SGS 2017 Half Year Results Presentation2. 2© SGS SA 2017
ALL RIGHTS RESERVED
HALF-YEAR RESULTS PRESENTATION
17 JULY 2017
DISCLAIMER
Certain matters discussed in this presentation may constitute forward-looking
statements that are neither historical facts nor guarantees of future performance.
Because these statements involve risks and uncertainties that are beyond control or
estimation of SGS, there are important factors that could cause actual results to differ
materially from those expressed or implied by these forward looking statements.
These statements speak only as of the date of this document. Except as required by
any applicable law or regulation, SGS expressly disclaims any obligation to release
publicly any updates or revisions to any forward looking statements contained
herein to reflect any change in SGS Group’s expectations with regard thereto or
any change in events or conditions on which any such statements are based.
4. 4© SGS SA 2017
ALL RIGHTS RESERVED
HALF-YEAR RESULTS PRESENTATION
17 JULY 2017
1. Constant currency basis. – 2. Before amortisation of acquisition intangibles and other
non-recurring items. – 3. Cash flow from operating activities net of capital expenditure.
H1 2017 HIGHLIGHTS
4.9%1
CHF 3.0 BN
FX 0.1%
14.1%
CHF 428 MIO
4.9%1
CHF
293 MIO
5.8%
CHF
210 MIO
(13.2)%
REVENUE
GROWTH
ADJUSTED
OPERATING
INCOME MARGIN2
PROFIT FOR
THE PERIOD
FREE
CASH FLOW3
5. CENTRAL ILLINOIS GRAIN
INSPECTION, INC.
USA
SGS LEICESTER LTD.
UNITED KINGDOM
5© SGS SA 2017
ALL RIGHTS RESERVED
HALF-YEAR RESULTS PRESENTATION
17 JULY 2017
H1 2017 ACQUISITIONS, STRATEGIC PARTNERSHIPS
AND SUBSEQUENT EVENTS
BF MACHINERY PTY LTD AND
CBF ENGINEERING PTY LTD
AUSTRALIA
LABORATOIRE LCA
MOROCCO
ILC MICRO-CHEM INC.
CANADA
HARRISON RESEARCH
LABORATORIES, INC.
USA
ACQUISITIONS AND STRATEGIC PARTNERSHIPS SUBSEQUENT EVENTS
SENSIMA INSPECTION
SWITZERLAND
6. 6© SGS SA 2017
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HALF-YEAR RESULTS PRESENTATION
