing activities. Cash flows from operating activities are
determined indirectly while cash flows from investing andfinancing activities are determined directly.
The composition of cash and cash equivalents matches thenet cash and cash equivalents disclosed in the statement of financial position as of the reporting date prior to the considerationof credit losses pursuant to IFRS 9. Cash and cash equivalents
are not subject to any restrictions.
The cash flow from investing activities includes the following payments from the acquisition and disposal of fully consolidated subsidiaries:
Dec. 31, 2018

Dec. 31, 2017

Total purchase/sale price–33,951–38,017

thereof settled in cash

–33,951–38,017

0

0

2,021

2,603

Non-current assets

29,83547,808Current assets

5,032

4,404

180

11,707

2,418

4,702

IN THOUSAND EUR

thereof not yet settled/received
Amount of cash and cash equivalents acquired/disposed of

The cash flow from investing activities takes account of purchase price liabilities from the acquisition of fully consolidated
subsidiaries from prior years amounting to 2,754 thousand euros. Payments were not higher than the liabilities recognized in prior years.
In addition, the cash flow from investing activities comprises purchase price payments of 4,541 thousand euros (prioryear: 15,911 thousand euros) for further subsidiaries and otherunits. These acquisitions did not result in any liabilities due tovariable purchase price components (prior year: 2,062 thousand euros).
The carrying amount of the receivables acquired approximates the fair value.

The development of liabilities stemming from financing activities is as follows.
Carrying
amountDec. 31, 2017

CashchangesNon-current loans

228,159

Current loans

IN THOUSAND EUR

Derivative financial instruments
Lease liabilities
Total liabilities from financing activities

Non-cash changes

Current liabilities

D E K R A Financial Report 2018

Carrying
amountDec. 31, 2018

Exchange
rate effects

Business
combinations

Change infair value

Otherchanges

1,443

615

0

0

31,522

261,739

65,43995,501

1,104

0

0

–29,451

132,593

570

0

0

0

–444

–1

125

3,494

–1,380

10

92

0

485

2,701

297,662

95,564

1,729

92

–444

2,555

397,158

Amount of assets and liabilities
acquired/disposed of

Non-current liabilities

77

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Notes

Notes

Finance lease

OTHER DISCLOSURES IN THE NOTES

8.1 Other financial obligations

Dec. 31, 2018

Liabilityfrom leaseobligations

Rental and lease obligationsin the current year

1,411

–

thereof interest portion

31–

IN THOUSAND EUR

The following rental and lease obligations from operating leases
relate primarily to obligations from property and vehicle leases.
Operating lease
IN THOUSAND EUR

Dec. 31, 2018

Dec. 31, 2017

Rental and lease obligationsin the current year

124,187

123,316

Residual term of less than 1 year

108,720

108,595

Residual term of 1 to 5 years

217,158

181,322

Residual term of more than 5 years

62,02866,321

Total obligations for future years

387,906

356,238

Residual term of less than 1 year

1,189

1,180

Residual term of 1 to 5 years

1,568

1,521

0

0

2,757

2,701

Residual term of more than 5 years
Total obligations for future years

9

CAPITAL M ANAGEMENTDEKRA pursues the goal of sustainably increasing equity. The
aim is to maintain an appropriate debt-to-equity ratio while
improving the EBIT margin. Equity was strengthened in thefiscal year by a contribution to the capital reserves of 10.0 million euros as well as an increase in the revenue reserves of
92.7 million euros. Differences from the currency translation of
the financial statements prepared in foreign currency by consolidated subsidiaries had a negative effect of 6.1 million euros onequity. The DEKRA Group’s equity ratio stood at 33.0 % (prioryear: 30.4 %) as of the end of the reporting period.
10 FI N A N C I A L M A N AG E M E N T

8.2 C ontingent liabilities, other contingencies
and collateral provided

Finance lease
IN THOUSAND EUR

The rental and lease obligations of the current year contain contingent lease payments of 762 thousand euros (prior year:
144 thousand euros). Property leases generally have residual
terms of up to ten to 15 years. Subleases result in lease income of
5,474 thousand euros (prior year: 4,157 thousand euros).

The difference between the total obligations for future years andthe lease liabilities recognized is the present value difference. The
assets recognized on the basis of the existing finance leases
amount to 3,953 thousand euros (prior year: 4,324 thousand euros). Of this total, an amount of 1,791 thousand euros is
attributable to land and buildings and 2,162 thousand euros toother plant and equipment. The leases contain purchase options.
No restrictions were imposed under the terms of these leases.
In 2018, the Group reported other financial obligations
including purchase commitments of 32,122 thousand euros(prior year: 47,388 thousand euros). These are mainly attributable to agreements concluded on commissioned construction projects as well as to long-term framework agreements.

79

Rental and lease obligationsin the current year

Dec. 31, 2017

Liabilityfrom leaseobligations

1,076

–

thereof interest portion

184–

Residual term of less than 1 year

1,224

1,219

Residual term of 1 to 5 years

2,306

2,275

0

0

3,530

3,494

Residual term of more than 5 years
Total obligations for future years

D E K R A Financial Report 2018

As in the prior year, there are no significant bank guarantees orcontingencies. Collateral and warranties of 825 thousand euros(prior year: 1,218 thousand euros) have been issued. The risk ofutilization is currently deemed to be low.
The DEKRA Group is not involved in any court proceedings that could have a significant influence on its economic or
financial situation.
8.3 Government grants

Government grants of 3,339 thousand euros (prior year:
2,608 thousand euros) were received in the past fiscal year. Mostof these relate to personnel-related grants.

The Group’s financial management includes cash and liquidity
management as well as the management of market price risks(interest, currency) and credit risks.
Cash management determines the required or surplus cash
for all DEKRA entities. Timely account management ensuresthat the necessary funds for payments are available where they
are needed, with the aim of keeping external investment andborrowing to a minimum.
Liquidity management ensures all payment obligations of
the entities in the DEKRA Group are always met. To this end,
the liquidity planning determines cash flows from operating
activities, secures foreseeable liquidity requirements at an earlystage and invests surplus liquidity on the money market.

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Notes

Notes

Market price risk management is responsible for limiting theimpact of interest rate and currency fluctuations on the Group’s
earnings. For this purpose, the market price risks are determined and used as a basis for hedging decisions. Such decisions
include the selection of hedging instruments, the volume to behedged and the period to be covered. DEKRA used derivative
financial instruments in the fiscal year to hedge variable-rate
finance arrangements.
The risk volume involved in the management of default
risk includes securities investments and the investment of cash
and cash equivalents in financial institutions as part of liquidity
management, as well as the credit risk relating to end customers
due to the granting and systematic monitoring of payment terms
from trade.
Short-term investments of cash and cash equivalents are
only made with top-rated financial institutions and on the basisof current ratings of rating agencies as well as taking into
account current CDS spreads. We use commercial credit agencies to assess the creditworthiness of our customers and in casesof doubt, upfront payment or bank guarantees are required.

Financial instruments

Since January 1, 2018, the application of IFRS 9 is mandatory forthe accounting of financial instruments. IFRS 9 requires financial assets and liabilities to be classified in one of the following
categories:a) F inancial assets at amortized costb) Financial assets at fair value through other comprehensive
incomec) F inancial assets at fair value through profit or lossdF inancial liabilities at amortized coste) Financial liabilities at fair value through profit or lossf) Derivative financial instruments designated as hedging
instruments
Until December 31, 2017, IAS 39 had to be applied for theaccounting of financial instruments. IAS 39 required financial
assets and liabilities to be classified under one of the following
categories:a) F inancial assets at fair value through profit or lossb) Loans issued and receivables at amortized costc) Held-to-maturity investmentsd) A vailable-for-sale assets at fair value not through profit
or losse) Financial liabilities at fair value through profit or lossf) Financial liabilities at amortized cost

The following table shows the net gains/losses for each category:
IN THOUSAND EUR

Dec. 31, 2018

Dec. 31, 2017

Financial assets at fair value
through profit or loss

1,200

0

Financial assets at amortized cost *)–2,228439

Financial assets at fair value throughother comprehensive income

258

0

Available-for-sale assets at fairvalue not through profit or loss

0

7,423

Financial liabilities at fair value
through profit or loss

–2,328–1,621–7,497–4,971–10,595

1,270

Financial liabilities at amortized cost*) Prior year: Loans issued and receivables at amortized cost

Net gains and losses mainly comprise interest expenses, interest
income, dividends, increases and impairments in value andimpairment losses as well as gains or losses on disposal. The
increase in net losses for financial assets at amortized cost primarily results from higher expenses incurred for the allocation
to specific bad debt allowances. The derecognition of assets
accounted for at amortized cost led to the recognition of lossesof 794 thousand euros.

