Financial Report
2019

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CONTENTS﻿At a glanceContents

On the road, at work, and at home, millions of people around the world
rely on DEKRA’s safety expertise. This leading non-listed expert organization
is fulfilling its corporate mission of improving safety with impartiality andindependence. With a workforce of nearly 44,000, 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 will be the global partner for a safe world.

02

Foreword

GROUP MANAGEMENT REPORT

03

CONSOLIDATED FINANCIAL STATEMENTS

Corporate information27	
Consolidated statement ofcomprehensive income03		Group business model05		
Objectives and strategies28	Consolidated statement offinancial position05		
Research and development
07		
Integrit y and sustainabilit y30	Consolidated statement ofchanges in equit y08		
Environmental protection andsustainabilit y

Since fiscal year 2019, DEKRA’s comprehensive range of services has
been marketed across eight regions worldwide and is summarized in theeight Service Divisions: Vehicle Inspection, Claims & Expertise, ProductTesting, Industrial Inspection, Consulting, Audits, Training, and Temp Work.

32	Consolidated statement ofcash flows09		
Personnel repor t
10Repor t on economic position

34	Notes to the consolidated
financial statements

10		General economic andindustr y-specific conditions

96

11		
Business performance

The portfolio ranges from vehicle inspections and expertise in claims services, industrial and construction inspections, security consulting, as wellas the testing and certification of products and systems, to training courses
and temporary work.

15		
Financial position and performance
19

100	
R epor t by the Chairman of
the Super visor y Board

Risk, oppor tunities, and forecast repor t

19		
Risk repor t
23		
Oppor tunities repor t
25		
Forecast repor t

KE Y DATA DEKR A SE
2017

2018

2019

in million EUR

3,134.8

3,340.5

3,409.0

in %

39.3

39.3

39.4

in million EUR

236.1

242.3

227.1

in %

7.5

7.3

6.7

in million EUR

228.9

227.9

210.2

Total assets

in million EUR

2,090.2

2,267.0

2,755.4

Equityin million EUR

635.5

748.8

796.3

in %

30.4

33.0

28.9

44,05745,19743,961

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

Independent auditor’s repor t

D E K R A Financial Report 2019

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FOREWORDGROUP MANAGEMENT REPORT﻿Corporate information﻿Foreword from the
Chairman of the Management Board

Dear readers,
DEKRA has been growing for many years. We have ensured thefuture of our business through strategic acquisitions, high levels
of investment, and the systematic development of expertise.

S T E FA N K Ö L B L

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

This paid off in 2019. Despite the difficult economic and politicalenvironment, we remain on the right course: Group revenue has
increased by 2.0 percent to around 3.41 billion euros. By the endof the year the number of employees was at a high level – ataround 44,000. Organizational improvements which were
implemented in eight regions and eight Service Divisions in 2019
contributed to this success. We were therefore able to further
improve our innovative capacity and customer focus.

Around 40 percent of revenue is now generated abroad – andthe trend is rising, for we also expanded into new markets in the 2019 reporting year. One
example is that, since entering into China, Chile, and the Vatican, DEKRA now inspects
vehicles in 21 countries and is the undisputed global market leader. Altogether, we havemanaged to both assert and further strengthen our position as the world’s leading nonlisted expert organization in the TIC industry (testing, inspection, certification).
This positive development encourages us in our “Vision 2025”: to be the global partner
for a safe world by the time of the Company´s 100th anniversary of founding whenever
the three areas of life – on the road, at work, and at home – concern technical and organizational safety, in digital and analog form.
Join us as we continue this journey.
Kind regards,

Group management reportfor the fiscal year 2019

CORPOR ATE INFOR M ATION

Systematic expansion of the range of products
and ser vices

Group business model

In its eight Service Divisions, DEKRA focuses on the ongoingdevelopment and optimization of services in order to be able tooffer customers an even better service in the future. As part of
the trend toward digitalization and increased networking, theService Divisions develop the safety solutions of tomorrow andunderscore DEKRA’s role as a pioneer of safety. The products
and services offered by DEKRA are bundled into the following
Service Divisions:

DEKR A ensures safet y

For over 90 years, DEKRA has strived to ensure people’s safety
in all of life’s situations. What started out in 1925 with thetechnical monitoring of motor vehicles, today comprises a wide
range of services for testing, inspecting, and certifying products,
processes, and plants, as well as for training and certifying
individuals. DEKRA is the world’s largest non-listed expert
organization in the TIC industry (testing, inspection,
certification) in terms of revenue, and benefits from the lasting
and global 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.
In 2019, DEKRA employed almost 44,000 people in around
60 countries on five continents. The Company is the global market leader for vehicle inspection, with around 27 million inspections carried out overall each year. Since 2019, the comprehensive services it offers have been bundled into eight Service
Divisions. The global business is managed by DEKRA SE basedin Stuttgart, and is divided into eight regions.
Represented in ever y region of the world

Of the eight regions, the Germany region is the biggest market
with revenue of 2.1 billion euros, followed by South-West Europe(which also includes the Company’s second domestic market ofFrance) with 532.2 million euros. DEKRA generated a businessvolume of 346.1 million euros in the North-West Europe region
and 162.5 million euros in Central East Europe & Middle East.
DEKRA’s growth markets include the North America andEast & South Asia regions, where revenue amounting to 93.6 million euros (North America) and 102.5 million euros (East &South Asia) was generated. DEKRA generated 18.7 million euros
in South America and 86.4 million euros in Southern Africa &Oceania.

Vehicle Inspection

This Service Division comprises periodic vehicle inspections,non-periodic technical inspections, and periodic emission tests
for all kinds of vehicles. With an eye on the future of mobility,
DEKRA continues to provide reliable technical inspections ofincreasingly networked and automated vehicles in this core areaof expertise.
Claims & Exper tise

The services offered by the Claims & Expertise Service Division
include claims settlements for any types of claims, vehicle valuation and administration services, and expertise – both nationally and internationally.
Product Testing

The testing and certification of consumer, industrial, automotive,
IT, communications, and medical products are part of the
Product Testing Service Division’s expertise. DEKRA combines
security and connectivity tests in order to work toward a futurein which products work perfectly and communicate clearly witheach other.

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

D E K R A Financial Report 201903

D E K R A Financial Report 2019

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GROUP MANAGEMENT REPORTGROUP MANAGEMENT REPORT

Corporate information

Corporate information

﻿﻿

DEKRA provides comprehensive building, facility, machinery,
and infrastructure inspection services to industry customers
around the world, including a wide range of destructive andnon-destructive materials tests.

holds a range of accreditations for system certifications, andoffers first-party (internal audits), second-party (auditing suppliers in accordance with their own standards), and third-party
audits (audits in accordance with internationally recognized
standards, with corresponding authorization).

Consulting

Training

DEKRA advises its customers, from top managers to factory
workers, on the safety-related, practical transformation of procedures and activities in a dynamic digital age, at the work placeand in operational practice.
The internationally active experts of the Consulting Service
Division follow a holistic, behavior-based approach based on scientific findings relating to the fundamental principles of humanbehavior.

The Training Service Division offers a broad range of solutions
and services in the fields of training, specialist education andplacement from abroad, languages, integration, and learning,
using modern learning management systems (LMS) and digitaltechnologies. DEKRA has operated as a training partner forindustry and government for more than 40 years.

Industrial Inspection

AuditsIndependent evaluations and certifications of management systems in accordance with national and international standards
are the core expertise of the Audits Service Division. DEKRA

Temp Work

Employees in the Temp Work Service Division are characterized
by their extensive know-how in the fields of HR, solution, event,and logistics management. DEKRA is one of Germany’s six­largest HR service providers in terms of revenue.

REGION PERSPECTIVESERVICE PERSPECTIVE

Germany
Central East Europe & Middle East

Temp Work

Training

AuditsConsulting

East & South Asia

Industrial Inspection

South America

Product Testing

North America

Claims & ExpertiseSouth-West Europe

Vehicle Inspection

North-West Europe

Objectives and strategies
Vision 2025: we will be the global par tner
for a safe world

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, and with its focus
on the three areas of life – on the road, at work, and at home –,DEKRA has mapped its course for the coming years. In this context, DEKRA has set itself the goal of being the global partner
for a safe world in its centenary year 2025. In the reporting year
2019, DEKRA once again demonstrated its full commitment toachieving 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 initiatives havebeen launched in order to achieve this vision: “Thought Leadership” (development of a Group-wide program aimed at establishing the Company as a global pioneer of safety), “Strategic
Marketing & Sales” (definition and implementation of a global
marketing and sales strategy), “Innovation Strategy & Processes”(designing and implementing Group-wide innovation strategies
and processes), “GLOBEX” (Global Business Excellence – harmonization and standardization of processes and systems),“Change Management Vision 2025” (the driving force behind allchange activities in connection with Vision 2025), and “Corporate Culture & Communication” (promoting a DEKRA culture
based on our Vision 2025).
On this basis, DEKRA introduced a new organizational
structure in the reporting year: the Target Operating Model 2020
(TOM 2020). TOM 2020 stands for the forward-looking develop­
ment of the entire organization in order to make better use ofopportunities 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 setting up a global sales organization and eightregional clusters around the world, charged with the focused
cultivation of markets and provision of services in the future.
DEKRA’s services are also bundled into eight global Service
Divisions. These will be responsible for developing the content
of services and safeguarding DEKRA’s standard of quality. The
main purpose of this is to enhance the Company’s responsiveness and innovative power.
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 accident­researchers, with crash tests, public campaigns, and cooperationin national and international committees. DEKRA’s accident
investigation function, for example, has been supporting automotive manufacturers and system suppliers with crash tests andaccident analyses for 40 years. 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 twelfth time in the fiscal year 2019.
The DEKRA VSR, published annually since 2008, provides
up-to-date information and advice on the further developmentof road safety for decision-makers in politics, associations, andcompanies. The multilingual report was presented not only inBrussels and Berlin, but also in many other cities such as Madrid,
Paris, Rome, and Beijing. The 2019 DEKRA VSR looks at thequestion of how to make children safer in traffic.

Southern Africa & Oceania

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D E K R A Financial Report 2019

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GROUP MANAGEMENT REPORTGROUP MANAGEMENT REPORT

Corporate information

Corporate information

﻿﻿

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 2019, DEKRA presented the fourth “DEKRA Vision
Zero Award”. The award is presented to a European city that has
not registered any road traffic fatalities for several years in a row.
The city of Lüdenscheid in the German federal state of North
Rhine-Westphalia was recognized in 2019 for seven 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
towards 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 pools
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. Here, on
540 hectares of land, Europe’s largest manufacturer-independent
testing and inspection center for automated and connected driving to date is being built. Together with other DEKRA facilities
in Spain and China, the Lausitzring and the facility in Klettwitz
also form part of a highly effective international testing network.
In Málaga, Spain, the current focus is on the secure connectivity and electromagnetic compatibility of cell phones, smart
home products, and Industry 4.0 applications as well as a testarea for connected driving. The focus there is on product testing,the development of early-stage test procedures, and the testingof V2X (vehicle-to-everything) technologies. DEKRA intensified
its activities in this field in Málaga in 2019.
The last stage of the conversion from race track to test track
for the future of mobility will also be completed in Klettwitz
during the year ahead. In addition to testing components inaccordance with the WLAN-based 5G standard, in the future it
will also be possible to test a wide range of scenarios for networked communication between vehicles and with their environment using the 5G mobile communications standard. In
addition to expanding the test tracks, the year 2019 saw the commissioning of another exhaust laboratory and a noise measurement track, which can record and test emissions in accordancewith the very latest standards.
Data plays a crucial role in the development of self-driving
vehicles and in the increased networking of traffic – including
with respect to safety. That is why, as part of the “Trust Center”
initiative, which it launched in 2019, DEKRA is working withother test organizations to promote unfiltered access to vehicles’
safety and environmental data. Without this data, it is not possible to guarantee the proper condition and safety of vehicles.
The “Trust Center” initiative is a trustee-based model for the
secure gathering and analysis of data for the purpose of consumer protection.
Innovative calibration instruments

The reliable testing of vehicle functions and emissions requires
testing technology and equipment that is 100 % reliable andprecise. By developing and launching innovative calibration
instruments for brake, headlamp, and exhaust test facilities,
DEKRA continued to invest in this field, which is important forroad traffic safety, in 2019. As a result, DEKRA was accredited
as a calibration laboratory in accordance with DIN EN ISO/IEC 17025 by the German National Accreditation Body. Thismeans that DEKRA’s calibration technicians can also provide
accredited on-site calibrations at vehicle inspection facilities
throughout Germany.

D E K R A Financial Report 2019

Lif ts in the cloudAs a lift inspection expert, DEKRA developed a ground-­breaking
cloud-based solution in the reporting year in the form of the“DEKRA Lift Explorer”. This enables lift operators to improve
the safety and efficiency of their machinery, and optimize­maintenance.
The “DEKRA Lift Explorer” consists of a high-tech box thesame size as a smart phone box, which is mounted onto the liftcar. This box records every ride, the position of the lift car, thedoor movements, and the load. The recorded data appears in a
web-based cloud dashboard in real time. The information gathered can be used to identify targeted maintenance and repair
measures in order to improve availability. The “DEKRA Lift
Explorer” also enhances safety in a way that goes beyond thestatutory requirements. If the lift breaks down between stories,
the operator can respond immediately irrespective of whether
an emergency call is made.
Successful digitalization campaign

The “DEKRA Lift Explorer” is one example of how DEKRA successfully promoted the digitalization of services and processes,
and opened up opportunities for future growth with new solutions in 2019.
In the growing field of electromobility, a function test for
rapid charging stations has been designed and is currently being
introduced in the Netherlands as a pilot market. In the equally
dynamic market for micro-mobility, DEKRA has not only beenassessing operating licenses for electric scooter sharing providers
since 2019, but is also working on international testing standards
for this recent form of urban mobility.
In New Zealand, DEKRA has developed a prototype for aself-learning system based on artificial intelligence (AI). Thissystem can calculate when a vehicle will break down with a highdegree of accuracy using remote diagnostics. Drawing the attention of vehicle owners to a potential defect improves road traffic
safety. Predictive maintenance is also gaining more and more
attention within industry. That is why DEKRA has created an

07

online monitoring system in the context of the Industrial IoT.
This constantly monitors the safety-related parameters of criticalassets such as boilers, pipelines, and cranes. Early maintenanceimproves safety in the factory hall.
DEKRA is also backing artificial intelligence (AI) for the
management of claims and the identification of insurance fraud
based on the scanning of images and voice analysis. Other
digital solutions, for example for audits, not only improve theservice provided to the customer but also help DEKRA to reduce
its administrative workload.
Integrit y and sustainabilit yCompliance 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 2019, 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 2019

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GROUP MANAGEMENT REPORTGROUP MANAGEMENT REPORT

Corporate information

Corporate information﻿

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 its impartiality
when rendering 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 those employed by DEKRA, that is employees,
middle management, executives, and board members, work on
the basis of these standards, and can be relied upon to fulfill theirduties and conduct themselves as fair-minded business partners.
The internal requirements and obligations are defined in thequality management system. 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 rose from 347 to 490. Thischange can mainly be attributed to the changed recording
method which is now structured according to more extensive
criteria as a result of the restructured Service Divisions, but it isalso due to changed official requirements and new services.
The Product Testing, Industrial Inspection, and Audits
Service Divisions have successfully completed all major reaccreditations worldwide and have obtained numerous extensionsin accreditation scopes. New accreditations were also completed
in the Product Testing Service Division, for example in the fieldof 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 andexpansion of the Company’s accreditation as a Notified Body fortesting medical devices and products to the new legal frameworkof the Medical Devices Regulation (MDR) and In Vitro Devices
Regulation (IVDR).
Environmental protection and sustainabilit y
Sustainabilit y management

Efforts to expand DEKRA’s sustainability management function
continued in the fiscal year 2019, and they were integrated into
the new Group structure via regional interfaces. 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 andinternational sustainability codes. DEKRA has complied with
the internationally recognized German sustainability code since
May 2017. DEKRA once again achieved silver in its ecovadis
sustainability rating, providing renewed external validation ofits direction.
The Company continued to work on environmental issues(expansion of its internal environment and climate management
function), social issues (DEKRA’s social standards, expansion of
HR sustainability and governance issues), the organizational
integration of sustainability management, and standards andprocesses aimed at promoting sustainability within the supply
chain. The Company’s direction with respect to sustainability isconstantly being assessed and developed by means of a dialog
with internal and external stakeholders. On the whole, DEKRA
mainly contributes to a sustainable trend for the economy, environment, and society as a multiplier, through its know-how andexpert services with a focus on safety, as well as by specificallysupporting customers in matters of sustainability and corporatesocial responsibility.

D E K R A Financial Report 201909

Protecting the environment and climate

Declaration of compliance

The internal environment management function was successfully transitioned to the new Group structure. The global management system and the data-based management of environmental conservation topics continue to be expanded anddeveloped in accordance with current findings and requirements. The focus is on the efficient use of energy and resources,
as well as protecting the climate. In doing so, DEKRA takes
advantage of the expertise of its employees who specialize inthese fields internally as well. Employees receive training and are
the target of awareness campaigns relating to environmental
issues. Internal best practices are highlighted, and applied tosuitable areas. What is more, DEKRA still offers expert services
in the area of climate, environment, and energy, thus also contributing to environmental and climate protection outside theCompany.

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 % (prior year: 16.7 %). This quota has
been reached. A target of 25 % has been set for the Management
Board from 2022 onward. A quota of 15 % and 20 % has been set
for the first management level (Executive C­ ommittee/Operational Committee) and second management level (Management
Committee), respectively. The Executive Committee/Operational Committee did not reach this target (12.5 %; prior year:
11.1 %). The Management Committee also did not reach this target (19.1 %; prior year: 20.8 %). Both targets remain in place, andwe are constantly working to achieve them.

Personnel repor t
Increase in global core workforce despite fallin headcount at Temp Work

The headcount of the core workforce assigned to DEKRA’s eightglobal regions (excluding Temp Work) increased by 1,116 employees in the fiscal year, from 26,617 to 27,733. The core workforce
in the Germany region grew by 4.3 % in comparison to the prioryear, from 11,974 to 12,493 employees. This was boosted by thegenerally good level of demand for automotive and industrial
services in ongoing business. The number of employees assigned
to the Service Divisions also rose from 108 to 217. The numberof employees in the central units (“Steering & Support”) held
steady at 707 (prior year: 715).
The headcount in Temp Work, however, fell by 2,453 acrossall DEKRA regions to 15,304 (prior year: 17,757) as a result of
the global economic slowdown. The headcount for Temp Workin Germany fell by 1,615 to 7,854 employees (prior year: 9,469).
As a result, the DEKRA Group employed a total of 43,961
people at the end of the year (prior year: 45,197).

Global management and junior talent development

DEKRA continued its global management development programin 2019. In the reporting year, the Managerial Foundation Programme (MFP) was completed for around 81 mid-level man­agers, with a total of around 320 days of participation. With
MFP, DEKRA has created a uniform concept of management
and the management culture that is required in order to implement the Company’s strategy. Efforts to enable managers to realize 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.
For years, DEKRA has used the International Advancement Programme (IAP) to promote junior talents who are working in or are to be prepared for international functions. In thismulti-modular program with international participants, specificbusiness cases for digital business models were once again processed and presented to the Management Board as a final task in
2019. The outputs of the projects are incorporated into ongoingwork by the relevant specialist departments.

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GROUP MANAGEMENT REPORTGROUP MANAGEMENT REPORT

Corporate information

Report on economic position

Report on economic position﻿

In addition to the centrally managed development measures mentioned above, various event series were held in Germany, France, and China under local responsibility.

REPORT ON ECONOMIC POSITION

General economic and industr y-specific conditions
Global economic growth slowing

Dialog and exchange with employees and managers

Among other things, a global “Engagement Survey” involving
around 28,000 employees in 36 different countries was conducted in October 2019. In more than 1,000 team dialogs, managers will analyze the results of the survey together with theirteams and derive targeted measures. This process also made it
possible to define and implement measures in adjacent management levels. The survey and the implementation processes also
provided important input for the relevant specialist departments. The survey, and the implementation of its findings, thus
constitute a management tool at all levels of leadership. Webbased learning programs were made available to managers inorder to support and manage the associated processes, and for
quality assurance purposes.
Integration and harmonization

The HR function supported the new Service Divisions andregions in connection with the Company-wide restructuring of
TOM 2020, and drew up or revised fundamental policies. These
include the binding Global Travel Policy, the standardization of
titles and function designations (Global Title Policy), and a harmonized job evaluation system (Global Grading Policy). Amongother things, the latter serves the planning of career paths andsuccession planning at DEKRA on the basis of a systematic Job
Family Matrix.

