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2021 Half year results presentation
SGS GROUP RESULTS
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.
1 © SGS SA 2021 all rights reserved.
Half year results presentation 19 July 2021
STRONG OPERATING
PERFORMANCE
DELIVERED ACROSS
OUR GLOBAL
NETWORK
HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK Q&A APPENDIX
■ The global situation is improving, but remains
challenging in parts of the network
	
■ Additional measures adopted by Operational
Integrity remain in place (work from home, cleaning
stations, additional hygiene and disinfection
procedures, mask wearing, social distancing)
	
■ We continue to ensure that Personal Protective
Equipment is available globally
	
■ Crisis Management Teams remain mobilized
Maintaining Covid-19 readiness
Employee safety remains our paramount priority
HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK Q&A APPENDIX
© SGS SA 2021 all rights reserved.
3 Half year results presentation 19 July 2021
A strong start to 2021
H1 2021 highlights
FREE CASH FLOW*
CHF 93 MIO (57.7%) +59.1%
ADJUSTED OPERATING INCOME*
CHF 457 MIO +40.6%2
BASIC EARNINGS PER SHARE
CHF 36.29
REVENUE
CHF 3.1 BN + 16.8%¹ +17.9%²  +12.4% organic*
*	 Alternative Performance Measures (APM), refer to the ‘2021 Half Year APM’ document
1.	Historical currency – 2. Constant currency (CCY) – Definition in APM
2021 | 93
2020 | 220
2021 | 457
2020²| 325
2021 | 36.29
2020 | 22.81
2021 | 3.1
2020²| 2.6
4
HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK Q&A APPENDIX
© SGS SA 2021 all rights reserved.
Half year results presentation 19 July 2021
Continued investment in our strategic priority areas
H1 2021 Acquisitions
Division:
H&N
Location:
United
Kingdom
Division:
C&P
Location:
Netherlands
Division:
H&N
Location:
Ireland
Division:
I&E
Location:
France
Division:
I&E
Location:
Germany
Division:
I&E
Location:
France
Analytical & Development Services (ADS) International Service Laboratory (ISL) BZH GmbH Deutsches Beratungszentrum für Hygiene
(MAJORITY STAKE)
Brightsight Metair
Autoscope/CTOK
5
HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK Q&A APPENDIX
© SGS SA 2021 all rights reserved.
Half year results presentation 19 July 2021
■ A number of sustainability milestones achieved in H1
	
■ Brightsight materially accelerates our ambition to
become the global TIC leader in cybersecurity
	
■ Digicomply increasingly adopted by food industry leaders
	
■ Continuing the evolution to globally harmonize
Laboratory Information Management Systems (LIMS)
	
■ World Class Services is progressing well
Strategic progress
Becoming a more sustainable, data-driven company
HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK Q&A APPENDIX
© SGS SA 2021 all rights reserved.
Half year results presentation 19 July 2021
6
OUR OPERATING
PERFORMANCE WAS
SUPPORTED BY OUR
STRONG FINANCIAL
DISCIPLINE
HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK Q&A APPENDIX
A very strong operating performance
H1 2021 financial highlights
(CHF million) June 2021 June 2020
Change
in %
June 2020
CCY1
Change in
CCY 1
%
REVENUE 3 094 2 650 16.8 2 625 17.9
OPERATING INCOME (EBIT) 430 302 42.4 299 43.8
OPERATING INCOME (EBIT) MARGIN 13.9% 11.4% 11.4%
ADJUSTED OPERATING INCOME* 457 330 38.5 325 40.6
ADJUSTED OPERATING INCOME MARGIN* 14.8% 12.5% 12.4%
PROFIT FOR THE PERIOD 290 177 63.8
PROFIT ATTRIBUTABLE TO EQUITY HOLDERS OF SGS SA 272 171 59.1
BASIC EPS (CHF) 36.29 22.81 59.1
CASH FLOW FROM OPERATING ACTIVITIES 342 413 (17.2)
FREE CASH FLOW* 93 220 (57.7)
*	 Alternative Performance Measures (APM), refer to the ‘2021 Half Year APM’ document
1.	Constant currency (CCY) – Definition in APM
HIGHLIGHTS FINANCIAL REVIEW
HIGHLIGHTS
BUSINESS REVIEW OUTLOOK Q&A APPENDIX
8 © SGS SA 2021 all rights reserved.
Half year results presentation 19 July 2021
Double-digit organic growth
H1 2021 Revenue growth composition
Revenue
June 2020
Organic Disposals Currency
impact
2 650
146
325
325
(2) (25)
3 094
(0.1%) (1.1%) 16.8%
12.4% 5.6%
Constant currency* 17.9%
Revenue
June 2021
Acquisitions
(CHF million)
*	 Alternative Performance Measures (APM), refer to the ‘2021 Half Year APM’ document
9
HIGHLIGHTS FINANCIAL REVIEW
REVENUE
BUSINESS REVIEW OUTLOOK Q&A APPENDIX
© SGS SA 2021 all rights reserved.
Half year results presentation 19 July 2021
C&P
H&N
I&E
NR
Kn
Total Group
20.0%
13.4%
33.4%
23.1%
10.1%
H&N, C&P and Kn continued to lead organic growth
*	 Alternative Performance Measures (APM), refer to the ‘2021 Half Year APM’ document
1.	Constant currency (CCY) – Definition in APM
0.5%
12.4%
(0.1%)
11.2%
10.0%
20.9%
13.3%
5.6%
26.2%
14.4%
0.4%
5.8%
Growth1
H1 2021
13.8%
35.3%
21.2%
5.9%
26.2%
17.9%
Organic* Acquisitions Disposals
H1 2021 Revenue growth¹ by division
(0.3%)
10
HIGHLIGHTS FINANCIAL REVIEW
REVENUE
BUSINESS REVIEW OUTLOOK Q&A APPENDIX
© SGS SA 2021 all rights reserved.
Half year results presentation 19 July 2021
EUROPE/
AFRICA/
MIDDLE EAST
AMERICAS
ASIA/PACIFIC
Total Group
Strong growth across our global network
Organic* Acquisitions Disposals
10.8%
12.4%
2.2%
10.5%
(0.2%)
5.6%
13.1%
14.1%
21.1%
13.1%
16.3%
17.9%
Growth1
H1 2021
H1 2021 Revenue growth1
by region
*	 Alternative Performance Measures (APM), refer to the ‘2021 Half Year APM’ document
1.	Constant currency (CCY) – Definition in APM
46.9%
18.7%
34.4%
(0.1%)
11
HIGHLIGHTS FINANCIAL REVIEW
REVENUE
BUSINESS REVIEW OUTLOOK Q&A APPENDIX
© SGS SA 2021 all rights reserved.
Half year results presentation 19 July 2021
June
2020
FTE
Acqui. Dispos./
Restr.
3.3% (1.2%)
Remaining
organic
4.8%
June
2021
6.8%
86 828 2 826
(1 006)
4 204 92 750
Increase: 5 922 6.8%
June
2020
Eur./Afr./
Mid. East
Americas Asia/
Pacific
June
2021
89 226
(505)
2 507 915 92 143
FTE
REVENUE
6.9%
21.1%
(2.8%)
13.1%
2.6%
16.3%
3.3%
17.9%
Increase: 2 917 3.3%
Disciplined workforce management
FTE1
End of period FTE1
Average by region
1.	Full Time Equivalent (FTE) Employees 1.	Full Time Equivalent (FTE) Employees
(102)
(0.1)%
Cost.
Optim.
12
HIGHLIGHTS FINANCIAL REVIEW
REVENUE
BUSINESS REVIEW OUTLOOK Q&A APPENDIX
© SGS SA 2021 all rights reserved.
Half year results presentation 19 July 2021
H1 2021 Adjusted operating income*
(CHF million)
Adj. op. inc.
June 2020
Organic Acquisitions Disposals Currency
impact
Adj. op. inc.
June 2021
330
12
121
(1) (5)
457
(0.3%) (2.1%) 38.5%
37.2% 3.7%
Constant currency* 40.6%
Very strong AOI growth
12.5%
14.8%
*	 Alternative Performance Measures (APM), refer to the ‘2021 Half Year APM’ document
HIGHLIGHTS FINANCIAL REVIEW
ADJUSTED OPERATING
INCOME
BUSINESS REVIEW OUTLOOK Q&A APPENDIX
13 © SGS SA 2021 all rights reserved.
Half year results presentation 19 July 2021
The integration of SGS Analytics progressing according to schedule
(former A&S division of Synlab) integration is expected to unlock cost synergies of CHF 20 million
2021 2022 2023
H1 H2 H1 H2 H1 H2
Integration Management Team Mgt. Team
Branding Communications Communications
Rebranding
Website & Media
Human Resources Insurance, Benefits Systems
Finance Treasury, Proc., CRE
Tax, NWC management, Internal Controls
Controlling & Reporting, FSSC implementation
Information Technology TSA IT Services
Network, Workspace, ERP Germany & Nordics ERP Benelux, UK
Infrastructure
LIMS Nordics, Germany LIMS Benelux, UK LIMS Finland, France
Legal Liability & Risk mgt. Legal Entity consolidation
Operational Integrity Onboarding OI personnel gap analysis & launch OI Integration program
Bd/Sales & Delivery BD / Sales
Hub & Spoke model integration
H&N footprint consolidation
I&E footprint consolidation
14 © SGS SA 2021 all rights reserved.
Half year results presentation 19 July 2021
HIGHLIGHTS FINANCIAL REVIEW
ADJUSTED OPERATING
INCOME
BUSINESS REVIEW OUTLOOK Q&A APPENDIX
BUILDERS ORGANIZATION OUR FRAMEWORK OUR PROGRESS
Objectives and Key Results (OKR)
is a method to manage goals and
performance. It is a framework that
combines strategies and results and
helps to optimize processes, promote
employees and drive change.
	