The net gains from assets at fair value through other comprehensive income mainly result from dividend-equivalent distributions.
Income from assets at fair value through profit or loss is
attributable to income from changes in market value and distributions.
The expense from financial liabilities at fair value throughprofit or loss stems from the increase in liabilities from put
options.
The revaluation surplus for equity instruments at fair value
through other comprehensive income increased on account ofgains and losses arising from changes in fair value amounting
to 20.4 million euros (effect from first-time application of IFRS
9: increase of 17.3 million euros) which were reported in othercomprehensive income. The measurement of the derivative
financial instruments before tax effects through other comprehensive income increased the reserve for hedging instruments
by 0.4 million euros to –0.2 million euros (prior year: –0.6 million euros). In the prior year, this item also included effects fromthe remeasurement of available-for-sale securities of –4.5 million euros. Deferred taxes of –0.1 million euros (prior year: a
total of 1.2 million euros) had the opposite effect.
The two tables below show the original measurement categories and carrying amounts of the financial assets and liabilities pursuant to IAS 39 as well as the new measurement categories and carrying amounts of these financial assets and liabilities
pursuant to IFRS 9. The tables also contain a reconciliation of
the carrying amounts of the financial assets and liabilities pursuant to IAS 39 as of December 31, 2017 with the carrying
amounts pursuant to IFRS 9 as of January 1, 2018.

* Arbeitnehmerseite

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Notes

Notes

IN THOUSAND EUR

IN THOUSAND EUR

Measurement
category
pursuant to
IAS 39Measurement
category
pursuant to
IFRS 9Carrying
amount pursuant to IAS 39
Dec. 31, 2017

Effect from thetransition

Carrying
amount pursuant to IFRS 9
Jan. 1, 2018

Measurement
category
pursuant to
IAS 39Measurement
category
pursuant to
IFRS 9Carrying
amount pursuant to IAS 39
Dec. 31, 2017

Effect from thetransition

Derivative financial instruments designated as hedging
instruments

n/a

n/a

105

0

105

Liabilities from business combinations

FVPL

FVPL

1,616

0

1,616

Financial liabilities

ACAC

228,159

0228,159

Finance lease liabilities *)

n/a

n/a

2,275

0

2,275

Other non-current liabilities

AC

AC

41

0

41

232,1960232,196

AssetsEquity and liabilities

Non-current assets

Non-current liabilities

Shares in affiliates and investees

AfS

FVOCI

27,175

17,32844,503

LaR/AfS

FVPL

5,349

0

5,349

Loans

LaR

AC

23,526–14

23,512Other financial assets

LaR

AC

4,204

–4

4,200

60,254

17,31077,564

Securities

83

Current assets

Carrying
amount pursuant to IFRS 9
Jan. 1, 2018

Current liabilities

Trade receivables including contract assets(prior year: percentage of completion)

LaR

AC

526,577–3,229523,348

Trade payables

ACAC

98,350098,350Cash and cash equivalents

LaR

AC

76,442–37

76,405

Profit participation rights

ACAC

14,8830

14,883

LaR/AfS

FVPL

503

0

503

Receivables from affiliates and investees

LaR

AC

108,737–2

108,735

Derivative financial instruments designated as hedging
instruments

n/a

n/a

465

0

465

Other financial assets

LaR

AC

64,073–310

63,763Liabilities from business combinations

FVPL

FVPL

19,916

0

19,916776,332–3,578772,754

Financial liabilities

ACAC

65,439065,439Liabilities to affiliates

ACAC

26,350026,350Liabilities to associates

AC

AC

921

0

921

Other current liabilities

ACAC

53,675053,675

Finance lease liabilities*

AC

AC

1,219

0

1,219

281,2180281,218

513,4140513,414

Securities

836,586

13,732

850,318

AC: Financial assets at amortized cost
AfS: Available-for-sale assets at fair value not through profit or loss
FVOCI: Financial assets at fair value not through profit or loss
FVPL: Financial assets at fair value through profit or loss
LaR: Loans issued and receivables at amortized cost*) Measured in accordance with IAS 17.
AC: Financial liabilities at amortized cost
FVPL: Financial liabilities at fair value through profit or loss

The transition effect of the shares in affiliates and investees of 17,328 thousand euros is due to the fair value remeasurement pursuant to IFRS 9. The other transition effects are due to the first-time application of the impairment requirements in IFRS 9.

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Notes

Notes

85

The following tables show a breakdown of line items into categories and classes and the allocation of financial assets and liabilities atfair value in the statement of financial position to the fair value hierarchy:
IN THOUSAND EUR

IN THOUSAND EUR

Carrying
amountDec. 31, 2018

Financialassets at
amortized
cost

Financialassets atfair value
not throughprofit or
loss

Financialassets atfair value
through
profit or
loss

Fair
value

thereoffair valuelevel 1

thereoffair valuelevel 2

thereoffair valuelevel 3

AssetsEquity and liabilities

Non-current assets

Non-current liabilities

Shares in affiliates and investees

52,811052,811052,8110052,811

Securities

6,942

0

0

6,942

6,942

819

6,123

0

Loans

10,81910,819

0

0

n/a

n/a

n/a

n/a

Other financial assets

6,575

6,575

0

0

n/a

n/a

n/a

n/a

77,147

17,394

52,811

6,942

59,753819

6,123

52,811

Derivative financial instruments designatedas hedging instruments
Liabilities from business combinations
Financial liabilities
Finance lease liabilities
Other non-current liabilities

Carrying
amountDec. 31,2018

Financialliabilities atfair value
not throughprofit or
loss

Financialliabilities atfair value
through
profit or
loss

Financialliabilities atamortized
cost

Fair
value

thereoffair valuelevel 1

thereoffair valuelevel 2

thereoffair valuelevel 3

125

125

0

0

125

0

125

0

1,719

0

1,719

0

1,719

0

0

1,719

261,73900261,739

n/a

n/a

n/a

n/a

1,521

0

0

1,521 *)

n/a

n/a

n/a

n/a

0

0

0

0

n/a

n/a

n/a

n/a

265,104

125

1,719

263,260

1,844

0

125

1,719

Current assets

Current liabilities

Trade receivables including
contract assets (prior year:
percentage of completion)

Trade payables including contract assets

140,61900140,619

n/a

n/a

n/a

n/a

568,556

568,556

0

0

n/a

n/a

n/a

n/a

Profit participation rights

14,19700

14,197

n/a

n/a

n/a

n/a

Cash and cash equivalents

78,45078,450

0

0

n/a

n/a

n/a

n/a

Securities

171

0

0

171

171

171

0

0

Receivables from affiliates and investees

99,60999,609

0

0

n/a

n/a

n/a

n/a

Other financial assets

85,626

85,626

0

0

n/a

n/a

n/a

n/a

832,412832,241

0

171

171

171

0

0

909,559

849,635

52,811

7,113

59,924990

6,123

Liabilities from business combinations

19,4380

19,4380

19,4380019,438Financial liabilities

132,59300132,593

n/a

n/a

n/a

n/a

Liabilities to affiliates

23,6220023,622

n/a

n/a

n/a

n/a

Liabilities to associates

1,059

0

0

1,059

n/a

n/a

n/a

n/a

Liabilities to other investees and investors

92

0

0

92

n/a

n/a

n/a

n/a

Other current liabilities

46,1340046,134

n/a

n/a

n/a

n/a

Finance lease liabilities

1,180

0

0

1,180 *)

n/a

n/a

n/a

n/a

378,934

0

19,438359,496

19,4380019,438644,038

125

21,157622,756

21,2820

125

21,15752,811*) Measured in accordance with IAS 17.

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Notes

Notes

IN THOUSAND EUR

IN THOUSAND EUR

Carrying
amountDec. 31, 2017

Loans issued
and receivables atamortized
cost

Availablefor-saleassets atfair value
not throughprofitor loss

Fair value

thereoffair valuelevel 1

thereoffair valuelevel 2

thereoffair valuelevel 3

AssetsCarrying
amountDec. 31, 2017

Financialliabilities atfair value
not throughprofit or
loss

Financialliabilities atfair value
through
profit or
loss

Financialliabilities atamortized
cost

Fair
value

thereoffair valuelevel 1

thereoffair valuelevel 2

thereoffair valuelevel 3

105

105

0

0

105

0

105

0

1,616

0

1,616

0

1,616

0

0

1,616

228,15900228,159

n/a

n/a

n/a

n/a

2,275

0

41

0

232,196

Trade payables
Profit participation rights

Equity and liabilities

Non-current assets

Non-current liabilities

Shares in affiliates and investees

27,175027,175

Securities

5,349

3

5,346

5,346

861

4,485

0

Loans

23,52623,526

0

n/a

n/a

n/a

n/a

Other financial assets

4,204

4,204

0

n/a

n/a

n/a

n/a

60,25427,733

1)

n/a

n/a

n/a

n/a

32,521

5,346

861

4,485

0

Derivative financial instruments designatedas hedging instruments
Liabilities from business combinations
Financial liabilities
Finance lease liabilities