The global economy continued to grow in 2019, albeit not as fast
as in the prior year. According to World Bank data, global grossdomestic product (GDP) grew by 2.4 %, which is below the figure
for the prior year (3.0 %). The strongest rates of growth wereachieved in East Asia and Oceania (5.8 %; prior year: 6.3 %),South Asia (4.9 %; prior year: 7.0 %), and the developing andemerging economies (3.5 %; prior year: 4.3 %). Industrializedcountries achieved an increase of 1.6 % (prior year: 2.2 %). In theeuro zone, GDP increased by 1.1 % compared to the prior year
(1.9 %).
Unemployment fell to its lowest level in years, both in theeuro zone and in the EU28 countries. In the euro zone countries,
at 7.4 % in December 2019, it remained below the figure of
the same month in the prior year (7.8 %). According to calculations by the statistical office of the European Commission(EUROSTAT), the unemployment rate in the EU28 was also
down on the prior year at 6.2 % in December 2019 (prior year:
6.6 %). Overall, around 15.5 million people were unemployed in
the EU28 in December 2019. The lowest figures were recorded in
the Czech Republic (2.0 %), Germany (3.2 %), Poland (3.3 %), andthe Netherlands (3.2 %). Unemployment was highest in Greece(16.6 %), Spain (13.7 %), and Italy (9.8 %).
According to EUROSTAT, annual inflation in the eurozone fell year-on-year from 1.5 % in the prior year to 1.3 % in
December 2019. EUROSTAT also reported that consumer prices
in Germany rose by 1.5 % in December 2019 compared with
1.7 % in December 2018.

prior year. Of the 14.3 million units, 3.6 million units were registered in Germany alone, which is an increase of 5 %. Unit sales
in the US market (just under 17 million units) were down yearon-year (–1.4 %). The trend in China was very negative (–9.5 %).
With sales of new vehicles of 21 million units, however, the People’s Republic of China remains the world’s largest passenger car
market by far.
DEKRA’s industrial business is influenced by the German
and international industrial economy. The geopolitical trade disputes between the US, Europe, and China had a very negative
impact on conditions. According to the BDI [“Bundesverband
der deutschen Industrie”: Federation of German Industries],order intake in Germany’s manufacturing sector fell by 5.6 % incomparison to the prior year in the third quarter of 2019. Orderintake from the euro zone fell by 6.3 % in the third quarterof 2019.
In the fields of education, training, and HR services (theTraining and Temp Work Service Divisions), apart from theawarding of government contracts, demand for temporary work
is particularly relevant. According to the data provided by theGerman Federal Employment Agency [“Bundesagentur für
Arbeit”], the moving average number of temporary workers inGermany from July 2018 to June 2019 was approximately
948,000. This is 87,000 fewer than in the same period of the prioryear. The temporary employment sector is usually the first to feelthe effects of an economic slowdown. In light of the changing
demands on the qualifications of employees, the Bundesagentur
für Arbeit also invested around 1.9 billion euros in the promotion of vocational training in 2020.
Business performanceGroup

Challenging framework conditions for DEKR A

Improved global positioning ensures growth

The global markets in the automotive industry, which is important for DEKRA, developed differently. According to data provided by the VDA [“Verband der Automobilindustrie”: German
Association of the Automotive Industry], the number of passenger cars sold in Western Europe in 2019 was up by 0.7 % on the

In the fiscal year 2019, 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 2.0 % to 3.4 billion euros. DEKRA’s earnings before interest and taxes (EBIT)
failed to reach the high prior-year figure, amounting to
201.8 million euros (prior year: 212.4 million euros).

D E K R A Financial Report 201911

Germany region

With revenue increasing by 1.9 % to 2.1 billion euros, Germany
underscored its status as DEKRA’s biggest market. Business was
positive across almost all services. In particular services in the
Inspection, Claims & Expertise, Product Testing, and Training
areas contributed to this growth. This can be partly attributed
to the high quality of services and the Company’s blanket coverage of Germany. DEKRA has also benefited from the course it
has set for its business lines in past years.
This was offset by the trend for Temp Work’s services,which can be attributed to the challenging economic situationin the past fiscal year, and the associated fall in demand for temporary workers.
Entr y into new inspection markets

With respect to the periodic inspection of passenger cars andtrucks, the Company was able to increase its market share to33.5 % (prior year: 33.4 %), with 9.7 million main inspections carried out. New markets were also tapped into at the same time.
For example, DEKRA has established itself in the field of“micro-mobility”, with more than 1,000 accreditations for issuing individual and general permits for electric scooters. Electricbikes were also identified as a field for expansion in 2019.
DEKRA conducts inspections and provides expertise in this segment on behalf of insurance companies.
The new forms of mobility that are currently being tested
in various cities include self-driving, electric shuttle buses.
DEKRA has provided expertise for individual permits fornumerous projects – including for the EasyMile EZ10, which is
being tested in Brandenburg, and for the self-driving, electric
shuttle bus as part of the HEAT (Hamburg Electric Autonomous
Transportation) project in Hamburg.
In addition to all kinds of vehicle inspections, businesswith other vehicle-related services also went well. 2019 wasanother year in which natural disasters caused damage. Thanks
to its flexible organization, DEKRA was able to dispatch experts
to the affected areas quickly. Proximity to the market and customers paid off when it came to winning a major German insurer
as a customer. This customer has now expanded the partnership

D E K R A Financial Report 2019

12

GROUP MANAGEMENT REPORTGROUP MANAGEMENT REPORT

Report on economic position

Report on economic position

﻿﻿

thanks to its positive experience with DEKRA. In the field ofused vehicle management, DEKRA won a contract with anotherautomotive manufacturer and was able to significantly increase
its revenue.
Sales achievements and market share gains

The performance of business in connection with DEKRA’s services in the fields of Product Testing, Industrial Inspection, andConsulting was characterized by the acquisition of customers,
gains in market share, and new services.
DEKRA has provided building technology services for amajor bank in Frankfurt and a cultural institution in Hamburg
since 2019, for example. For a major traffic infrastructure projectin Stuttgart DEKRA is developing a fire safety concept, and for
new customers in industry DEKRA conducts safety inspectionsof machinery and large-scale engines.
The market shares in inspection markets with links toindustry increased sharply in some cases (for example to 24 %for gas station inspections and 14 % for regular lift inspections).
DEKRA also made substantial gains in its business with the
manufacturers and operators of wind power facilities.
On behalf of one German automotive manufacturer,
DEKRA is helping one of its suppliers to build up CO2-neutral
battery cell production, and assessing compliance with environmental standards in Germany. There are also new manufacturing facilities in China and the US.
New services were introduced, including the online
recording of mental hazards at the workplace, preventive lift
maintenance (see “Lift Explorer” on page 7 in the “Research anddevelopment” section), and the testing of air conditioning units
for legionella.
Business with large customers reinforced

The Training and Temp Work areas continued to expand theirservices for large customers in 2019. Assistance is being provided
to a leading e-commerce company with the implementation of
its internal career selection program, for example. Employees arebeing prepared for new tasks outside the company. DEKRA
Akademie is training employees as professional drivers, forexample, and placing them with other companies.
2019 saw a sharp increase in demand from suppliers fortraining in the field of electromobility. Employees are preparedfor new challenges with DEKRA’s know-how from dealing withhigh-voltage components to working with live electrical systems.
The Temp Work Service Division established a new business line in connection with the introduction of micro-mobility
in Germany. This included helping four national e-scooter­providers to build up their HR infrastructure. DEKRA provided
around 600 temporary workers in this field within the space ofsix months.
Central East Europe & Middle East region

In the reporting year, DEKRA generated revenue of 162.5 million euros (prior year: 159.4 million euros) in the Central East
Europe & Middle East region. This revenue growth was above
all fueled by services in the Vehicle Inspection and Claims &Expertise areas. A global rail transport technology manufacturer
was gained as a customer in 2019, for example. With its Industrial Inspection services, DEKRA demonstrated the potential of
the non-destructive materials testing of components duringongoing production, including data management for the quality
assurance process, at a manufacturing plant in the Czech Republic. The contract that was subsequently concluded not only covers the manufacturer’s facilities in the Czech Republic, but all of
its more than 60 plants worldwide.
Nor th -West Europe region

DEKRA generated revenue of 346.1 million euros (prior year:
329.4 million euros) in the North-West Europe region. One year
after entering the Danish vehicle inspection market, DEKRA
already has a network of 29 passenger car and truck inspection
stations and a market share of 10 %. The Company also significantly improved its position in the Swedish vehicle inspection
market. DEKRA was also recognized as the best service provider

D E K R A Financial Report 2019

in this category. This is reflected in the growth of the Vehicle
Inspection areas’s revenue in comparison to the prior year. In
Finland, further improvements were made to VALTO360, a
DEKRA app for the inspection of industrial machinery, in 2019.
VALTO360 allows industrial machinery and its measurement
points as well as its measurement results to be recorded digitally.
This facilitates the current inspection process, and makes it easier to compare with past data. Release version 2.0 of the app waslaunched onto the Scandinavian, German, and French markets
at the end of 2019. In Belgium, DEKRA concluded a contract for
fleet and remarketing services with an automotive group.
South -West Europe region

DEKRA generated revenue of 532.2 million euros (prior year:
526.6 million euros) in the South-West Europe region. In France,
DEKRA’s second domestic market, the Company was able tobuild up its business in a number of service sectors. The Vehicle
and Industrial Inspection areas, which are the Company’s best
performers in terms of revenue, contributed the most to thisrevenue growth. In the field of industrial inspection, an automotive supplier entrusted DEKRA with both the safety audits of its
plants and the inspection of manufacturing processes. DEKRA
is also providing advice on how to improve production processes. DEKRA also provides advisory services for a French
automotive group in connection with the market launch of its
cross-brand used vehicle brand. In the French plants of a European aircraft manufacturer, DEKRA has been training employees on health and safety issues since 2019. DEKRA gained entry
into the temporary employment market by opening two branches
in Paris.
In Spain, DEKRA benefited from a strong position in themarket for secure wireless connectivity technology. A leading
manufacturer of connected car solutions was gained as a customer. The contract consists of assessing functional safety andtype approval for more than 100 countries. DEKRA also handles
the functional safety inspection of infotainment systems for a
North American automotive manufacturer.

13

Nor th America region

Revenue in the North America region rose slightly to 93.6 million euros (prior year: 93.1 million euros). Gains in market share,in particular for Vehicle and Industrial Inspection services, contributed to this increase in revenue. The revenue of the Claims& Expertise area fell in comparison to the prior year, however.
A major US flight operator significantly improved its workplace safety with DEKRA’s help. Thanks to DEKRA’s advisory
services in connection with organizational and process safety,
injuries and down time were significantly reduced year-on-year.
DEKRA successfully launched a new self-learning system inorder to raise awareness of safety in large, mainly manufacturing
companies. The digital dashboard-based solution focuses on thesafety-related aspects of employees’ behavior, and provides companies’ workplace safety officers with tools for identifying andeliminating risks.
In the field of industrial inspection, in 2019 DEKRA
acquired JAMKO, a company based in New York State that specializes in remote visual inspection. This added to the range ofservices DEKRA offers, and enabled it to win a major order foran energy utility company. DEKRA also made gains in thehighly competitive market for vehicle inspections.
South America region

DEKRA generated revenue of 18.7 million euros (prior year:
19.0 million euros) in the South America region. The revenue of
the Claims & Expertise area fell slightly, while in the ProductTesting area it rose slightly.
After China (please refer to page 14, East & South Asia
region), in 2019 DEKRA successfully gained entry into theChilean vehicle inspection market as well. This means that fromnext year, when vehicle inspections in Chile commence, DEKRA
will be active in 20 different countries.
Following the award of the first franchises, DEKRA will
start periodic vehicle inspections in the course of 2020. The Chilean market is particularly interesting because vehicles there aresubject to inspections that are comparable to the standards in

D E K R A Financial Report 2019

14

GROUP MANAGEMENT REPORTGROUP MANAGEMENT REPORT

Report on economic position

Report on economic position﻿﻿

Europe. DEKRA will initially operate five inspection stations in
Santiago de Chile, the region surrounding the capital witharound eight million inhabitants. This lays the foundation forfurther expansion. DEKRA also wants to be a leading partner
for vehicle inspections in Chile.
Following its positive experiences in Europe, DEKRA has
taken the first steps toward transferring its Expert-­MigrationProgram to Brazil. This program trains nursing staff andprepares them for working in Germany. The start in Brazil was
promising. Work has already started on building a corresponding training center in São Paulo. The first 100 nurses are
currently undergoing training.
East & South Asia region

The global expert organization generated revenue of 102.5 million euros (prior year: 88.2 million euros) in the East & South
Asia region. This increase can mainly be attributed to services
in the Product Testing division. This economic area is an important growth market for DEKRA. The positive trend was centeredaround China. The People’s Republic’s gross domestic product(GDP) continued to grow despite the trade dispute with the US.
DEKRA benefited disproportionately from this thanks to its
good position in the market.
The Company improved its position both in markets inwhich DEKRA has traditionally operated, such as testing thefunctional safety of automotive electronics, and in relatively newlines of business. DEKRA has moved into the markets for thetesting of solar energy equipment and rail transport, for example, and has been able to reinforce its market position in the processing industry. The latter helps improve safety in Chinese­factories.
One of the highlights of the year was the start of vehicle
inspection activities. Work started at two stations, including thelargest inspection station in DEKRA’s global network in Beijing.
The station has six lanes for emission tests and four for assessing
the technical safety of passenger cars, trucks, and buses. Vehicle
inspections in China are organized on the basis of the divisionof labor, and partially automated. This time-saving processmeans that up to 400 vehicles can be inspected every day. In the

future, it should be possible to inspect around 100,000 vehicles
a year in DEKRA’s largest vehicle inspection station to date.
DEKRA has established a regional holding structure in
China in order to be able to exploit the remaining potential for
growth even better in the future.
Southern Africa & Oceania region

Revenue of 86.4 million euros (prior year: 97.3 million euros)
was generated in the Southern Africa & Oceania region. The
decline in revenue can mainly be attributed to the difficult market conditions in South Africa in the Industrial Inspection
business. For the next three years, DEKRA will still be the New
Zealand government’s exclusive partner for the assessment ofpractical driving tests. The existing contract was extended bythree years, and comprises roughly 260,000 tests per year.
VTNZ, DEKRA’s local entity, has also demonstrated its
capacity for innovation in the field of vehicle inspection. A
prototype application that uses the principles of artificial intelligence can predict defects and breakdowns with a high degreeof accuracy. This makes it possible to improve road traffic safety
by carrying out prompt maintenance and replacement work on
vehicles. Thanks to this and other innovative approaches tothe digitalization of services, VTNZ was listed as one of New
Zealand’s 50 most innovative companies.
In South Africa, the second major market in the region,
the Company was able to build on its position as a leading­provider of vehicle inspections. The market share rose to 17.7 %.
Among other things, this was achieved thanks to contracts forthe inspection of Uber vehicles, as well as buses and trucks. Conditions in the Industrial Inspection market were challenging. On
the other hand, however, the Company was able to acquire amajor new customer for the Product Testing area. In addition toEurope, DEKRA now also provides certification services for oneof the world’s biggest cell phone manufacturers in South Africa
as well.
Overall statement by management

DEKRA continued its trajectory of growth in 2019. In the fiscal
year 2019, the increase in revenue was almost exclusively the

D E K R A Financial Report 2019

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 presence, DEKRA will participate in the global trend toward more
technical and organizational security. The chances of sustainable
and stable growth remain good, despite the significant deterioration of economic conditions. The evolution of the organization
through TOM 2020 has prepared DEKRA to make full use ofopportunities on the market.
Financial position and performance
Financial performance

The DEKRA Group increased its revenue by 68.5 million euros
in the fiscal year 2019 (prior year: 205.7 million euros) to
3,409.0 million euros (prior year: 3,340.5 million euros), whichis equivalent to a revenue increase of 2.0 % (prior year: 6.6 %).
This means that the target for revenue in 2019 was missed by aslight margin, which can be attributed in part to difficult market
conditions in the Temp Work segment.
GROUP REVENUE
worldwide in million euros

3,341

3,409

2018

2019

+2.0 %
Revenue increase

Of this growth, 1.6 % (prior year: 6.0 %) was achieved throughorganic growth and first-time consolidations, while 0.2 % of thisrevenue growth in 2019 (prior year: 1.3 %) stems from the acqui-

15

sitions in the fiscal year and full consolidation of entities
acquired during the prior year. Changes in exchange rates
increased revenue by 0.2 % (prior year: negative effect of 0.7 %).
Much of the increase in revenue stemmed from the Germany, East & South Asia, and North-West Europe regions. Thiswas offset by the trend in the Southern Africa & Oceania region,
particularly due to the challenging economic and political environment in South Africa. Services in the Vehicle Inspection,
Consulting, Product Testing, and Industrial Inspection areas
made a significant contribution to the increase in revenue. There
was a substantial decline in Temp Work, however, which can be
attributed to the challenging economic situation in the past fiscal
year, and the associated fall in demand for temporary workers.
Other operating income increased by 3.9 million euros to37.2 million euros (prior year: 33.3 million euros).
At 5.1 %, the increase in the cost of materials outpaced theincrease in revenue. As a result, the ratio of cost of materials torevenue increased to 9.8 % (prior year: 9.5 %), which can be partly
attributed to lost revenue in Temp Work. Personnel expenses
increased by 1.8 % to 2,227.9 million euros (prior year:
2,189.4 million euros). The ratio of personnel expenses to rev­enue fell slightly by 0.1 percentage points in the fiscal year 2019,from 65.5 % to 65.4 %. The effect from the decline in Temp Work
was offset by the increase in the number of employees in otherservice areas.
Other operating expenses fell by 75.6 million euros to498.3 million euros, which translates into a 2.6-percentage point
reduction in the expense ratio to 14.6 % (prior year: 17.2 %). This
was largely due to the application of IFRS 16 for the first time,
which resulted in the different classification of lease expenses
and therefore reduced other operating expenses by 107.4 million euros. On the other hand, there was an increase in valuation
allowances on receivables, IT costs, and administrative expenses.
The volume of write-downs rose at a much faster rate thanrevenue (113.7 %), by 104.1 million euros to 194.9 million euros
in the fiscal year 2019 (prior year: 90.8 million euros). Most of
this increase (101.4 million euros) was due to the amortizationof right-of-use assets on the basis of leases that were capitalized
in the fiscal year in accordance with IFRS 16.

D E K R A Financial Report 2019

16

GROUP MANAGEMENT REPORTGROUP MANAGEMENT REPORT

Report on economic position

Report on economic position﻿﻿

Operating profit (EBIT) – calculated as earnings before
taxes and the financial result – decreased by 5.0 % to a total of
201.8 million euros (prior year: 212.4 million euros). This meansthat the expected slight increase in the operating result in thefiscal year in comparison to the prior year was also not achieved,
as expectations for Temp Work and also individual regions were
not met. The return on sales calculated in relation to operating
profit fell by 0.5 percentage points year-on-year to 5.9 %.
The financial result fell by 2.6 million euros on the prioryear to 20.2 million euros. This is mainly due to the applicationof IFRS 16 for the first time, which increased financial expenses
by 6.6 million euros due to the discounting of lease liabilities.
The impairment losses in the financial result for the prior year
were 3.0 million euros higher. Other interest and similar income
also fell. The reduction of net lending from pension liabilities by
0.7 million euros in comparison to the prior year also improved
the financial result.
Earnings before taxes decreased by 6.8 % to 181.6 million euros (prior year: 194.8 million euros). The return on sales,
calculated in relation to income before taxes, fell to 5.3 % (prioryear: 5.8 %).
The Group tax rate rose 3.6 percentage points on the prioryear to 34.0 % (prior year: 30.4 %). This increase mainly stems
from a change in the law to abolish the tax credit on social security contributions in France (CICE – Crédit d’impôt pour lacompétitivité de l’emploi), which reduced the volume of tax-­
exempt expenses in comparison to the prior year. Changes in the
tax rates in France and the US (resulting among other things in
the impairment of deferred tax assets) and much lower capitalizations of loss carryforwards that can be utilized in the future
in comparison to the prior year at certain subsidiaries also contributed to the increase in the Group’s tax rate.
The consolidated net income for the fiscal year 2019
decreased by 15.7 million euros to 119.8 million euros (prioryear: 135.5 million euros).
Other comprehensive income fell by 28.6 million euros to–33.8 million euros (prior year: –5.2 million euros). This change
can mainly be attributed to actuarial adjustments to pension
liabilities, which reduced other comprehensive income by
53.9 million euros (prior year: 19.8 million euros). These adjust-ments largely stemmed from the reduction of the interest rate by
0.75 percentage points to 1.0 % in the fiscal year. This was offset
by the adjustment of other non-current financial instrumentswith no effect on income to their fair value, amounting to
16.0 million euros. The reserve for currency translation also
increased by 4.2 million euros (prior year: –6.1 million euros).
This was primarily due to the subsidiaries in the UK, US, South
Africa, and Taiwan. This was countered by currency translation
effects of subsidiaries in Sweden. This results in total com­prehensive income, taking into account expenses and income
recognized directly in equity, of 86.1 million euros (prior year:
130.3 million euros).
To aid comparison of the operating result, the operating resultand earnings before taxes for 2019 and 2018 were adjusted forthe following non-operating (special) effects:– Amortization of intangible assets identified as part ofa 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,– Restructuring expenses, M&A costs, and integration
costs,– Earnings from the sale of entities and individual
items of property, plant and equipment, as well asfrom the subsequent measurement of purchase pricecomponents (earn-out agreements) and frompurchase price reimbursements,– Exchange rate effects in relation to loans within theGroup (effect on the financial result),– Special effects from the measurement of put and call
options (effect on the financial result).
Adjusted operating profit decreased by 6.2 % to 227.1 million euros (prior year: 242.3 million euros). As a result, the margin for the adjusted operating profit fell by 0.6 percentage points
to 6.7 %. Adjusted earnings before taxes amounted to 210.2 million euros in the fiscal year (prior year: 227.9 million euros). This
represents a margin of 6.2 % (prior year: 6.8 %).

D E K R A Financial Report 201917

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 2 019
in million euros

+6.3

+2.4

+0.7

+0.4
227.1

+15.5
+3.3
210.2
–20.2
201.8

EBIT 2019
unadjusted

PPA
impairment

Project costs

Othereliminations

Integration andtransaction costs

Restructuring
expenses

EBIT 2019adjusted

Financial result
unadjusted

Eliminations fromfinancial result

EBT 2019
adjusted

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

+1.3

+0.7

+1.6
242.3

+18.6
+3.2
227.9
–17.6

212.4

EBIT 2018
unadjusted

PPA
impairment

Project costs

Othereliminations

Integration andtransaction costs

Restructuring
expenses

D E K R A Financial Report 2019

EBIT 2018adjusted

Financial result
unadjusted

Eliminations fromfinancial result

EBT 2018
adjusted

18

GROUP MANAGEMENT REPORT
Report on economic position

GROUP 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 2019, excluding acquisitions,amounted to 128.2 million euros (prior year: 123.7 million euros). Spending mainly related to land and buildings, technical and other equipment, furniture and fixtures as well as
intangible assets. The volume of investment for acquisitions was
down year-on-year in the past fiscal year.
Liquidit y analysis

In the fiscal year 2019, the DEKRA Group’s liquidity was mainly
influenced by a more favorable trend for net working capital anda reduction in acquisitions.
Cash flow from operating activities (343.3 million euros;
prior year: 94.0 million euros) was mainly influenced by theapplication of IFRS 16 for the first time, and the associatedincrease in the amortization of right-of-use assets by 101.4 million euros. Cash flow from operating activities improved significantly despite a reduction of 15.7 million euros in operating
profit after adjusting for non-cash expenses and income. Thiswas mainly due to the increase of 87.4 million euros in net working capital in particular. Payments of 41.4 million euros madein the prior year in order to build up plan assets, and a reductionof 10.4 million euros in the volume of tax payments, also boosted
cash flow from operating activities.
The net cash outflow from investing activities came to154.6 million euros (prior year: 174.9 million euros). This decline
stems from reduced investment in acquisitions (15.2 million euros; prior year: 40.1 million euros). This was offset by afurther increase in the volume of investment in property, plantand equipment, and in intangible assets.