17 JULY 2017
EUROPE, AFRICA
AND MIDDLE EAST
AMERICAS
ASIA PACIFIC
1. End of period.
92 900 EMPLOYEES1
AND 2 000 OFFICES & LABORATORIES
AROUND THE GLOBE ENABLING REACH AND LOCAL SUPPORT
450
22 500
1 150
38 400
400
32 000
Offices, Labs
& Multi-labs
Employees
8. 8© SGS SA 2017
ALL RIGHTS RESERVED
HALF-YEAR RESULTS PRESENTATION
17 JULY 2017
1. Before amortisation of acquisition intangibles and other non-recurring items. – 2. Constant currency basis.
H1 2017 FINANCIAL HIGHLIGHTS
(CHF million) JUNE 2017
JUNE 2016
PRO-FORMA2
JUNE 2016
REVENUE 3 047 2 904 2 901
Change in % 4.9 5.0
ADJUSTED OPERATING INCOME1
428 408 411
Change in % 4.9 4.3
ADJUSTED OPERATING INCOME MARGIN1
IN % 14.1 14.1 14.2
OPERATING INCOME (EBIT) 410 391 394
Change in % 4.9 4.1
OPERATING INCOME (EBIT) MARGIN IN % 13.5 13.5 13.6
PROFIT FOR THE PERIOD 293 274 277
Change in % 6.9 5.8
PROFIT ATTRIBUTABLE TO EQUITY HOLDERS OF SGS SA 276 256 258
Change in % 7.8 7.0
BASIC EPS (CHF) 36.58 33.71 34.02
ADJUSTED BASIC EPS (CHF)1
38.88 35.83 36.13
10. 10© SGS SA 2017
ALL RIGHTS RESERVED
HALF-YEAR RESULTS PRESENTATION
17 JULY 2017
H1 2017 REVENUE GROWTH COMPOSITION
REVENUE
JUNE 2016
CHF MIO
H1 2016
ORGANIC
3.4%
ACQUISITIONS
3.6%
DISPOSALS
0.0%
CURRENCY
IMPACT
(1.6)%
REVENUE
JUNE 2017
5.4%
2 901
45
98
(0) 3 3 047
3.4% (0.0)% 1.5% 0.1% 5.0%
Constant currency growth: 4.9%
11. 11© SGS SA 2017
ALL RIGHTS RESERVED
HALF-YEAR RESULTS PRESENTATION
17 JULY 2017
H1 2017 BUSINESS PORTFOLIO
4.2%
GIS
(0.1)% 0.5% 15.7%
AFL
18.2%
OGC
10.6%
MIN
8.9%
TRP
0.8%
(0.2)%
7.6%
EHS
(0.3)%
(0.7)%
14.3%
IND
(0.9)%
5.3%
CBE
0.0% 0.9% 15.2%
CRS
H1 REVENUE
Change1
Change1
1. Constant currency basis.
12. 12© SGS SA 2017
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HALF-YEAR RESULTS PRESENTATION
17 JULY 2017
1.0%
1. Constant currency basis.
H1 2017 REVENUE GROWTH1
BY BUSINESS
AFL
MIN
OGC
CRS
CBE
IND
EHS
TRP
GIS
TOTAL
GROWTH
Organic Acquisitions Disposals
3.6%
1.5%
0.4%
1.0%
2.1%
1.3%
(4.9)%
7.2% 8.2%
3.1%
1.3%
12.0%
3.9%
(1.3)%
0.7%
15.0%
1.8%
4.9%
8.6%
1.6%
(1.8)%
5.7%
10.9%
8.5%
27.0%
14.0%
8.0%
7.0%
8.3%
3.9%
(1.4)%
14.6%
1.8%
3.4%
3.7%
2.1%
H1 2017 H1 2016
13. 13© SGS SA 2017
ALL RIGHTS RESERVED
HALF-YEAR RESULTS PRESENTATION
17 JULY 2017
H1 2017 REVENUE GROWTH1
BY REGION
EUROPE / AFRICA /
MIDDLE EAST
AMERICAS
ASIA / PACIFIC
TOTAL GROUP
2.2%
1.5%
Organic Acquisitions Disposals
H1 2017 H1 2016
GROWTH
Revenue %
1. Constant currency basis.
3.3%
0.5%
2.2%5.9%
3.4%
4.0%
2.7%
8.1%
4.9%
6.1%
12.5%
3.9%
7.0%
0.7%
14. 14© SGS SA 2017
ALL RIGHTS RESERVED
HALF-YEAR RESULTS PRESENTATION
17 JULY 2017
EVOLUTION OF HEADCOUNTS
HEADCOUNT END OF PERIOD1
3 479 1 608 (577)
HEADCOUNT AVERAGE
H12016
H12016
H12017
H12017
88 37688 402
92 06592 912
92 06592 912
HEADCOUNT
AVERAGE HEADCOUNT % REVENUE %
Europe/Africa/
Middle East
1 432 3.9 4.0
Americas 773 3.6 2.7
Asia /Pacific 1 484 4.9 8.1
TOTAL 3 689 4.2 4.9
VARIANCE BY REGION
3 689 INCREASE
4.2%
4 510 INCREASE
5.1%
GROUP HEADCOUNT END OF PERIOD
ORGANIC
BUSINESS
GROWTH ACQUISITIONS
DISPOSALS AND
RESTRUCTURING
GROUP HEADCOUNT AVERAGE
1. As of 30 June 2017.
16. 16© SGS SA 2017
ALL RIGHTS RESERVED
HALF-YEAR RESULTS PRESENTATION
17 JULY 2017
1. Before amortisation of acquisition intangibles and other non-recurring items.
H1 2017 ADJUSTED OPERATING INCOME1
GROWTH
ADJ. OP. INC.
JUNE 2016
H1 2016
ORGANIC
0.4%
ACQUISITIONS
1.9%
DISPOSALS
0.0%
CURRENCY
IMPACT
(2.5)%
ADJ. OP. INC.