0

2,275

2)

n/a

n/a

n/a

n/a

0

41

n/a

n/a

n/a

n/a

105

1,616

230,475

1,721

0

105

1,616

98,3500098,350

n/a

n/a

n/a

n/a

14,8830014,883

n/a

n/a

n/a

n/a

465

465

0

0

465

0

465

0

Liabilities from business combinations

19,916

0

19,916

0

19,9160

0

19,916

Financial liabilities

65,4390065,439

n/a

n/a

n/a

n/a

Liabilities to affiliates

26,3500026,350

n/a

n/a

n/a

n/a

921

0

0

921

n/a

n/a

n/a

n/a

0

0

0

0

n/a

n/a

n/a

n/a

Other current liabilities

53,6750053,675n/an/aFinance lease liabilities

Other non-current liabilities

Current liabilities

Current assets

Trade receivables including
percentage of completion

526,577

526,577

0

n/a

n/a

n/a

n/a

Cash and cash equivalents

76,44276,442

0

n/a

n/a

n/a

n/a

503

343

160

160

160

0

0

Receivables from affiliates
and investees

108,737

108,737

0

n/a

n/a

n/a

n/a

Other financial assets

64,07364,073

0

n/a

n/a

n/a

n/a

776,332

776,172

160

160

160

0

0

Securities

Derivative financial instruments designatedas hedging instruments

Liabilities to associates
Liabilities to other investees and investors

836,5861)

87803,905

32,681

5,506

1,021

This contains available-for-sale assets at amortized cost of 27,175 thousand euros for which it is not possible to reliably determine a fair value.
No sale is expected. In the absence of a specific term, the non-current assets were allocated to the available-for-sale category.
The fair values would factor in future effects.

D E K R A Financial Report 2018

4,485

0
2)

n/a

n/a

2)

1,219

0

0

1,219

n/a

n/a

n/a

n/a

281,218465

19,916

260,837

20,381

0465

19,916

513,414570

21,532

491,312

22,1020570

21,532

Measured in accordance with IAS 17.

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Notes

Notes

The levels of the fair value hierarchy and their application to ourassets and liabilities are described below:
Level 1:	Market prices quoted on active markets for identicalassets or liabilities;
Level 2:	Other information than quoted market prices thatcan be directly (e.g., prices) or indirectly (e.g., derived
from prices) observed; andLevel 3:	Information relating to assets and liabilities that is notbased on observable market data.
Development of level 3 of the fair value hierarchy:
2018

2017

As of January 1

21,532

22,664

Additions

58,2702,062

Disposals–28,064–4,815

Fair value changes

22,230

1,621

As of December 31

73,96821,532

IN THOUSAND EUR

The first-time application of IFRS 9 results in a one-time addition of 44.5 million euros.
The contingent purchase price liabilities were recognizedat present value.
The non-observable input parameters of liabilities frombusiness combinations primarily include factors such as theoperating result, earnings before depreciation and amortization,
financial result and income tax or the development of the working capital of the acquired business.
As of the reporting date, there are significant purchaseprice liabilities for DEKRA New Zealand Ltd., Wellington, New
Zealand, and Core Visual Inspection Services, Inc., Austin, USA.

Assuming a change of +10 %/–10 % in the underlying parameters
regarding non-observable input factors as of the next possible
exercise date, the amount of the purchase price obligation, including put options and earn-outs, for the significant obligations frombusiness combinations would be 4 % higher or 4 % lower.
Contingent purchase price liabilities of 2,328 thousand euros were expensed through profit or loss. The amountresults from liabilities that still exist as of the reporting date.
Any future changes in value in the purchase price liabilities
will be recognized through profit or loss in subsequent periods.
Shares in affiliates and investees are measured using thediscounted cash flow method. If the interest rate used changes
by +1 %/–1 % and at the same time the cash flows change by–10 %/+10 %, the amount of shares in affiliates and investees
changes by –14.2 %/+43.6 %.
The majority of contractually agreed maturity dates forfinancial instruments at amortized cost are within twelve
months of the reporting date. As such, their carrying amounts
as of the reporting date approximately equate to their fair values.
For all items of non-current financial assets and liabilities notrecognized at fair value (except for non-current financial liabilities), the carrying amount is equal to the fair value.
For loans with longer terms, the present value largely corresponds to the carrying amount as, for the most part, variableinterest rates based on market-dependent interest rates are usedin the contractual agreements.
As regards financial liabilities, the fair value of non-current liabilities due to banks bearing a fixed interest rate is determined based on the present value of the expected future cash
flows. The discount rates are based on market interest rates withreference to the maturities. The fair value of non-current financial liabilities with a carrying amount of 265,104 thousand euros
comes to 264,992 thousand euros (level 2).

D E K R A Financial Report 201889

As of the reporting date, the contractually agreed undiscounted
financial liabilities including interest breaks down as follows:

Risks from financial instruments
Principles of financial management

The main goals of the DEKRA Group’s financial management
are to ensure solvency at all times and to limit financial risks.
Financial derivatives are only used for hedging purposes
for existing or foreseeable hedged items. This does not give riseto any additional risks for the Group. The transactions are only
carried out with marketable instruments.
Liquidit y risks

The liquidity required for operations and for implementing strategic measures is ensured through the cash and cash equivalents
held and bank loans committed in writing (working capitalcredit and acquisition lines). Cash and cash equivalents are heldin bank accounts or invested in the form of overnight money andtime deposits as well as short-term money market papers. A central cash pool has been set up at DEKRA SE for German subsidiaries as well as the increasing number of international subsidiaries from the euro zone. Cash pools have also been established
for the subsidiaries in the US (USD), in the UK (GBP) and in
Sweden (SEK).
The entities are generally financed centrally through
DEKRA SE.
In order to visualize liquidity risks, the DEKRA Groupprepares an overview of maturities for its undiscounted payment
obligations arising from financial instruments.
As of December 31, 2018, the DEKRA Group was exposed
to only a very small risk of being unable to meet its payment
obligations arising from financial instruments in the future. The
DEKRA Group requires sufficient liquidity for future acquisitions, which is ensured by the promissory notes and by longerterm loan commitments. As of December 31, 2018, there are
medium-term credit lines of 226.2 million euros granted in writing that have not yet been drawn.

D E C . 31, 2 018
IN THOUSAND EUR< 1 year

1 to 5 years> 5 years

Trade payables

93,7670

0

Financial liabilities

135,069

237,452

34,712Other financial liabilities

85,10300Derivative financial
instruments (negative)
designated as hedging
instruments

73

95

0

Finance lease liabilities

1,189

1,568

0

315,201

239,115

34,712D E C . 31, 2 017
IN THOUSAND EUR< 1 year

1 to 5 years> 5 years

Trade payables

98,3500

0Financial liabilities

68,906

137,648

99,775

Other financial liabilities

95,829410Derivative financial
instruments (negative)
designated as hedging
instruments

536

168

0

Finance lease liabilities

1,224

2,306

0

264,845

140,163

99,775We also refer to our explanations on the contingent liabilities innote 8.2, which have an unlimited term.

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Notes

Notes

In addition to liabilities from promissory notes, the liabilities tobanks mostly include short- and medium-term utilization of
credit lines as well as investment financing of foreign subsidiaries.
Credit risk (default risk)

In the course of its operations, DEKRA is exposed to the risk ofdefault on outstanding receivables. The DEKRA Group counters
this risk with timely receivables management, which entails theregular monitoring of outstanding items as well as timely dunning and collection of receivables. Potential defaults are accounted
for using specific bad debt allowances and portfolio-based bad
debt allowances. The maximum default risk is the carrying
amount of the receivables as of the reporting date. There were no
significant risk concentrations as of the reporting date.
DEKRA is also exposed to default risk in relation to cash
investments. In order to minimize these risks as far as possible,
we restrict our cash deposits to counterparties with first-classcredit ratings subject to defined counterparty limits. In addition,
there is a limit on the proportion of the entire investment volume
that may be invested with any one counterparty. Investments insecurities are only made with investment grade institutions.
The maximum risk of counterparty default is calculated inaccordance with the carrying amounts of the financial assets as
an equivalent for the maximum default risk. As of December 31,
2018, therefore, the DEKRA Group was exposed to the theoretical maximum possible risk of counterparty default apparent
from the table above for the breakdown of carrying amounts ofthe financial instruments.
No collateral is pledged by the counterparties for the financial instruments held. As of December 31, 2018, with the exception of trade receivables and loans, no material financial assets
were overdue or affected by amendments to contracts.