The net cash outflow from financing activities came to178.3 million euros (prior year: net inflow of 79.1 million euros).
The application of IFRS 16 for the first time, which categorizes
payments to repay lease liabilities (which in 2018 were lease
expenses in operating cash flow) and the corresponding interest
as cash flow from financing activities, reduced cash flow fromfinancing activities by 107.4 million euros. Cash flow fromfinancing activities was also reduced by the transfer of profit to
DEKRA e.V., Stuttgart (37.4 million euros; prior year: 54.0 million euros), the cash outflow relating to the change in the cash
pool with DEKRA e.V., Stuttgart, as of the reporting date
(36.9 million euros; prior year: net inflow of 33.5 million euros),and cash outflows in connection with the payment of interestand installments on loans. This was offset by the payment of
25.0 million euros into the capital reserves (prior year: 10.0 million euros).
Cash and cash equivalents (consisting of checks, cash in
hand, bank balances, and other cash equivalents) rose by a totalof 13.8 million euros to 92.3 million euros (prior year: 78.5 million euros).
Composition of assets, equit y, and liabilities

Total assets rose by 488.4 million euros (prior year: 176.8 million euros) from 2,267.0 million euros to 2,755.4 million euros
in the past fiscal year. This represents a change of 21.5 % (prioryear: 8.5 %).
The growth consists of an increase in non-current assetsof 445.8 million euros to 1,796.7 million euros (prior year:
1,350.9 million euros) as well as an increase in current assets of
42.7 million euros to 958.7 million euros (prior year: 916.0 million euros).
Non-current assets increased by 343.8 million euros dueto the application of IFRS 16 for the first time and the associatedcapitalization of right-of-use assets. Upon application for the
first time, the right-of-use assets increased by 373.7 million euros
with no effect on income. Property, plant and equipment also
increased by 11.4 % to 419.0 million euros (prior year: 376.1 mil-

D E K R A Financial Report 2019lion euros). This increase is largely due to the acquisition, construction, and modernization of properties for the Group’s own
use, the acquisition of land, and investment in new technicalequipment.
Total trade receivables and contract assets remained
almost unchanged in comparison to the prior year. The maturi­
ties of trade receivables at the overall Group level fell by about
five days to 52 days (prior year: 57 days) due to the improved
management of receivables. The increase in current assets therefore stems for the most part from the increase of 45.9 million euros in other current financial assets with respect to theshareholder, to 231.3 million euros. Cash and cash equivalents
also rose by 13.8 million euros.
Equity increased by 47.5 million euros to 796.3 million euros (prior year: 748.8 million euros). This is largely attributable to the consolidated net income for the year of 119.8 million euros (prior year: 135.5 million euros). The transfer of
profits to DEKRA e.V., Stuttgart, and the addition to the capitalreserves by DEKRA e.V., Stuttgart, in the fiscal year came to53.0 million euros (prior year: 37.4 million euros) and 25.0 million euros (prior year: 10.0 million euros) respectively. The
Group’s equity was also boosted by the measurement of non-consolidated subsidiaries at fair value with no effect on income(16.0 million euros) and effects totaling –4.2 million euros fromthe translation of currencies (prior year: 6.1 million euros). Thiswas partially offset by the recognition of the remeasurement ofpension obligations through other comprehensive income (lessdeferred tax assets) amounting to 53.9 million euros (net) (prioryear: 19.8 million euros), as well as the effects of applying IFRS 16
for the first time in the fiscal year (13.1 million euros), which
reduced equity. The equity ratio decreased to 28.9 % from 33.0 %in the prior year.
Non-current liabilities increased by 268.5 million euros to1,057.9 million euros (prior year: 789.4 million euros), largely
due to the application of IFRS 16 for the first time. Upon application for the first time, liabilities due to lease obligations
increased by 295.5 million euros with no effect on income. These

19

fell by 21.7 million euros to 273.8 million euros during the year
in progress. Provisions for pensions also rose by 107.1 million euros, or 61.5 million after being netted against a 45.6 million euro increase in plan assets. Non-current liabilities to banks
fell by 57.3 million euros for maturity-related reasons, and thesewere reported as current liabilities. The current and non-current
liabilities are mainly denominated in euros.
Current liabilities rose by 23.7 %, from 728.7 million euros
to 901.2 million euros. This stems from the increase in lease liabilities, which increased with no effect on income by 91.3 million euros upon the application of IFRS 16 for the first time, andamounted to 84.6 million euros as of the balance sheet date.
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, 2019, there
are medium-term lines of credit of 312.3 million euros pledged
in writing that have not yet been drawn.
Summar y assessment of financial positionand performance

Despite the increase in revenue, the trend for the DEKRA
Group’s results of operations in the fiscal year 2019 did not meet
expectations. 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 risks

DEKRA fundamentally overhauled its risk management process
in 2019. This included introducing its own risk management
software. A risk inventory is now carried out for the fiscal year
in progress and the two subsequent years, with strategic risks
that are cumulative in nature recorded separately. The new process also includes the DEKRA Matrix from the regions and Service Divisions. This allows potential risks to be systematically
identified and categorized according to whether the likelihood

D E K R A Financial Report 2019

20

GROUP MANAGEMENT REPORTGROUP MANAGEMENT REPORT

Risk, opportunities, and forecast report

Risk, opportunities, and forecast reportof their occurrence and the loss potential are high (dark green),moderate (light green and striped), or low (white).
QUANTIFIC ATION OF RISKS

Loss potential in % of sales
critical/severe>0.60 %
very high>0.35–0.60 %medium/moderate>0.15–0.35 %minor>0.05–0.15 %marginal>0–0.05 %rare

unlikely

0–10 %

10–<25 %medium/possible25–<50 %likelyfrequent

50–<75 %75–100 %Likelihood in %Urgent need for action

Need for action

Possible need for action

No need for action

The management levels responsible develop prompt countermeasures on the basis of the new risk management process. 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 2019 in its new form, is continuously being 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 remained stable 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 the development of technology could cast doubt on existing businessmodels. The outbreak of the coronavirus has the potential topose general economic risks that could cause economic growth
to slow, not only in China but around the world. This could
impact DEKRA’s business in a way that cannot currently
be ­estimated.
The business with automotive services is fundamentally
exposed to the regulatory risk of changes in the law. Following
the organizational realignment under TOM 2020, the regions
Germany, South-West Europe, North-West Europe, and Central
East Europe & Middle East are potentially affected. This risk iscurrently deemed to be low. Fierce competition and changing
technologies in the Vehicle Inspection Service Division pose amoderate risk as cost increases can only be passed on to thecustomers to a limited extent. DEKRA lowers this risk by
constantly improving productivity based on optimized processes
and new technologies to ensure more road safety and fewer
traffic ­fatalities.
Expectations with respect to the economy also determine
how willing DEKRA’s industrial customers are to invest. The riskof a drop in orders grows with real or suspected economic uncertainty. This affects the Product Testing and Industrial Inspection
Service Divisions, 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 globalization of its business.
The provision of services in the Training and Temp Work
areas is particularly sensitive to the performance of the economy.
In both these areas, revenue and earnings may be affected byfluctuations in orders caused by cyclical developments. As partof TOM 2020, this particularly affects the Germany and Central
East Europe & Middle East regions. 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 high risks in the
Temp Work Service Division. DEKRA is responding to these

D E K R A Financial Report 2019

regulatory interventions in the employee leasing markets bybuilding up its business with key accounts and by investing in
its position as a quality provider.
The systemic and industry risks posed by the market andstatutory provisions added up to a hypothetical anticipated damage volume of 114.2 million euros in 2019. The structure and distribution of risk for the years 2019, 2020, and 2021 are deemed
to be stable.
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 opportunities for growth. The risk of the failure of thestronger focus on internal networking and greater proximity to
the customer is currently considered low. This assessment isbased on the professional project management surrounding the
introduction of the new organization, which has already proved
its worth. DEKRA will also continue its policy of organic growth
supplemented by targeted acquisitions. DEKRA broadens its
footprint in terms of both expertise and geography by means ofstrategic acquisitions. However, the integration of acquired companies may fail or be delayed. Budgets may be unrealistic andsynergy effects unattainable. These risks are judged to be moderate. There are also measurement risks for capitalized 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 internationalization of businessentails – 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 theongoing adjustment of the liability protection offered by insurance policies to changing circumstances.
Those responsible identified 41 strategic risks that are
cumulative in nature. The associated anticipated theoreticaldamage volume is 88.2 million euros. These risks can be divided
into the categories of digitalization, new technologies, new competitors, the end of the service/product life cycle or commoditi-

21

zation, regulatory changes, and markets. DEKRA pays particular attention to the strategic risks because they are also associatedwith substantial opportunities.
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
testing, expertise, certifications, and seals. Risks arising frommissing or amended government authorizations are mitigatedby targeted committee work. This allows changes to laws andstandards to be identified in time and DEKRA services to be
rapidly adapted. Particularly important in this context is theoften time-consuming training and education of the examiners
and inspectors as well as the timely planning and provision of
the necessary equipment.
The adjustments to the national regulations in Germany
demanded by Germany’s national accreditation body (DAkkS;“Deutsche Akkreditierungsstelle”) in recent years specificallyconcerned the handling of test and measurement equipment. In
Germany, national requirements for the main inspection previously required that test and measurement equipment be regularly gaged, calibrated, and individually tested in accordancewith various different standards.
The standard to be audited by DAkkS requires consistentISO-compliant calibration. A certification procedure wastherefore introduced in 2016 that prescribes a mandatory stepby-step program for the universal implementation of theISO 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 to such an extent that all accreditations by DAkkS have so
far been completed successfully. DAkkS carried out additional
audits in 2019 in order to test the proof of calibration. The measures needed to adjust and implement the calibration procedure
have been initiated. There are no discernible risks on DEKRA’s
side that the assessment procedure will not be completed successfully by 2020.

D E K R A Financial Report 2019

22

GROUP MANAGEMENT REPORTGROUP MANAGEMENT REPORT

Risk, opportunities, and forecast report

Risk, opportunities, and forecast report

One element for the identification and assessment of risks
worldwide from accreditations, and from internal process risks
as well as for monitoring the compliance of internal basic processes, is the Control Self Assessment. This is carried out in parallel with risk management surveys and results in the aforementioned risk inventory that lists and evaluates internal processrisks and market risks.
Overall, the risk of approvals based on accreditations being
revoked is classified as low due to extensive precautionary andrisk mitigation measures.
Personnel 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 win ambitious professional and qualified
young employees. That is why DEKRA invests regularly in its
appeal as an employer, thereby further reducing the low risk of
not having the personnel necessary for further expansion.
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 or lostor getting into the hands of unauthorized third parties by constantly 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 GDPR (General Data Protection Regulation), are classed as low thanks to the Company’s adequate
data protection processes, which are constantly being revised.
Financial risks

Although there is a certain risk of bad debts and late payments,
it is deemed to be low. DEKRA protects itself from default bymeans of active customer and contract management, global key
account management, and thorough creditworthiness checks.
By planning ahead, DEKRA is also able to reduce the interest
rate risk. As most of DEKRA’s transactions are conducted ineuros, the exchange rate risk is low. Debt financing of the Groupis primarily provided by loans against a promissory note as wellas through approved bank 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 the reporting date amounts to 14.0 million euros(prior year: 14.0 million euros).
The liquidity headroom required for the operating businessis secured by means of cash and cash equivalents, as well as via
approved lines of credit at DEKRA SE. The central cash pool isused to control the liquidity and supply of both the national andincreasingly also the international subsidiaries. The resulting
transparency prevents possible risks. Short-term investments ofcash and cash equivalents are generally made with top-rated
financial institutions and on the basis of current ratings from 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 futureis also classed as low.
Overall assessment of the Board of Management on risks
to the Group’s abilit y to continue as a going concern

The profile and structure of DEKRA’s risks, as well as its ability
to withstand risk and the distribution of risk between the individual entities, are stable, and measures have been defined tolimit the level of risk. The strategic risks are currently manageable on the basis of the projects and measures that have been

D E K R A Financial Report 2019

initiated and planned (Business Development). Provided these
are implemented consistently, and with a focus on strategic
opportunities and risks, the Management Board considers therisk profile to be reasonable. Due to the strong equity, the sophisticated business models, the broad portfolio, and the solid
financing structure, the sum of the individual risks does notendanger the ability of DEKRA to continue as a going concern
in any way. There are currently no identifiable risks to the Company’s ability to continue as a going concern.
Oppor tunities repor t
Environment and industr y oppor tunities

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. DEKRA is set up for further growth in thethree areas of life – on the road, at work, and at home.
Oppor tunities by Ser vice Division
Vehicle Inspection

Growing demand for road traffic safety in developed markets
and emerging economies such as those of Asia and Latin America is one of the most important trends that will continue toboost the global importance of vehicle inspections. We con­tribute to safety with our many years of sound experience.
Developments that are becoming increasingly relevant,such as networked and (partially) automated driving, car sharing, new propulsion technologies etc., offer the opportunity toestablish additional inspection volumes and new inspection content. New information technologies that are used in the field of
Periodical Technical Inspection (PTI) allow DEKRA to develop
standard solutions for the end-to-end value-added chain.
Efforts toward autonomous driving will require new andtechnologically sophisticated inspections in the field of support
systems (Advanced Driver Assistance Systems). Although therise of electromobility will lead to a reduction in emission tests,
it offers new opportunities for the inspection of electrical systems. It is also necessary to continue making changes to content,

23such as emission tests for combustion engines. This means that
other pollutants such as particles and nitrogen oxides are being
included in the measurements.
Claims & Exper tise

Current and future developments in the field of automotive technology also present opportunities in tangential service areas.
Autonomous driving is expected to lead to changed and morechallenging processes – particularly in the fields of accident
analysis and court expertise – that present opportunities for ourbusiness activities.
Common forms of insurance, and therefore also the processing of claims, are becoming increasingly digitalized and automated. Both insurers and providers will need to differentiatethemselves due to the saturated market and pressure on prices.
The rise of artificial intelligence will also be a factor in the future.
The rise of electromobility in particular will place increased
demands on the evaluation of vehicles and vehicle components.
This will create new lines of business, such as the testing of batteries throughout their life cycle. The increased shared proportion
offers additional potential in the field of condition evaluation.
Product Testing

Networked and automated driving is based on a number of connectivity technologies that are also used for other commercial
purposes. These technologies will influence DEKRA’s services
and change the procedures and content of future homologationand type approval processes, and therefore offer opportunities
for new business models.
The number of potential vulnerabilities is increasing due tothe complexity of technologies and software environments. It isnecessary to protect the safety and security of vehicles and data,
as well as users’ privacy. Functional safety will become increasingly important. Generally speaking, there will not be any moreproduct testing in the future without connectivity, EMC (Electromagnetic Compatibility), and cyber security. The introductionof CASE (Connected Autonomous Shared Electric) is placing new
and additional demands on components and systems.

D E K R A Financial Report 2019

24

GROUP MANAGEMENT REPORTGROUP MANAGEMENT REPORT

Risk, opportunities, and forecast report

Risk, opportunities, and forecast reportIndustrial Inspection

The industrial IoT (Internet of Things) is making it possible toadd substantial value for customers. As a result of the increasing
statutory requirements, the IoT presents opportunities for new
business models. Digitalization also offers added value for analyzing the condition of test objects. Intelligently combining(online) monitoring, VR (Virtual Reality), and AR (Augmented
Reality) technologies as well as experts on-site will be crucial inthis respect.
Consulting

Predictive Analytics and real-time insight are becoming thenorm. Business Intelligence and analysis software will lay thegroundwork for predictive models. Analyzing increasing volumes of data and mastering complexity offer opportunities for
new business models. There has also been a noticeable increasein demand on the market for arranging pragmatic solutions to
new requirements such as the GDPR (General Data Protection
Regulation), TISAX (Trusted Information Security Assessment
Exchange), and cyber security for SMEs, particularly in connection with digitalization projects.
AuditsAn increasing number of large international companies are placing high demands on their partner companies throughout thevalue-added chain. These partnership standards are represented
by certificates, which the companies need to fulfill and which
therefore present a business opportunity. A significant increase
in requirements has been observed in all of the sub-divisions:first-party (internal audits), second-party (auditing suppliers inaccordance with their own standards), and third-party audits(audits in accordance with internationally recognized standards,
with corresponding authorization), and new standards are
required. Conventional certifications such as ISA 9000 and
14000 are in the final phase of their life cycle.

(Learning Management Systems) will have a lasting impact on
the way training is provided. Demand for in-depth, tailored
training with flexible scheduling is rising on the whole.
Temp Work

Despite the economic slowdown, demand for qualified specialists and temporary workers can still be expected to remain high.
Strategic oppor tunities

Promoting safety has been DEKRA’s mission pursuant to its articles of incorporation since its foundation in 1925. The strategicorientation toward this important socio-political concern has
been strengthened further. With its “Vision 2025”, DEKRA willcontinue to expand its position as a global partner for a safe
world 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 and thus for the Company.
The organizational development of “TOM 2020”, the redefinition of the matrix, sales activities, improved collaboration,and the exploitation of the Group’s strengths will enable DEKRA
to continue 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
the organization concerns all areas of the “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

Training

Due to the discrepancy between the demand for and supply ofworkers in the national employment markets, and the ongoingprocess of globalization, cross-border approaches to HR solutions and training are set to increase. Different technologies suchas VR (Virtual Reality), AR (Augmented Reality), and LMS

Through its strategic acquisitions and globalization in recent
years, DEKRA is set for further growth. The fact that the Groupis highly diversified in terms of both geography and areas ofexpertise with respect to the issue of safety, and the new structure, are expected to present opportunities for growth, both inGermany and abroad.

D E K R A Financial Report 2019

Stuttgart, March 30, 2020

Forecast repor t
Challenging conditions

The economic environment is expected to remain positive in thecurrent year, but be characterized by volatility and differing
trends between regions. According to estimates by the International Monetary Fund (IMF), global GDP will decrease below
the previous year’s growth rate. It is difficult to estimate how far
and for how long this will decline.
The fact that the underlying economic conditions are
becoming more difficult can mainly be attributed to persistentgeopolitical challenges. Protectionist actions have now createdtrade barriers between markets and regions. Political instability
in important economic areas is increasingly impacting economic
growth, and the consequences of the coronavirus outbreak are
not foreseeable. DEKRA is not immune to this. Thanks to its
good international positioning and the strong basic human needfor safety, however, DEKRA expects further growth. The following forecast for revenue and EBIT does not take into account a
possible negative impact of the coronavirus on economic development. Revenue is expected to increase by 3.0 % to 5.0 % in thefiscal year 2020. Organic growth is expected to be higher than
external growth driven by acquisitions. The planning for 2020
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 divisions, and continue
to optimize the global structures and processes in sales and theService Divisions. The way the spread of the coronavirus acrossthe world is shaping the environment is expected to have a negative impact on business development in the fiscal year 2020.
Due to the negative effects of the spread of the virus worldwide,
it is assumed that revenue and earnings targets will not bereached regardless of how long the crisis lasts. Headcount is also
expected to continue to rise in line with revenue growth. DEKRA
expects the number of employees in its core workforce
to increase by between 1,000 and 1,500 as of year-end 2020.
Following a successful fiscal year 2019, the DEKRA Management
Board expects the strategic alignment of the Group and TOM
2020 to create further impetus for growth.