JUNE 2017
(0.2)%
411
3
17
- (3)
428
4.2% 0.0%0.7% (0.6)% 4.3%
Constant currency growth: 4.9%
CHF MIO
17. 17© SGS SA 2017
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HALF-YEAR RESULTS PRESENTATION
17 JULY 2017
1. Before amortisation of acquisition intangibles and other non-recurring items. – 2. Constant currency basis.
H1 2017 ADJUSTED OPERATING INCOME1
PORTFOLIO
Change2
Change2
3.3%
GIS
(2.5)% 1.3% 16.7%
AFL
13.0%
OGC
10.4%
MIN
11.4%
TRP
2.2%
0.4%
4.3%
EHS
(1.6)%
(0.2)%
7.2%
IND
(2.9)%
6.4%
CBE
0.7% 2.6% 27.3%
CRS
18. 18© SGS SA 2017
ALL RIGHTS RESERVED
HALF-YEAR RESULTS PRESENTATION
17 JULY 2017
1. Before amortisation of acquisition intangibles and other non-recurring items. – 2. Constant currency basis.
H1 2017 ADJUSTED OPERATING MARGIN1
BY BUSINESS
30%
25%
20%
15%
10%
5%
0%
AFL CRSMIN CBE TRPOGC IND GIS TOTAL
GROUP
EHS
14.2%
13.1%
9.9%
24.3%
14.9%
9.4%
10.6%
16.0%
18.9%
14.9%
13.8%
10.0%
25.1%
17.1%
7.1%
8.1%
18.0%
11.1%
June 20162
June 2017
14.1% 14.1%
20. 20© SGS SA 2017
ALL RIGHTS RESERVED
HALF-YEAR RESULTS PRESENTATION
17 JULY 2017
1. Before amortisation of acquisition intangibles and other non-recurring items (calculated over the past 12 months).
H1 2017 CONSOLIDATED BALANCE SHEET
(CHF million) JUNE 2017 DEC 2016
Land, buildings and equipment 933 972
Goodwill 1 182 1 195
Intangible assets 227 246
Other Long-term assets 332 325
NON-CURRENT ASSETS 2 674 2 738
Unbilled revenues and inventories 334 290
Trade accounts and notes receivable 943 997
Other receivables and prepayments 431 340
Marketable securities 10 9
Cash and cash equivalents 952 975
CURRENT ASSETS 2 670 2 611
TOTAL 5 344 5 349
NET DEBT (1 136) (736)
NET DEBT / ADJUSTED EBITDA RATIO1
0.93 0.61
(CHF million) JUNE 2017 DEC 2016
Share capital 8 8
Reserves 1 460 1 765
SHAREHOLDERS’ EQUITY 1 468 1 773
NON-CONTROLLING INTERESTS 84 80
Long-term loans 2 090 1 719
Provisions and other liabilities 266 289
NON-CURRENT LIABILITIES 2 356 2 008
Accounts payable 615 641
Other liabilities 821 847
CURRENT LIABILITIES 1 436 1 488
LIABILITIES 3 792 3 496
TOTAL 5 344 5 349
ASSETS SHAREHOLDERS’ EQUITY AND LIABILITIES
22. 22© SGS SA 2017
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HALF-YEAR RESULTS PRESENTATION
17 JULY 2017
H1 2017 CONDENSED CASH FLOW
(CHF million) JUNE 2017 JUNE 2016
PROFIT FOR THE PERIOD 293 277
Non-cash items 274 271
Increase in working capital (119) (86)
Taxes paid (119) (96)
CASH FLOW FROM OPERATING ACTIVITIES 329 366
Net purchase of fixed assets (119) (124)
Net acquisition of businesses (12) (99)
Decrease in marketable securities and other 5 237
CASH FLOW FROM INVESTING ACTIVITIES (126) 14
Dividends paid to equity holders of SGS SA (528) (517)
Dividends paid to non-controlling interests (8) (7)
Transaction with non-controlling interests 1 (3)
Net cash received/(paid) on treasury shares 5 (67)
Proceeds of corporate bonds 375 -
Interest paid (46) (38)
Increase in borrowings 4 1
CASH FLOW FROM FINANCING ACTIVITIES (197) (631)
Currency translation (29) (22)
DECREASE IN CASH AND CASH EQUIVALENTS (23) (273)
FREE CASH FLOW1
210 242
ADJUSTED CASH CONVERSION RATIO2
57.7% 66.5%
1. Cash flow from operating activities net of capital expenditure. – 2. Cash flow from operating
activities / Adjusted EBITDA.