Interest rate risks

In the course of our investing and financing activities, we areexposed to interest rate risks. For borrowings, such risks are
generally managed using interest rate derivatives in definedinterest rate hedge ranges. In relation to investing, interest rate
fluctuations result in changes in the fair values of fixed income
securities. For bonds most (and for shares all) long-term investments are made via funds. In order to manage price risks forthese investment items, financial derivatives are recognized by
the fund management by way of a hedge as necessary.
The risk for the statement of comprehensive income ismeasured in the DEKRA Group using a sensitivity analysis. This
analysis tests for the impact on interest income or interest
expense of a shift in the term structure of interest rates by 100
base points.
An upward shift of 100 base points would result in an
increase in the interest result of 838 thousand euros (prior year:
1,282 thousand euros). A downward shift of 100 base points
would result in a decrease in the interest result of 838 thousand euros (prior year: 1,280 thousand euros).
An upward shift of 100 base points would result in an
increase in the fair value of hedging instruments reported inequity of 221 thousand euros not taking tax effects into consideration. A downward shift of 100 base points would result in adecrease in the fair value reported in equity of 228 thousand euros before deferred taxes.
Interest derivatives were concluded to hedge the interest
risk for material variable-interest loans and reported as hedging
transactions as defined by IFRS 9.
Cash flow hedges for variable - interest loans

In order to hedge the interest risk of the promissory note loans,interest derivatives (interest rate swaps) were concluded in priorfiscal years, thus largely fixing the interest expense on the loans.
The regulations on cash flow hedge accounting wereapplied for derivatives with a nominal volume of 14.0 million euros and for hedging underlying transactions with a nominal volume of 48.5 million euros. This resulted in a hedge ratioof 29 %.

D E K R A Financial Report 2018

Residual term Dec. 31, 2018
< 1 year

1-2 years

2-3 years

3-4 years00

10,000

4,000

n/a

n/a

0.8 %

1.3 %

Nominal amount
IN THOUSAND EUR
Average hedged
interest rate

The hedging instruments DEKRA designated in hedges have thefollowing effects on the consolidated statement of financial position as of December 31, 2018:
IN THOUSAND EUR

Derivative financial
instruments designated as hedging
instruments

Nominalvalue

14,000Carrying
amount125

Item in the
consolidated
statementof financial
position

Non-current
financialliabilities

Changes infair value
in the reporting period21

The fair value of the derivative financial instruments, which areinterest rate hedges, is determined using the mark-to-market
method. This involves using the discounted cash flow method
and customary market interest rates.
Interest swaps are recognized at fair value. The effective portion of the changes in the fair value of the interest swap determined as a cash flow hedge is recognized in equity; the ineffective
portion of the changes in the fair value is recognized throughprofit or loss. The cash flow hedges for the variable-interest portions of the loans did not lead to any ineffective hedges in the fiscal year to be recognized in profit or loss. The payments received
and made from these interest swaps were netted in the interest
expense and are thus a component of the interest result. Interest
expense of 509 thousand euros was recorded in the fiscal year.

91

exclusively in their local currency. In connection with investments and intragroup transactions, liabilities occasionally arise
in foreign currencies, for which hedging is decided on a case-bycase basis.
A 10 % change in the rate of the euro against the Swedishkrona, the Brazilian real and the US dollar would affect the result
from the translation of short-term and long-term loans to affiliates by approximately 4.9 million euros not taking tax effects
into consideration. Decisions on necessary currency hedges aretaken on a case-by-case basis. No material effects are expectedfrom currency fluctuations for the other financial assets or liabilities. Group revenue includes revenue of 560.3 million euros(prior year: 538.8 million euros) that was not recorded in a eurozone country.
Other price risks

As part of the presentation of market risks, IFRS 7 also requires
disclosures on how hypothetical changes in risk variables affectprices of financial instruments. Possible risk variables include inparticular stock market prices or indices. As of December 31,
2018, the Group had financial assets at fair value through profit
or loss totaling 7.11 million euros (prior year: 32.7 million euros
as available-for-sale financial assets), which are subject to fairvalue fluctuations. These risks are mainly due to interest rate,credit and price risks. The fair value changes averaged 5.51 % in2018 and 5.13 % in 2017.
Securities and restricted assets

As in the prior year, there were no restrictions on title or disposal
for legally and beneficially owned property, plant and equipment, with the exception of the assets recognized under financeleases. Other assets include 1.2 million euros (prior year: 1.1 million euros) of premium reserve from employer’s pension liability
insurance policies pledged as collateral for pension obligations,but not to the entitled employees.
No financial assets were pledged as collateral for liabilities
or contingent liabilities.

Currency risks

Currency risks from the operating activities are immaterial,
since the local entities bill the services they render locally almost

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Notes

Notes

Transactions with DEKR A e.V., Stuttgar t

11 R E L A T E D P A R T Y D I S C L O S U R E S

Pursuant to IAS 24 “Related Party Disclosures,” transactions
with related parties must be disclosed. The Management Board
and Supervisory Board as well as owners qualify as related parties within the meaning of IAS 24.9.
Remuneration of the Management Board

The remuneration paid to Management Board members (shortterm benefits) comprises fixed annual compensation and a performance-related variable bonus.
Remuneration for the Management Board of DEKRA SE
including reimbursement of expenses amounted to 2,571 thousand euros (prior year: 2,556 thousand euros).
In addition, there were further expenses (among otherthings, for pensions of DEKRA SE) of 842 thousand euros (prioryear: 805 thousand euros) and obligations of 11,716 thousand euros (prior year: 9,891 thousand euros) relating to thisgroup of persons.
This results in total remuneration of 3,413 thousand euros(prior year: 3,361 thousand euros).
Total remuneration paid to former members of the Management Board amounts to 711 thousand euros (prior year:
399 thousand euros). There are also pension obligations of
3,340 thousand euros.
Remuneration of the Super visor y Board

The remuneration paid to the Supervisory Board for the reporting year came to 261 thousand euros (prior year: 203 thousand euros), of which a total amount of 261 thousand euros(prior year: 203 thousand euros) is reported as liabilities as of thereporting date.
In addition, there were further expenses (among otherthings, for pensions of DEKRA SE) of 599 thousand euros (prioryear: 667 thousand euros) and obligations of 1,066 thousand euros (prior year: 1,021 thousand euros) relating to thisgroup of persons.

There are liabilities of 22.6 million euros (prior year: 24.8 million euros) to DEKRA e.V., Stuttgart, as of December 31, 2018,
which mainly stem from VAT liabilities. There are also receivables of 90.6 million euros (prior year: 93.7 million euros) thatprimarily result from the cash pooling less profit and losstransfer.
There are lease agreements in place between DEKRA e.V.,
Stuttgart, as lessor and various companies of the DEKRA Groupas tenants. Rent for business premises amounted to 19.7 million euros in fiscal year 2018 (prior year: 19.8 million euros).
Receivables from and liabilities to DEKRA e.V., Stuttgart, gave
rise to interest income of 1.5 million euros (prior year: 1.5 million euros) and interest expenses of 0.6 million euros (prior year:
0.3 million euros). Tax allocations amounted to 35.8 million euros (prior year: 48.8 million euros). In addition, services
totaling 3.3 million euros (prior year: 1.5 million euros) werepurchased from DEKRA e.V., Stuttgart.
Under a corporate lease agreement, activities are primarily
performed in the field of German automotive testing and expertises by an operating company of the DEKRA Group for DEKRA
e.V., Stuttgart. Business is generally conducted in the name ofand for the account of DEKRA Automobil GmbH, Stuttgart. Alltransactions and business processes are carried out at DEKRA
Automobil GmbH.
As remuneration for the activities, a flat-rate percentageof the profit generated before income taxes or of revenue isinvoiced. In fiscal year 2018, a total volume of 5.2 million euros(prior year: 5.4 million euros) was charged to the DEKRA
Group. DEKRA e.V., Stuttgart, recorded revenue of the sameamount from this source.
In addition, the DEKRA Group rendered services of
10.9 million euros (prior year: 9.6 million euros) for DEKRA e.V.,
Stuttgart, in the fiscal year.
There is a profit and loss transfer agreement in place
between DEKRA SE and DEKRA e.V., Stuttgart, as well as a tax
group for income tax and VAT purposes.

D E K R A Financial Report 2018

Transactions with non - consolidated entities, associates aswell as investees
Dec. 31, 2018

Dec. 31, 2017

Services rendered

4.6

4.7

Services purchased

4.7

5.1

Finance income

0.3

0.6

Receivables and loans

19.1

36.7

Liabilities*)

1.0

1.6

Dec. 31, 2018

Dec. 31, 2017

S U B S I D I A R I E S T H AT A R E N OT FU L LY
CONSOLIDATED IN MILLION EUROSASSOCIATESIN MILLION EUROS

Services rendered

0.2

0.1

Services purchased

10.3

11.2

Liabilities

1.1

0.9

INVESTEESIN MILLION EUROS

Dec. 31, 2018

Dec. 31, 2017

Services rendered

0.4

0.3

Services purchased

1.1

0.8

Finance income

0.2

0.3

Receivables and loans

0.3

0.3

Liabilities*)

0.1

0.0

*) Liabilities are partially netted with the receivables in the statement of financial
position.