DEKRA SEThe Management Board  Kölbl, Vorsitzender  Klinke  Linsenmaier  Rauh

D E K R A Financial Report 2019

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 2019
Notes

2019

2018

5.1

3,408,962

3,340,549

Increase in inventories of work in process

1,141

1,101

Own work capitalized

8,454

8,371

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

34

1 General comments

34

2 Accounting principles

34

3 Accounting policies

48

4 Acquisition of subsidiaries

Other operating income

5.2

37,19433,293

Cost of materials

5.3–332,891–316,865

Personnel expenses

5.4–2,227,854–2,189,391

Other operating expenses

5.5–498,273–573,912

Amortization and depreciation of intangible assets,right-of-use assets, and property, plant and equipment

5.6–194,902–90,770

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

5.7

531

782

Interest income

5.7

4,988

6,004

Interest expense

5.7–25,980–21,723

Other financial result

5.7

220

–2,672

5.7–20,241–17,609

181,590

194,767

5.8–61,757–59,250

48

5 Statement of comprehensive income/income statement

Financial result

53

6 Statement of financial position

Earnings before taxes

70

7 Statement of cash flows

Income taxes

72

8 Other disclosures in the notes

73

9 Capital management

Net income for the year74

10 Financial management84

11 Related par t y disclosures

86

12 Disclosures on the Management Board and Super visor y Board

87

13 Subsequent events87

14 Other disclosures

9 6 			INDEPENDENT AUDITOR’S REPORT

1 0 0 		REPORT FROM THE CHAIRMAN OF THE SUPERVISORY BOARD

27

5.9

119,833

135,517

thereof attributable to owners of DEKRA SE

6.12

118,606

133,886

thereof attributable to non-controlling interests

6.13

1,227

1,631

Hedging instruments at fair value throughother comprehensive income

6.16

26

444

Deferred taxes recognized throughother comprehensive income

5.8

–8

–135

5.9

4,193

–6,1084,211–5,799Net loss/gain on the provision forTranslation reserve
Items that can be recycled through profit or loss in the future
Net loss/gain on the provision for
Remeasurement of defined benefit plans

6.14–78,866–27,859

Equity instruments at fair value throughother comprehensive income

6.5

15,98820,351

Deferred taxes recognized throughother comprehensive income

5.8

24,9398,069

Items that will not be recycled through profit or loss in future–37,939

561

Other comprehensive income–33,728–5,238

Total comprehensive income

86,105130,279

Owners of DEKRA SE

84,878

128,648

Non-controlling interests

1,227

1,631

thereof attributable to

D E K R A Financial Report 2019

D E K R A Financial Report 2019

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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, 2019ASSETS

Notes

IN THOUSAND EUR

Dec. 31, 2019

Dec. 31, 2018

EQUITY AND LIABILITIES

Notes

IN THOUSAND EUR

Dec. 31, 2019

Dec. 31, 2018

EquityNon-current assets

Intangible assets

Issued capital

6.12

25,56525,565

Capital reserve

6.12

585,529

560,529

376,083

Revenue reserves

6.12

453,048398,299

12,266

11,755

Accumulated other comprehensive income

6.12–281,660–247,933

6.5

97,23077,147

Total equity of the owner782,482

736,460

6.6

8,701

7,341

Non-controlling interests

13,834

12,3485.8

176,109

151,481

796,316

748,808

1,796,682

1,350,942

6.1/6.2

736,565

727,135

Right-of-use assets

8.1

346,7880Property, plant and equipment

6.3

419,023

Financial assets accounted for using the equity method

6.4

Other non-current financial assets
Other non-current assets
Deferred income tax assets

6.13

Liabilities
Non-current liabilities

Current assets

Inventories

6.7

11,2108,908

Provisions for pensions and similar obligations

6.14

530,971

469,473

Contract assets

6.8

70,44644,767

Other non-current provisions

6.15

15,914

19,775Trade receivables

6.8

498,034

523,789

Non-current financial liabilities

6.16

478,793

265,104

Other current financial assets

6.9

231,291

185,406

Other non-current liabilities

6.18

2,486

3,549

Other current assets

6.10

34,43733,799Deferred income tax liabilities

5.8

29,77831,528Current income tax receivables

5.8

21,01540,894

1,057,942

789,429

Cash and cash equivalents

6.11

Total assets

92,30978,450Current liabilities

958,742916,013

Other current provisions

6.15

24,917

15,663

Trade payables

6.17

112,219

93,767

Contract liabilities

6.17

45,44946,852Current financial liabilities

6.16

367,513238,315

Other current liabilities

6.18

346,017

328,000

Current income tax liabilities

5.8

5,051

6,121

901,166

728,718

Total liabilities

1,959,108

1,518,147

Total equity and liabilities

2,755,424

2,266,955

2,755,424

D E K R A Financial Report 20192,266,955

D E K R A Financial Report 2019

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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 2019
IN THOUSAND EUR

Accumulated other comprehensive income

EquityGroup equity

Issued capital

Capital reserve

Revenue reserve

Translation reserve

Equity instruments atfair value throughother comprehensive
incomeHedging instruments
at fair value throughother comprehensive
incomeRemeasurement ofdefined benefit plans

OwnersNon-controllinginterests

25,565550,529

305,616–11,150

17,328–396–248,477

639,015

10,544

649,559–37,402–31–37,433

As of Dec. 31, 2017

Profit and loss transfer agreement/dividend distribution–37,402

Capital increase

10,00010,0000

10,000

–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

Other changes

Other comprehensive income for the period
Total comprehensive income
As of Dec. 31, 2018

–6,10820,351

309–19,790–5,2380–5,23800133,886–6,10820,351

309–19,790

128,648

1,631

130,279

25,565560,529398,299–17,258

37,679–87–268,267

736,460

12,348748,808–13,121–33–13,154

25,565560,529

385,178–17,258

37,679–87–268,267

723,339

12,315735,654–53,014–96–53,11025,000025,000

0

388

388

Effect of first-time application of IFRS 16–13,121

As of Jan. 1, 2019 – adjusted

Profit and loss transfer agreement/dividend distribution–53,014

Capital increase

25,000

Other changes
Changes to the consolidated group

2,278

2,278

0

2,278

Consolidated net income for the year

118,606

118,606

1,227

119,833

Other comprehensive income for the period
Total comprehensive income
As of Dec. 31, 2019

D E K R A Financial Report 2019

4,193

15,98819–53,927–33,727

0–33,72700

118,606

4,193

15,98819–53,927

84,8791,227

86,10625,565585,529453,048–13,065

53,667–68–322,194782,482

13,834

796,316

D E K R A Financial Report 2019

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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

﻿

﻿

33

DEKRA SE
Consolidated statement of cash flows
for fiscal year 2019
OPER ATING ACTIVITIESFINANCING ACTIVITIES

2019

2018

Consolidated net income for the year

119,833

135,517

Cash received from equity contributions from owners

Depreciation/amortization/impairment losses/reversals of impairment losses

194,925

94,022

IN THOUSAND EUR

Gain/loss from the disposal of financial andintangible assets and property, plant and equipment–2,255–784Interest income/expenses and dividends

10,203

7,121

Current income taxes

62,20659,250Change in non-current provisions–16,075–4,481

0–41,353

Other non-cash expenses/income

27,439–4,255

Change in inventories, receivables, and other assets–12,377–63,347

Change in liabilities and current provisions

21,344–15,103

Profit or loss from associates–1,036–904

Contribution of cash and cash equivalents to cover pension assets

Interest received

2019

2018

25,00010,000Cash paid to owners and non-controlling interests from profit transfers/dividends–37,569–54,051

Cash received/paid in relation to loans to owners–36,90333,474

Cash repayments of loans–40,135–10,500

Cash received from borrowing

26,497109,201

IN THOUSAND EUR

Cash repayments of lease liabilities–100,752–1,380Interest paid

–14,413–7,653

Cash flow from financing activities–178,275

79,091

2019

2018

Changes in cash and cash equivalents

10,447–1,802C A S H A N D C A S H E Q U I VA L E N T S

IN THOUSAND EUR

3,771

3,412

–65,070–75,475

Taxes received

62

132

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

3,369

3,853

Dividends received

348

258

Cash and cash equivalents at the beginning of the period

78,49376,442

343,318

94,010Cash and cash equivalents at the end of the period

92,30978,4932019

2018

Intangible assets and property, plant and equipment–139,411–132,470

Financial assets and other assets–13,879–13,003

Subsidiaries and other business entities–15,154–40,147

11,184

8,782

Taxes paid

Cash flow from operating activities

INVESTING ACTIVITIESIN 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 2019

2,664

1,935

–154,596–174,903

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Notes

Notes

35

Notes to the consolidated financial
statements of DEKRA SE, Stuttgart,
for fiscal year 20191

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 Vehicle Inspection, Claims &Expertise, Product Testing, Industrial Inspection, Consulting,
Audits, Training, and Temp Work.
The consolidated financial statements as of December 31,
2019 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, 2019 on March 30, 2020 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 ReportingStandards (IFRS) as adopted by the EU as of the reporting date.
The principles of the Framework and the IFRS of theInternational Accounting Standards Board (IASB) as well as theinterpretations of the IFRS Interpretations Committee 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 ineuros. Unless otherwise stated, all amounts have been roundedup or down to the nearest thousand euros in accordance withcustomary commercial practice.
The consolidated financial statements comply with therequirements of Sec. 315e (3) HGB [“Handelsgesetzbuch”:­German Commercial Code].
3

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 firsttime in the fiscal year 2019 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 DATEIMPAC 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 andinterpretations were subject tomandatory application for the firsttime in the fiscal year:

IAS 19Plan Amendment,
Curtailment or Settlement;
January 1, 2019

According to the amendments, entities must use updated assumptions in order to determine the current service cost and the net interest for the remaining term of the reporting
period following a plan amendment, curtailment, or settlement and to recognize any
decreases in surplus as part of the past service cost through profit or loss, even if this surplus had not previously been recognized due to the effect of the asset ceiling. The amendment does not have any significant effects on the consolidated financial statements.

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

Investors may own long-term investments (such as preferred shares or non-current loans)in associates or joint ventures that, in substance, form part of the net investment in these
entities. The IASB published a narrow scope amendment to IAS 28 clarifying that theselong-term investments in associates or joint ventures not accounted for using the equity
method, are to be measured in accordance with IFRS 9. This includes the impairment
requirements pursuant to IFRS 9. The amendment does not have any effect on the consolidated financial statements.

IFRS 9Prepayment Features with
Negative Compensation;
January 1, 2019

The amendments to IFRS 9 aim to clarify how certain financial assets are classified using
prepayment features pursuant to IFRS 9. A modification clarifies an aspect of the accounting treatment of financial liabilities. The amendment does not have any effect on the consolidated financial statements.

IFRS 16
Leases;January 1, 2019

IFRS 16 was published in January 2016 and provides new recognition, measurement,
presentation, and disclosure requirements for leases for fiscal years beginning on or afterJanuary 1, 2019.
IFRS 16 primarily affected lease accounting for lessees and led to all leases being recognized in the statement of financial position.
The distinction between finance and operating leases required to date no longer applies
with respect to the lessee. A right of use to the underlying asset as well as a financial liability for the obligation for future payments must now be recognized on the assets andthe liabilities side respectively.
The initial application of IFRS 16 resulted in an increase in total assets of 373.7 million euros in 2019.
The changes are largely presented in notes 3.2 and 8.1.

D E K R A Financial Report 2019

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

The interpretation is to be applied where there are uncertainties regarding tax gains/losses, tax bases, unused tax losses, unused tax credits, and tax rates. It deals, among
other things, with the question as to whether tax matters should be assessed individuallyor jointly. In this respect, IFRIC 23 expands on the existing regulations in IAS 12. The
amendment does not have any significant effects on the consolidated financial statements.

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

The Annual Improvements to IFRSs 2015–2019 Cycle relate to an omnibus of standards.
The resulting amendments applicable from January 1, 2019 relate to IFRS 3 Business Combinations, IFRS 11 Joint Arrangements, IAS 12 Income Taxes, and IAS 23 Borrowing Costs.
The amendment does not have any effect on the consolidated financial statements.

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Notes

Notes

The IASB and the IFRS IC have issued the standards, interpretations, and amendments listed below that were not yet mandatory
as of December 31, 2019. Aside from the early adoption of the regulations on the IBOR reform (IFRS 9), there are no plans to adopt
these standards early.
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

IFRS 3Business Combinations;January 1, 2020

No

Currently being assessed

IFRS 7
Financial Instruments: Disclosures;
January 1, 2020

No

Currently being assessed

IFRS 9Financial Instruments;
January 1, 2020

No

DEKRA voluntarily adopted the requirements of the interest ratebenchmark reform (IFRS 9) early. For the purpose of hedge accounting, the necessary adjustment of the base interest rates (LIBOR/EURIBOR) or their replacement with risk-free rates raised the question as
to whether the planned (and hedged) future cash flows could still bedeemed to be highly probable (and therefore be hedged) as they arebased on the EURIBOR. With the regulation, the board clarified that
until the instruments in use were actually amended, entities could
assume that – subject to other matters – the cash flows based on the
EURIBOR could be deemed to be highly probable. As a result, thetreatment of interest hedges entered into by DEKRA can be maintained. There are no other effects on the financial statements.

IAS 39Financial Instruments:
Recognition and Measurement;
January 1, 2020

No

Currently being assessed

Amendments to references
to the Framework;
January 1, 2020

No

Currently being assessed

IFRS 17
Insurance Contracts;
January 1, 2021

No

None

Amended standards and interpretations

D E K R A Financial Report 2019

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
to voting 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,
or other 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 andperformance, have generally been included in the consolidated
financial statements at fair value.

37

Non-controlling interests in the total comprehensive
income and equity of subsidiaries are presented separately inthe statement of comprehensive 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 theother entities listed in “Other disclosures” accordingly as ofDecember 31, 2019. The financial statements of the individual
subsidiaries are included in the consolidated financial statements as of December 31, 2019 using the uniform accounting
policies stipulated by DEKRA SE. In addition to DEKRA SE,
Stuttgart, a total of 23 German (prior year: 25) and 133 foreign(prior year: 136) 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 date oftransfer of control (IFRS 3). Where there are non-controlling interests, a proportionate share of goodwill in accordance with IFRS 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, aretranslated at the exchange rate at which the payment or receiptof advance consideration has been recognized for the firsttime. In subsequent periods, monetary assets and liabilities
in foreign currencies are translated at the exchange rate asof 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 the financial 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, 2019

Dec. 31, 2018

2019

2018

4.51574.44404.41354.3087

Czech koruna (CZK)

25.4080

25.7240

25.6698

25.6432

Chinese renminbi (CNY)7.82057.8751

7.73397.8074

Danish krone (DKK)

7.4715

7.46737.4661

7.4532Pound sterling (GBP)

0.85080.89450.87730.8847

Croatian kuna (HRK)

7.43957.41257.4182

7.4182

Hungarian forint (HUF)

330.5300

320.9800

325.2308

318.8250

Moroccan dirham (MAD)10.7293

10.9476

10.6888

11.0524

New Zealand dollar (NZD)

1.66531.7056

1.69931.7059Hong Kong dollar (HKD)

8.74738.96758.77249.2599Polish złoty (PLN)

4.25684.30144.29794.2606

Swedish krona (SEK)

10.4468

10.2548

10.5867

10.2567

1.12341.14501.11961.1815South African rand (ZAR)

15.7773

16.459416.173115.6134

Taiwan dollar (TWD)

33.633435.1827

34.5772

35.6551

Swiss franc (CHF)

1.0854

1.12691.1127

1.1549Japanese yen (JPY)121.9400

125.8500

122.0567

130.4100

D E K R A Financial Report 2019

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
purchase price elements as well as interest derivatives.
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 or loss.
Under IAS 38, goodwill from acquisition accounting is
not amortized. Where necessary, impairment losses are recognized in accordance with IAS 36 (impairment only approach).

ANNUAL AVERAGE RATE

Brazilian real (BRL)

US dollar (USD)

3.2 Significant accounting policies

Intangible assets

Acquired intangible assets are recognized at cost less any accumulated amortization. The useful lives of all intangible assets
are classified as finite and are generally between three and eight
years. Useful lives of trademarks or customer relationships often 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.
Proper t y, plant and equipment

Pursuant to IAS 16, property, plant and equipment are recognized at cost less accumulated depreciation. If there are39

indications of impairment and the recoverable amount is below
the cost less any accumulated depreciation and impairment
losses, then an impairment loss is recognized.
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 andmachinery 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 accountin the calculation of the depreciation charge.
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 recognized in
the statement of comprehensive income under other operating
income or other operating expenses.
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 periodof time to get ready for its intended use or sale.
Leases

As of January 1, 2019, the Group applied IFRS 16 for the first time.
The Group applied IFRS 16 using the modified retrospective method (IFRS 16.C5 (b)). In accordance with this, thecumulative effect from first-time application as of January 1,
2019 was recognized in the revenue reserves. The comparative
information for 2018 was therefore not restated. The details on
the changes in accounting policies are listed below.

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Notes

Notes

Definition of a lease

Previously the Group determined at contract inception whether
an arrangement was or contained a lease under IFRIC 4 Determining whether an Arrangement contains a Lease. The Group
now assesses whether a contract is or contains a lease based on
the definition of a lease.
Upon transitioning to IFRS 16, the Group decided toapply the practical expedient to grandfather the assessment of
which transactions are leases. The Group only applied IFRS 16
to contracts that had previously been identified as leases. Contracts that were not identified as leases pursuant to IAS 17 andIFRIC 4 were not reviewed to determine whether a lease pur­suant to IFRS 16 exists. As a result, the definition of a lease pursuant to IFRS 16 was only applied to contracts that were concluded or amended after January 1, 2019.
Leases as lessee

As lessee, the Group leases real estate, technical and IT equipment, and furniture and fixtures. The Group previously classified leases as operating leases or finance leases based on its
assessment as to whether the lease has transferred substantially
all the risks and rewards incidental to ownership of an underlying asset. Pursuant to IFRS 16, the Group recognizes right-ofuse assets and lease liabilities for most of these lease agreements,
i.e., these lease agreements are recognized in the statement offinancial position. Non-lease components are separated fromlease components.
Pursuant to IFRS 16.C8, the Group recognizes a lease liability as of January 1, 2019 for leases previously classified as
operating leases applying IAS 17. The Group measures the leaseliability at the present value of the remaining lease payments,
discounted at the lessee’s incremental borrowing rate as ofJanuary 1, 2019. Furthermore, the Group generally recognizes
right-of-use assets for leases. Right-of-use assets are measured
as follows:– at the carrying amount as if IFRS 16 had been applied
since the commencement date, discounted at theGroup’s incremental borrowing rate at the date of firsttime initial application or– at an amount equal to the lease liability, adjusted by theamount of any prepaid or deferred lease payment.
The Group tested its right-of-use assets for impairment at thetime of the transition and came to the conclusion that there are
no impairment indications.
The Group has used a number of practical expedients
when applying IFRS 16 to leases that were classified as operatingleases pursuant to IAS 17. For individual leases, the Group:– did not recognize right-of-use assets and lease liabilities
for leases for which the lease term ends within 12
months of the date of initial application– used hindsight when determining the lease term.
Furthermore, for leases with a term of 12 months or less andfor leases of low-value assets, the Group uses the practical
expedients that apply for short-term leases and for leases of lowvalue assets.

D E K R A Financial Report 2019

Leases as lessor

The Group leases out some of its assets. These leases have beenclassified as operating leases.
At the date of transition to IFRS 16, the Group is not
required to make adjustments for leases for which it acts as­lessor, except for sub-leases.
The Group sub-leases some of its properties. Pursuant to
IAS 17, head lease and sub-lease contracts were classified as
operating leases. The Group classified the sub-leases on the basisof the right-of-use asset rather than the underlying asset andcame to the conclusion that they are operating leases under
IFRS 16.
The Group has applied IFRS 15 Revenue from Contracts
with Customers to allocate the consideration in the contract toeach lease and non-lease component.

IN THOUSAND EUR

41

Jan. 1, 2019

Obligations from operating leases as ofDecember 31, 2018 as stated in the consolidated
financial statements pursuant to IAS 17

387,906

Other effects–1,100

Lease liabilities as of January 1, 2019

386,806

Inventories

Inventories are measured at the lower of cost or 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.

Impact on financial statements

On transitioning to IFRS 16, the Group recognized additionalright-of-use assets and additional lease liabilities, recognizing
the difference in the revenue reserves. The effects as of the transition date are summarized below.
IN THOUSAND EUR

Jan. 1, 2019

Right-of-use assets – property,
plant and equipment

373,685

Lease liabilities

386,806

Revenue reserves–13,121

When measuring the lease liabilities from operating leases, theGroup discounted the lease payments using its incremental borrowing rate as of January 1, 2019. The weighted average interest
rate is 1.84 %.

Financial assets and financial liabilities

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 on potentiallyfavorable 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
are included. 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 on
potentially unfavorable terms. These primarily include liabilities
to banks and trade payables as well as other financial liabilities.

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Notes

Notes

Financial assets

Financial assets are accounted for pursuant to IFRS 9. Under
IFRS 9, financial assets are divided into three categories: financial assets at amortized cost, financial assets at fair value
through other comprehensive income, and financial assets atfair value through profit or loss.
Financial assets at amortized costThis category includes debt instruments with contractual
cash flows that are solely payments of principal and interest on the principal amount outstanding. Furthermore,
the debt instruments in this category are held within abusiness model whose objective is to hold financial assets
in order 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 subsidiaries that are not fully consolidated and otherloans, trade receivables, cash and cash equivalents, receivables due from affiliates, and other financial assets.
Financial assets at fair value through other comprehensive
incomeDebt 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 cumulativechanges in fair value are not reclassified to profit or loss evenwhen these equity instruments are derecognized.
Both the initial recognition and subsequent
measure­ment of the assets is at fair value. Transaction
costs are recognized through profit or loss. Changes invalue are generally recognized in the statement of comprehensive income. By contrast, information on the collection of contractual cash flows, such as interest income,and dividends for debt instruments are recognizedthrough profit or loss for debt instruments and equity
instruments, respectively.
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.
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 through othercomprehensive income is not exercised, as well as deriva­tives
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.

D E K R A Financial Report 2019

The DEKRA Group allocates the securities held tothis category.
Financial liabilities

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

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. Subsequentremeasurement 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 secured
interest payments.
Financial liabilities at fair value through profit or loss

Derivatives with negative fair values must be assigned tothis category, unless they are recognized as part of aneffective 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 optionally be
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, mea­
surement is the same as for financial assets at fair value
through profit or loss.
At the DEKRA Group, liabilities from businesscombinations are allocated to this category.

43

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 isrecog­nized in other comprehensive income, taking into accountthe related 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, contract assets, and other financial assets

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 matching interest rate.
Contract assets contain receivables from unbilled service
contracts. Their recognition is governed by IFRS 15 “Revenue
from Contracts with Customers”.
DEKRA recognizes revenue over time as a continuous
flow of benefits to customers, or an asset with no alternative use
is created. In both cases, an ordinary termination right by thecustomer gives rise to a reimbursement claim for the respective
proportionate selling price. DEKRA therefore recognizes rev­enue based on the respective degree of completion of the performance obligation. Selecting the method to determine thepercentage 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.
Trade receivables, contract assets, and other financial
assets are subject to the impairment model of 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 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 for income tax purposes.
Current income tax liabilities/income tax assets are mea­
sured 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. IFRIC 23 wasobserved when determining income tax liabilities. The sub­sidiaries included are asked whether they have any uncertain
tax treatments. If such treatments exist, they are taken into
account accordingly. The initial application of IFRIC 23 did not
result in any significant changes.
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 planfor the respective entity. Deferred taxes are calculated using therespective local tax rates on the basis of the tax rates that are
expected to apply for the period of reversal of the difference.
Changes to tax rates adopted by the reporting date are taken
into account when 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.
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
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 prioryears must be reversed when there is a change in estimate andthe 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 ofother assets, impairment tests can only be carried out in connection with a cash-generating unit.
Until December 31, 2018, the cash-generating units for the
goodwill impairment test were identified at the level of the Business Units Automotive, Industrial, and Personnel. This was due

D E K R A Financial Report 2019

to single management, shared customer service and uniform
product policy, a joint advertising strategy, as well as joint management and monitoring of the respective units.
Following the organizational realignment under the Target Operating Model 2020 (TOM 2020), management and monitoring have been performed by eight regional clusters as wellas the globally operating unit “Temp Work” since 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 new
CGUs. The reallocation was performed in 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 valueof the former Business Units.
In the course of the impairment test of a cash-generating
unit, the carrying amount of a cash-generating unit is comparedto 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 andthe present value of the cash flows of a cash-generating unit arelower than its carrying amount, the impairment expense recog­
nized through profit or loss is allocated to the individual assetsof the cash-generating unit. This allocation is made in proportion 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 togoodwill and then allocated proportionately to the other assetsof 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.