23. 23© SGS SA 2017
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HALF-YEAR RESULTS PRESENTATION
17 JULY 2017
H1 2017 CAPITAL EXPENDITURE
CAPEX BY REGION
ANNUAL CAPEX CHF MIO
400
300
200
2012 20162013 20172014 2015
Capital
Expenditure
Depreciation
and amortisation
CHF
131 MIO
CHF
131 MIO
5.8%
GIS
15.4%
TRP
7.7%
EHS
9.4%
IND
1.3%
CBE
18.3%
AFL
18.0%
OGC
7.6%
MIN
16.5%
CRS
CAPEX BY BUSINESS
30.5%
Asia / Pacific
19.8%
Americas
49.7%
Europe / Africa
/ Middle East
25. 25© SGS SA 2017
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HALF-YEAR RESULTS PRESENTATION
17 JULY 2017
H1 2017 FOREIGN CURRENCY REVENUES
26.1%
OTHER
2.2%
KRW
2.6%
AUD
2.8%
BRL
2.8%
GBP
2.9%
CLP
3.4%
CAD
26.0%
EUR
14.5%
USD
12.9%
CNY
3.8%
TWD
26. 26© SGS SA 2017
ALL RIGHTS RESERVED
HALF-YEAR RESULTS PRESENTATION
17 JULY 2017
EUR USD CNY TWD CAD CLP GBP BRL AUD KRW
2017
2016
CHANGE
FOREIGN CURRENCY AVERAGE RATE CHANGE
H1 2017 VERSUS H1 2016 RATE
20%
15%
10%
5%
0%
(5)%
(10)%
(1.8)%
1.3%
(3.7)%
8.2%
1.0%
5.9%
(11.1)%
4.1%
17.8%
4.9%
1.0764
1.0959
(1.8)%
0.9953
0.9822
1.3%
0.1447
0.1503
(3.7)%
0.0324
0.0300
8.2%
0.7456
0.7381
1.0%
0.0015
0.0014
5.9%
1.2519
1.4090
(11.1)%
0.3131
0.2657
17.8%
0.7501
0.7205
4.1%
0.0009
0.0008
4.9%
27. 27© SGS SA 2017
ALL RIGHTS RESERVED
HALF-YEAR RESULTS PRESENTATION
17 JULY 2017
FINANCIAL SUMMARY
1. Constant currency basis. – 2. Before amortisation of acquisition intangibles and other
non-recurring items. – 3. Cash flow from operating activities net of capital expenditure.
··Revenue growth1
of 4.9% of which 3.4% organic
··Increase in Adjusted Operating Income1,2
by 4.9% and
flat Adjusted Operating Income margin2
at 14.1%
··Profit for the period increased by 5.8%,
up to CHF 293 million
··Investment of CHF 131 million in Capex and Acquisitions
··Free cash flow3
of CHF 210 million
29. 29© SGS SA 2017
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HALF-YEAR RESULTS PRESENTATION
17 JULY 2017
1. Before amortisation of acquisition intangibles and other non-recurring items. – 2. Constant currency basis.
AGRICULTURE, FOOD AND LIFE (AFL)
(CHF million) JUNE 2017
JUNE 2016
PRO-FORMA2
JUNE 2016
REVENUE 478.3 442.2 444.0
Change in % 8.2 7.7
ADJUSTED OPERATING
INCOME¹
71.5 62.7 62.7
Change in % 14.0 14.0
MARGIN %¹ 14.9 14.2 14.1
1. Before amortisation of acquisition intangibles and other non-recurring items. - 2. Constant currency basis.
OVERVIEW
··Strong growth in Food and Life driven by activities
across all geographies
··Slow start for Trade activities impacted by inferior
crop quality in Europe
··Seed Crop growth supported by gradual
improvement in the input supplier market
OUTLOOK
··Recently launched services around food safety,
authenticity and supply chain transparency to drive
growth in the second half
··Growth of Trade expected to improve with the new
harvest in the Northern hemisphere
··Seed Crop growth to continue in line with
market trends
··Strategic investments and positive market
environment to fuel growth in Life activities
30. 30© SGS SA 2017
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HALF-YEAR RESULTS PRESENTATION
17 JULY 2017
MINERALS (MIN)