D E K R A Financial Report 2018

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Notes

Notes

1 2 D I S C L O S U R E S O N T H E M A N A G E M E N T B O A R D A N D
SUPERVISORY BOARD

The members of the Management Board are:
• Stefan Kölbl
Chairman
Leinfelden-Echterdingen• Clemens Klinke
Boffzen• Roland Gerdon (bis 16. Mai 2018)
Stuttgart• Thomas Müllerschön (17. Mai bis 31. Dezember 2018)
Emerkingen• Wolfgang Linsenmaier (ab 1. Januar 2019)
Freiberg am Neckar• Ivo Rauh
Stuttgart
The members of the Company’s Supervisory Board in thereporting year were:• Thomas Pleines
Chairman of the Supervisory Board
Former chairman of the Management Board
Allianz Versicherungs-AG
President of the Presidential Board of DEKRA e.V.,
Stuttgart• Dipl.-Ing. Hartwig Meis *)Deputy Chairman of the Supervisory Board(until June 30, 2018)
Chairman of the Central Works Council of DEKRA
Automobil GmbH and publicly appointed and sworn expert
at Münster branch of DEKRA Automobil GmbH, Stuttgart• Monika Roth-Lehnen *)Deputy Chairwoman of the Supervisory Board
since November 8, 2018
Chairwoman of the Works Council of DEKRA SE,
Chairwoman of the Central Works Council of DEKRA
Akademie GmbH, Stuttgart
Service Center Wuppertal of DEKRA Akademie GmbH,
Stuttgart• Ulrich Beiderwieden *)Formerly ver.di federal administration
Head of sector
Sector 13 Special Services• Frank Beimborn *)(since July 1, 2018)
Chairman of the central works council of DEKRA
Automobil GmbH at Dortmund branch of DEKRA
Automobil GmbH, Stuttgart• Prof. Dr. Sabine Fließ
Douglas endowed Chair of Service Management,
University of Hagen, Hagen• Jean-Luc Inderbitzin *)Deputy chairman of the Works Council of DEKRA SE,
Representative of the French trade union CFDTDEKRA Industrial S.A.S., Limoges, France• Dipl.-Ing. (FH) Wilfried Kettner *)Deputy Chairman of the Works Council of DEKRA SE,
Chairman of the Central Works Council of DEKRA
Automobil GmbH at Suhl branch of DEKRA AutomobilGmbH, Stuttgart• Dipl.-Wirtsch.-Ing. Arndt G. Kirchhoff
Managing partner of the Kirchhoff Group, Iserlohn• Laurent Masquet *)Deputy production manager IT
DEKRA Automotive Solutions, Bordeaux, France• Dipl.-Ing. (FH) Wilhelm Oberfranz
Head of the branch
DEKRA Automobil GmbH, Stuttgart• Dipl.-Wirtsch.-Ing. Peter Tyroller
General manager
Robert Bosch GmbH, Stuttgart• Prof. Dr. Wolfgang Weiler
Chairman
German Insurance Association (GDV)

13 S U B S E Q U E N T E V E N T S

There were no significant events after the reporting date.
14 O T H E R D I S C L O S U R E S

Audit of the financial statements

The Annual General Meeting on April 24, 2018 appointed Ernst& Young GmbH Wirtschaftsprüfungsgesellschaft as auditorsof the separate and consolidated financial statements for fiscal
year 2018.
The auditors’ fees recognized in the fiscal year are shownin the following table.

IN THOUSAND EUR

2018

2017

Audit services

866

840

Tax advisory services

170

183

1,036

1,023

List of shareholdings and consolidated group

The Group’s entire shareholdings pursuant to Sec. 313 (2) HGB
as well as all of the entities included in the consolidated financial
statements in addition to DEKRA SE are presented in the following list.

*) Employee

D E K R A Financial Report 2018

D E K R A Financial Report 2018

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C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S

Notes

Notes

Share of capital

IN %

97

Share of capitalIN %DEKRA Test Center S.A., Montredon des Corbières, France

100.00100.00DEKRA Expertise S.A.S., Cormelles le Royal, France

100.00100.00DEKRA Service Maroc S.A., Casablanca, Morocco

100.00DEKRA Certification Tanúsító és Szolgáltató Kft., Budapest, Hungary

DEKRA Qualification GmbH, Stuttgart

4)

100.00DEKRA Certification (Proprietary) Ltd., Centurion, South Africa

100.00DEKRA Certification GmbH, Stuttgart

4)

100.00DEKRA CZ a.s., Prague, Czech Republic

100.00DEKRA Personal GmbH, Stuttgart

4)

100.00DEKRA POLSKA Sp. z o.o., Warsaw, Poland

100.00DEKRA Claims Services GmbH, Stuttgart

4)

100.00DEKRA Services S.A., Barcelona, Spain

DEKRA Beteiligungs- und Finanzierungs GmbH, Stuttgart

4)

100.00DEKRA Claims Services Luxembourg S.A., Luxembourg, Luxembourg

DEKRA Assurance Services GmbH, Stuttgart

4)

100.00DEKRA Claims Services Netherlands B.V., Rotterdam, Netherlands

100.00DEKRA Media GmbH, Mönchengladbach

1)100.00DEKRA Claims Services UK Ltd., London, UK

100.00DEKRA Personaldienste GmbH, Stuttgart

4)

100.00DEKRA France S.A.S., Bagneux, France

100.00DEKRA Event & Logistic Services GmbH, Stuttgart

4)

100.00DEKRA Belgium N.V., Zaventem, Belgium

DEKRA EXAM GmbH, Bochum

4)

100.00DEKRA Certification S.L., Barcelona, Spain

PRO-LOG Beteiligungs GmbH, Stuttgart

100.00DEKRA Certification Sp. z o.o., Wroclaw (Breslau), Poland

100.00PRO-LOG Ruhr GmbH, Bochum

100.00DEKRA Services Inc. (formerly: DEKRA Automotive North America, Inc.), Marietta, USA

100.00100.00DEKRA Portugal S.A., Lisbon, Portugal

100.00100.00DEKRA North America, Inc., Marietta, USA

100.00100.00DEKRA Austria Automotive GmbH, Vienna, Austria

100.00100.00DEKRA zaposljavanje i zastupanje d.o.o., Zagreb, Republic of Croatia

100.00Affiliates in Germany:

DEKRA Automobil GmbH, Stuttgart

4)

DEKRA Akademie GmbH, Stuttgart

4)

DEKRA Arbeit GmbH, Stuttgart

4)

PRO-LOG Personal GmbH, Stuttgart
DEKRA Immobilien GmbH, Stuttgart

4)

PRO-LOG IV GmbH, Stuttgart
DEKRA Industrial International GmbH, Stuttgart

4)

UPDOWN Ingenieurteam für Fördertechnik GmbH, Hamburg
GKK Gutachten GmbH, Düsseldorf

4)

80.00
1)

92.00

100.001)

100.00100.001)

100.00100.00DEKRA Hellas EPE, Athens, Greece

1)100.00100.00DEKRA Claims Services Austria GmbH, Vienna, Austria

1)100.00100.00100.00100.00DEKRA Claims Services Hungary Service Ltd., Budapest, Hungary

1)

DEKRA Automotive Solutions Germany GmbH, Frankfurt am Main

4)

100.00DEKRA Certification S.R.L., Cluj-Napoca, Romania

1)

DEKRA INCOS GmbH, Ingolstadt

4)

100.00DEKRA Cargo & Security Services GmbH, Stuttgart

1)

100.00DEKRA Claims & Expert Services (Suisse) S.A., Thônex, Switzerland(formerly: DEKRA Claims Services Switzerland S.A., Geneva, Switzerland)

100.00DEKRA Italia S.r.l., Arese (Milan), Italy

100.00DEKRA Industrial Holding S.A.S., Limoges, France

100.00DEKRA Inspection Services GmbH, Stuttgart

DEKRA Visatec GmbH, Sulzberg

100.00DEKRA Testing and Certification GmbH, Stuttgart (formerly: Dresden)

4)100.00Affiliates in other countries:

DEKRA Automotive Solutions S.A.S.U., Bordeaux, France

100.00DEKRA Foncier S.N.C., Trappes, France

100.00Auto Bilan France S.A.S.U., Trappes, France

100.00DEKRA Automotive S.A.S., Trappes, France

100.00C.T.A. S.A.R.L., Trappes, France

90.00

DEKRA Automotive Maroc S.A., Casablanca, Morocco

80.00

D E K R A Financial Report 2018

DEKRA Arbeit Magyaroszag Szolgáltató Kft., Budapest, Hungary

100.00DEKRA Claims Services Trust reg., Vaduz, Liechtenstein1)

100.00DEKRA Zaposljavanje d.o.o., Belgrade, Serbia

1)100.00DEKRA za privremeno zaposljavanje d.o.o., Zagreb, Republic of Croatia
DEKRA zaposljavanje d.o.o., Sarajevo, Republic of Bosnia-Herzegovina

100.001)

DEKRA Certification S.A.S., Bagneux, France

100.00100.00DEKRA Expert OOO, Kiev, Ukraine

1)

DEKRA kvalifikácia a poradenstvo s.r.o., Bratislava, Slovak Republic

D E K R A Financial Report 2018

80.00
100.0098

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C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S