45

Stage 1: 12-month expected credit losses

Stage 1 comprises all instruments for which there has notbeen a significant increase in credit risk since initialrecog­
n ition. 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 all instruments for which there has
been a significant increase in credit risk as of the reporting
date compared to the date of initial recognition, but noobjective indication of impairment. All expected losses
are recognized over the residual term of the instrument
as impairment. A past due status of more than 30 days isused as objective evidence for a significant increase in thecredit risk.
Stage 3: lifetime expected credit losses – credit standing
impairedIf there is also objective evidence of impairment in addition to a significant increase of the credit risk as of thereporting date, all expected losses of the instruments arerecognized as impairment over the entire lifetime. A past
due status of more than 90 days is used as objective evidence of impairment as well as further indications offinancial 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

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Notes

Notes

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 are accounted for using adequate specific bad debt
allowances. For further information, we refer to the comments
on impairment in section 6.8.
For receivables from credit balances at banks, loans, andother financial assets, the expected credit losses pursuant to
IFRS 9 are determined annually on the basis of probabilities ofdefault derived from the respective rating of the contractual
partner, as well as the loss given default and the amount at riskof 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.
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 corporate bonds
with a fixed rate of interest 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 primarily result fromdeviations from the assumptions made, are recorded in othercomprehensive income in the period in which they occur. Past
service cost from plan amendments is immediately recognizedin personnel 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 forecasted with an adequately objective degree of certainty and that the obligation results from past
events. In addition, provisions for potential losses for onerous
contracts are recognized in accordance with IAS 37.
The provision is measured at 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 andthe period 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 theGroup 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.

D E K R A Financial Report 2019

Revenue recognition

DEKRA realizes revenue pursuant to IFRS 15 “Revenue fromContracts with Customers”. IFRS 15 provides for a uniform
principles-based five-step model for calculating revenue thatmust be applied to all contracts with customers. DEKRA
recog­n izes revenue over time as a continuous flow of benefits
to customers, or an asset with no alternative use is created. In
both cases, an ordinary termination right by the customer
gives rise to a reimbursement claim for the respective proportionate selling price. DEKRA therefore recognizes revenue
based on the respective degree of completion of the performance obligation.
Dividends are recognized when the right to receive payment arises.
Government grants

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 as of the date thesubsidized expenses are incurred, unless they relate to subsidies
for an 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 and recognition of assets and liabilities as well as
income and expenses. Actual amounts may differ from theamounts based on 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

47

explanations and to the comments in note 6 on the individual
items in the statement of financial position.
The Group determines the term of the lease based on the
non-cancellable period of the lease, including reasonably certain extension options and the periods covered by an option toterminate the lease if it is reasonably certain that the Group will
not make use of this option.
The Group has concluded several leases containing extension and termination options. It makes judgments when assessing whether it is reasonably certain that the option to extend/
terminate the lease will be exercised or not, i.e., it takes all relevant factors into account that provide an economic incentive
to exercise the extension or termination options. After the commencement date, the Group reassesses the lease term if a significant event or a change in circumstances occurs that is within
its control and that affects whether it will exercise the option toextend or terminate the lease or not (e.g., carrying out significant leasehold improvements or making significant adjustments
to the underlying asset).
The term of lease agreements generally corresponds to thecontractual term. As open-ended contracts do not have a contractual term, the cluster term is used in this case. The cluster
term is the term that contracts in the same cluster generally
have. A cluster is a group of lease agreements for similar underlying assets. DEKRA categorizes lease agreements into the following clusters: IT, buildings, vehicles, technical equipment aswell as furniture and fixtures. The cluster term was determined
for the fiscal year and is based on past experience. Also for termination and extension options, the cluster term is determinedas the lease term provided that the cluster term is greater thanthe contractual term. Should a contract with a termination or
extension option be greater than the contractual term, the contractual term is then used.
For details on possible lease payments for periods after thetime for exercising the extension and termination options has
expired that are not taken into account in the lease term, we
refer to note 8.1.
The Group tests goodwill for impairment at least once ayear. The impairment tests carried out are mainly based on

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Notes

Notes

estimates. Various scenarios were therefore worked out for theindividual cash-generating units. The main estimates were thefuture net cash flows, based on market developments, as well asassumptions about economic development and an estimate ofincreases in personnel costs, the growth rates, and the weighted
average cost of capital. Even if the estimates should change, therecoverable amount is currently expected to exceed the carrying
amount of goodwill. In particular with regard to the assumptions
concerning goodwill impairment or on the expected future cash
flows and weighted 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 defaults.
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 obligations
and the pension benefit payments of the subsequent year are
determined based on actuarial parameters such as interest rate,
future salary and pension increases, and age. Changes inparameters can have a significant effect on the benefit obligation. For further explanations, we refer to note 6.14.
In some business combinations, contingent consideration
has been arranged or call or put options for non-controllinginterests have been agreed with the seller. The resulting purchase price liabilities 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 them being used in the
future is assessed taking into account various factors such as

future taxable profit 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

ACQUISITION OF SUBSIDIARIES

Presentation of acquisitions in the fiscal year

No significant acquisition took place in the fiscal year 2019. Nor
were there any acquisitions that were significant collectively.
Presentation of significant acquisitions in the prior year

In 2018, the acquisition of Industrial Safety Group B.V.,
Rotterdam, the Netherlands, as well as its subsidiaries was
significant. This acquisition resulted in goodwill of 4.5 million euros.
Industrial Safety Group B.V. and its subsidiaries were
included in the consolidated financial statements from August
1, 2018. The companies contributed 10.5 million euros (prioryear: 5.2 million euros) to Group revenue.

5

STATEMENT OF COMPREHENSIVE INCOME/
INCOME STATEMENT

The statement of comprehensive income has been preparedusing the nature of expense method. Income and expenses
attributable to the fiscal year are recognized through profit orloss. Non-owner-based transactions reported as other comprehensive income are presented after the income statement (onestatement approach).
5.1 Revenue

Revenue is broken down by region and Service Division.
The revenue results from ordinary activities.

D E K R A Financial Report 2019

Revenue by region
2019

2018

2,066,931

2,027,549

South-West Europe

532,162

526,550

North-West Europe

346,126

329,404

Central East Europe & Middle East

162,462

159,365

East & South Asia

102,485

88,228

North America

93,62093,109Southern Africa & Oceania

86,44997,318South America

18,72719,026

3,408,962

3,340,549

IN THOUSAND EUR

Germany49

At DEKRA, the terms of payment differ according toregion and service. Across the Group, the terms of payment
generally range between 30 and 60 days and do not contain any
significant financing components.
For customer contracts that have an original expected
duration of more than one year or performance obligations notrecognized in accordance with IFRS 15.B16, the transaction
price for the remaining unsatisfied or partially unsatisfied performance obligations can be broken down as of December 31,
2019 as follows:
2019

2018

Within one year

3,791

7,362

More than one year

2,632

848

6,423

8,210

IN THOUSAND EUR

Revenue by Ser vice Division
IN THOUSAND EUR

2019

2018

Vehicle Inspection

1,064,555

993,606

Claims & Expertise

560,711547,600

Industrial Inspection

504,089

490,146

Temp Work471,188529,681

Product Testing

243,952

228,385

Consulting

220,670

217,363

Training

219,489

209,573

Audits81,197

83,734

Other

43,111

40,461

3,408,962

3,340,549

Revenue also includes income from unbilled service contracts(over time) as of year-end of 33,768 thousand euros (prior year:
39,123 thousand euros), which is 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).

5.2 Other operating income

Other operating income amounts to 37.2 million euros (prioryear: 33.3 million euros). This includes income from the disposal of non-current assets of 4.7 million euros (prior year:
3.1 million euros), income from the reversal of allowances of
4.2 million euros (prior year: 2.2 million euros) as well as reintegration and payroll subsidies totaling 3.3 million euros (prioryear: 3.3 million euros). Other operating income also includes
income from compensation of 2.3 million euros (prior year:
4.3 million euros) and exchange gains of 2.0 million euros(prior year: 2.7 million euros).
5.3 Cost of materials

Cost of materials breaks down as follows:
2019

2018

Cost of purchased services

301,381

287,153

Cost of purchased merchandise

31,51029,712332,891

316,865

IN THOUSAND EUR

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Notes

Notes

5.4 Personnel expenses
IN THOUSAND EUR

2019

2018

Wages and salaries

1,843,507

1,813,230

Social security costs(excl. pension insurance premiums)

247,127

243,965

Pension costs

137,220

132,196

2,227,854

2,189,391

Pension costs also include employer contributions to the statutory pension insurance fund of 100.9 million euros (prior year:
100.6 million euros). The majority of Group employees are­salaried employees.
The Group’s employees are distributed as follows:

operating expenses compared to the prior year is primarily
attributable to the first-time application of IFRS 16, which
resulted in the classification of rental expenses being changed
and thereby causing other operating expenses to fall by
107.4 million euros.
5.6 A mor tization and depreciation of intangible assets,right- of- use assets, and proper t y, plant and equipment

The composition of depreciation, amortization, and impairment
losses is presented in the statements of changes in intangible
assets, right-of-use assets, and property, plant and equipment.
See notes 6.1, 6.3, and 8.2.
5.7 Financial result

The financial result breaks down as follows:
IN THOUSAND EUR

2019

2018

Investment result from companies
accounted for using the equity method

531

782

307

258

51

0

2019

2018

Germany

21,60822,364South-West Europe

7,589

8,184

Central East Europe & Middle East

4,323

4,205

Dividends from equity
instruments at fair value
not through profit or loss

North-West Europe

3,035

2,790

Other investment result

Southern Africa & Oceania

1,743

2,139

East & South Asia

1,593

1,456

Expenses from investments andshares in affiliates

A N N UA L AV E R AG E

North America

559

573

South America

248

250

Central units

627

586

Service Divisions

207

106

41,52942,653

5.5 Other operating expenses

Other operating expenses of 498.3 million euros (prior year:
573.9 million euros) contain travel expenses of 104.0 million euros (prior year: 104.5 million euros), administrative
expenses of 89.3 million euros (prior year: 85.8 million euros),IT and telephone costs of 82.2 million euros (prior year:
77.1 million euros), rent and building costs of 55.2 million euros(prior year: 130.7 million euros) as well as advertising expenses
of 43.1 million euros (prior year: 43.3 million euros). Other
operating expenses contain exchange differences of 3.4 million euros (prior year: 2.9 million euros). The decrease in other–112–2,135Result from securities–1

50

Result from loans

–25

–845

Other financial result

220–2,672

Interest income

4,988

6,004

Interest expenses–25,980–21,723

thereof other interest expenses–18,328–13,383

thereof interest expenses forthe phased retirement scheme–80

thereof net lending from
German phased retirement
scheme obligations

57

4–7,701–8,344

Interest result–20,992–15,719

Financial result–20,241–17,609

thereof net lending frompension provisions

D E K R A Financial Report 2019

The investment result from companies accounted forusing the equity method of 531 thousand euros (prior year:
782 thousand euros) relates to the recognition of profit sharesof FSD Fahrzeugsystemdaten GmbH, Dresden, Germany, andEuro Transport Media Verlags- und Veranstaltungsgesellschaft
mbH, Stuttgart, Germany. Other financial result mainly comprises dividend income from securities held as well as impairments of loans to non-consolidated subsidiaries.
Interest income primarily stems from interest income
from loans and receivables of 3,046 thousand euros (prior year:
3,026 thousand euros). Measurements in foreign currencies had
an effect of 666 thousand euros (prior year: 1,846 thousand euros) on interest income.
Other interest expenses of 18,328 thousand euros (prioryear: 13,383 thousand euros) chiefly stem from short-term andlong-term loans. Due to the first-time application of IFRS 16,
interest expenses from discounting lease liabilities of
6,605 thousand euros were included for the first time in the fiscal year. Moreover, this includes expenses from the increase inliabilities from put and call options in connection with sub­sidiaries acquired in prior years of 2,863 thousand euros (prioryear: 2,518 thousand euros) as well as expenses from currency
effects of 1,184 thousand euros (prior year: 2,404 thousand
euros) in the fiscal year.
Net lending from pension provisions results from interest
expenses arising from pension obligations of 17,068 thousand euros (prior year: 16,556 thousand euros) less the expected
return on plan assets of 9,367 thousand euros (prior year:
8,212 thousand euros).

51

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 33.3 million euros (prior year: 35.8 million euros) are also recognizedunder income taxes. The tax allocation corresponds to theactual tax incurred up to the level of DEKRA SE. The resulting
receivables and liabilities are included under receivables andliabilities to affiliates.
IN THOUSAND EUR

Current taxes

2019

2018

63,77358,355

–850

4,390

–1,166–3,49561,75759,250

Deferred taxes
Temporary differences
Unused tax losses

Current taxes contain tax expenses of 745 thousand euros (prioryear: –787 thousand euros) relating to other periods.
As of the reporting date, the DEKRA Group disclosed
38,317 thousand euros in total of unused tax losses (prior year:
33,070 thousand euros), which resulted in deferred tax assets of
10,449 thousand euros (prior year: 9,183 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.
Deferred taxes from temporary measurement differenceswere determined using future anticipated local tax rates, e.g.,
30.5 % (prior year: 30.5 %) for Germany, 25.0 % (prior year:
28.0 %) for France, and 25.0 % (prior year: 25.0 %) for the
Netherlands.
No deferred taxes were recognized on retained earnings
from subsidiaries, since the profits are to remain invested in thesubsidiaries for the time being.

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Notes

Notes

The deferred taxes as of December 31, 2019 break down as follows:
DEFERRED TAX ASSETSIN THOUSAND EUR

DEFERRED TAX LIABILITIES

Dec. 31, 2019

Dec. 31, 2018

Dec. 31, 2019

Dec. 31, 2018

Non-current assets

89,694

82,23577,06334,823Current assets

6,366

4,294

5,149

4,903

Pension provisions

157,991

137,81088,79579,197

Other non-current liabilities

37,303

1,479

1,471

1,900

17,880

6,002

874

227

Deferred taxes on temporary measurement differences309,234

231,820

173,352

121,050

Deferred taxes on unused tax losses

10,449

9,183

0

0

Non-current liabilities

Current liabilities

Total deferred taxes

319,683

241,003

173,352

121,050

Offsetting at tax group level–143,574–89,522–143,574–89,522

Disclosure

176,109

151,481

29,77831,528The 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 %.
2019

2018

Consolidated earnings before tax

181,590

194,767

Expected tax expense (30.525 %)

55,43059,453Losses for which no deferred taxes
were recognized

848

604

Differences from foreign tax rates–876–2,974Tax-free income–690–2,506

Non-deductible expenses

7,144

7,809

Tax items relating to other periods–303–3,334

Other tax effects

204

198

61,75759,250IN THOUSAND EUR

Effective tax expense

Deferred income tax assets and current income tax assets

The Group has unused tax losses that can be carried forward
indefinitely of 22,570 thousand euros (prior year: 20,749 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 24,931 thousand euros (prior year: 7,934 thousand euros) was reported inother comprehensive income. There were also changes in thedeferred taxes from first-time consolidations as well as fromcurrency translation effects.
The decrease in current income tax receivables is primarily due to a legislative change to abolish tax credits on social
security contributions in France (Crédit d’impôt pour lacompétitivité et l’emploi).

D E K R A Financial Report 2019

Deferred income tax liabilities and current income tax
liabilities

6

Besides those from effective tax obligations, tax liabilities
arise mainly from deferred tax liabilities. The recognition andmeasurement differences determined from adjustments of thestatements 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 0.5 million euros (prior year: 2.3 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 33.3 million euros has
been offset against receivables from affiliates.

Non - current assets

53

STATEMENT OF FINANCIAL POSITION

6.1 Intangible assets

In addition to goodwill, items include customer lists acquired fora consideration, franchises, industrial and similar rights and assets,
and internally generated intangible assets (IT developments).
Internally generated intangible assets of 2,852 thousand euros (prior year: 4,384 thousand euros) were recognized
for software developments in the reporting year
No impairments were necessary for goodwill and forinternally generated intangible assets in the reporting year.

5.9 Statement of comprehensive income

The consolidated net income for the year under IFRSs stands at
119.8 million euros (prior year: 135.5 million euros). This serves
as a basis for developing the income statement into the statement of comprehensive income. Items affecting other comprehensive income, which will not be recycled through profit orloss in the future, include the remeasurement of defined benefit
pension plans of –78.9 million euros (prior year: –27.9 million euros), less associated deferred taxes of 24.9 million euros(prior year: 8.1 million euros), as well as the change in the fairvalue of equity instruments at fair value through other comprehensive income of 16.0 million euros (prior year: 20.4 million euros).
Reclassification adjustments from other comprehensive
income to profit or loss in the fiscal year are explained in note 10.
In addition, income from currency translation of 4.2 million euros (prior year: expenses of 6.1 million euros) were recog­
nized in other comprehensive income. The effects of foreign currency translation are primarily due to translation of items fromthe pound sterling, US dollar, and South African rand. This was
mainly countered by the effects from the translation of items
from the Swedish krona. These items could also be recycled
through profit and loss in the future if certain conditions are met.

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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

Cost as of Jan. 1, 2018

Exchange difference on opening balance
Exchange difference in current year
Additions
Additions to the consolidated group
Disposals
Reclassifications
As of Dec. 31, 2018/Jan. 1, 2019

Exchange difference on opening balance
Exchange difference in current year

6.2 Goodwill

INTANGIBLE ASSETSIN THOUSAND EUR

Goodwill

Franchises,industrial andsimilar rights

Other
intangible
assetsInternallygeneratedintangible
assets

Prepayments
and intangible
assets underdevelopment

Total

549,846

154,259

220,864

38,317

10,309973,595–3,15723–1,195–194

0–4,523

167

5

36

43

6

257

0

7,102

2,164

4,384

10,37924,02935,37321

11,3340046,728–936–284–1,951–883–79–4,13332

6,436–4,634–132–2,669–967

581,325

167,562

226,618

41,535

17,946

1,034,986

2,422

37

1,237

61

6

3,763

28

–4

4

21

–1

48

Additions

6,396

9,738

2,457

2,852

12,63334,076

Additions to the consolidated group

9,684

0

1,703

0

0

11,387

Disposals

–852

–319

–6,777–675–38–8,661

Reclassifications

0

6,482

73

816

–6,994377

As of Dec. 31, 2019

599,003

183,496

225,315

44,61023,552

1,075,976

Amortization and impairment losses
As of 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

Reclassifications–72–2,390

2,556

1,276

0

1,370

As of Dec. 31, 2018/Jan. 1, 2019

–72

–128,401–158,897–20,4810–307,851

Exchange difference on opening balance

–61

–28

–659

–72

0

–820

Exchange difference in current year

0

1

–94

–12

0

–105

Additions0–14,440–18,360–3,8490–36,649

Disposals

0

119

6,004

0

0

6,123

Reclassifications

0

–40

–69

0

0

–109

As of Dec. 31, 2019

–133

–142,789–172,075–24,4140–339,411

Carrying amount as of Dec. 31, 2019598,870

40,70753,24020,19623,552736,565

Carrying amount as of Dec. 31, 2018581,253

39,161

67,72121,055

17,946727,136

Carrying amount as of Jan. 1, 2018549,847

40,95377,347

20,03810,309698,493

D E K R A Financial Report 2019

Of the goodwill in the fiscal year, 215.9 million euros relate to
the CGU Germany, 110.1 million euros to the CGU South-West
Europe, 89.5 million euros to the CGU North-West Europe,58.2 million euros to the CGU North America, and 56.7 million euros to the CGU East & South Asia. Furthermore,
26.2 million euros relate to the CGU Central East Europe &Middle East, 23.1 million euros to the CGU Temp Work,
16.5 million euros to the CGU Southern Africa & Oceania, and
2.7 million euros to the CGU South America.
In the prior year, 213.7 million euros of the goodwill
related to Business Unit DEKRA Automotive, 321.2 million euros to Business Unit DEKRA Industrial, and 46.4 million euros to Business Unit DEKRA Personnel.
Additions of 16.1 million euros to goodwill are attribut­
able to acquisitions and asset deals that took place in 2019 as
well as the inclusion in the consolidated group of entities previously considered to be immaterial. Furthermore, goodwill
increased by 2.4 million euros (prior year: decrease of 3.0 million euros) due to currency translation differences.
The recoverable amount of each cash-generating unit
was determined using the value in use of the relevant unit.