■ Combines vision, mission, values
and strategy with day-to-day work
	
■ Establishes objectives and
enables the best use of resources
	
■ Helps to set and track
the right priorities
	
■ Accelerates time to
implementation
	
■ Creates transparency and
improves communication
	
■ Encourages an autonomous
work environment
	
■ FSSC on-boarding (incl.
Group standard ERP) for
Nordics, Germany (A&S)
and Southern Africa
	
■ Go – live of centralized billing in
India and Mexico & centralizing
cash collection for Spain
	
■ Global roll-out of the standardized,
fully integrated and digitalized
3rd party certification system
(until Q1 2022) for Knowledge
	
■ Design of the CORE for the digital
lab model for the Environment,
Food and Life lab testing activities
	
■ Four laboratories passed their first
WCS (World Class Services) audit
Level up initiative
DESIGN
BUILD EXTERNAL DELIVERY
PARTNERS
INTEGRATION LAYER
SGS DIGITAL
ASSETS
BUSINESS
ANALYST
IT
EXPERTS
IT
ENGINEERS
AGILE
PROFILES
IT
COMMUNITY
PRODUCT
A
PRODUCT
B
PRODUCT
C
PRODUCT
D
BUSINESS
COMMUNITY
© SGS SA 2021 all rights reserved.
Half year results presentation 19 July 2021
HIGHLIGHTS FINANCIAL REVIEW
ADJUSTED OPERATING
INCOME
BUSINESS REVIEW OUTLOOK Q&A APPENDIX
15
0
5
10
15
20
25
30
C&P H&N I&E NR Kn Total Group
Overall improved divisional margin performance
*	 Alternative Performance Measures (APM), refer to the ‘2021 Half Year APM’ document
1.	Constant currency (CCY) – Definition in APM
H1 2021 Adjusted operating income margin1,*
23.0%
21.4%
10.8%
15.5%
6.5%
9.6%
14.1%
12.6%
10.5%
19.8%
12.4%
14.8%
HY 2021    HY 2020
16 © SGS SA 2021 all rights reserved.
Half year results presentation 19 July 2021
HIGHLIGHTS FINANCIAL REVIEW
ADJUSTED OPERATING
INCOME
BUSINESS REVIEW OUTLOOK Q&A APPENDIX
H1 2021 Consolidated balance sheet
*	 Alternative Performance Measures (APM), refer to the ‘2021 Half Year APM’ document
Assets
(CHF million) June 2021 December 2020
Property, plant and equipment 914 872
Right-of-use assets 632 590
Goodwill 1 774 1 651
Other intangible assets 372 333
Investments in joint ventures, associates and other companies 35 34
Deferred tax assets 172 161
Other non-current assets 167 154
NON-CURRENT ASSETS 4 066 3 795
Inventories 59 57
Unbilled revenues and work in progress 207 160
Trade receivables 951 856
Other receivables and prepayments 257 188
Current tax assets 105 77
Marketable securities 8 9
Cash and cash equivalents 1 169 1 766
CURRENT ASSETS 2 756 3 113
TOTAL 6 822 6 908
NET DEBT* (2 085) (1 478)
Equity and liabilities
(CHF million) June 2021 December 2020
Equity holder of SGS SA 861 1 060
Non-controlling interests 95 74
EQUITY 956 1 134
Loans and other financial liabilities 2 928 2 390
Lease liabilities 502 470
Deferred tax liabilities 64 53
Defined benefit obligations 98 136
Provisions 93 88
NON-CURRENT LIABILITIES 3 685 3 137
Loans and other financial liabilities 334 863
Lease liabilities 165 151
Trade and other payables 690 658
Provisions 67 85
Current tax liabilities 154 140
Contract liabilities 234 189
Other creditors and accruals 537 551
CURRENT LIABILITIES 2 181 2 637
TOTAL 6 822 6 908
HIGHLIGHTS FINANCIAL REVIEW
BALANCE SHEET
BUSINESS REVIEW OUTLOOK Q&A APPENDIX
17 © SGS SA 2021 all rights reserved.
Half year results presentation 19 July 2021
H1 2021 Condensed cash flow
(CHF million) June 2021 June 2020
PROFIT FOR THE PERIOD 290 177
Non-cash and non-operating items 404 361
(Increase) in working capital (202) –
Taxes paid (150) (125)
CASH FLOW FROM OPERATING ACTIVITIES 342 413
Net purchase of fixed assets (147) (103)
Acquisition of businesses (103) (23)
Proceeds from sales of businesses – 71
Increase in interest received and other 9 4
CASH FLOW USED BY INVESTING ACTIVITIES (241) (51)
Dividends paid to equity holders of SGS SA (599) (598)
Dividends paid to non-controlling interests (4) (2)
Transaction with non-controlling interests (11) –
Cash paid on treasury shares – (189)
Proceeds from corporate bonds 817 499
Payment of corporate bonds (276) –
Interest paid (38) (41)
Payment of lease liabilities (91) (80)
Proceeds from borrowings 44 –
Payment of borrowings (553) –
CASH FLOW USED BY FINANCING ACTIVITIES (711) (411)
Currency translation 13 (15)
DECREASE IN CASH AND CASH EQUIVALENTS (597) (64)
*	 Alternative Performance Measures (APM), refer to the ‘2021 Half Year APM’ document	
(CHF million) June 2021 June 2020
CASH FLOW FROM OPERATING ACTIVITIES 342 413
Purchase of property, plant and equipment and other intangible assets (150) (108)
Disposal of property, plant and equipment and other intangible assets 3 5
Operating lease outflows (102) (90)
FREE CASH FLOW* 93 220
HIGHLIGHTS FINANCIAL REVIEW
CASH FLOW
BUSINESS REVIEW OUTLOOK QA APPENDIX
18 © SGS SA 2021 all rights reserved.
Half year results presentation 19 July 2021
-20
-10
0
50
100
150
200
250
HY2018 HY2019 HY2020 HY2021
-1%
-2%
0%
1%
2%
3%
4%
5%
Working capital normalizing following H1 2020
*	 Alternative Performance Measures (APM), refer to the ‘2021 Half Year APM’ document
Operating Net Working Capital (CHF million) In % of Revenue
Operating net working capital*
in % of LTM revenue
3.5%
2.9%
(0.1%
)
(0.2%
)
196
233
(4)
(12)
Negative Operating Net Working Capital
in Half Year 2021 driven by:
	
