President & CEO's statement
Providing trust in a digitalizing world
With continued pressure in shipping and in the upstream oil and gas market, 2017 was another challenging year for DNV GL. We endured a further revenue contraction, but with a continued focus on costs and efficiencies, we were able to post a modest profit. We are now well positioned to take advantage of a positive trend in our core markets, which could happen towards the end of 2018.
After successive years of challenging market conditions, DNV GL has emerged a leaner organization, with a cost base reduced by some 4 billion NOK over the last three years. Importantly, we are also more agile, having invested heavily in our ongoing digital transformation.
There were rapid and step-change developments in digitalization last year in DNV GL. We officially launched our industry data platform Veracity – a secure, scalable, cloud-based solution for data sharing, analytics and co-innovation.
Our new business area, Digital Solutions, began operating at the beginning of this year. Digital Solutions will be responsible for running our Veracity platform and associated data management, data quality assurance and cyber security services. We rolled our Software business into Digital Solutions, where the focus will increasingly be on offering software-as-a-service. Each of our other business areas will continue to digitalize and enhance their own service offerings.
Our journey towards being a more efficient, data-led and automated ship and offshore class society continues apace. We launched a historic first for the ship classification industry: the rollout of IMO-compliant electronic class and statutory certificates across the entire fleet of DNV GL classed vessels. Over 50,000 electronic certificates were delivered in under four months. Customers are also saving time and costs with our Smart Survey Booking tool. Other significant advances in automating and digitizing aspects of our survey work, together with new assurance services associated with onboard sensors and data streams, are described in this report.
In Oil & Gas, we have been working closely with customers in helping them cut complexity, drive efficiency and stay safe. Our award-winning myQRA tool is emblematic of this work in providing interactive, advanced risk communication and visualization.
We placed our customers’ management system and products certificates, some 90,000 of them, in a private blockchain, and are continuing to drive important innovations in areas of supply chain transparency and in medical data within our Business Assurance entity.
Our Energy business area is similarly focused on digitalization, from digital twins for optimal power generation to the Internet of Energy that describes the digital and software-based technologies enabling greater connectivity and controllability in the power industry.
Because over 70% of our business relates to energy in some form, having a clear view of the coming energy transition is of strategic importance to us and our customers. We launched our first global Energy Transition Outlook which generated unprecedented interest and has led to many valuable discussions with customers across several industries. We look forward to intensifying our forecasting efforts in the coming year.
The foundation, Det Norske Veritas, assumed the sole ownership of DNV GL in December after buying the remaining stake owned by Mayfair. Mayfair was the owner of GL and became a minority shareholder of DNV GL following the DNV and GL merger in 2013. We now have one owner with a long-term view. It also means that 100% of the profit made by DNV GL will remain in the group of companies to further develop and position the company globally.
We will continue to invest 5% of our revenue in research, development and innovation and continue our bold moves on our digitalization journey.
Our business model is based on trust at all levels and in all business environments. We strive to reflect the DNV GL values in all our work and to demonstrate conscious leadership for a safe and sustainable future.
We continue our support for the UN Global Compact principles and actively work with customers and partners to deliver on the UN’s 17 Sustainable Development Goals. Working with tangible sustainable solutions - some of which are showcased in this report - is driven by our purpose of safeguarding life property and the environment. This purpose of safeguarding life, property and environment is more valid than ever before, and I’m confident that DNV GL is well positioned to be at the forefront in all our industries.