Notes

Notes

Share of capitalIN %DEKRA Automotive AB, Eskilstuna, Sweden
DEKRA (Shanghai) Co., Ltd., Shanghai, China

99

Share of capitalIN %100.00Chilworth France S.A.S., St. Jonage, France

100.00100.00100.00

Safety Consulting Engineers Inc., Schaumburg, USA

DEKRA Automotive EOOD (formerly: DEKRA Automotive OOD), Sofia, Republic of Bulgaria

1)

100.00DEKRA ITV España S.L., Madrid, Spain

Consorzio DEKRA Revisioni S.r.l., Arese (Milan), Italy

1)

99.00

Centro Revisione Auto s.c.a.r.l., Genoa, Italy

1)

51.11

DEKRA Expertises Ltda., Atibaia, Brazil

1)

100.00DEKRA Canada Inc., Saint John NB, Canada

1)

100.00DEKRA kvalifikace a poradenství s.r.o., Prague, Czech Republic

1)

100.00DEKRA Kalite Kontrol Hizmetleri A.S., Ankara, Turkey

100.00DEKRA Servicios Recursos Humano S.L., Barcelona, Spain

100.00Behavioral Science Technology (BST) Inc., Oxnard, USA

100.00DEKRA Empleo ETT S.L., Barcelona, Spain

100.00Behavioral Science Technology International (BSTI) Inc., Oxnard, USA

100.00DEKRA Automotiv d.o.o., Sesvete, Republic of Croatia

1)

100.00DEKRA Akademie A/S, Brondby, Denmark100.00DEKRA Russ O.O.O., Moscow, Russia

1)

99.99

BST Consultants Pte. Ltd., Singapore, Republic of Singapore

100.00DEKRA Akademie Kft., Budapest, Hungary

100.00100.00Behavioral Science Technology Consultores do Brasil Ltda., Sao Paulo, Brazil

100.00DEKRA Hasar Servisi Ltd. Sti., Istanbul, Turkey

1)

100.00DEKRA Services ApS, Brondby, Denmark100.00DEKRA Claims Services Maroc S.A.R.L., Casablanca, Morocco1)

100.00DEKRA AMU Center Sydjylland A/S, Vejen, Denmark100.00100.00DEKRA AMU Center Nordsjaelland ApS, Ishoj, Denmark100.00100.00DEKRA AMU Center Midtjylland ApS, Skjern, Denmark100.00100.00DEKRA Uddannelser A/S, Braband, Denmark100.00DEKRA Finland Oy, Vantaa, Finland

100.00DEKRA Equipment & Services A/S (formerly: Grøn Køreteknisk Anlæg A/S), Orbaek, Denmark

DEKRA Industrial Oy, Vantaa, Finland

100.00DEKRA Praca Sp. z o.o., Krakow, Poland

DEKRA Automotive Pty. Ltd., Johannesburg, South Africa

100.00DEKRA Caribbean B.V., Willemstad, Curaçao

DEKRA Zaposljavanje d.o.o., Podgoriza, Republic of Montenegro

100.00DEKRA Management (Shanghai) Co., Ltd., Shanghai, China

SLOVDEKRA s.r.o., Bratislava, Slovak Republic

100.00DEKRA Netherlands Holding B.V., Arnheim, Netherlands

DEKRA Claims Services Portugal S.A., Lisbon, Portugal
DEKRA Claims and Expertise B.V., Alkmaar, Netherlands
DEKRA Industrial (Guangzhou) Co., Ltd., Guangzhou, China

DEKRA Claims Services, Kiev, Ukraine

1)

100.001)

100.00100.00100.00Road Safety Consulting N.V., Brussels, Belgium

1)

50.10

100.00DEKRA Outsourcing d.o.o., Belgrade, Republic of Serbia

1)100.0070.00

DEKRA People B.V., Alkmaar, Netherlands

100.00

Checkauto Consultatoria Tecnica E Informacoes veiculares Ltda., Atibaia, Brazil

100.00DEKRA Privremeno Zaposljavanje Podgorica d.o.o., Podgorica, Republic of Montenegro

100.00DEKRA Vistorias e Serviços Ltda., Atibaia, Brazil

100.00DEKRA Insight Australia Pty Ltd., South Melbourne, Australia

DEKRA South Africa Pty. Ltd., Johannesburg, South Africa

100.00Hangzhou DEKRA WIT Certification Co., Ltd., Hangzhou, China

1)

DEKRA Industrial AB, Gothenburg, Sweden
DEKRA Sweden AB, Gothenburg, Sweden

100.00DEKRA usluge d.o.o., Zagreb, Republic of Croatia

1)

100.0060.00

DEKRA Revisión Técnica SpA, Santiago de Chile, Chile1)

100.00100.00DEKRA Services (PTY) Ltd., Vereeniging, South Africa

100.00100.00DEKRA Industrial RSA (Pty) Ltd., Vereeniging, South Africa

100.00DEKRA Industrial AS, Soli, Norway

1)

100.00DEKRA Quality Management AB, Frösön, Sweden

100.00DEKRA Egypt for Services and Consulting, Cairo, Egypt

1)

51.00

DEKRA Inspecoes Portugal - Unipessoal LDT, Lisbon, Portugal

DEKRA Motores - Vistoria Veicular Ltda., Atibaia, Brazil

1)

100.00DEKRA Vrabotuvanje dooel, Skopje, Republic of North Macedonia

DEKRA UK Ltd., Southampton, UK

100.00DEKRA AMU Center Fyn ApS, Odense, Denmark

Chilworth Technology Ltd., Southampton, UK

100.00European Road Stars Academy (ERSA) SPRL, Brussels, Belgium

DEKRA (India) Pvt. Ltd. (formerly: Chilworth Technology (Pvt) Ltd.), New Delhi, India

100.00DEKRA New Zealand Ltd., Wellington, New Zealand

60.00

100.00

Vehicle Testing New Zealand Ltd. (VTNZ), Wellington, New Zealand

60.00

Chilworth Technology Inc., Plainsboro, USA
D E K R A Financial Report 2018

100.001)

100.00100.00D E K R A Financial Report 2018

1)

50.10

100

C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S

C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S

Notes

Notes

Share of capital

IN %

101

Share of capitalIN %D Akademie S.r.l., Verona, Italy

100.00DEKRA Services s.r.o., Bratislava, Slovak Republic

1)

100.00DEKRA AMU Center Hovedstaden A/S, Brondby, Denmark100.00PRO-LOG CG d.o.o., Podgorica, Republic of Montenegro

1)

100.00DEKRA Job ApS, Brondby, Denmark100.00DEKRA Automotive d.o.o., Belgrade, Republic of Serbia

1)100.00100.00DEKRA AMU Center Sjaelland A/S, Naestved, Denmark100.00DEKRA Lesotho (Pty) Ltd., Lesotho, South Africa

100.00VEIKI-VNL Villamos Nagylaboratóriumok Korlátolt Felelősségü Társaság, Budapest, Hungary

100.00100.00100.00Master Test – Inspeção de Veículos, S.A., Évora, Portugal

100.00Core Visual Inspection Services, Inc., Austin, USA

DEKRA Akademie SRL, Bucharest, Romania

1)

DEKRA Automotive Ltd., Stokenchurch, UK
DEKRA España S.L., Madrid, Spain
DEKRA Akademie EPE, Thessaloniki, Greece

1)

DEKRA Automotive La Reunion S.A.S., Sainte-Clotilde, France
DEKRA Rail B.V., Utrecht, Netherlands
DEKRA agencija d.o.o., Sarajevo, Republic of Bosnia-Herzegovina

1)Regulatory Consultants, Inc. Safety, Horton, USA

100.001)

100.00100.00TATRA TRUCK s.r.o.,Krásny Brod, Slovak Republic

1)

100.00Master Test Chile SpA., Santiago de Chile, Chile1)

100.00100.00100.00100.00D. Invest S.r.l., Cinisello Balsamo, Italy

Arbeit De Agency for Temporary Employment, Skopje, Republic of North Macedonia

1)

100.00Epoche & Espri S.L.U., Madrid, Spain

100.00DEKRA zaposlitev d.o.o., Ljubljana, Republic of Slovenia

1)

100.00DEKRA Arbeit (Schweiz) Holding AG, Sargans, Switzerland(formerly: Transteam Personal Holding AG, Mels, Switzerland)

100.00DEKRA Arbeit AG St.Gallen (formerly: TP Handels- und Dienstleistungs AG), Mels, Switzerland

100.00DEKRA Arbeit AG Wil (formerly: Transteam Personal AG Wil), Wil, Switzerland

100.00DEKRA Arbeit AG Basel (formerly: Transteam Personal AG), Basel, Switzerland

100.00DEKRA Arbeit AG Buchs (formerly: Transteam Personal AG), Buchs, Switzerland