■ EVA performance management
	
■ Centralized cash collection
	
■ Centralized in-country billing projects
HIGHLIGHTS FINANCIAL REVIEW
CASH FLOW
BUSINESS REVIEW OUTLOOK QA APPENDIX
19 © SGS SA 2021 all rights reserved.
Half year results presentation 19 July 2021
0
25
50
75
100
125
150
175
200
HY2018 HY2019 HY2020 HY2021
5%
4%
3%
2%
1%
0%
Accelerating our investment in strategic priority areas
Capex in % of revenue Capital expenditure by business
Capital Expenditure (Capex) In % of Revenue
(CHF million)
144
108
150
130
4.4%
3.9%
4.1%
4.8%
CHF 150 MIO
2%
Kn
17%
HN
29%
IE
28%
CP
24%
NR
HIGHLIGHTS FINANCIAL REVIEW
CASH FLOW
BUSINESS REVIEW OUTLOOK QA APPENDIX
20 © SGS SA 2021 all rights reserved.
Half year results presentation 19 July 2021
*	 Alternative Performance Measures (APM), refer to the ‘2021 Half Year APM’ document
1.	Constant currency (CCY) – Definition in APM
2.	Percentage points
	
■ Revenue increased by 17.9%1
of which 12.4% organic*
	
■ Increase in Adjusted Operating Income*
of 40.6%1
	
■ Increase in Adjusted Operating Income Margin*
to 14.8% (+2.4 pp1,2
)
	
■ Profit for the period increased by 63.8% to CHF 290 million
	
■ Capital Investment of CHF 150 million
	
■ Free cash flow of CHF 93 million
	
■ Return on Invested Capital*
of 17.8%
H1 2021 Financial summary
HIGHLIGHTS FINANCIAL REVIEW
FINANCIAL SUMMARY
BUSINESS REVIEW OUTLOOK QA APPENDIX
21 © SGS SA 2021 all rights reserved.
Half year results presentation 19 July 2021
DIVISIONAL
REVIEW
HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK QA APPENDIX
Overview
	
■ Organic growth of 13.3% supported by post-pandemic
recovery and investment in Connectivity
	
■ Excellent performance in all Connectivity activities
	
■ Solid growth in Softlines from retailers and brands
	
■ Full recovery from Hardlines in Hardgoods and Toys.
Improving market conditions for Auto Laboratories
	
■ Trade Facilitation services benefiting from eCustoms services
in Europe following Brexit
	
■ Strategic milestone acquisition of Brightsight cybersecurity
evaluation laboratory
Outlook
	
■ Growth expected to continue in H2
	
■ Connectivity to be the major growth driver benefiting
from new capabilities and capacity. Newly acquired
Brightsight to make a positive impact
	
■ Solid activity level expected to continue in Softlines
from retailers and brands, but lower PPE volumes
	
■ Hardgoods remains the growth driver of Hardlines,
while Auto Laboratories should improve
	
■ Solid growth expected from eCustoms solutions and
improvement of PCA volumes in Trade Facilitation services
Leveraging our long-term strategic investment
Connectivity  Products (CP)
(CHF million) June 2021 June 20202
Change in %
June 2020
CCY1
Change in
CCY %1
REVENUE 618 547 13.0 543 13.8
ADJUSTED
OPERATING
INCOME*
142 116 22.4 116 22.4
MARGIN %* 23.0 21.2 21.4
*	 Alternative Performance Measures (APM), refer to the ‘2021 Half Year APM’ document
1.	
Constant currency (CCY) – Definition in APM – 2. See note 2 on Segment information restatement of the HY 2021 Press Release
23
HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK QA APPENDIX
Half year results presentation 19 July 2021 © SGS SA 2021 all rights reserved.
Overview
	
■ Organic growth at 20.9% with double-digit growth in all SBUs
and all geographies
	
■ Food growth was driven by new regulations and an expanded
client base
	
■ Health Science grew well above the divisional average
boosted by Covid-19 vaccines
	
■ Cosmetics  Hygiene grew in line with the organic divisional
average benefiting from a strong rebound in activity
Outlook
	
■ Strong performance to continue in H2
	
■ Covid-19 rebound to continue but growth to
ease versus strong Q4 comparatives
	
■ Health Science and Food to lead the growth
supported by outsourcing and regulations
	
■ Momentum to continue in Cosmetics  Hygiene
led by strong demand in the USA
	
■ Continued integration of acquired companies
and a solid pipeline of potential targets
A very strong performance across the global portfolio
Health  Nutrition (HN)
(CHF million) June 2021 June 20202
Change in %
June 2020
CCY1
Change in
CCY %1
REVENUE 414 306 35.3 306 35.3
ADJUSTED
OPERATING
INCOME*
64 33 93.9 33 93.9
MARGIN %* 15.5 10.8 10.8
*	 Alternative Performance Measures (APM), refer to the ‘2021 Half Year APM’ document
1.	
Constant currency (CCY) – Definition in APM – 2. See note 2 on Segment information restatement of the HY 2021 Press Release
24
HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK QA APPENDIX
Half year results presentation 19 July 2021 © SGS SA 2021 all rights reserved.
Overview
	
■ Organic growth of 10.0% driven by a strong rebound across
Europe, Asia and Latin America
	
■ Field services and Inspection growth was above divisional
average supported by renewables projects 
	
■ Industrial and Public Health and Safety outperformed, fueled
by the industrial safety laboratory network
	
■ Technical Assessment and Advisory benefited from a good
volume of projects and a strong performance from recently
acquired Ryobi Geotechnique
Outlook
	
■ Acceleration of energy transition and infrastructure
improvement trends will foster growth
	
■ Some recovery expected in existing OG related services
due to a favorable oil price and increasing demand
	
■ Strong focus on scalable bolt-on acquisitions
	
■ Synlab AS integration on track delivering operational
synergies and the expansion of Hub and Spoke model
Growth accelerated through H1
Industries  Environment (IE)
(CHF million) June 2021 June 20202
Change in %
June 2020
CCY1
Change in
CCY %1
REVENUE 1 033 859 20.3 852 21.2
ADJUSTED
OPERATING
INCOME*
99 55 80.0 55 80.0
MARGIN %* 9.6 6.4 6.5
*	 Alternative Performance Measures (APM), refer to the ‘2021 Half Year APM’ document
1.	
Constant currency (CCY) – Definition in APM – 2. See note 2 on Segment information restatement of the HY 2021 Press Release
25
HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK QA APPENDIX
Half year results presentation 19 July 2021 © SGS SA 2021 all rights reserved.
Overview
	
■ Natural Resources grew by 5.8% organically
	
■ Trade  Inspection grew moderately
	
■ High single-digit growth in Minerals commodities offset the
impact from lower oil demand and poor crop season in most
European countries
	
■ Double-digit growth in Laboratory testing boosted by surge in
exploration sample volumes
	