1. Before amortisation of acquisition intangibles and other non-recurring items. – 2. Constant currency basis.
OVERVIEW
··Strong growth in Trade Services with volume
increase in major bulk commodities
··Good performance in Energy Minerals in Africa,
Russia and Indonesia
··Increased sample volumes in Geochemistry in
Africa and Australia
··Increase in demand for pilot plant testing
in Metallurgy
OUTLOOK
··Market improvement to continue with projects
moving into production phase
··Six new onsite laboratory contracts to start in
the second half
··Focus on global sales and business development
targeting both traditional and niche services
(CHF million) JUNE 2017
JUNE 2016
PRO-FORMA2
JUNE 2016
REVENUE 323.2 313.4 305.2
Change in % 3.1 5.9
ADJUSTED OPERATING
INCOME¹
44.7 41.0 39.3
Change in % 9.0 13.7
MARGIN %¹ 13.8 13.1 12.9
1. Before amortisation of acquisition intangibles and other non-recurring items. - 2. Constant Currency basis.
31. 31© SGS SA 2017
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HALF-YEAR RESULTS PRESENTATION
17 JULY 2017
1. Before amortisation of acquisition intangibles and other non-recurring items. – 2. Constant currency basis.
OIL, GAS AND CHEMICALS (OGC)
OVERVIEW
··Significant contracts in Plant and Terminal Operations
··Single-digit growth in Upstream with contract wins in
Middle East
··Solid results in Sample Management segment and
Oil Condition Monitoring
··Non-Inspection related testing impacted by low
volumes in lab commissioning services
··Slow start in Europe and North America impacting
Trade-related activities
OUTLOOK
··Likelihood of market stabilisation due to production
cuts extension agreement
··Trade inspection and non-inspection related testing
continues to be challenging
··Other business segments expecting single-digit growth
(CHF million) JUNE 2017
JUNE 2016
PRO-FORMA2
JUNE 2016
REVENUE 556.4 549.1 549.0
Change in % 1.3 1.3
ADJUSTED OPERATING
INCOME¹
55.8 54.1 54.3
Change in % 3.1 2.8
MARGIN %¹ 10.0 9.9 9.9
1. Before amortisation of acquisition intangibles and other non-recurring items. - 2. Constant currency basis.
32. 32© SGS SA 2017
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HALF-YEAR RESULTS PRESENTATION
17 JULY 2017
CONSUMER AND RETAIL (CRS)
1. Before amortisation of acquisition intangibles and other non-recurring items. – 2. Constant currency basis.
OVERVIEW
··Solid results from North East Asia and North and
Central Europe
··Double-digit growth in Electrical Electronics
with improved Wireless testing
··Strong growth in Softlines and Hardlines
··Cosmetics, Personal Care and Household performing
well in China, Taiwan, Germany and North America
OUTLOOK
··Opportunities in Softlines and Hardlines with the
rapid development of e-retailers and e-platforms
··Market share gains in electrical safety and
EMC activities
··Objectives set by the Zero Discharge of
Hazardous Chemicals campaign to boost
SGS sustainability solutions
(CHF million) JUNE 2017
JUNE 2016
PRO-FORMA2
JUNE 2016
REVENUE 463.7 414.2 416.4
Change in % 12.0 11.4
ADJUSTED OPERATING
INCOME¹
116.4 100.7 102.1
Change in % 15.6 14.0
MARGIN %¹ 25.1 24.3 24.5
1. Before amortisation of acquisition intangibles and other non-recurring items. - 2. Constant currency basis.
33. 33© SGS SA 2017
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HALF-YEAR RESULTS PRESENTATION
17 JULY 2017
CERTIFICATION AND BUSINESS ENHANCEMENT (CBE)