95.00

DEKRA Arbeit AG Chur (formerly: Transteam Personal AG), Chur, Switzerland

90.00

DEKRA Arbeit AG Sargans (formerly: Transteam Personal AG), Sargans, Switzerland

94.00

UAB DEKRA Industrial, Visaginas, Lithuania

100.00

COMENIUS Oktató és Kiadó Kft., Pecs, Hungary

1)

100.00Comenius Szakközépiskola és Szakiskola, Pecs, Hungary

1)

100.00DEKRA Testing and Certification Co., Ltd., New Taipei City, Taiwan

100.00DEKRA Testing & Certification (Suzhou) Co., Ltd., Suzhou, China

100.00QTK Asia Electronics, Road Town (Tortola), British Virgin Islands

100.00DEKRA Middle East Fze, Dubai, United Arab Emirates

1)

DEKRA AQS Solutions, Inc., Minneapolis, USA

100.00100.00DTS Service Aps., Odense, Denmark100.00DEKRA iST Reliability Services Inc., Hsinchu, Taiwan

51.00

DEKRA iST Reliability Services Limited, Hong Kong, Hong Kong

51.00

DEKRA iST Reliability Services Limited, Kunshan, China

1)1)

DEKRA Arbeit (Schweiz) Verwaltungs AG (formerly: TPVAG Transteam Personal Verwaltungs AG),
Sargans, Switzerland

100.00100.00DEKRA Arbeit Bulgaria EOOD, Sofia, Republic of Bulgaria

1)

100.00PROTEC Services, Limoges, France

1)

100.00

STK Žatec s.r.o., Žatec, Czech Republic

1)

100.0051.00

Autoservis u Oharky s.r.o., Žatec, Czech Republic

1)

100.00Optimus Seventh Generation Holding Ltd., Aberdeen, Scotland

100.00DEKRA Arbeit Austria GmbH, Vienna, Austria

1)100.00DEKRA Organisational Reliability Ltd, Aberdeen, Scotland

100.00Beijing DEKRA Vehicle Inspection Co., Ltd, Beijing, China

1)100.00DEKRA Testing and Certification, S.A.U., Malaga, Spain

100.00PRO-LOG SR DOO, Belgrade, Republic of Serbia

1)100.00DEKRA Testing and Certification Ltda., Santiago de Chile, Chile

99.90

SINISTRAUTO Gabinete Tecnico de Regulaçao de Sinistros Automove Lda., Linda-a-Velha, Portugal

100.00

Bureau d’Expertises Despretz SA/NV, Brussels, Belgium

DEKRA Arbeit AG Oftringen (formerly: DEKRA Arbeit (Schweiz) AG), Oftringen, Switzerland

100.00Gain Solutions Ltd., Chippenham, UK

100.00DEKRA Inspection Oy, Vantaa, Finland

100.00Industrial Safety Group B.V., Rotterdam, Netherlands

100.00DEKRA AMU Center Nordjylland A/S, Saeby, Denmark100.00

Arbo Support B.V., Rotterdam, Netherlands

DEKRA Services France SAS, Bagneux, France

100.00100.0082.00

DEKRA Akademie sh.p.K, Tirana, Albania

1)

DEKRA Automotive S.à r.l., Munsbach, Luxembourg

1)

QC Plzeň s.r.o., Plzeň, Czech Republic
D E K R A Financial Report 2018

100.001)

100.00100.00Industrial Safety BVBA, Antwerp, Belgium

1)100.00DEKRA Arbeit Anstalt, Eschen, Liechtenstein1)

100.00DEKRA Personnel France SAS, Bagneux, France

1)

100.00D E K R A Financial Report 2018

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Notes

Notes

Share of capital

IN %

103

Share of capital

IN %AL-SYN ApS, Silkeborg, Denmark1)

100.00Equity investments:

DEKRA TW s.r.o., Bratislava, Slovak Republic

1)

100.00

ARGE “Technische Prüfstelle für den Kraftfahrzeugverkehr 21” GbR, Dresden

3) 5)

DEKRA Arbeit L.L.C., Prishtina, Republic of Kosovo

1)

100.00Magility GmbH, Kirchheim unter Teck

3) 5)

DEKRA Arbeit SHPK, Tirana, Albania

1)100.00DYNAE S.A., Villefontaine, France

19.93

DEKRA Industrial SAS, Limoges, France

100.00Société Coopérative de Promotion S.A., Trappes, France< 5.00DEKRA Solutions (Pty) Ltd., Centurion, South Africa

100.00Credit Agricole S.A., Paris, France< 1.00DEKRA Industrial S.A.R.L., Algiers, Algeria

99.50

Credit Mutuel, Paris, France< 1.00DEKRA Industrial SA. (formerly: DEKRA AMBIO S.A.U.), Barcelona, Spain

100.00

ITT Technology Transfer s.r.l., Ferrara, Italy

DEKRA Inspection S.A., Casablanca, Morocco

100.00DEKRA Certification B.V., Arnheim, Netherlands

100.00DEKRA Solutions B.V., Arnheim, Netherlands

100.00DEKRA Testing and Certification S.r.l., Osnago, Italy

100.00DEKRA Certification K.K., Tokyo, Japan

100.00DEKRA Testing Services (Zhejiang) Ltd., Zhejiang, China

51.00

DEKRA Testing and Certification (Shanghai) Ltd., Shanghai, China
DEKRA Certification Ltd., Pershore Worcestershire, UK

100.00DEKRA Certification Ltd., Tel Aviv, Israel

100.00DEKRA Certification Hong Kong Ltd., Fanling, Hong Kong

100.00DEKRA Certification Inc., North Wales, USA

100.00Not included in the consolidated financial statements by way of full consolidation.
Not accounted for using the equity method due to insignificance for assets and liabilities, financial position and financial performance.
3)
T he disclosures pursuant to Sec. 313 (2) No. 4 HGB are not made since they are insignificant for the presentation of a true and fair view of the Groupʼs assets
and liabilities, financial position and financial performance.
4)
Utilization of the exemption pursuant to Sec. 264 (3) HGB.
5)
Significant influence is not exercised.
1)

2)

Stuttgart, March 21, 2019
DEKRA SEThe Management Board

Associates in Germany:Euro Transport Media Verlags- und Veranstaltungsgesellschaft mbH, Stuttgart

40.00

FSD Fahrzeugsystemdaten GmbH, Dresden

35.54  Kölbl, Chairman

Associates in other countries:

TRANSDEKRA AG, Moscow, Russia

2)

50.00

DEKRA - EXPERT Müszaki Szakértöi Kft., Budapest, Hungary

2)

50.00

DEKRA Claims Services France S.A., Levallois Perret, France

2)

50.00

NDT Training Center AB, Västeras, Sweden

2)

33.00

DEKRA Services Spolka z.o.o, Krakow, Poland

2)

50.00

  Klinke  Linsenmaier  Rauh
D E K R A Financial Report 2018

25.10

1.00

100.001)

25.00

D E K R A Financial Report 2018

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Independent auditor’s report

Independent auditor’s report

105

Translation of the German independent auditor’s repor t
concerning the audit of the consolidated financial statements
and group management repor t prepared in German.

DEKRA SE
Independent auditor’s report
To DEKR A SE

Basis for the opinions

Opinions

We have audited the consolidated financial statements of
DEKRA SE, Stuttgart, and its subsidiaries (the Group), which
comprise the consolidated statement of comprehensive income
for the fiscal year from January 1 to December 31, 2018, the consolidated statement of financial position as of December 31, 2018,
the consolidated statement of changes in equity and the consolidated statement of cash flows for the fiscal year from January 1
to December 31, 2018, and the notes to the consolidated financial
statements, including a summary of significant accounting
policies. In addition, we have audited the group management
report of DEKRA SE for the financial year from January 1 to
December 31, 2018. In accordance with the German legal
requirements, we have not audited the content of the group
corporate governance statement contained in the “Declarationof corporate governance” section of the group management
report.
In our opinion, on the basis of the knowledge obtained in theaudit,– the accompanying consolidated financial statements comply, inall material respects, with the IFRSs as adopted by the EU, andthe additional requirements of German commercial law pursuant to Sec. 315e (1) HGB and, in compliance with these requirements, give a true and fair view of the assets, liabilities, andfinancial position of the Group as of December 31, 2018, and ofits financial performance for the financial year from January 1
to December 31, 2018, and– the accompanying group management report as a whole provides an appropriate view of the Group’s position. In all material
respects, this group management report is consistent with theconsolidated financial statements, complies with German legal
requirements and appropriately presents the opportunities andrisks of future development. Our opinion on the group management report does not cover the content of the corporate governance statement referred to above.