■ Metallurgy and Consulting benefited from 2020 project delays
Outlook
	
■ Mineral commodities to maintain momentum
	
■ Improving crop season for AGRI commodities
	
■ OGC Commodities volumes dependent on recovery
	
■ Strong activity to continue in commercial and onsite
laboratory testing
	
■ Solid pipeline for Metallurgy and Consulting
	
■ Launch of Smart Warehouse, a digital solution for cargo
condition monitoring
Strong momentum in Minerals partially offset by OG and AGRI
Natural Resources (NR)
(CHF million) June 2021 June 20202
Change in %
June 2020
CCY1
Change in
CCY %1
REVENUE 716 689 3.9 676 5.9
ADJUSTED
OPERATING
INCOME*
90 100 (10.0) 95 (5.3)
MARGIN %* 12.6 14.5 14.1
*	 Alternative Performance Measures (APM), refer to the ‘2021 Half Year APM’ document
1.	
Constant currency (CCY) – Definition in APM – 2. See note 2 on Segment information restatement of the HY 2021 Press Release
26
HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK QA APPENDIX
Half year results presentation 19 July 2021 © SGS SA 2021 all rights reserved.
Overview
	
■ Knowledge organic growth at 26.2% with excellent
performance in Certification across geographies
	
■ Management System Certification grew above divisional
level, driven by postponed work, recertification and increased
demand for Food and Information Security Certification
	
■ Consulting and Training grew below the divisional average
due to slower market recovery
Outlook
	
■ Growth to moderate in H2 as the benefit from the post-
lockdown Audit catch-up is completed
	
■ ESG Assurance Solutions and Supplier Risk Management
services to generate new revenue streams
	
■ Continued roll-out of CertIQ, the new Knowledge Certification
platform, which will further digitalize our audit data and
drive efficiencies
An excellent performance in Certification
Knowledge (Kn)
(CHF million) June 2021 June 20202
Change in %
June 2020
CCY1
Change in
CCY %1
REVENUE 313 249 25.7 248 26.2
ADJUSTED
OPERATING
INCOME*
62 26 138.5 26 138.5
MARGIN %* 19.8 10.4 10.5
*	 Alternative Performance Measures (APM), refer to the ‘2021 Half Year APM’ document
1.	
Constant currency (CCY) – Definition in APM – 2. See note 2 on Segment information restatement of the HY 2021 Press Release
27
HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK QA APPENDIX
Half year results presentation 19 July 2021 © SGS SA 2021 all rights reserved.
OUTLOOK
HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK QA APPENDIX
■ Solid organic* growth normalizing for the impact of Covid-19
	
■ Improving the adjusted operating income margin*
	
■ Strong cash conversion
	
■ Maintaining best-in-class organic return on invested capital*
	
■ Accelerating investment into our strategic focus areas with
MA as a key enabler
	
■ At least maintaining or growing the dividend
Guidance 2021
*	 Alternative Performance Measures (APM), refer to the ‘2021 Half Year APM’ document
HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK QA APPENDIX
29 Half year results presentation 19 July 2021 © SGS SA 2021 all rights reserved.
Mid-term targets 2020-2023
PLANET PERFORMANCE PEOPLE
Reducing our CO2 emissions
Support the transition to a low-carbon world by
meeting our Science-based Target of reducing
our CO2 emissions per revenue by 35%¹
High single-digit constant
currency revenue CAGR
Driven by mid-single-digit organic
growth p.a. and a focus on MA
Ensuring Diversity
Nurture diversity and inclusion based on merit
by ensuring equal opportunity to all employees
and evolving our gender diversity to 30% women
in leadership at CEO-3 positions and above
Sustainability Solutions
Support our customers on their journey to sustainability
by increasing the proportion of revenue generated
by our sustainability solutions to above 50%
 10% Adjusted Operating Income CAGR World Class Service (WCS)
Promote a culture of operational safety, efficiency and
excellence through our WCS program: 20% of our WCS
labs (2020 perimeter) reaching WCS Bronze award level
Integrity Principles
Reduce the impact that our supply chain has
on society by achieving 100% of our strategic
suppliers trained on our integrity principles
Strong EVA discipline Supporting personal development
Support the personal development of our
employees by increasing the completion
rate of job-related training by 10%²
Energy Efficiency
Increasing annually the number of energy
efficiency measures in our 100 most
energy intensive owned buildings
Maintain or grow the Dividend Per Share Positive impact on communities
Increase by 10%² our positive impact on our communities
through employee volunteering, focusing on vulnerable
groups including those affected by pandemics
1.	Against a 2014 baseline 2. Against a 2019 baseline
HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK QA APPENDIX
30 Half year results presentation 19 July 2021 © SGS SA 2021 all rights reserved.
QA
HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK QA APPENDIX
TO REGISTER FOR
QUESTIONS PRESS *
AND 1 ON YOUR
TELEPHONE
HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK QA APPENDIX
APPENDIX
HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK QA APPENDIX
CAGR	 Compound Annual Growth Rate
CAPEX	 Capital Expenditure
ESG 	 Environmental, Social and Governance
EVA	 Economic Value Added
FTE 	 Full Time Equivalent Employees
NWC	 Net Working Capital
PCA	 Product Conformity Assessment
PPE	 Personal Protective Equipment
OGC	 Oil, Gas and Chemicals
OG 	 Oil and Gas
SBU 	 Strategic Business Unit
LTM 	 Last Twelve Months
Acronyms and other abbreviations
34
HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK QA APPENDIX
Half year results presentation 19 July 2021 © SGS SA 2021 all rights reserved.
Long-term shareholder value creation
H1 REVENUE CHF BN
2021 | 3.1
2020 | 2.6
2019 | 3.3
2018 | 3.3
2017 | 3.0
H1 RETURN ON INVESTED CAPITAL*
%
2021 | 17.8
2020 | 18.7
2019 | 23.7
2018 | 20.8
2017 | 19.4
H1 ADJUSTED OPERATING INCOME*
CHF MIO
2021 | 457
2020 | 330
2019 | 489
2018 | 481
2017 | 428
H1 FREE CASH FLOW*
CHF MIO
2021 | 93
2020 | 220
2019 | 216
2018 | 176
2017 | 210
H1 NET PROFIT CHF MIO
2021 | 290
2020 | 177
2019 | 399
2018 | 296
2017 | 293
*	 Alternative Performance Measures (APM), refer to the ‘2021 Half Year APM’ document
35
HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK QA APPENDIX
Half year results presentation 19 July 2021 © SGS SA 2021 all rights reserved.
1.	Constant currency (CCY) – Definition in APM
H1 2021 revenue portfolio
A well-balanced portfolio
33.4%
IE
20.0%
CP
23.1%
NR
13.4%
HN
10.1%
Kn
Change1
0.8%
1.7%
0.9%
Change1
(2.7%)
(0.7%)
36
HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK QA APPENDIX
Half year results presentation 19 July 2021 © SGS SA 2021 all rights reserved.
H1 2021 adjusted operating income*
portfolio
*	 Alternative Performance Measures (APM), refer to the ‘2021 Half Year APM’ document
1.	Constant currency (CCY) – Definition in APM
A well-balanced portfolio
Change1
Change1
31.1%
CP
21.7%
IE
19.7%
NR
14.0%
HN
13.5%
Kn 5.5%
3.8%
(4.6%)
(9.5%)
4.8%
37
HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK QA APPENDIX
Half year results presentation 19 July 2021 © SGS SA 2021 all rights reserved.
EUR, USD and CNY represent 52% of 2021 revenue
H1 2021 foreign currency revenues
27.5%
EUR
29.2%
OTHER
1.9%
RUB
3.0%
GBP
15.4%
CNY
2.1%
KRW
3.4%
CAD
2.0%
CLP
8.8%
USD
2.4%
AUD
4.3%
TWD
38
HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK QA APPENDIX
Half year results presentation 19 July 2021 © SGS SA 2021 all rights reserved.
-20%
-15%
-10%
-5%
0%
5%
10%
Main currencies’ variation against CHF in H1 2021
Foreign currency average rate change H1 2021 versus H1 2020 rate
1.0943 0.1403 0.9081 0.0324 0.7279 1.2601 0.7002 0.0008 0.0013 0.0122
1.0645 0.1374 0.9664 0.0322 0.7092 1.2192 0.6358 0.0008 0.0012 0.0140
2.8% 2.1% (6.0%) 0.6% 2.6% 3.4% 10.1% 1.4% 6.0% (12.6%)
EUR CNY USD TWD CAD GBP AUD KRW CLP RUB
June 2021
June 2020
Change
2.8% 2.1%
(6.0)%
0.6%
2.6% 3.4%
10.1%
6.0%
1.4%
(12.6)%
39
HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK QA APPENDIX
Half year results presentation 19 July 2021 © SGS SA 2021 all rights reserved.
Investor relations information and events dates
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
INVESTOR AND MEDIA
RELATIONS
Toby Reeks
SGS SA
1 place des Alpes
P.O. Box 2152
CH – 1211 Geneva 1
t	 +41 (0)22 739 99 87
m	+41 (0)79 641 83 02
STOCK EXCHANGE TRADING
SIX Swiss Exchange
COMMON STOCK SYMBOLS
Bloomberg: Registered Share:
SGSN.SW
Reuters: Registered Share:
SGSN.S
Telekurs: Registered Share:
SGSN
ISIN: Registered Share:
CH0002497458
Swiss security number: 249745
STOCK EXCHANGE LISTING
SIX Swiss Exchange, SGSN
INVESTOR DAYS
November 2022
2021 FULL YEAR RESULTS
Thursday, 27 January 2022
ANNUAL GENERAL MEETING
OF SHAREHOLDERS
Tuesday, 29 March 2022
Geneva, Switzerland
40
HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK QA APPENDIX
Half year results presentation 19 July 2021 © SGS SA 2021 all rights reserved.
www.sgs.com SGS is a registered trademark of SGS Société Générale de Surveillance SA