1. Before amortisation of acquisition intangibles and other non-recurring items. – 2. Constant currency basis.
OVERVIEW
··Good results in Certification, particularly in medical
device activities for unannounced audits
··Transition to the new ISO 9000:2015 and 14000:2015
progressing well, particularly in Asia
··Solid margin improvement driven by the USA and
UK, disposal of loss making activity (Stax) in Australia
and further consolidation of back-office activities
OUTLOOK
··Growth to accelerate in the second half with
increased transition work for Management and
Environment Management Systems
··Acceleration of medical device activity thanks
to investments made in the first half
··Training and performance assessment activities
to remain strong
(CHF million) JUNE 2017
JUNE 2016
PRO-FORMA2
JUNE 2016
REVENUE 160.7 154.7 156.3
Change in % 3.9 2.8
ADJUSTED OPERATING
INCOME¹
27.5 23.1 23.6
Change in % 19.0 16.5
MARGIN %¹ 17.1 14.9 15.1
1. Before amortisation of acquisition intangibles and other non-recurring items. - 2. Constant currency basis.
34. 34© SGS SA 2017
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HALF-YEAR RESULTS PRESENTATION
17 JULY 2017
INDUSTRIAL (IND)
1. Before amortisation of acquisition intangibles and other non-recurring items. – 2. Constant currency basis.
OVERVIEW
··Energy activities still impacted by low oil and gas
capital expenditures and price pressure
··Steady growth in power and utilities sector in both
the nuclear and conventional fields
··Launch of the service for online monitoring of steel
structures using advanced sensor technology and
data analytics
OUTLOOK
··Major construction supervision project for gas
pipeline in Peru starts in the second half
··Positive trend in Power Utility, expected to grow
in 2018; concerns still in oil and gas
··Continued strong growth in Laboratory services
in Africa and Asia
(CHF million) JUNE 2017
JUNE 2016
PRO-FORMA2
JUNE 2016
REVENUE 435.2 440.8 433.8
Change in % (1.3) 0.3
ADJUSTED OPERATING
INCOME¹
30.9 41.3 41.2
Change in % (25.2) (25.0)
MARGIN %¹ 7.1 9.4 9.5
1. Before amortisation of acquisition intangibles and other non-recurring items. - 2. Constant currency basis.
35. 35© SGS SA 2017
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HALF-YEAR RESULTS PRESENTATION
17 JULY 2017
ENVIRONMENT, HEALTH AND SAFETY (EHS)
1. Before amortisation of acquisition intangibles and other non-recurring items. – 2. Constant currency basis.
OVERVIEW
··Strong growth in traditional Testing and Health
and Safety services offset by project completion
in the first half of 2016 in Europe
··Global contract wins in hospitality, real estate
and retail sectors
··Continuous improvement in Laboratory services
with network optimisation
··Increased dioxin testing activities in China and Taiwan
OUTLOOK
··Accutest network optimisation to improve business
performance in the second half
··Growth in Asbestos services in Europe, Asia
and Americas
··Strong growth of testing in Marine services from
existing and new clients
(CHF million) JUNE 2017
JUNE 2016
PRO-FORMA2
JUNE 2016
REVENUE 230.8 229.2 227.2
Change in % 0.7 1.6
ADJUSTED OPERATING
INCOME¹
18.6 24.3 24.0
Change in % (23.5) (22.5)
MARGIN %¹ 8.1 10.6 10.6
1. Before amortisation of acquisition intangibles and other non-recurring items. - 2. Constant currency basis.
36. 36© SGS SA 2017
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HALF-YEAR RESULTS PRESENTATION
17 JULY 2017
TRANSPORTATION (TRP)
1. Before amortisation of acquisition intangibles and other non-recurring items. – 2. Constant currency basis.
OVERVIEW
··Double-digit growth in all activities
··Strong growth in Regulated services spurred by
full deployment of driver theory test in France
··Solid growth in Testing services
··Deployment of the Motor Vehicle Inspection
programme in Uganda
··Increased inspection volumes in Field services in
the USA and Europe
OUTLOOK
··Safety and emission programmes commoditised
in Europe and North America
··Demand for testing services in Automotive and
Aerospace expanding
··Digital Business Transformation taking place with
Commercial Inspection Services
(CHF million) JUNE 2017
JUNE 2016
PRO-FORMA2
JUNE 2016
REVENUE 271.8 236.3 239.6
Change in % 15.0 13.4
ADJUSTED OPERATING
INCOME¹
48.9 37.7 38.1
Change in % 29.7 28.3
MARGIN %¹ 18.0 16.0 15.9
1. Before amortisation of acquisition intangibles and other non-recurring items. - 2. Constant currency basis.
37. 37© SGS SA 2017
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HALF-YEAR RESULTS PRESENTATION
17 JULY 2017
GOVERNMENTS AND INSTITUTIONS (GIS)