We conducted our audit of the consolidated financial statements
and of the group management report in accordance with Sec. 317
HGB and in compliance with German Generally AcceptedStandards for Financial Statement Audits promulgated by theInstitut der Wirtschaftsprüfer [Institute of Public Auditors inGermany] (IDW). Our responsibilities under those requirements
and principles are further described in the “Auditor’s responsibilities for the audit of the consolidated financial statements andof the group management report” section of our auditor’s report.
We are independent of the group entities in accordance with therequirements of German commercial and professional law, andwe have fulfilled our other German professional responsibilities
in accordance with these requirements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinions on the consolidated financial statements and on the group management report.
Other information

The Supervisory Board is responsible for the Report of the Supervisory Board. In all other respects, the executive directors are
responsible for the other information. The other information
comprises the group corporate governance statement containedin the “Declaration of corporate governance” section of thegroup management report as well as the remaining componentsof the annual financial report, with the exception of the audited
consolidated financial statements and combined management
report as well as our independent auditor’s report, in particular
the sections “At a glance”, “Foreword by the Chairman of theManagement Board” and “Report by the Chairman of the Supervisory Board”. We received a version of this other informationby the time this auditor’s report was issued.
Our opinions on the consolidated financial statements andon the group management report do not cover the other information, and consequently we do not express an opinion or any
other form of assurance conclusion thereon.

Pursuant to Sec. 322 (3) Sentence 1 HGB, we declare that our
audit has not led to any reservations relating to the legal compliance of the consolidated financial statements and of the groupmanagement report.

D E K R A Financial Report 2018

In connection with our audit, our responsibility is to read theother information and, in so doing, to consider whether theother information– is materially inconsistent with the consolidated financial statements, with the group management report or our knowledge
obtained in the audit, or–o therwise appears to be materially misstated.
If, based on the work we have performed, we conclude that
there is a material misstatement of this other information, weare required to report that fact. We have nothing to report inthis regard.
Responsibilities of the executive directors and theSuper visor y Board for the consolidated financial statements
and the group management repor t

The executive directors are responsible for the preparation of theconsolidated financial statements that comply, in all material
respects, with IFRSs as adopted by the EU and the additional
requirements of German commercial law pursuant to Sec. 315e(1) HGB, and that the consolidated financial statements, in compliance with these requirements, give a true and fair view of theassets, liabilities, financial position, and financial performanceof the Group. In addition, the executive directors are responsible for such internal control as they have determined necessary
to enable the preparation of consolidated financial statementsthat are free from material misstatement, whether due to fraud
or error.
In preparing the consolidated financial statements, theexecutive directors are responsible for assessing the Group’s ability to continue as a going concern. They also have the responsibility for disclosing, as applicable, matters related to going concern. In addition, they are responsible for financial reporting
based on the going concern basis of accounting unless there isan intention to liquidate the Group or to cease operations, orthere is no realistic alternative but to do so.

Furthermore, the executive directors are responsible for the
preparation of the group management report that, as a whole,provides an appropriate view of the Group’s position and is, inall material respects, consistent with the consolidated financial
statements, complies with German legal requirements, andappropriately presents the opportunities and risks of future
development. In addition, the executive directors are responsible
for such arrangements and measures (systems) as they have considered necessary to enable the preparation of a group management report that is in accordance with the applicable German
legal requirements, and to be able to provide sufficient appropriate evidence for the assertions in the group management report.
The Supervisory Board is responsible for overseeing theGroup’s financial reporting process for the preparation of theconsolidated financial statements and of the group management
report.
Auditor’s responsibilities for the audit of the consolidated
financial statements and of the group management repor t

Our objectives are to obtain reasonable assurance about whether
the consolidated financial statements as a whole are free frommaterial misstatement, whether due to fraud or error, andwhether the group management report as a whole provides anappropriate view of the Group’s position and, in all material
respects, is consistent with the consolidated financial statements
and the knowledge obtained in the audit, complies with the German legal requirements and appropriately presents the opportunities and risks of future development, as well as to issue an auditor’s report that includes our opinions on the consolidated
financial statements and on the group management report.
Reasonable assurance is a high level of assurance, but is
not a guarantee that an audit conducted in accordance with
Sec. 317 HGB and in compliance with German Generally
Accepted Standards for Financial Statement Audits promulgatedby the Institut der Wirtschaftsprüfer (IDW) will always detect amaterial misstatement. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated
financial statements and this group management report.

D E K R A Financial Report 2018

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C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S

C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S

Independent auditor’s report

Independent auditor’s report

We exercise professional judgment and maintain professional
skepticism throughout the audit. We also:– Identify and assess the risks of material misstatement of theconsolidated financial statements and of the group management report, whether due to fraud or error, design and perform
audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis
for our opinions. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting fromerror, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
– Obtain an understanding of internal control relevant to theaudit of the consolidated financial statements and of arrangements and measures (systems) relevant to the audit of the groupmanagement report in order to design audit procedures thatare appropriate in the circumstances, but not for the purposeof expressing an opinion on the effectiveness of these systems.
– Evaluate the appropriateness of accounting policies used by
the executive directors and the reasonableness of estimates
made by the executive directors and related disclosures.
– Conclude on the appropriateness of the executive directors’ useof the going concern basis of accounting and, based on theaudit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt
on the Group’s ability to continue as a going concern. If weconclude that a material uncertainty exists, we are required to
draw attention in the auditor’s report to the related disclosuresin the consolidated financial statements and in the group management report or, if such disclosures are inadequate, to modify our respective opinions. Our conclusions are based on theaudit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Group tocease to be able to continue as a going concern.

– Evaluate the overall presentation, structure and content of theconsolidated financial statements, including the disclosures,and whether the consolidated financial statements present theunderlying transactions and events in a manner that the consolidated financial statements give a true and fair view of theassets, liabilities, financial position and financial performanceof the Group in compliance with IFRSs as adopted by the EU
and the additional requirements of German commercial law
pursuant to Sec. 315e (1) HGB.
– Obtain sufficient appropriate audit evidence regarding thefinancial information of the entities or business activities
within the Group to express opinions on the consolidated
financial statements and on the group management report. We
are responsible for the direction, supervision and performanceof the group audit. We remain solely responsible for our opinions.
– Evaluate the consistency of the group management report withthe consolidated financial statements, its conformity with[German] law, and the view of the Group’s position it provides.
– Perform audit procedures on the prospective information presented by the executive directors in the group management
report. On the basis of sufficient appropriate audit evidence weevaluate, in particular, the significant assumptions used by the
executive directors as a basis for the prospective information,and evaluate the proper derivation of the prospective information from these assumptions. We do not express a separate
opinion on the prospective information and on the assumptions used as a basis. There is a substantial unavoidable riskthat future events will differ materially from the prospective
information.

D E K R A Financial Report 2018

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of theaudit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.
Stuttgart, March 22, 2019
Ernst & Young GmbH
Wirtschaftsprüfungsgesellschaft

HummelWirtschaftsprüfer[German Public Auditor]

Fischer
Wirtschaftsprüferin[German Public Auditor]

D E K R A Financial Report 2018

107

108

Report by the Chairman of the Super visor y Board

Report by the
Chairman of the Supervisory Board

THOMAS PLEINES109

C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S

The Supervisory Board fulfilled its oversight and advisory function
for the Management Board of DEKRA SE in the reporting year 2018
in a comprehensive manner. We were regularly informed verballyand in writing about important business transactions. In addition, themain business transactions were discussed in detail at two Supervisory
Board meetings as well as at meetings and discussions between
the Chairman of the Supervisory Board and the Management Board.
The economic situation and strategic alignment of DEKRA werediscussed in the context of achieving long-term stable and healthy
corporate development.

President of the Presidential Boardof DEKRA e. V. and Chairman of theSupervisory Board of DEKRA SE.

The Supervisory Board determined that 2018 was yet anothersuccessful year for DEKRA SE. The key business indicators such as
revenue and result improved. The number of employees worldwide increased byover 1,000 to more than 45,000.

Imprint

DEKR A e.V.
Communications and Brand Mangament
Handwerkstrasse 1570565 Stuttgar t, Germany
Phone +49.711.7861–2876
Fax +49.711.7861–2912

CONCEPT AND DESIGN

Strichpunkt GmbH
Stuttgar t/Berlin
PHOTOGRAPHY

Sebastian Vollmer t, Hamburg
REPRO

ctrl -s GmbH, Stuttgar t

The Supervisory Board appointed Ernst & Young GmbH, Wirtschaftsprüfungsgesell­schaft, Stuttgart, as auditors for the annual financial statements and management
report as well as for the consolidated financial statements and consolidated management report of DEKRA SE together with the accounting system for the 2018 financial
year. The Supervisory Board duly notes and concurs with the unqualified audit opinionof the auditor. The Supervisory Board’s own review raised no objections to theannual financial statements, management report, consolidated financial statements andcon­solidated management report. The annual financial statements compiled by theManagement Board are endorsed by the Supervisory Board and are therefore finalized.
The Supervisory Board would like to thank the Management Board for its successful
work during the reporting year. We wish to thank all employees for their commitment
to DEKRA.
Stuttgart, April, 2019The Supervisory Board

THOMAS PLEINES,

Chairman

D E K R A Financial Report 2018

D E K R A Financial Report 2018

DEKRA SE
Handwerkstrasse 1570565 Stuttgart, Germany
Phone +49.711.7861–0
Fax +49.711.7861–2912

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