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SGS 2021 Half Year Results Presentation

  • 1. 2021 Half year results presentation SGS GROUP RESULTS
  • 2.
  • 3. 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. 1 © SGS SA 2021 all rights reserved. Half year results presentation 19 July 2021
  • 4. STRONG OPERATING PERFORMANCE DELIVERED ACROSS OUR GLOBAL NETWORK HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK Q&A APPENDIX
  • 5. ■ The global situation is improving, but remains challenging in parts of the network ■ Additional measures adopted by Operational Integrity remain in place (work from home, cleaning stations, additional hygiene and disinfection procedures, mask wearing, social distancing) ■ We continue to ensure that Personal Protective Equipment is available globally ■ Crisis Management Teams remain mobilized Maintaining Covid-19 readiness Employee safety remains our paramount priority HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK Q&A APPENDIX © SGS SA 2021 all rights reserved. 3 Half year results presentation 19 July 2021
  • 6. A strong start to 2021 H1 2021 highlights FREE CASH FLOW* CHF 93 MIO (57.7%) +59.1% ADJUSTED OPERATING INCOME* CHF 457 MIO +40.6%2 BASIC EARNINGS PER SHARE CHF 36.29 REVENUE CHF 3.1 BN + 16.8%¹ +17.9%²  +12.4% organic* * Alternative Performance Measures (APM), refer to the ‘2021 Half Year APM’ document 1. Historical currency – 2. Constant currency (CCY) – Definition in APM 2021 | 93 2020 | 220 2021 | 457 2020²| 325 2021 | 36.29 2020 | 22.81 2021 | 3.1 2020²| 2.6 4 HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK Q&A APPENDIX © SGS SA 2021 all rights reserved. Half year results presentation 19 July 2021
  • 7. Continued investment in our strategic priority areas H1 2021 Acquisitions Division: H&N Location: United Kingdom Division: C&P Location: Netherlands Division: H&N Location: Ireland Division: I&E Location: France Division: I&E Location: Germany Division: I&E Location: France Analytical & Development Services (ADS) International Service Laboratory (ISL) BZH GmbH Deutsches Beratungszentrum für Hygiene (MAJORITY STAKE) Brightsight Metair Autoscope/CTOK 5 HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK Q&A APPENDIX © SGS SA 2021 all rights reserved. Half year results presentation 19 July 2021
  • 8. ■ A number of sustainability milestones achieved in H1 ■ Brightsight materially accelerates our ambition to become the global TIC leader in cybersecurity ■ Digicomply increasingly adopted by food industry leaders ■ Continuing the evolution to globally harmonize Laboratory Information Management Systems (LIMS) ■ World Class Services is progressing well Strategic progress Becoming a more sustainable, data-driven company HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK Q&A APPENDIX © SGS SA 2021 all rights reserved. Half year results presentation 19 July 2021 6
  • 9. OUR OPERATING PERFORMANCE WAS SUPPORTED BY OUR STRONG FINANCIAL DISCIPLINE HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK Q&A APPENDIX
  • 10. A very strong operating performance H1 2021 financial highlights (CHF million) June 2021 June 2020 Change in % June 2020 CCY1 Change in CCY 1 % REVENUE 3 094 2 650 16.8 2 625 17.9 OPERATING INCOME (EBIT) 430 302 42.4 299 43.8 OPERATING INCOME (EBIT) MARGIN 13.9% 11.4% 11.4% ADJUSTED OPERATING INCOME* 457 330 38.5 325 40.6 ADJUSTED OPERATING INCOME MARGIN* 14.8% 12.5% 12.4% PROFIT FOR THE PERIOD 290 177 63.8 PROFIT ATTRIBUTABLE TO EQUITY HOLDERS OF SGS SA 272 171 59.1 BASIC EPS (CHF) 36.29 22.81 59.1 CASH FLOW FROM OPERATING ACTIVITIES 342 413 (17.2) FREE CASH FLOW* 93 220 (57.7) * Alternative Performance Measures (APM), refer to the ‘2021 Half Year APM’ document 1. Constant currency (CCY) – Definition in APM HIGHLIGHTS FINANCIAL REVIEW HIGHLIGHTS BUSINESS REVIEW OUTLOOK Q&A APPENDIX 8 © SGS SA 2021 all rights reserved. Half year results presentation 19 July 2021
  • 11. Double-digit organic growth H1 2021 Revenue growth composition Revenue June 2020 Organic Disposals Currency impact 2 650 146 325 325 (2) (25) 3 094 (0.1%) (1.1%) 16.8% 12.4% 5.6% Constant currency* 17.9% Revenue June 2021 Acquisitions (CHF million) * Alternative Performance Measures (APM), refer to the ‘2021 Half Year APM’ document 9 HIGHLIGHTS FINANCIAL REVIEW REVENUE BUSINESS REVIEW OUTLOOK Q&A APPENDIX © SGS SA 2021 all rights reserved. Half year results presentation 19 July 2021
  • 12. C&P H&N I&E NR Kn Total Group 20.0% 13.4% 33.4% 23.1% 10.1% H&N, C&P and Kn continued to lead organic growth * Alternative Performance Measures (APM), refer to the ‘2021 Half Year APM’ document 1. Constant currency (CCY) – Definition in APM 0.5% 12.4% (0.1%) 11.2% 10.0% 20.9% 13.3% 5.6% 26.2% 14.4% 0.4% 5.8% Growth1 H1 2021 13.8% 35.3% 21.2% 5.9% 26.2% 17.9% Organic* Acquisitions Disposals H1 2021 Revenue growth¹ by division (0.3%) 10 HIGHLIGHTS FINANCIAL REVIEW REVENUE BUSINESS REVIEW OUTLOOK Q&A APPENDIX © SGS SA 2021 all rights reserved. Half year results presentation 19 July 2021
  • 13. EUROPE/ AFRICA/ MIDDLE EAST AMERICAS ASIA/PACIFIC Total Group Strong growth across our global network Organic* Acquisitions Disposals 10.8% 12.4% 2.2% 10.5% (0.2%) 5.6% 13.1% 14.1% 21.1% 13.1% 16.3% 17.9% Growth1 H1 2021 H1 2021 Revenue growth1 by region * Alternative Performance Measures (APM), refer to the ‘2021 Half Year APM’ document 1. Constant currency (CCY) – Definition in APM 46.9% 18.7% 34.4% (0.1%) 11 HIGHLIGHTS FINANCIAL REVIEW REVENUE BUSINESS REVIEW OUTLOOK Q&A APPENDIX © SGS SA 2021 all rights reserved. Half year results presentation 19 July 2021
  • 14. June 2020 FTE Acqui. Dispos./ Restr. 3.3% (1.2%) Remaining organic 4.8% June 2021 6.8% 86 828 2 826 (1 006) 4 204 92 750 Increase: 5 922 6.8% June 2020 Eur./Afr./ Mid. East Americas Asia/ Pacific June 2021 89 226 (505) 2 507 915 92 143 FTE REVENUE 6.9% 21.1% (2.8%) 13.1% 2.6% 16.3% 3.3% 17.9% Increase: 2 917 3.3% Disciplined workforce management FTE1 End of period FTE1 Average by region 1. Full Time Equivalent (FTE) Employees 1. Full Time Equivalent (FTE) Employees (102) (0.1)% Cost. Optim. 12 HIGHLIGHTS FINANCIAL REVIEW REVENUE BUSINESS REVIEW OUTLOOK Q&A APPENDIX © SGS SA 2021 all rights reserved. Half year results presentation 19 July 2021
  • 15. H1 2021 Adjusted operating income* (CHF million) Adj. op. inc. June 2020 Organic Acquisitions Disposals Currency impact Adj. op. inc. June 2021 330 12 121 (1) (5) 457 (0.3%) (2.1%) 38.5% 37.2% 3.7% Constant currency* 40.6% Very strong AOI growth 12.5% 14.8% * Alternative Performance Measures (APM), refer to the ‘2021 Half Year APM’ document HIGHLIGHTS FINANCIAL REVIEW ADJUSTED OPERATING INCOME BUSINESS REVIEW OUTLOOK Q&A APPENDIX 13 © SGS SA 2021 all rights reserved. Half year results presentation 19 July 2021