55

Cash flow forecasts are based on detailed plans by management, covering a three-year planning period. Management’splans reflect past experience and expectations of future market and corporate developments. Cash flows after the threeyear period were extrapolated taking into account estimatedgrowth rates of 0.5 % (prior year: 0.5 %). The estimatedgrowth rates came from forecasts by the Company. For theeight regional clusters, cash flows were discounted using arisk-adjusted interest rate after tax of 6.5 % (prior year: 7.0 %for each of the Business Units DEKRA Automotive and
DEKRA Industrial). For the globally operating Temp Worka risk-adjusted interest rate after tax of 8.0 % (prior year:
7.6 %) was used.
A 10 % decrease in the expected cash flows or a 1 %increase in the discount rate underlying the value in use calculation for the cash-generating unit would individually not resultin any impairment losses. If both scenarios (10 % decrease in
the expected cash flows and 1 % increase in the discount rate)
were to occur simultaneously, this would result in a need for
impairment for the cash-generating unit North America.
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, 2019

Dec. 31, 2018

200,840

209,621235,644

14,840660,945

Aggregated non-current assets

31,41820,929Exchange difference on opening balance–290–1,182–222

165–1,529Aggregated current assets

28,81738,080Exchange difference in current year

–134

201

95

–79

83

843

20,51136,447

23,97432,825

14,442

107,688

23,042

5,426

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

241,774

228,462

258,988

18,758

747,982

549

1,636

635

352

3,172

Cost as of Jan. 1, 2018

Additions
Additions to the consolidated group
Disposals
Reclassifications
As of Dec. 31, 2018/Jan. 1, 2019

Exchange difference on opening balance
Exchange difference in current year

–16

–101

260

–61

82

10,13734,54735,43831,915

112,037

592

423

119

0

1,134

Disposals–4,572–10,255–23,534–302–38,663

Reclassifications*–1,171

–853

5,074

–11,122–8,072As of Dec. 31, 2019247,293

253,859

276,980

39,540817,672

Depreciation and impairment losses
As of Jan. 1, 2018

–67,029–122,073–153,691–3,303–346,096

Exchange difference on opening balance

37

550

76

–55

608

Exchange difference in current year

68

27

–68

0

27

Additions–6,961–19,570–26,2110

Disposals

2,203

6,213

13,1600

Reclassifications

2,564

4,126

–1,962–69,118–130,727–139

Additions
Additions to the consolidated group

Aggregated non-current liabilities
Aggregated current liabilities

Number ofentities

Fair value
spreadIN MILLIONEUROSCentral East Europe &Middle East

37.3

43

0.0–2.8

South-West Europe

23.0

10

0.0–12.4

RegionEast & South Asia

14.0

3

0.0–9.7

Aggregated revenue

38,73039,753

North-West Europe

10.0

9

0.0–4.8

Aggregated net income for the year

3,253

2,773

Germany

3.4

6

0.0–3.0

North America

1.4

1

1.4

South America

0.0

3

0.0

Southern Africa &Oceania

0.0

1

0.0

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, 2018–52,742

Shares in affiliates

68,436

51,15021,576

Other investments

1,659

1,661

0

4,728

Loans to affiliates–168,696–3,358–371,899

–723

–342

–156

–1,360

–5

108

–115

0

–12

Additions–7,047–21,071–26,026–1,966–56,110

Disposals

347

8,334

18,16935

26,885

Reclassifications*

756

2,384

707

0

3,847

As of Dec. 31, 2019–75,206–141,695–176,303–5,445–398,649

Carrying amount as of Dec. 31, 2019

172,087

112,164

100,677

34,095419,023

Carrying amount as of Dec. 31, 2018

172,656

97,73590,292

15,400376,083

Carrying amount as of Jan. 1, 2018

133,81187,54881,953

11,537

314,849

Exchange difference in current year

Fair value
IN MILLION
EUROS

2018

Dec. 31, 2019

Exchange difference on opening balance

this, 16.0 million euros had a positive effect on other comprehensive income in the fiscal year. This is counterbalanced by the
first-time consolidation of one entity in fiscal year 2019. The fairvalue of the shares in affiliates not included in the consolidated
financial statements breaks down by region as follows:2019

IN THOUSAND EUR

IN THOUSAND EUR

As of Dec. 31, 2018/Jan. 1, 2019

13,998

10,409Other loans

147

410

Securities

9,605

6,942

Sundry other non-current financial
assets

3,385

6,575

97,23077,147

DEKRA measures equity instruments at fair value through othercomprehensive income. The accumulated reversals of impairments of the shares in affiliates amount to 50.0 million euros. Of

The increase in loans to affiliates is mainly due to issuing additional loans.
Securities remained relatively stable compared to the prioryear. Net reversals of impairments of 592 thousand euros (prioryear: 389 thousand euros) were recognized in 2019. The accumulated reversals of impairments of the securities amount to
842 thousand euros.
Risk provisioning for the loans to affiliates and other loans
developed in the reporting period as follows:
Level 1

Level 2

Level 3

–4,08300

Utilization

24

0

0

Reclassifications

911

0

0

Loss allowances asof December 31–3,14800

Loss allowances asof January 1* Reclassification of finance lease to point 8.1 contained here as IFRS 16 was applied for the first time.

D E K R A Financial Report 201957

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Notes

Notes

Reclassifications of 911 thousand euros are primarily
attributable to reclassifications of non-current financial assets
to current financial assets.
The risk provisioning for the other non-current financial
assets amounts to –293 thousand euros (prior year: –245 thousand euros).
6.6 Other non - current assets

Dec. 31, 2019

Dec. 31, 2018

Contract assets

71,582

46,251

Trade receivables, gross519,235

544,003

Loss allowances on contract assets–1,136–1,484

Loss allowances on
trade receivables–21,201–20,214

568,480

568,556

IN THOUSAND EUR

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

Dec. 31, 2019

Dec. 31, 2018

1,237

1,229

Other non-current assets

7,464

6,112

8,701

7,341

Current assets
6.7 Inventories
Dec. 31, 2019

Dec. 31, 2018Materials and supplies

1,497

1,463

Work in progress

5,000

2,484

Merchandise

4,713

4,961

11,2102019

2018

Loss allowances as of January 1–20,214–21,195

Additions–8,104–5,118

Utilization

3,244

4,010

IN THOUSAND EUR

Reversal
Loss allowances as of December 31

Reimbursement claims
from employer’s pension
liability insurance

IN THOUSAND EUR

Write-downs on trade receivables break down as follows:

8,908

Contract assets are recognized for unbilled services as of thereporting date. These services are largely allocated to the Industrial Inspection, Product Testing, and Audits Service Divisions.
Amounts recognized under contract assets are reclassified to
trade receivables after defined invoicing dates or after the service has been concluded and inspected by the customer. Anyremaining performance obligations from contracts included
under contract assets are usually satisfied and invoiced within
the following fiscal year.
Trade receivables do not bear interest and are usually due
for payment within 30 to 60 days.
The maturities of trade receivables break down as follows:
Gross amount
Dec. 31, 2019

Loss allowance
Dec. 31, 2019

Not past due – 180 days past due

481,909–4,658

Past due between 181 – 240 days

6,798

–1,025

IN THOUSAND EUR

Past due between 241 – 360 days
Past due more than 360 days

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.

D E K R A Financial Report 2019

3,873

2,089

–21,201–20,214

None of the contract assets are past due. Loss allowances oncontract assets developed as follows:

Receivables from affiliates and other investees andin­vestors contain liabilities from income tax and VAT, profit
transfers from DEKRA SE, and other cost allocations to theowner totaling 84,317 thousand euros, which are offset against
receivables from the cash pool and other cost allocations of
203,264 thousand euros. The increase in this item is primarily
attributable to the higher receivables from the cash pool compared to the prior year.
The increase in other financial assets is primarily attribut­able
to an increase in reimbursement claims from loss adjustments.
Impairment of other current financial assets developed asfollows:
2019

2018

Loss allowances as of January 1–1,850–3,671

Additions–1,803–372

Utilization

29

2,193

Reversal

16

0

–794

0

–4,402–1,850IN THOUSAND EUR

2019

2018

–1,484–52

Additions–157–1,562

Utilization

4

126

IN THOUSAND EUR

Loss allowances as of January 1

Reversal
Loss allowances as of December 31

501

4–1,136–1,484

Expenses incurred for the allocation to loss allowances areincluded under other operating expenses.

59

Reclassifications
Loss allowances as of December 31

6.10 Other current assets

This item principally contains prepaid expenses and other current tax receivables.

6.9 Other current financial assets
6.11 Cash and cash equivalents
IN THOUSAND EUR

Dec. 31, 2019

Dec. 31, 2018

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:

7,973–1,92822,555–13,590

Securities

1,100

171

519,235–21,201

Receivables from affiliates andother investees and investors

130,493

99,609Sundry other current
financial assets

99,69885,626

Cash at banks

231,291

185,406

Dec. 31, 2019

Dec. 31, 201889,28976,643

Cash on hand

1,654

1,222

Cash equivalents less than 3 months

1,366

585

92,30978,450IN THOUSAND EUR

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Notes

Notes

Cash at banks includes short-term deposits with terms of
up to three months.
Bad debt allowances on cash and cash equivalents developed as follows:
IN THOUSAND EUR

Loss allowances as of January 1
Additions
Loss allowances as of December 31

Dec. 31, 2019

Dec. 31, 2018

–43

–37

0

–6

–43

–43

6.12 Equit y

For information on the development of equity, refer to the statement of changes in equity. Effects of the first-time applicationof new accounting standards are also presented in the statementof changes 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 585,529 thousand euros (prior year:
560,529 thousand euros) mainly include contributions from
DEKRA e.V., Stuttgart. A contribution of 25,000 thousand euros
was made to the capital reserves in the reporting year.
Revenue reserves contain the Group net income for theperiod and the profits of consolidated companies generated inprior years to the extent these have not been distributed ortransferred. There is a profit and loss transfer agreement inplace between DEKRA SE and the parent. The profit transfer
is reported in other comprehensive income as a transaction
with the equity investor. The difference between the profit
transfer in accordance with German commercial law and the
IFRS result is recorded in the revenue reserves. Changes in
actuarial gains and losses from defined benefit plans, the gains
or losses from the fair value measurement of hedging instruments and shares in non-consolidated subsidiaries, anddeferred taxes not recognized through profit or loss, and thetranslation 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

6.14 P ensions and other post- employment benefits

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).
IN THOUSAND EUR

Dec. 31, 2019

Dec. 31, 2018

Aggregated non-current assets

12,902

9,979

Aggregated current assets

10,1088,524

Aggregated non-current liabilities

2,139

498

Aggregated current liabilities

5,908

4,871

2019

2018

Aggregated revenue

11,2749,411

Aggregated net income for the year

1,189

1,335

IN THOUSAND EUR

Of these amounts, non-current assets of 10,655 thousand euros,
current assets of 4,187 thousand euros, non-current liabilitiesof 1,853 thousand euros, current liabilities of 3,617 thousand euros, revenue of 6,105 thousand euros, and net income
for the year of 842 thousand euros are attributable to DEKRAiST Reliability Services Inc., Hsinchu, Taiwan.

D E K R A Financial Report 2019

Dec. 31, 2019

Dec. 31, 2018

Pension provisions in Germany

513,367

455,540

Pension provisions inother countries

17,604

13,933530,971

469,473

IN THOUSAND EUR

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
and indirect commitments are defined benefit obligations forwhich assets (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 enteredinto with Allianz Treuhand GmbH, Stuttgart, which acts as
the trustee in a two-tier trust arrangement (administrative
trust and collateral trust). The funds transferred to fund thepension obligations are managed in trust by Allianz TreuhandGmbH, Stuttgart, and are earmarked for use solely for the settlement of pension obligations.

61

The Company pension scheme was reorganized with effectas of January 1, 2012 (DEKRA Company pension). Claims
vested prior to this date were not affected. Within the scope ofthe reorganization, direct commitments were made as defined
contribution plans in accordance with the rules of separately
concluded works agreements. The pension plan is described asa defined contribution plan, as the amount of the benefit isderived from and determined 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.
The pension provisions in other countries mainly relate topension 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 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-specificrisks 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 ofappropriate assumptions. When calculating the obligation, theinflation 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.

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Notes

Notes

63

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:
Benefitobligation

Plan assets (–)

Total

1,013,059–543,586

469,473

19,6870

19,687

1,890

0

1,890

Net interest cost (standard interest)

17,068–9,367

7,701

29,246

Net pension cost according to the income statement

38,645–9,36729,278

6,300

6,300

Actual return on plan assets less “net interest cost”

0–16,168–16,168

11,167

0

11,167

Actuarial gain/loss from changes in demographic assumptions

–566

0

–566

4,346

4,828

9,174

Actuarial gain/loss from changes in assumptions based on experience–6,602–19–6,621

778

0

778

Actuarial gain/loss from changes in financial assumptions

101,1110

101,111

Change from asset ceiling unless contained in net interest expense

IN THOUSAND EUR

Benefitobligation

Plan assets (–)

Total

As of Jan. 1, 2018

981,963–489,548

492,415

As of Jan. 1, 2019

Current service cost

20,340020,340Current service cost

562

0

562

Past service cost

Net interest cost (standard interest)

16,556–8,212

8,344

Net pension cost according to the income statement

37,458–8,212

Actual return on plan assets less “net interest cost”

0

Actuarial gain/loss from changes in demographic assumptions
Actuarial gain/loss from changes in assumptions based on experience

Past service cost/plan curtailment

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

461

–21

440

16,752

11,107

27,859–29,536

15,834–13,702

IN THOUSAND EUR

1,110

0

1,110

Remeasurement of defined benefit pension plans

95,053–16,187

78,866

Benefits paid

–30,728

16,794–13,934

Plan settlements

521

–374

147

339

–339

0

Employer contributions

0–66,981–66,981

Employer contributions

0–24,431–24,431

Employee contributions

5,931–5,401

530

Employee contributions

6,815–6,251

564–23,084–56,922–80,006

Total payments–23,574–14,227–37,801

–30

–11

–41

Changes in the consolidated group–2,980–5,865–8,845

1,013,059–543,586

469,473

As of Dec. 31, 2019

1,120,203–589,232

530,971

1,062,330

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

thereof funded

962,225

thereof funded

thereof unfunded

50,834

thereof unfunded

D E K R A Financial Report 201957,873

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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 14.61 years (prior year: 14.26 years).
The expected future pension payments for the coming fivefiscal years are as follows:
IN THOUSAND EUR

Expected
pensionbenefitpayments

2020

2021

2022

2023

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 %

2024

Interest rate
Increase insalaries
32,232

36,777

37,83638,99440,504The 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
as direct capital investments. We refer in this respect to our
explanations in note 10. The recognized plan deficit is mostly
covered by 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.

Increase inpensions

GERMANYOTHER COUNTRIES

Dec. 31,2019

Dec. 31,2018

Dec. 31,2019

Dec. 31,
2018

1.00

1.75

0.91

1.67

2.00
1.75

2.00
1.75

1.66
1.50

1.00
1.50

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 arefinanced through payments to an insurance company. The
resulting plan assets include qualifying insurance policies only.

D E K R A Financial Report 2019

Changes inassumptions

Increase inassumption

Decrease inassumption

Interest rate

0.5 %

6.1 %
decrease

6.9 %increase

Increase insalaries

0.5 %

0.2 %
increase

0.2 %decrease

Increase inpensions

0.5 %

5.7 %
increase

5.2 %decrease

Employeeturnover

0.5 %

0.1 %
decrease

0.1 %increase

One year

5.0 %increase

5.0 %decrease

Age

The employer contributions to plan assets are expected toamount to 30.5 million euros in the next fiscal year (prior year:
12.6 million euros).
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 112.6 million euros in the reporting
year (prior year: 108.9 million euros). The future amount ofthese expenses essentially depends on the development of theunderlying pension insurance systems.

Plan assets

The fair value of plan assets breaks down as follows by asset class:Dec. 31,2019

thereofmarket pricequoted onan active
marketDec. 31,2018

thereofmarket pricequoted onan active
marketEmployer’s
pensionliability
insurance

368,4960360,1790Securities

214,9460

175,517

0

5,790

0

7,890

0

589,2320543,5860

IN THOUSAND
EUR

Other

65

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Notes

Notes

67

6.15 Non - current and current provisions
IN THOUSAND EUR

IN THOUSAND EUR

As ofJan. 1, 2019

Allocation

Additionsto the consolidated group

Utilization

Reversal

Reclassifications

As ofDec. 31, 2019

As ofJan. 1, 2018

Allocation

Additions tothe consolidated group

Utilization

Reversal

Reclassifications

As ofDec. 31, 2018

Non-current provisions

Non-current provisions

Other personnel provisions

4,644

637

0

–743

–901

36

3,673

Other personnel provisions

4,835

1,347

0

–937

–602

0

4,644

Phased retirement

197

0

0

–72

0

36

161

Phased retirement

216

17

0

–36

0

0

197

thereof from phased
retirement obligation

1,600

345

0

–472

0

0

1,473

thereof from phased
retirement obligation

1,505

264

0

–169

0

0

1,600

thereof from phased
retirement plan assets–1,403

–345

0

400

0

36

–1,312

thereof from phased
retirement plan assets–1,289

–247

0

133

0

0

–1,403Long-service award

2,688

584

0

–347

0

0

2,925

Long-service award

3,377

405

0

–258

0

–836

2,688

Sundry other personnel
provisions

1,759

53

0

–324

–901

0

587

Sundry otherpersonnel provisions

1,243

925

0

–643

–602

836

1,759

Other non-personnel provisions

15,1316,044

0–7,078–1,8560

12,241Other non-personnel provisions

14,0183,019

3–1,042–827–40

15,131

Warranty provisions

7,097

3,710

0

–6,266–1,0000

3,541Warranty provisions

6,057

1,040

0

0

0

0

7,097

Litigation, warranty, andsimilar obligation provisions

5,727

1,997

0

–622

–567

0

6,535

Litigation, warranty, andsimilar obligation provisions

5,513

1,696

0

–682

–800

0

5,727

Other provisions

2,307

337

0

–190

–289

0

2,165

Other provisions

2,448

283

3

–360

–27

–40

2,307

19,7756,681

0–7,821–2,75736

15,91418,8534,366

3–1,979–1,429–40

19,775Current provisions

Current provisions

Other personnel provisions
Other non-personnel provisions

2,182

5,656

0

–1,878

–484

0

5,476

Other personnel provisions

2,347

3,700

0

–2,999

–702

–164

2,182

Other non-personnel provisions

17,723

4,998

468–3,926–5,089–693

13,481

196

133

0

–172

0

0

157

13,481

14,2230–5,918–2,3450

19,441

157

665

0

–157

0

0

665

Potential losses

1,191

257

0

–319

–113

0

1,016

Potential losses

1,317

364

0

–452

–38

0

1,191

Litigation, warranty, andsimilar obligation provisions

5,000

2,189

0

–118

–573

0

6,498

Litigation, warranty, andsimilar obligation provisions

4,048

1,529

0

–254

–622

299

5,000

Other provisions

7,133

11,1120–5,324–1,6590

11,262Other provisions

12,162

2,972

468–3,048–4,429

–992

7,133

15,663

19,8790–7,796–2,8290

24,917

20,0708,698

468–6,925–5,791–857

15,663

Other restructuring

D E K R A Financial Report 2019

Other restructuring

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Notes

Notes

In France, there are non-current obligations relating towarranties of 9,369 thousand euros (prior year: 12,746 thousand euros), the risks of which exceed the insurance cover.
There are also long-term obligations based on country-specificdues. As in the prior 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 theamount that will probably be required.
6.16 Non - current and current financial liabilities
Non - current financial liabilities
IN THOUSAND EUR

Dec. 31, 2019

Dec. 31, 2018

Liabilities to banks

204,399

261,739

246

0

74

125

273,774

1,521

Trade payables
Derivative financial instruments
Lease liabilities
Liabilities from businesscombinations

300

1,719

478,793

265,104

Current financial liabilities

The increase in current liabilities to employees by
1,607 thousand euros is mainly cut-off related.
The decrease in other financial liabilities by 2,914 thousand euros is primarily attributable to the decrease in liabilities
to DEKRA Unterstützungskasse e.V.
DEKRA SE granted its managers and employees theoption of 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, 2,515,135 (prior year:
2,700,281) profit participation rights were subscribed. The subscribed participation capital ensures participation in theadjusted 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 therecipient at short notice at any time.

IN THOUSAND EUR

Dec. 31, 2019

Dec. 31, 2018

Liabilities to banks

180,222

132,593

Profit participation rights

13,252

14,197

Financial liabilities to affiliates

22,844

23,622Financial liabilities to associates

944

1,059

Financial liabilities to investees
and investors

79

92

Derivative financial instruments

25

0Lease liabilities

84,578

1,180

Liabilities from businesscombinations

20,742

19,438

Liabilities to employees

31,711

30,104

Other financial liabilities

13,116

16,0306.17 T rade payables and contract liabilities

367,513238,315

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

The overall decrease in liabilities to banks of 9,711 thousand euros is mainly due to repaying current loans. At the sametime, loans and promissory notes previously recognized as
non-current financial liabilities were reclassified as current
financial liabilities on account of their maturity.
The liabilities to affiliates include liabilities from cash pooling, income tax and VAT as well as other cost allocations, someof which have been netted with receivables from affiliates. The
decrease of 778 thousand euros is mainly due to lower liabilities
from profit and loss transfer agreements and from trade liabilities.
The increase in non-current and current lease liabilitiesof 355,651 thousand euros is attributable to the first-time application of IFRS 16 and the related recognition of the present
value of the future lease payments as lease liabilities.

D E K R A Financial Report 2019

Contract liabilities include prepayments received from
customers for uncompleted services. Prepayments are generally
current.
DEKRA receives payments from customers based on asettlement 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. Receiv­
ables are recognized as soon as DEKRA fulfills its contractual
obligations. Contract liabilities relate to payments that arereceived prematurely, i.e., before the contractual obligations
have been satisfied. Contract liabilities are recognized as rev­enue as soon as the contractual service has been rendered. In
fiscal year 2019, revenue included in contract liabilities as ofJanuary 1, 2019 was recognized as follows:
IN THOUSAND EUR

IN THOUSAND EUR

Dec. 31, 2019

Dec. 31, 2018

Trade payables

112,219

93,767

Contract liabilities

45,44946,852

157,668

140,61969

Dec. 31, 2019

Dec. 31, 2018

30,453

34,69529

1,110

30,48235,805

Revenue recognizedin the fiscal year:
Amounts recognized incontract liabilities at the
beginning of the period
Performance obligations
satisfied in previous periods

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Notes

Notes

6.18 Other non - current and current liabilities

7

Other non-current non-financial liabilities primarily include
liabilities to the pension guarantee association and security
deposits received.
Other current liabilities break down as follows:
Dec. 31, 2019

Dec. 31, 2018

Personnel-related liabilities

218,311

205,898

Other liabilities for taxes

57,10456,929Social security

37,59437,964

Prepayments received
from loss adjustments

14,811

6,867

Sundry other

18,197

20,342

346,017

328,000

IN THOUSAND EUR

Personnel-related liabilities chiefly relate to outstanding vari­able salary components and accrued vacation.
Liabilities from taxes principally relate to VAT and wage tax.
The liabilities are carried at fair value.