1. Before amortisation of acquisition intangibles and other non-recurring items. – 2. Constant currency basis.
OVERVIEW
··Strong growth in TransitNet services driven by
the expansion in Eastern Europe
··New PCA mandate in Cameroon. Good performance
in United Arab Emirates
··Successful deployment of SGS Dtect®
and
E-ValuatorTM
solution in Cameroon
··Contract completions in Benin and Kurdistan
··Margins impacted by the provisioning of accounts
receivables due to delays in collections
OUTLOOK
··Good prospects in cargo in transit visibility, TransitNet,
PCA and Forestry activities
··Enhancement of the inspection process:
servicing customs and other agencies with remote
inspection capabilities
··Digital and innovative solutions in Forestry, Track
Trace, Tax monitoring and Land administration
(CHF million) JUNE 2017
JUNE 2016
PRO-FORMA2
JUNE 2016
REVENUE 126.9 124.6 129.8
Change in % 1.8 (2.2)
ADJUSTED OPERATING
INCOME¹
14.1 23.5 25.5
Change in % (40.0) (44.7)
MARGIN %¹ 11.1 18.9 19.6
1. Before amortisation of acquisition intangibles and other non-recurring items. - 2. Constant Currency basis.
39. 39© SGS SA 2017
ALL RIGHTS RESERVED
HALF-YEAR RESULTS PRESENTATION
17 JULY 2017
SOLID ORGANIC
REVENUE GROWTH
HIGHER ADJUSTED
OPERATING INCOME ROBUST CASH FLOW
GUIDANCE 20171
1. At stable market conditions.
40. 40© SGS SA 2017
ALL RIGHTS RESERVED
HALF-YEAR RESULTS PRESENTATION
17 JULY 2017
OUTLOOK 2020
··Mid single-digit organic growth on average with
improvement over the 2016-20 period supported by the new
focused structure and new strategic initiatives
··Accelerating MA activities with acquired revenue over
the period in the range of CHF 1 billion
··Adjusted Operating Income Margin of at least 18% by
the end of the period supported by efficiency improvement
initiatives and improved pricing
··Strong cash conversion
··Robust returns on invested capital
··Solid dividend distributions, in line with improvement
in net earnings
44. 44© SGS SA 2017
ALL RIGHTS RESERVED
HALF-YEAR RESULTS PRESENTATION
17 JULY 2017
ACRONYMS AND OTHER ABBREVIATIONS
EMC Electromagnetic Compatibility
E-VALUATOR Valuation on high risk consignements
ISO 9000:2015 ISO Quality management systems
ISO 14000:2015 ISO Environmental management
PCA Product Conformity Assessments
SGS DTECT SGS Scanner Image Analysis Platform
STAX SGS Safety Sofware
TRANSITNET SGS customisable web platform
adapted for transit operations
PTO Plant and Terminal Operations
45. 45© SGS SA 2017
ALL RIGHTS RESERVED
HALF-YEAR RESULTS PRESENTATION
17 JULY 2017
INVESTOR DAYS (IN VIETNAM)
Thursday and Friday,
26 and 27 October 2017
2017 FULL YEAR RESULTS
Tuesday, 23 January 2018
ANNUAL GENERAL MEETING
OF SHAREHOLDERS
Monday, 19 March 2018
Geneva, Switzerland
UPCOMING INVESTOR RELATIONS EVENT DATES
46. 46© SGS SA 2017
ALL RIGHTS RESERVED
HALF-YEAR RESULTS PRESENTATION
17 JULY 2017
SGS SA CORPORATE OFFICE
1 place des Alpes
P.O. Box 2152
CH – 1211 Geneva 1
t +41 (0)22 739 91 11
f +41 (0)22 739 98 86
e sgs.investor.relations@sgs.com
www.sgs.com
STOCK EXCHANGE LISTING
SIX Swiss Exchange, SGSN
STOCK EXCHANGE TRADING
SIX Swiss Exchange
COMMON STOCK SYMBOLS
Bloomberg: Registered Share: SGSN.VX
Reuters: Registered Share: SGSN.VX
Telekurs: Registered Share: SGSN
ISIN: Registered Share: CH0002497458
Swiss security number: 249745
CORPORATE DEVELOPMENT,
COMMUNICATIONS
INVESTOR RELATIONS
Jean-Luc de Buman
SGS SA
1 place des Alpes
P.O. Box 2152
CH – 1211 Geneva 1
t +41 (0)22 739 93 31
f +41 (0)22 739 92 00
www.sgs.com
INVESTOR RELATIONS INFORMATION