  • 16. The integration of SGS Analytics progressing according to schedule (former A&S division of Synlab) integration is expected to unlock cost synergies of CHF 20 million 2021 2022 2023 H1 H2 H1 H2 H1 H2 Integration Management Team Mgt. Team Branding Communications Communications Rebranding Website & Media Human Resources Insurance, Benefits Systems Finance Treasury, Proc., CRE Tax, NWC management, Internal Controls Controlling & Reporting, FSSC implementation Information Technology TSA IT Services Network, Workspace, ERP Germany & Nordics ERP Benelux, UK Infrastructure LIMS Nordics, Germany LIMS Benelux, UK LIMS Finland, France Legal Liability & Risk mgt. Legal Entity consolidation Operational Integrity Onboarding OI personnel gap analysis & launch OI Integration program Bd/Sales & Delivery BD / Sales Hub & Spoke model integration H&N footprint consolidation I&E footprint consolidation 14 © SGS SA 2021 all rights reserved. Half year results presentation 19 July 2021 HIGHLIGHTS FINANCIAL REVIEW ADJUSTED OPERATING INCOME BUSINESS REVIEW OUTLOOK Q&A APPENDIX
  • 17. BUILDERS ORGANIZATION OUR FRAMEWORK OUR PROGRESS Objectives and Key Results (OKR) is a method to manage goals and performance. It is a framework that combines strategies and results and helps to optimize processes, promote employees and drive change. ■ Combines vision, mission, values and strategy with day-to-day work ■ Establishes objectives and enables the best use of resources ■ Helps to set and track the right priorities ■ Accelerates time to implementation ■ Creates transparency and improves communication ■ Encourages an autonomous work environment ■ FSSC on-boarding (incl. Group standard ERP) for Nordics, Germany (A&S) and Southern Africa ■ Go – live of centralized billing in India and Mexico & centralizing cash collection for Spain ■ Global roll-out of the standardized, fully integrated and digitalized 3rd party certification system (until Q1 2022) for Knowledge ■ Design of the CORE for the digital lab model for the Environment, Food and Life lab testing activities ■ Four laboratories passed their first WCS (World Class Services) audit Level up initiative DESIGN BUILD EXTERNAL DELIVERY PARTNERS INTEGRATION LAYER SGS DIGITAL ASSETS BUSINESS ANALYST IT EXPERTS IT ENGINEERS AGILE PROFILES IT COMMUNITY PRODUCT A PRODUCT B PRODUCT C PRODUCT D BUSINESS COMMUNITY © SGS SA 2021 all rights reserved. Half year results presentation 19 July 2021 HIGHLIGHTS FINANCIAL REVIEW ADJUSTED OPERATING INCOME BUSINESS REVIEW OUTLOOK Q&A APPENDIX 15
  • 18. 0 5 10 15 20 25 30 C&P H&N I&E NR Kn Total Group Overall improved divisional margin performance * Alternative Performance Measures (APM), refer to the ‘2021 Half Year APM’ document 1. Constant currency (CCY) – Definition in APM H1 2021 Adjusted operating income margin1,* 23.0% 21.4% 10.8% 15.5% 6.5% 9.6% 14.1% 12.6% 10.5% 19.8% 12.4% 14.8% HY 2021    HY 2020 16 © SGS SA 2021 all rights reserved. Half year results presentation 19 July 2021 HIGHLIGHTS FINANCIAL REVIEW ADJUSTED OPERATING INCOME BUSINESS REVIEW OUTLOOK Q&A APPENDIX
  • 19. H1 2021 Consolidated balance sheet * Alternative Performance Measures (APM), refer to the ‘2021 Half Year APM’ document Assets (CHF million) June 2021 December 2020 Property, plant and equipment 914 872 Right-of-use assets 632 590 Goodwill 1 774 1 651 Other intangible assets 372 333 Investments in joint ventures, associates and other companies 35 34 Deferred tax assets 172 161 Other non-current assets 167 154 NON-CURRENT ASSETS 4 066 3 795 Inventories 59 57 Unbilled revenues and work in progress 207 160 Trade receivables 951 856 Other receivables and prepayments 257 188 Current tax assets 105 77 Marketable securities 8 9 Cash and cash equivalents 1 169 1 766 CURRENT ASSETS 2 756 3 113 TOTAL 6 822 6 908 NET DEBT* (2 085) (1 478) Equity and liabilities (CHF million) June 2021 December 2020 Equity holder of SGS SA 861 1 060 Non-controlling interests 95 74 EQUITY 956 1 134 Loans and other financial liabilities 2 928 2 390 Lease liabilities 502 470 Deferred tax liabilities 64 53 Defined benefit obligations 98 136 Provisions 93 88 NON-CURRENT LIABILITIES 3 685 3 137 Loans and other financial liabilities 334 863 Lease liabilities 165 151 Trade and other payables 690 658 Provisions 67 85 Current tax liabilities 154 140 Contract liabilities 234 189 Other creditors and accruals 537 551 CURRENT LIABILITIES 2 181 2 637 TOTAL 6 822 6 908 HIGHLIGHTS FINANCIAL REVIEW BALANCE SHEET BUSINESS REVIEW OUTLOOK Q&A APPENDIX 17 © SGS SA 2021 all rights reserved. Half year results presentation 19 July 2021
  • 20. H1 2021 Condensed cash flow (CHF million) June 2021 June 2020 PROFIT FOR THE PERIOD 290 177 Non-cash and non-operating items 404 361 (Increase) in working capital (202) – Taxes paid (150) (125) CASH FLOW FROM OPERATING ACTIVITIES 342 413 Net purchase of fixed assets (147) (103) Acquisition of businesses (103) (23) Proceeds from sales of businesses – 71 Increase in interest received and other 9 4 CASH FLOW USED BY INVESTING ACTIVITIES (241) (51) Dividends paid to equity holders of SGS SA (599) (598) Dividends paid to non-controlling interests (4) (2) Transaction with non-controlling interests (11) – Cash paid on treasury shares – (189) Proceeds from corporate bonds 817 499 Payment of corporate bonds (276) – Interest paid (38) (41) Payment of lease liabilities (91) (80) Proceeds from borrowings 44 – Payment of borrowings (553) – CASH FLOW USED BY FINANCING ACTIVITIES (711) (411) Currency translation 13 (15) DECREASE IN CASH AND CASH EQUIVALENTS (597) (64) * Alternative Performance Measures (APM), refer to the ‘2021 Half Year APM’ document (CHF million) June 2021 June 2020 CASH FLOW FROM OPERATING ACTIVITIES 342 413 Purchase of property, plant and equipment and other intangible assets (150) (108) Disposal of property, plant and equipment and other intangible assets 3 5 Operating lease outflows (102) (90) FREE CASH FLOW* 93 220 HIGHLIGHTS FINANCIAL REVIEW CASH FLOW BUSINESS REVIEW OUTLOOK QA APPENDIX 18 © SGS SA 2021 all rights reserved. Half year results presentation 19 July 2021
  • 21. -20 -10 0 50 100 150 200 250 HY2018 HY2019 HY2020 HY2021 -1% -2% 0% 1% 2% 3% 4% 5% Working capital normalizing following H1 2020 * Alternative Performance Measures (APM), refer to the ‘2021 Half Year APM’ document Operating Net Working Capital (CHF million) In % of Revenue Operating net working capital* in % of LTM revenue 3.5% 2.9% (0.1% ) (0.2% ) 196 233 (4) (12) Negative Operating Net Working Capital in Half Year 2021 driven by: ■ EVA performance management ■ Centralized cash collection ■ Centralized in-country billing projects HIGHLIGHTS FINANCIAL REVIEW CASH FLOW BUSINESS REVIEW OUTLOOK QA APPENDIX 19 © SGS SA 2021 all rights reserved. Half year results presentation 19 July 2021
