Interview with Joan Amigó, CEO of the Applus+ Group

How do you evaluate the progress of the Strategic Plan and what are the prospects for 2024?

Applus+ Strategic Plan for 2022-2024 is based on three pillars: Leadership, Innovation and Technology, Trusted Partner. The purpose is to enhance the value of the company for the benefit of our shareholders and other stakeholders. I am pleased to say that we have made good progress in the first two years of the plan, 2022 and 2023, with most of the targets on track to be met or already exceeded.

The successful deployment of the Strategic Plan has resulted in strong growth in profit and cash flow. In 2023, Applus+ revenues increased to €2,057.9 million, and we have increased our margin and return on invested capital. We have continued to invest and have divested from businesses that no longer fit into our long-term strategy. We have paid an annual dividend and completed our second share buyback, while financial leverage has been reduced to its lowest level since 2019.

I am very proud to say that the company has also met its sustainability goals. In August 2023, the SBTi initiative validated Applus+ goal to reach net zero emissions by 2050. Additionally, the Group increased renewable electricity consumption to 85%.

Innovation continues to be a priority. Our R&D portfolio in various technological lines and digitalisation includes 243 projects, to which 1,340 people dedicate more than 482,000 hours. Applus+ has an intellectual property portfolio with 166 patents in force and 33 active patent families. We collaborate with public and private organisations in around 100 agreements and share our knowledge in technical forums.

If Applus+ becomes a private company following the successfully completion of the current takeover process, what will this mean for the company, our clients and other stakeholders?

Our Group has been owned by private equity in the past, and the experience was positive, with significant investments to internationalise Applus+ and increased service offering. We are therefore familiar with this type of ownership structure. We are confident that it can continue to add value to the company and its stakeholders, with robust organic growth resulting from the top-tier services we offer in growing industries and geographies and continued investment in acquisitions that generate strong synergies with Applus+.

How have our sustainable services improved?

In recent years, the Group has focused on diversifying the service portfolio to better manage risks and opportunities arising from technological and climate change. Demand is growing strongly and has been complemented by acquisitions of companies that also provide sustainability services.
In 2023, revenues and profits generated from the provision of services that have a positive impact on the environment or society amounted to €1,138 million, 55% of the Group's total revenues and an 8% increase compared to 2022. Services belonging to controversial sectors such as oil and gas and the nuclear industry, although they may have a positive impact, are excluded.

Services that have a direct positive impact on the environment include those for renewable energy, vehicle emissions, environmental inspections, energy audits, waste management studies, innovation projects for eco-friendly vehicle engines or lightweight materials testing for the aerospace sector. Services that have a positive impact on society include periodic vehicle safety inspections, cybersecurity, product safety testing and certification, including vehicles, industrial, medical and consumer products, inspection of communication networks, road safety management, system certification, metrology and industrial calibration. 

What impact does Applus+ have on its clients and society through its services?

We have incorporated emerging technologies into our services, such as remote testing solutions, drones and artificial intelligence, which help clients reduce risks and minimise downtime during inspections. We contribute to reducing their carbon footprint through services related to low-emission energy, sustainable mobility and consultancy and advisory services on energy efficiency.

Through improving the safety, efficiency and lifespan of our clients' products and infrastructures, we directly contribute to society. In terms of job creation, Applus+ has generated 53,163 jobs, 41% of which are direct employment. 

Thanks to our efforts, we have been distinguished by our clients with several awards in 2023, including the prestigious PME Excellence Award, granted by the Government of Portugal to 10 companies, and second place in the Open Innovation category of the 100 Open Start-ups in Colombia, to name a few. All our divisions have maintained a consistent Net Promoter Score (NPS), and we have expanded this assessment to new areas. Based on more than 157,000 surveys, Applus+ has achieved a score of 50, indicating an "excellent" performance.

How do Applus+ professionals contribute to the company's success?

Our employees are our most valuable asset and our best ambassadors. We strive to create a work environment where our people feel valued, motivated and empowered to reach their full potential. We have several initiatives underway to recognise our people for their hard work, as well as to enhance their progress and good relationships with their peers.

We are aware that we need to attract and retain talented professionals to ensure the sustainability of the business. We have established training programs aimed at continuously developing all members of our staff, promoting their personal and professional growth. This initiative has allowed us to fill 60% of management positions through internal promotions, maintaining an adequate balance with the turnover rate we consider necessary, which was 12.6% in 2023.

What is the plan to address future challenges?

The challenges posed by climate change, energy transition and technological advancements will become increasingly pressing. At the same time, the expectations of our investors and other stakeholders will grow, both in terms of financial returns and value creation. At Applus+, we will strive to maintain open dialogue with everyone to understand and adapt to their needs.

We will align our services aligned with the megatrends of energy transition, electrification and connectivity, increasing their prominence within the company, and we will continue to reduce our carbon footprint. And we can only accomplish all this by attracting and retaining the best professionals, fostering a culture of excellence in a safe and supportive work environment that promotes a good work-life balance and investing in training.

I am honoured to serve as CEO and proud to lead a committed management team that will ensure our success and guide Applus+ towards a sustainable future.