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 offinancial position as of the reporting date prior to the consideration of 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, 2019

Dec. 31, 2018

Total purchase/sale price–7,671–33,951

thereof settled in cash

–7,671–33,951

Amount of cash and cash
equivalents acquired/disposed of

1,444

2,021

IN THOUSAND EUR

Non-current assets

7,049

29,835Current assets

2,350

5,032

Non-current liabilities

1,219

180

Current liabilities

1,888

2,418

D E K R A Financial Report 2019

The cash flow from investing activities takes account ofpurchase price liabilities from the acquisition of fully consolidated subsidiaries from prior years amounting to 1,377 thousand euros. Payments were not higher than the liabilities recog­
nized in prior years.
In addition, the cash flow from investing activities comprises purchase price payments of 5,824 thousand euros (prioryear: 4,541 thousand euros) for further subsidiaries and otherunits. These acquisitions did not result in any liabilities due tovariable purchase price components (prior year: 0 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, 2018

CashchangeNon-current loans

261,739

Current loans

132,593

IN THOUSAND EUR

Derivative financial instruments
Total liabilities from financing activities *)Amount of assets and liabilities
acquired/disposed of71

Non-cash changes

Carrying
amountDec. 31, 2019

Exchange
rate effects

Business
combinations

Change infair value

Otherchanges

6,198

502

0

0

–64,040

204,399–18,028980

0064,677

180,222

125

0

0

0

–26

0

99

394,457–11,830

1,482

0

–26

637

384,720*) Not including lease liabilities. These are presented separately in note 8.1.

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Notes

Notes

OTHER DISCLOSURES IN THE NOTES

8.1 Leases
Leases as lessee

The Group has concluded lease agreements for IT, buildings,
vehicles, technical equipment as well as furniture and fixturesthat it uses in its operations. Lease agreements for IT generally
have terms between 1 and 5 years, buildings between 1 and 30
years. For vehicles, the term is generally between 1 and 6 years,
for technical equipment between 3 and 7 years. Lease agreements for furniture and fixtures generally have terms between
1 and 10 years. The obligations of the Group from its lease agreements are secured by means of the lessor’s title to the leased
assets. Several lease agreements contain extension and termination options.
The Group has also concluded lease agreements for assets
with a term of 12 months or less as well as for low-value assets.
For these lease agreements, the Group uses practical expedientsthat apply for short-term leases and for leases for which theunderlying asset is of low value.
The table below presents the carrying amounts of the disclosed right-of-use assets and the changes during the reporting
period.
IN THOUSAND
EUR

Buildings

VehiclesFurnitureand fixtures

Subtotalbuildings,
vehicles,F&F

As of Jan. 1, 2019329,557

42,7072,465

374,730

Depreciation–77,531–22,293–1,202–101,026

Additions

51,161

18,1501,498

70,810

Disposals

–102

–20

–402

–524

Exchange rate
differences
As of Dec. 31, 2019

527

43

9

579

303,61238,587

2,370

344,569

The following amounts were recognized through profit orloss in the reporting period:

IN THOUSAND
EUR

Subtotalbuildings,
vehicles,F&F

IT

As of Jan. 1, 2019374,730

2,404

505

377,639

Depreciation–101,026–1,039–79–102,144

Additions

70,810360

7671,246

Disposals

–524

0

0

–524

Exchange rate
differences

Expenses for short-term leases
and low-value leases–27,927

579

–8

0

572

Total

–34,431344,569

1,717

502

346,788

As of Dec. 31, 2019Technical
equipment

Total

L E A S E S P U R S UA N T T O I F R S 16
IN THOUSAND EUR

The table below shows the carrying amounts of the lease liabilities (contained in non-current financial liabilities) and thechange during this reporting period:
IN THOUSAND EUR

2019

As of Jan. 1

389,506

Additions

70,485Interest growth

6,608

Payments
Exchange rate differences
As of Dec. 31–108,828
580

358,352

thereof current

84,578

thereof non-current

273,774

The maturity analysis of the lease liabilities is presented in note 10.

D E K R A Financial Report 20192019

Interest expenses on lease liabilities–6,605

Income from subleasing right-of-use
assets, presented in other revenue

101

O P E R AT I N G L E A S E S P U R S U A N T T O I A S 17
IN THOUSAND EUR

Lease expense
Income from subleasing right-of-use
assets, presented in other revenue
Total

2018

–127,724
84–127,640

The Group’s cash outflows for leases amounted to108,828 thousand euros in 2019. In addition, the Group recognized non-cash additions to right-of-use assets of 71,051 thousand euros and lease liabilities of 70,485 thousand euros in 2019.
The Group has concluded several leases containing
extension and termination options. These options are negotiated by management in order to be able to manage the leaseportfolio f lexibly and in line with the Group’s respective
business requirements. Assessing the question as to whether
exercising these extension and termination options is reasonably certain requires management to make key judgments(see note 3.2).

73

8.2 Other financial obligations

In 2019, the Group reported other financial obligations including purchase commitments of 29,754 thousand euros (prioryear: 32,122 thousand euros). These are mainly attributable toagreements concluded on commissioned construction projects
as well as to long-term framework agreements.
8.3 Contingent liabilities, other contingencies, andcollateral provided

As in the prior year, there are no significant bank guarantees orcontingencies. Collateral and warranties of 825 thousand euros(prior year: 825 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.
8.4 Government grants

Government grants of 3,328 thousand euros (prior year:
3,339 thousand euros) were received in the past fiscal year. Mostof these relate to personnel-related grants.
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 25.0 million euros as well as an increase in the revenue reserves of
67.9 million euros. Differences from the currency translation of
the financial statements prepared in foreign currency by consolidated subsidiaries had a positive effect of 4.2 million euros
on equity. The DEKRA Group’s equity ratio stood at 28.9 %(prior year: 33.0 %) as of the end of the reporting period.

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Notes

Notes

10 FI N A N C I A L M A N AG E M E N T

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
ensures that the necessary funds for payments are available
where they are needed, with the aim of keeping external investment and borrowing to a minimum.
Liquidity management ensures that all payment obligations of the entities in the DEKRA Group are always met. To thisend, the liquidity planning determines cash flows from operating activities, secures foreseeable liquidity requirements at an
early stage, and invests surplus liquidity on the money market.
Market price risk management is responsible for limiting
the impact of interest rate and currency fluctuations on theGroup’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 be hedged, and the period to be covered. DEKRA usedderiva­tive 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 from 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

Pursuant to IFRS 9, financial assets and liabilities are classified
into one of the following categories:a) Financial assets at amortized costb) Financial assets at fair value through other comprehensive
incomec) Financial assets at fair value through profit or lossd) Financial liabilities at amortized coste) Financial liabilities at fair value through profit or lossf) Derivative financial instruments designated as hedging
instruments

D E K R A Financial Report 2019

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

Financial assets at fair value
through profit or loss
Financial assets at amortized cost
Financial assets at fair value
through other comprehensive
incomeFinancial liabilities at fairvalue through profit or loss
Financial liabilities atamortized cost

Dec. 31, 2019

Dec. 31, 2018

1,276

1,200

–3,891–2,228348

258–3,346–2,328–7,205–7,497–12,818–10,595

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.

75

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 16.0 million euros (prior year: 20.4 million euros) which werereported in other comprehensive income. The measurement of
the derivative financial instruments before tax effects throughother comprehensive income increased the reserve for hedging
instruments by 0.1 million euros to –0.1 million euros (prioryear: –0.2 million euros). Deferred taxes of 0.1 million euros(prior year: 0.1 million euros) had the opposite effect.
The following tables show a breakdown of line items into
categories and classes and the allocation of financial assets andliabilities at fair value in the statement of financial position to
one of the three levels of the fair value hierarchy:

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Notes

Notes

77

IN THOUSAND EUR

IN THOUSAND EUR

Carrying
amountDec. 31,2019

Financialassets at
amortized
cost

Financialassets atfair value
throughothercomprehensive income

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

70,096

070,095070,0950070,095

Securities

9,605

0

0

9,605

9,605

762

8,843

0

Loans

14,14414,145

0

0

n/a

n/a

n/a

n/a

Other financial assets

3,385

3,385

0

0

n/a

n/a

n/a

n/a

97,23017,53070,095

9,605

79,700762

8,843

70,095Derivative financial instruments designatedas hedging instruments

Carrying
amountDec. 31,2019

Financialliabilities atamortized
cost

Financialliabilities atfair value
throughothercomprehensive income

Financialliabilities atfair value
through
profit or
loss

Fair
value

thereoffair valuelevel 1

thereoffair valuelevel 2

thereoffair valuelevel 3

74

0

74

0

74

0

74

0

300

0

0

300

300

0

0

300

Financial liabilities

204,399

204,399

0

0

n/a

n/a

n/a

n/a

Lease liabilities

273,774

273,774

0

0

n/a

n/a

n/a

n/a

Liabilities from business combinations

Other non-current liabilities

246

246

0

0

n/a

n/a

n/a

n/a

478,793

478,419

74

300

374

0

74

300

Current liabilities

Current assets

Trade receivables

498,034

498,034

0

0

n/a

n/a

n/a

n/a

Trade payables

112,219

112,219

0

0

n/a

n/a

n/a

n/a

Cash and cash equivalents

92,30992,309

0

0

n/a

n/a

n/a

n/a

Profit participation rights

13,252

13,252

0

0

n/a

n/a

n/a

n/a

1,100

0

0

1,100

1,100

954

146

0

Receivables from affiliates and investees

130,493

130,493

0

0

n/a

n/a

n/a

n/a

25

0

25

0

25

0

25

0

Other financial assets

99,69899,698

0

0

n/a

n/a

n/a

n/a

Liabilities from business combinations

20,7420020,742

20,7420020,742

821,634

820,534

0

1,100

1,100

954

146

0

Financial liabilities

180,222

180,222

0

0

n/a

n/a

n/a

n/a

Liabilities to affiliates

22,844

22,844

0

0

n/a

n/a

n/a

n/a

Liabilities to associates

944

944

0

0

n/a

n/a

n/a

n/a

Liabilities to other investees and investors

79

79

0

0

n/a

n/a

n/a

n/a

Other current liabilities

44,82844,828

0

0

n/a

n/a

n/a

n/a

Lease liabilities

84,57884,578

0

0

n/a

n/a

n/a

n/a

479,733

458,966

25

20,742

20,7670

25

20,742

958,526

937,38599

21,042

21,141

0

99

21,042

Securities

918,864

838,064

70,095D E K R A Financial Report 201910,70580,800

1,716

8,989

70,095Derivative financial instruments
designated as hedging instruments

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Notes

Notes

79

IN THOUSAND EUR

IN THOUSAND EUR

Carrying
amountDec. 31,2018

Financialassets at
amortized
cost

Financialassets atfair value
throughothercomprehensive income

Financialassets atfair value
through
profit or
loss

Fair
value

thereoffair valuelevel 1

thereoffair valuelevel 2Carrying
amountDec. 31,2018

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
designated as hedging instruments
Liabilities from business combinations
Financial liabilities
Finance lease liabilities

Financialliabilities atamortized
cost

Financialliabilities atfair value
throughothercomprehensive income

Financialliabilities atfair value
through
profit or
loss

Fair
value

thereoffair valuelevel 1

thereoffair valuelevel 2

thereoffair valuelevel 3

125

0

125

0

125

0

125

0

1,719

0

0

1,719

1,719

0

0

1,719

261,739

261,739

0

0

n/a

n/a

n/a

n/a

1,521

)

1,521 *

0

0

n/a

n/a

n/a

n/a

265,104

263,260

125

1,719

1,844

0

125

1,719

93,767

93,767

0

0

n/a

n/a

n/a

n/a

Current liabilities

Trade payables

Current assets

Trade receivables

523,789

523,789

0

0

n/a

n/a

n/a

n/a

Profit participation rights

14,197

14,197

0

0

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

Liabilities from business combinations

19,4380019,43819,4380019,438

171

0

0

171

171

171

0

0

Financial liabilities

132,593

132,593

0

0

n/a

n/a

n/a

n/a

99,60999,609

0

0

n/a

n/a

n/a

n/a

Liabilities to affiliates

23,622

23,622

0

0

n/a

n/a

n/a

n/a

85,626

85,626

0

0

n/a

n/a

n/a

n/a

Liabilities to associates

1,059

1,059

0

0

n/a

n/a

n/a

n/a

787,645787,474

0

171

171

171

0

0

92

92

0

0

n/a

n/a

n/a

n/a

Other current liabilities

46,134

46,134

0

0

n/a

n/a

n/a

n/a

Finance lease liabilities

1,180

1,180 *

)

0

0

n/a

n/a

n/a

n/a

332,082

312,644

019,43819,4380019,438597,186

575,904

125

21,157

21,2820

125

21,157

Securities
Receivables from affiliates and investees
Other financial assets

864,792

804,868

52,811

7,113

59,924990

6,123

Liabilities to other investees and investors

52,811*) Measured in accordance with IAS 17.

D E K R A Financial Report 2019

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Notes

Notes

The levels of the fair value hierarchy and their application
to our assets 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
Level 3: 	Information relating to assets and liabilities that is
not based on observable market data
Development of level 3 of the fair value hierarchy:
2019

2018

As of Jan. 1

73,96821,532

Additions

7,042

58,270

Disposals–8,648–28,064

Fair value changes

18,77622,230

As of Dec. 31

91,13773,968IN THOUSAND EUR

The contingent purchase price liabilities were recognized atpresent 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 theworking capital of the acquired business.
As of the reporting date, notable purchase price liabilities
exist for DEKRA New Zealand Ltd., Wellington, New Zealand.
Assuming a change of +10 %/–10 % in the underlying
parameters regarding non-observable input factors as of thenext possible exercise date, the amount of the purchase priceobligation, including put options and earn-outs, for the significant obligations from business combinations would be 5 %higher/5 % lower.

Contingent purchase price liabilities of 3,346 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 –27.1 %/+31.2 %.
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
not recognized 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 204,398 thousand euros comes to 205,687 thousand euros (level 2).

D E K R A Financial Report 2019

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 capital credit and acquisition lines). Cash and cash equivalents areheld in bank accounts or invested in the form of overnightmoney and time 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 for the increasing number ofinternational subsidiaries from the euro zone. Cash pools havealso 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, 2019, 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, 2019, there are
medium-term credit lines of 312.3 million euros granted inwriting that have not yet been drawn.

81

As of the reporting date, the contractually agreed undiscounted financial liabilities including interest breaks down as
follows:
D E C . 31, 2 019
IN THOUSAND EUR< 1 year

1–5 years> 5 years

Trade payables

112,21900

Financial liabilities

183,092

177,041

34,143

81,946

246

0

81

59

0

5,382

219,778

161,299382,720

397,124

195,441

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

1–5 years> 5 years

Trade payables

93,7670

0

Financial liabilities

135,069

237,452

34,712Other financial liabilities

85,103

0

0

73

95

0

Other financial liabilities
Derivative financial
instruments (negative)
designated as hedging
instruments
Lease liabilities

Derivative financial
instruments (negative)
designated as hedging
instruments
Finance lease liabilities

1,189

1,568

0

315,201

239,115

34,712We also refer to our explanations on the contingent liabilities
in note 8.2, which have an unlimited term.

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Notes

Notes

In addition to liabilities from promissory notes, the liabilities to banks mostly include short- and medium-term utilization of credit lines as well as investment financing of foreignsubsidiaries.
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 areaccounted 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 thereporting 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
in accordance with the carrying amounts of the financial assets
as an equivalent for the maximum default risk. As of December
31, 2019, 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 amountsof the financial instruments.
No collateral is pledged by the counterparties for thefinancial instruments held. As of December 31, 2019, 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 1,997 thousand euros (prioryear: 838 thousand euros). A downward shift of 100 base points
would result in a decrease in the interest result of 125 thousand euros (prior year: 838 thousand euros).
An upward shift of 100 base points would result in an
increase in the fair value of hedging instruments reported inequity of 81 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 84 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.

D E K R A Financial Report 2019

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 %:
Residual term Dec. 31, 2019
< 1 year

1–2 years

2–3 years

3–4 years

Nominal amount
IN THOUSAND
EURO

10,000

0

4,000

0

Average hedged
interest rate

0.8 %

n/a

1.3 %

n/a

83

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 deter­
mined 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 portionsof 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 72 thousand euros was recorded in the fiscal year.
Currency risks

The hedging instruments DEKRA designated in hedges havethe following effects on the consolidated statement of financial
position as of December 31, 2019:
IN THOUSAND
EUR

Derivative
financial instruments designatedas hedging
instruments
Derivative
financial instruments designatedas hedging
instruments

Nominalvalue

10,0004,000

Carrying
amountItem in the
consolidated
statementof financial
position

Changesin fair
value in thereportingperiod74

Noncurrent
financialliabilities

–52

25

Current
financialliabilities

25

Currency risks from the operating activities are immaterial,
since the local entities bill the services they render locallyalmost exclusively in their local currency. In connection withinvestments and intragroup transactions, liabilities occasionallyarise in foreign currencies, for which hedging is decided on acase-by-case basis.
A 10 % change in the exchange rate of the euro against thesignificant currencies within the Group would affect the result
from the translation of short-term and long-term loans to affiliates by approximately 9.2 million euros not taking deferred tax
effects into consideration. Decisions on necessary currency
hedges are taken on a case-by-case basis. No material effects are
expected from the change in the exchange rate for the otherfinancial assets or liabilities. Group revenue includes revenue of
571.9 million euros (prior year: 560.3 million euros) that was
not recorded in a euro zone country.

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Notes

Notes

Other price risks

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

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
in particular stock market prices or indices. As of December 31,
2019, the Group had financial assets at fair value through profit
or loss totaling 10.7 million euros (prior year: 7.1 million euros),which are subject to fair value fluctuations. These risks aremainly due to interest rate, credit, and price risks. The fair valuechanges averaged 8.2 % in 2019 and 5.5 % in 2018.
Securities and restricted assets

As in the prior year, there were no restrictions on title or disposal for legally and beneficially owned property, plant andequipment, with the exception of the assets recognized underfinance leases. Other assets include 1.2 million euros (prioryear: 1.2 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.

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 2,809 thousand euros (prior year: 2,571 thousand euros).
In addition, there were further expenses (among otherthings, for pensions of DEKRA SE) of 918 thousand euros (prioryear: 842 thousand euros) and obligations of 14,410 thousand euros (prior year: 11,716 thousand euros) relating to thisgroup of persons.
This results in total remuneration of 3,727 thousand euros(prior year: 3,413 thousand euros).
Total remuneration paid to former members of the Management Board amounts to 419 thousand euros (prior year:
711 thousand euros). There are also pension obligations of
4,950 thousand euros.
Remuneration of the Super visor y Board

The remuneration paid to the Supervisory Board for the reporting year came to 295 thousand euros (prior year: 261 thousand euros), of which a total amount of 295 thousand euros(prior year: 261 thousand euros) is reported as liabilities as of
the reporting date.
In addition, there were further expenses (among otherthings, for pensions of DEKRA SE) of 486 thousand euros (prioryear: 599 thousand euros) and obligations of 1,194 thousand euros (prior year: 1,066 thousand euros) relating to thisgroup of persons.

D E K R A Financial Report 2019

Transactions with DEKR A e.V., Stuttgar t

There are liabilities of 20.9 million euros (prior year: 22.6 million euros) to DEKRA e.V., Stuttgart, as of December 31, 2019,
which mainly stem from VAT liabilities. There are also receivablesof 111.6 million euros (prior year: 90.6 million euros) that primarily result from the cash pooling less profit and loss transfer.
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 2019 (prior year: 19.7 million euros).
Receivables from and liabilities to DEKRA e.V., Stuttgart, gave
rise to interest income of 1.4 million euros (prior year: 1.5 million euros) and interest expenses of 0.4 million euros (prioryear: 0.6 million euros). Tax allocations for income taxes
amounted to 33.3 million euros (prior year: 35.8 million euros).
In addition, services totaling 2.7 million euros (prior year:
3.3 million euros) were purchased from DEKRA e.V., Stuttgart.
Under a corporate lease agreement, activities are primarily performed in the field of German automotive testing andexpertise by an operating company of the DEKRA Group for
DEKRA e.V., Stuttgart. Business is generally conducted in thename of and for the account of DEKRA Automobil GmbH,
Stuttgart. All transactions and business processes are carriedout 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 2019, a total volume of 5.8 million euros(prior year: 5.2 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
10.1 million euros (prior year: 10.9 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.

85

Transactions with non - consolidated entities, associates, aswell as investees
Dec. 31, 2019

Dec. 31, 2018

Services rendered

5.8

4.6

Services purchased

6.8

4.7

Finance income

0.6

0.3

Receivables and loans

32.6

19.1

Liabilities *

1.9

1.0

ASSOCIATESIN MILLION EUROS

Dec. 31, 2019

Dec. 31, 2018

Services rendered

0.2

0.2

Services purchased

10.3

10.3

Liabilities

0.9

1.1

INVESTEESIN MILLION EUROS

Dec. 31, 2019

Dec. 31, 2018

Services rendered

0.4

0.4

Services purchased

0.9

1.1

Finance income

0.3

0.2

Receivables and loans

0.2

0.3

Liabilities *)

0.1

0.1

SUBSIDIARIES THAT ARE
N OT FU L LY C O N S O L I DAT E D
IN MILLION EUROS)*) L iabilities are partially netted with the receivablesin the statement of financial position.