  • 22. 0 25 50 75 100 125 150 175 200 HY2018 HY2019 HY2020 HY2021 5% 4% 3% 2% 1% 0% Accelerating our investment in strategic priority areas Capex in % of revenue Capital expenditure by business Capital Expenditure (Capex) In % of Revenue (CHF million) 144 108 150 130 4.4% 3.9% 4.1% 4.8% CHF 150 MIO 2% Kn 17% HN 29% IE 28% CP 24% NR HIGHLIGHTS FINANCIAL REVIEW CASH FLOW BUSINESS REVIEW OUTLOOK QA APPENDIX 20 © SGS SA 2021 all rights reserved. Half year results presentation 19 July 2021
  • 23. * Alternative Performance Measures (APM), refer to the ‘2021 Half Year APM’ document 1. Constant currency (CCY) – Definition in APM 2. Percentage points ■ Revenue increased by 17.9%1 of which 12.4% organic* ■ Increase in Adjusted Operating Income* of 40.6%1 ■ Increase in Adjusted Operating Income Margin* to 14.8% (+2.4 pp1,2 ) ■ Profit for the period increased by 63.8% to CHF 290 million ■ Capital Investment of CHF 150 million ■ Free cash flow of CHF 93 million ■ Return on Invested Capital* of 17.8% H1 2021 Financial summary HIGHLIGHTS FINANCIAL REVIEW FINANCIAL SUMMARY BUSINESS REVIEW OUTLOOK QA APPENDIX 21 © SGS SA 2021 all rights reserved. Half year results presentation 19 July 2021
  • 24. DIVISIONAL REVIEW HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK QA APPENDIX
  • 25. Overview ■ Organic growth of 13.3% supported by post-pandemic recovery and investment in Connectivity ■ Excellent performance in all Connectivity activities ■ Solid growth in Softlines from retailers and brands ■ Full recovery from Hardlines in Hardgoods and Toys. Improving market conditions for Auto Laboratories ■ Trade Facilitation services benefiting from eCustoms services in Europe following Brexit ■ Strategic milestone acquisition of Brightsight cybersecurity evaluation laboratory Outlook ■ Growth expected to continue in H2 ■ Connectivity to be the major growth driver benefiting from new capabilities and capacity. Newly acquired Brightsight to make a positive impact ■ Solid activity level expected to continue in Softlines from retailers and brands, but lower PPE volumes ■ Hardgoods remains the growth driver of Hardlines, while Auto Laboratories should improve ■ Solid growth expected from eCustoms solutions and improvement of PCA volumes in Trade Facilitation services Leveraging our long-term strategic investment Connectivity Products (CP) (CHF million) June 2021 June 20202 Change in % June 2020 CCY1 Change in CCY %1 REVENUE 618 547 13.0 543 13.8 ADJUSTED OPERATING INCOME* 142 116 22.4 116 22.4 MARGIN %* 23.0 21.2 21.4 * Alternative Performance Measures (APM), refer to the ‘2021 Half Year APM’ document 1. Constant currency (CCY) – Definition in APM – 2. See note 2 on Segment information restatement of the HY 2021 Press Release 23 HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK QA APPENDIX Half year results presentation 19 July 2021 © SGS SA 2021 all rights reserved.
  • 26. Overview ■ Organic growth at 20.9% with double-digit growth in all SBUs and all geographies ■ Food growth was driven by new regulations and an expanded client base ■ Health Science grew well above the divisional average boosted by Covid-19 vaccines ■ Cosmetics Hygiene grew in line with the organic divisional average benefiting from a strong rebound in activity Outlook ■ Strong performance to continue in H2 ■ Covid-19 rebound to continue but growth to ease versus strong Q4 comparatives ■ Health Science and Food to lead the growth supported by outsourcing and regulations ■ Momentum to continue in Cosmetics Hygiene led by strong demand in the USA ■ Continued integration of acquired companies and a solid pipeline of potential targets A very strong performance across the global portfolio Health Nutrition (HN) (CHF million) June 2021 June 20202 Change in % June 2020 CCY1 Change in CCY %1 REVENUE 414 306 35.3 306 35.3 ADJUSTED OPERATING INCOME* 64 33 93.9 33 93.9 MARGIN %* 15.5 10.8 10.8 * Alternative Performance Measures (APM), refer to the ‘2021 Half Year APM’ document 1. Constant currency (CCY) – Definition in APM – 2. See note 2 on Segment information restatement of the HY 2021 Press Release 24 HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK QA APPENDIX Half year results presentation 19 July 2021 © SGS SA 2021 all rights reserved.
  • 27. Overview ■ Organic growth of 10.0% driven by a strong rebound across Europe, Asia and Latin America ■ Field services and Inspection growth was above divisional average supported by renewables projects  ■ Industrial and Public Health and Safety outperformed, fueled by the industrial safety laboratory network ■ Technical Assessment and Advisory benefited from a good volume of projects and a strong performance from recently acquired Ryobi Geotechnique Outlook ■ Acceleration of energy transition and infrastructure improvement trends will foster growth ■ Some recovery expected in existing OG related services due to a favorable oil price and increasing demand ■ Strong focus on scalable bolt-on acquisitions ■ Synlab AS integration on track delivering operational synergies and the expansion of Hub and Spoke model Growth accelerated through H1 Industries Environment (IE) (CHF million) June 2021 June 20202 Change in % June 2020 CCY1 Change in CCY %1 REVENUE 1 033 859 20.3 852 21.2 ADJUSTED OPERATING INCOME* 99 55 80.0 55 80.0 MARGIN %* 9.6 6.4 6.5 * Alternative Performance Measures (APM), refer to the ‘2021 Half Year APM’ document 1. Constant currency (CCY) – Definition in APM – 2. See note 2 on Segment information restatement of the HY 2021 Press Release 25 HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK QA APPENDIX Half year results presentation 19 July 2021 © SGS SA 2021 all rights reserved.
  • 28. Overview ■ Natural Resources grew by 5.8% organically ■ Trade Inspection grew moderately ■ High single-digit growth in Minerals commodities offset the impact from lower oil demand and poor crop season in most European countries ■ Double-digit growth in Laboratory testing boosted by surge in exploration sample volumes ■ Metallurgy and Consulting benefited from 2020 project delays Outlook ■ Mineral commodities to maintain momentum ■ Improving crop season for AGRI commodities ■ OGC Commodities volumes dependent on recovery ■ Strong activity to continue in commercial and onsite laboratory testing ■ Solid pipeline for Metallurgy and Consulting ■ Launch of Smart Warehouse, a digital solution for cargo condition monitoring Strong momentum in Minerals partially offset by OG and AGRI Natural Resources (NR) (CHF million) June 2021 June 20202 Change in % June 2020 CCY1 Change in CCY %1 REVENUE 716 689 3.9 676 5.9 ADJUSTED OPERATING INCOME* 90 100 (10.0) 95 (5.3) MARGIN %* 12.6 14.5 14.1 * Alternative Performance Measures (APM), refer to the ‘2021 Half Year APM’ document 1. Constant currency (CCY) – Definition in APM – 2. See note 2 on Segment information restatement of the HY 2021 Press Release 26 HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK QA APPENDIX Half year results presentation 19 July 2021 © SGS SA 2021 all rights reserved.
