Building on strong foundations, the Testing, Inspection and Certification sector is poised to capitalise on a host of potential growth opportunities in 2018.
The TIC industry enjoys some key advantages. Operators generally deliver higher margins and require relatively lower capital expenditure than other business services sectors. And financial performance is typically underpinned by excellent revenue visibility, due to longer-term contracts and framework agreements –
supplemented by regulation.
These sound fundamentals ensured the TIC sector remained strong in 2017. In fact, despite much political uncertainty, the entire TIC industry has remained resilient through the economic cycle.
From drones to Big Data, recent advances are being embraced by TIC companies keen to offer new capabilities to their clients.
2017 saw further leaps in the digitisation of the industry. Digital inspection, predictive maintenance and integrated sensors are replacing physical inspection. These advances provide growth opportunities and help operators to raise margins, enter new markets and embed client relationships.
M&A: a divided field
While the biggest players are scaling back their acquisitions, the healthy appetite of second-tier firms is driving an active M&A scene.
Key players have all pledged significant funding for M&A and announced ambitious short-term targets. For example, SGS completed 12 transactions in 2017, moving it closer to its strategic plan of acquiring revenues of CHF 1bn (c. €867m) by 2020. And RINA is looking to spend around €200m ahead of an IPO in the next three years.