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Notes

Notes

12 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• Wolfgang Linsenmaier
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
President of the Presidential Board of DEKRA e.V., Stuttgart
Former Chairman of the Management Board
Allianz Versicherungs-AG• Monika Roth-Lehnen *)Deputy Chairwoman of the Supervisory Board
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 head office
Head of sector
Sector 13 Special Services• Frank Beimborn *)Deputy Chairman of the Central Works Councilof DEKRA Automobil GmbH, Stuttgart,
publicly appointed and sworn expert at Dortmund
branch of DEKRA Automobil GmbH, Stuttgart• Prof. Dr. Sabine Fließ
Douglas Endowed Chair of Service Management,
University of Hagen, Hagen• Klaus-Jürgen Heitmann(since April 9, 2019)
Spokesman of the Board of Directors of HUK-Coburg
Versicherungsgruppe, Coburg• 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 Munich branch (until March 31, 2019)
DEKRA Automobil GmbH, Stuttgart• Dipl.-Wirtsch.-Ing. Peter Tyroller
General Manager
Robert Bosch GmbH, Stuttgart• Prof. Dr. Wolfgang Weiler(until April 9, 2019)
President
German Insurance Association (GDV), Berlin

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

Ongoing restrictions stemming from the coronavirus could havea negative impact on the assets, liabilities, financial position, andfinancial performance in the fiscal year 2020. We refer to ourcomments in the forecast report within the management report.
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 9, 2019 appointed Ernst &Young GmbH Wirtschaftsprüfungsgesellschaft as auditors of theseparate and consolidated financial statements for fiscal year 2019.
The auditors’ fees recognized in the fiscal year are shownin the following table:
IN THOUSAND EUR

2019

2018

Audit services

749

866

Tax advisory services

214

170

963

1,036

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 thefollowing list.

*) Employee

D E K R A Financial Report 2019

D E K R A Financial Report 2019

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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 %

89

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., Madrid (formerly: 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, the 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

PRO-LOG Beteiligungs GmbH, Stuttgart

100.00DEKRA Certification S.L., Barcelona, Spain

PRO-LOG Ruhr GmbH, Bochum

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

100.00PRO-LOG Personal GmbH, Stuttgart

100.00DEKRA Services Inc., Marietta, USA

100.00100.00DEKRA Portugal S.A., Lisbon, Portugal

100.00100.00DEKRA North America, Inc., Atlanta (formerly: Marietta), USA

100.00100.00DEKRA Austria Automotive GmbH, Vienna, Austria

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

Affiliates in Germany:

DEKRA Automobil GmbH, Stuttgart

4)

DEKRA Akademie GmbH, Stuttgart

4)

DEKRA Arbeit GmbH, Stuttgart

4)

DEKRA Immobilien GmbH, Stuttgart

4)

PRO-LOG IV GmbH, Stuttgart
UPDOWN Ingenieurteam für Fördertechnik GmbH, Hamburg
GKK Gutachten GmbH, Düsseldorf

4)

80.00
1)

92.00

100.001)

100.00100.001)

100.00100.00100.00DEKRA Hellas EPE, Athens, Greece

1)

DEKRA Automotive Solutions Germany GmbH, Frankfurt am Main

4)

100.00DEKRA Claims Services Austria GmbH, Vienna, Austria

1)100.00DEKRA INCOS GmbH, Ingolstadt

4)

100.00DEKRA Claims Services Hungary Service Ltd., Budapest, Hungary

1)

100.00DEKRA Cargo & Security Services GmbH, Stuttgart

1)

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

1)

100.00100.00DEKRA Claims & Expert Services (Suisse) S.A., Thônex, Switzerland

100.00100.00DEKRA Italia S.r.l., Arese (Milan), Italy

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

100.00DEKRA Arbeit Magyaroszag Szolgáltató Kft., Budapest, Hungary

100.00DEKRA Inspection Services GmbH, Stuttgart

DEKRA Visatec GmbH, Sulzberg
DEKRA Testing and Certification GmbH, Stuttgart

4)

Affiliates in other countries:

100.00DEKRA Automotive Solutions S.A.S.U., Bordeaux, France

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

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

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

1)100.00Auto Bilan France S.A.S.U., Trappes, France

100.00DEKRA za privremeno zaposljavanje d.o.o., Zagreb, Republic of Croatia

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

100.00DEKRA zaposljavanje d.o.o., Sarajevo, Republic of Bosnia-Herzegovina

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

90.00

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

DEKRA Automotive Maroc S.A., Casablanca, Morocco

80.00

DEKRA Expert OOO, Kiev, Ukraine

D E K R A Financial Report 2019100.001)

100.00100.00

1)

D E K R A Financial Report 2019

80.00

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Notes

Notes

Share of capital

IN %

91

Share of capitalIN %DEKRA kvalifikácia a poradenstvo s.r.o., Bratislava, Republic of Slovakia

100.00Chilworth Technology Inc., Princeton (formerly: Plainsboro), USA

100.00DEKRA Automotive AB, Eskilstuna, Sweden

100.00Chilworth France S.A.S., St. Jonage, France

100.00100.00DEKRA (Shanghai) Co., Ltd., Shanghai, China

100.00

Safety Consulting Engineers Inc., Schaumburg, USA

DEKRA Automotive EOOD, Sofia, Republic of Bulgaria

1)

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

DEKRA Expertises Ltda., Atibaia, Brazil

1)

100.00DEKRA Canada Inc., Moncton NB (formerly: Saint John NB), Canada

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

1)

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

100.00DEKRA Servicios Recursos Humanos 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., Zagreb (formerly: 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

100.001)

100.00100.00Behavioral Science Technology Consultores do Brasil Ltda., São 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 Sydjylland A/S (formerly: DEKRA AMU Center Sydjylland A/S), Vejen, Denmark100.00100.00DEKRA Hovedstaden A/S (formerly: DEKRA AMU Center Hovedstaden A/S), Brondby, Denmark100.00DEKRA Claims and Expertise B.V., Alkmaar, the Netherlands
DEKRA Industrial (Guangzhou) Co., Ltd., Guangzhou, China

100.00DEKRA Job ApS, Brondby, Denmark100.00DEKRA Finland Oy, Vantaa, Finland

100.00DEKRA Industrial Oy, Vantaa, Finland

100.00DEKRA Nordsjælland ApS (formerly: DEKRA AMU Center Nordsjaelland ApS), Hillerød(formerly: Ishoj), Denmark100.00DEKRA Automotive Pty. Ltd., KlerksOord, Rosslyn (formerly: Johannesburg), South Africa

100.00DEKRA Midtjylland ApS (formerly: DEKRA AMU Center Midtjylland ApS), Skjern, Denmark100.00DEKRA Zaposljavanje d.o.o., Podgorica, Republic of Montenegro

100.00DEKRA Uddannelser A/S, Braband, Denmark100.00DEKRA Slovensko s.r.o. (formerly: SLOVDEKRA s.r.o.), Bratislava, Republic of Slovakia

100.001)

DEKRA Netherlands Holding B.V., Arnheim, the Netherlands
DEKRA Claims Services, Kiev, Ukraine

100.001)

70.00

DEKRA Equipment & Services A/S, Brøndby (formerly: Ørbaek), Denmark
DEKRA Praca Sp. z o.o., Krakow, Poland

100.001)

DEKRA Caribbean B.V., Willemstad, Curaçao

100.00100.00DEKRA (Shanghai) Investment Co., Ltd., (formerly: DEKRA Management (Shanghai) Co., Ltd.),
Shanghai, China

Checkauto Consultatoria Técnica E Informações veiculares Ltda., Atibaia, Brazil

100.00DEKRA Vistorias e Serviços Ltda., Atibaia, Brazil

100.00Road Safety Consulting N.V., Brussels, Belgium

1)

50.10

DEKRA South Africa Pty. Ltd., KlerksOord, Rosslyn (formerly: Johannesburg), South Africa

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

1)

Hangzhou DEKRA Certification Co., Ltd. (formerly: Hangzhou DEKRA WIT Certification Co., Ltd.),
Hangzhou, China

100.00100.00DEKRA Industrial AB, Gothenburg, Sweden

100.00DEKRA Sweden AB, Gothenburg, Sweden

100.00DEKRA Industrial AS, Soli, Norway

1)

100.00DEKRA Egypt for Services and Consulting, Cairo, Egypt

1)

51.00

DEKRA Motores – Vistoria Veicular Ltda., Atibaia, Brazil

1)

100.00DEKRA UK Ltd., Southampton, UK

100.00Chilworth Technology Ltd., Southampton, UK

100.00DEKRA (India) Pvt. Ltd., New Delhi, India

100.00D E K R A Financial Report 2019100.00DEKRA People B.V., Alkmaar, the Netherlands

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

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

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

1)

100.00DEKRA Revisión Técnica SpA, Santiago de Chile, Chile1)

100.00DEKRA Services (PTY) Ltd., Vereeniging, South Africa

100.00DEKRA Industrial RSA (Pty) Ltd., Gauteng (formerly: Vereeniging), South Africa

100.00DEKRA Quality Management AB, Frösön, Sweden

100.00DEKRA Inspeções Portugal – Unipessoal LDT, Lisbon, Portugal

100.00D E K R A Financial Report 2019

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Notes

Notes

Share of capitalIN %DEKRA Vrabotuvanje dooel, Skopje, Republic of North Macedonia

1)

DEKRA Fyn ApS (formerly: DEKRA AMU Center Fyn ApS), Odense, Denmark
European Road Stars Academy (ERSA) SPRL, Brussels, Belgium

Share of capitalIN %100.00DEKRA Automotive S.à r.l., Munsbach, Luxembourg

100.00QC Plzeň s.r.o., Plzeň, Czech Republic

93

1)

100.00
82.00

50.10

DEKRA Development s.r.o. (formerly: DEKRA Services s.r.o.), Bratislava, Republic of Slovakia

1)

DEKRA New Zealand Ltd., Wellington, New Zealand

60.00

PRO-LOG CG d.o.o., Podgorica, Republic of Montenegro

1)

100.00

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

60.00

DEKRA Automotive d.o.o., Belgrade, Republic of Serbia

1)100.00

D Akademie S.r.l., Verona, Italy

100.00DEKRA Sjælland A/S (formerly: DEKRA AMU Center Sjælland A/S), Næstved, Denmark

DEKRA Automotive Ltd., Stokenchurch, UK

100.00DEKRA Lesotho (Pty) Ltd., Lesotho, South Africa

DEKRA España S.L., Madrid, Spain

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

100.00DEKRA Akademie EPE, Thessaloniki, Greece

1)

1)

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

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

100.00100.001)

100.00100.00TATRA TRUCK s.r.o., Krásny Brod, Republic of Slovakia

1)

100.00100.00Master Test Chile SpA., Santiago de Chile, Chile1)

100.00100.00Core Visual Inspection Services, Inc., Austin, USA

100.00D. Invest S.r.l., Cinisello Balsamo, Italy

100.001)

100.00100.00DEKRA Arbeit (Schweiz) Holding AG, Sargans, Switzerland

100.00Arbeit De Agency for Temporary Employment, Skopje, Republic of North Macedonia

1)

100.00DEKRA Arbeit AG St. Gallen, St. Gallen (formerly: Mels), Switzerland

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

1)

100.00DEKRA Arbeit AG Wil, Wil, Switzerland

100.00100.00DEKRA Arbeit AG Basel, Basel, Switzerland

100.00

COMENIUS Oktató és Kiadó Kft., Pecs, Hungary

1)

100.00DEKRA Arbeit AG Buchs, Buchs, Switzerland

95.00

Comenius Szakközépiskola és Szakiskola, Pecs, Hungary

1)

100.00DEKRA Arbeit AG Chur, Chur, Switzerland

90.00

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

100.00DEKRA Arbeit AG Sargans, Sargans, Switzerland

94.00

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

100.00DEKRA Arbeit (Schweiz) Verwaltungs AG, Sargans, Switzerland

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

100.00DEKRA Arbeit Bulgaria EOOD, Sofia, Bulgaria

1)

100.00100.00DEKRA Services Spolka z.o.o, Krakow, Poland

1)

100.00DEKRA AQS Solutions, Inc., Minneapolis, USA

100.00PROTEC Services, Limoges, France

1)

51.00

DEKRA iST Reliability Services Inc., Hsinchu, Taiwan

51.00

DEKRA Arbeit Austria GmbH, Vienna, Austria

1)100.00DEKRA iST Reliability Services Limited, Hong Kong, Hong Kong

51.00

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

1)100.00DEKRA iST Reliability Services Limited, Kunshan, China

51.00

PRO-LOG SR DOO, Belgrade, Republic of Serbia

1)100.00DEKRA Organisational Reliability Ltd., Aberdeen, Scotland

100.00Gain Solutions Ltd., Stokenchurch (formerly: Chippenham), UK

100.00DEKRA Testing and Certification, S.A.U., Málaga, Spain

100.00Industrial Safety Group B.V., Capelle aan den Ijssel (formerly: Rotterdam), the Netherlands

100.0099.90

Arbo Support B.V., Capelle aan den Ijssel (formerly: Rotterdam), the Netherlands

100.00Industrial Safety BVBA, Antwerp, Belgium

1)

DEKRA Arbeit AG Oftringen, Oftringen, Switzerland

100.00DEKRA Arbeit Anstalt, Eschen, Liechtenstein

1)

95.00

DEKRA Inspection Oy, Vantaa, Finland

100.00DEKRA Personnel France SAS, Bagneux, France

1)

100.00DEKRA Nordjylland A/S (formerly: DEKRA AMU Center Nordjylland A/S), Sæby, Denmark100.00DEKRA Bilsyn ApS (formerly: AL-SYN ApS), Silkeborg, Denmark

DEKRA Services France SAS, Bagneux, France

100.00DEKRA TW s.r.o., Bratislava, Republic of Slovakia

UAB DEKRA Industrial, Visaginas, Lithuania

DEKRA Middle East Fze, Dubai, United Arab Emirates

1)

DEKRA Testing and Certification Ltda., Santiago de Chile, Chile
DEKRA Akademie sh.p.K, Tirana, Albania

1)

D E K R A Financial Report 2019100.00100.00
1)

D E K R A Financial Report 2019100.00100.0094

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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 %

95

Share of capitalIN %DEKRA Arbeit L.L.C., Prishtina, Kosovo

1)

100.00Equity investments:

DEKRA Arbeit SHPK, Tirana, Albania

1)100.00

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

DEKRA Arbeit Recursos Humanos LTDA, São Paulo, Brazil

1)

100.00DYNAE S.A., Villefontaine, France

19.93

Shenzhen Detong Vehicle Inspection Co.,Ltd., Shenzhen, China

1)

80.00

Société Coopérative de Promotion S.A., Trappes, France< 5.00STK Kunovice s.r.o., Kunovice, Czech Republic

1)

100.00Crédit Agricole S.A., Paris, France< 1.00DEKRA Audit CZ s.r.o., Praha 4 -Chodov, Czech Republic

1)

100.00Crédit Mutuel, Paris, France< 1.00

Van Cleemput Sprl., Châtelet, Belgium

1)100.00

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

DEKRA Southern Africa Oceania Limited, Wellington, New Zealand

100.00DEKRA Industrial SAS, Limoges, France

100.001)

DEKRA Solutions (Pty) Ltd., Centurion, South Africa

100.003)

DEKRA Industrial S.A.R.L., Algiers, Algeria

99.50

DEKRA Industrial SA., Barcelona, Spain

100.00DEKRA Inspection S.A., Casablanca, Morocco

100.00DEKRA Certification B.V., Arnheim, the Netherlands

100.00DEKRA Solutions B.V., Arnheim, the 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

Not 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.
T he disclosures pursuant to Sec. 313 (2) No. 4 HGB have not been made since they are insignificant for the presentation of a true and fair view of the Group‘sassets and liabilities, financial position, and financial performance.
4)
Utilization of the exemption pursuant to Sec. 264 (3) HGB.
5)
Significant influence is not exercised.
2)

Stuttgart, March 30, 2020
DEKRA SEThe Management Board

100.00DEKRA Certification Ltd., Tel Aviv, Israel

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

100.00DEKRA Certification Inc., North Wales, USA

100.00  Kölbl, Chairman

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

40.00

FSD Fahrzeugsystemdaten GmbH, Dresden

33.71

Magility GmbH, Kirchheim unter Teck

2)

25.10

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, Västerås, Sweden

2)

33.00

  Klinke

Associates in other countries:  Linsenmaier  Rauh
D E K R A Financial Report 2019

25.00

1.00

100.00
1)3) 5)

D E K R A Financial Report 2019

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Independent auditor’s report

Independent auditor’s report

97

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, 2019, the consolidated statement of financial position as of December 31,
2019, the consolidated statement of changes in equity and theconsolidated statement of cash flows for the fiscal year fromJanuary 1 to December 31, 2019, and the notes to the consolidated financial statements, including a summary of significant
accounting policies. In addition, we have audited the groupmanagement report of DEKRA SE for the fiscal year from January 1 to December 31, 2019. In accordance with the German
legal requirements, we have not audited the content of the groupstatement on corporate governance in section “Declaration ofcompliance” 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 [“Handelsgesetzbuch”: German
Commercial Code] and, in compliance with these requirements,
give a true and fair view of the assets, liabilities, and financial
position of the Group as of December 31, 2019, and of its financial performance for the fiscal year from January 1 to December
31, 2019, and– t he 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 withthe consolidated financial statements, complies with German
legal requirements, and appropriately presents the opportunities and risks of future development. Our opinion on thegroup management report does not cover the content of thecorporate 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 and of the group management report” section of ourauditor’s report. We are independent of the group entities inaccordance with the requirements of German commercial andprofessional law, and we have fulfilled our other German professional responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained issufficient 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 theSupervisory Board. In all other respects, the executive directors
are responsible for the other information. The other information
comprises the group statement on corporate governance contained in section “Declaration of compliance” of the groupmanagement report. It also comprises the other components of
the annual report except for the audited consolidated financial
statements and group management report as well as our auditor’s report, in particular section “Foreword of the Chairmanof the Management Board” and section “Report of the Chairman of the Supervisory Board”. We received a version of thisother information by the time this auditor’s report was issued.
Our opinions on the consolidated financial statements
and on the group management report do not cover the otherinformation, 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 thegroup management report.

D E K R A Financial Report 2019

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– otherwise 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, we are
required to report that fact. We have nothing to report in thisregard.
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
the consolidated 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, incompliance with these requirements, give a true and fair viewof the assets, liabilities, financial position, and financial performance of 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
statements that 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 theresponsibility for disclosing, as applicable, matters related togoing concern. In addition, they are responsible for financial
reporting based on the going concern basis of accounting unlessthere is an intention to liquidate the Group or to cease operations, or there is no realistic alternative but to do so.

Furthermore, the executive directors are responsible forthe preparation of the group management report that, as awhole, provides an appropriate view of the Group’s position andis, in all material respects, consistent with the consolidated
financial statements, complies with German legal requirements,
and appropriately presents the opportunities and risks of future
development. In addition, the executive directors are responsible for such arrangements and measures (systems) as they haveconsidered 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 sufficientappropriate 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, and whether
the group management report as a whole provides an appropriate
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 andrisks of future development. Our objective is also 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 AcceptedStandards for Financial Statement Audits promulgated by theInstitut der Wirtschaftsprüfer (IDW) will always detect a material 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.

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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 abasis for our opinions. The risk of not detecting a material
misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override ofinternal 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 thegroup management report in order to design audit proceduresthat are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of thesesystems.
– 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’
use of 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 disclosures in the consolidated financial statements and in thegroup management report or, if such disclosures are inadequate, to modify our respective opinions. Our conclusions are
based on the audit evidence obtained up to the date of ourauditor’s report. However, future events or conditions may
cause the Group to cease to be able to continue as a going concern.
– Evaluate the overall presentation, structure, and content of
the consolidated financial statements, including the disclosures, and whether the consolidated financial statements present the underlying transactions and events in such a mannerthat the consolidated financial statements give a true and fairview of the assets, liabilities, financial position, and financial
performance of 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 performance of the group audit. We remain solely responsible forour opinions.
– Evaluate the consistency of the group management reportwith the 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
we evaluate, in particular, the significant assumptions usedby 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 aseparate opinion on the prospective information and on theassumptions used as a basis. There is a substantial unavoidable
risk that future events will differ materially from the prospective information.

D E K R A Financial Report 2019

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 31, 2020
Ernst & Young GmbH
Wirtschaftsprüfungsgesellschaft

Marbler
Wirtschaftsprüfer[German Public Auditor]

HummelWirtschaftsprüfer[German Public Auditor]

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Report from the
Chairman of the Supervisory Board

In the 2019 reporting year, the Supervisory Board fully performed its role of monitoring and guiding the Management
Board of DEKRA SE. We regularly received written and oral
reports on key business activities. The key business operations were detailed and discussed in two Supervisory Board
meetings and in meetings and talks between the Chairmanof the Supervisory Board and the Management Board. The
Supervisory Board and the Management Board discussed
the economic situation and the strategic course, with the aimof ensuring sustained stable and healthy Company development.

THOMAS PLEINES

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

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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
Report from the Chairman of the Super visor y Board

The Supervisory Board notes that 2019 was once again asuccessful year for DEKRA SE. The Company managed to
improve key business indicators or keep them at a high level.
Revenue increased by around 2.0 percent to more than
3.41 billion euros. The number of employees at the end of2019 was almost 44,000.

Imprint

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

CONCEPT AND DESIGN

Strichpunkt GmbH
Stuttgar t/Berlin
ILLUSTR ATION

Bernd Schifferdecker
PRINT

e.kurz+co druck und medientechnik gmbh

The Supervisory Board appointed the auditing firm Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft, Stuttgart, as the external auditor and commissioned it to examine
DEKRA SE’s annual accounts, management report, consolidated financial statement,
and Group management report, together with the accounting for the 2019 fiscal year.
The Supervisory Board acknowledged and approved the unqualified audit opinion of
the external auditor.
The Supervisory Board’s own examination of the annual accounts, management report,
consolidated financial statement, and Group management report did not resultin any objections. The annual accounts drawn up by the Management Board areapproved by the Supervisory Board and thereby adopted. The Supervisory Board
thanks the Management Board and all employees for their successful endeavors in thereporting year.
Stuttgart, April 2020
The Supervisory Board

THOMAS PLEINES,

Chairman

D E K R A Financial Report 2019

D E K R A Financial Report 2019

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

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