  • 29. Overview ■ Knowledge organic growth at 26.2% with excellent performance in Certification across geographies ■ Management System Certification grew above divisional level, driven by postponed work, recertification and increased demand for Food and Information Security Certification ■ Consulting and Training grew below the divisional average due to slower market recovery Outlook ■ Growth to moderate in H2 as the benefit from the post- lockdown Audit catch-up is completed ■ ESG Assurance Solutions and Supplier Risk Management services to generate new revenue streams ■ Continued roll-out of CertIQ, the new Knowledge Certification platform, which will further digitalize our audit data and drive efficiencies An excellent performance in Certification Knowledge (Kn) (CHF million) June 2021 June 20202 Change in % June 2020 CCY1 Change in CCY %1 REVENUE 313 249 25.7 248 26.2 ADJUSTED OPERATING INCOME* 62 26 138.5 26 138.5 MARGIN %* 19.8 10.4 10.5 * Alternative Performance Measures (APM), refer to the ‘2021 Half Year APM’ document 1. Constant currency (CCY) – Definition in APM – 2. See note 2 on Segment information restatement of the HY 2021 Press Release 27 HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK QA APPENDIX Half year results presentation 19 July 2021 © SGS SA 2021 all rights reserved.
  • 30. OUTLOOK HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK QA APPENDIX
  • 31. ■ Solid organic* growth normalizing for the impact of Covid-19 ■ Improving the adjusted operating income margin* ■ Strong cash conversion ■ Maintaining best-in-class organic return on invested capital* ■ Accelerating investment into our strategic focus areas with MA as a key enabler ■ At least maintaining or growing the dividend Guidance 2021 * Alternative Performance Measures (APM), refer to the ‘2021 Half Year APM’ document HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK QA APPENDIX 29 Half year results presentation 19 July 2021 © SGS SA 2021 all rights reserved.
  • 32. Mid-term targets 2020-2023 PLANET PERFORMANCE PEOPLE Reducing our CO2 emissions Support the transition to a low-carbon world by meeting our Science-based Target of reducing our CO2 emissions per revenue by 35%¹ High single-digit constant currency revenue CAGR Driven by mid-single-digit organic growth p.a. and a focus on MA Ensuring Diversity Nurture diversity and inclusion based on merit by ensuring equal opportunity to all employees and evolving our gender diversity to 30% women in leadership at CEO-3 positions and above Sustainability Solutions Support our customers on their journey to sustainability by increasing the proportion of revenue generated by our sustainability solutions to above 50% 10% Adjusted Operating Income CAGR World Class Service (WCS) Promote a culture of operational safety, efficiency and excellence through our WCS program: 20% of our WCS labs (2020 perimeter) reaching WCS Bronze award level Integrity Principles Reduce the impact that our supply chain has on society by achieving 100% of our strategic suppliers trained on our integrity principles Strong EVA discipline Supporting personal development Support the personal development of our employees by increasing the completion rate of job-related training by 10%² Energy Efficiency Increasing annually the number of energy efficiency measures in our 100 most energy intensive owned buildings Maintain or grow the Dividend Per Share Positive impact on communities Increase by 10%² our positive impact on our communities through employee volunteering, focusing on vulnerable groups including those affected by pandemics 1. Against a 2014 baseline 2. Against a 2019 baseline HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK QA APPENDIX 30 Half year results presentation 19 July 2021 © SGS SA 2021 all rights reserved.
  • 33. QA HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK QA APPENDIX
  • 34. TO REGISTER FOR QUESTIONS PRESS * AND 1 ON YOUR TELEPHONE HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK QA APPENDIX
  • 35. APPENDIX HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK QA APPENDIX
  • 36. CAGR Compound Annual Growth Rate CAPEX Capital Expenditure ESG Environmental, Social and Governance EVA Economic Value Added FTE Full Time Equivalent Employees NWC Net Working Capital PCA Product Conformity Assessment PPE Personal Protective Equipment OGC Oil, Gas and Chemicals OG Oil and Gas SBU Strategic Business Unit LTM Last Twelve Months Acronyms and other abbreviations 34 HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK QA APPENDIX Half year results presentation 19 July 2021 © SGS SA 2021 all rights reserved.
  • 37. Long-term shareholder value creation H1 REVENUE CHF BN 2021 | 3.1 2020 | 2.6 2019 | 3.3 2018 | 3.3 2017 | 3.0 H1 RETURN ON INVESTED CAPITAL* % 2021 | 17.8 2020 | 18.7 2019 | 23.7 2018 | 20.8 2017 | 19.4 H1 ADJUSTED OPERATING INCOME* CHF MIO 2021 | 457 2020 | 330 2019 | 489 2018 | 481 2017 | 428 H1 FREE CASH FLOW* CHF MIO 2021 | 93 2020 | 220 2019 | 216 2018 | 176 2017 | 210 H1 NET PROFIT CHF MIO 2021 | 290 2020 | 177 2019 | 399 2018 | 296 2017 | 293 * Alternative Performance Measures (APM), refer to the ‘2021 Half Year APM’ document 35 HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK QA APPENDIX Half year results presentation 19 July 2021 © SGS SA 2021 all rights reserved.
  • 38. 1. Constant currency (CCY) – Definition in APM H1 2021 revenue portfolio A well-balanced portfolio 33.4% IE 20.0% CP 23.1% NR 13.4% HN 10.1% Kn Change1 0.8% 1.7% 0.9% Change1 (2.7%) (0.7%) 36 HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK QA APPENDIX Half year results presentation 19 July 2021 © SGS SA 2021 all rights reserved.
  • 39. H1 2021 adjusted operating income* portfolio * Alternative Performance Measures (APM), refer to the ‘2021 Half Year APM’ document 1. Constant currency (CCY) – Definition in APM A well-balanced portfolio Change1 Change1 31.1% CP 21.7% IE 19.7% NR 14.0% HN 13.5% Kn 5.5% 3.8% (4.6%) (9.5%) 4.8% 37 HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK QA APPENDIX Half year results presentation 19 July 2021 © SGS SA 2021 all rights reserved.
  • 40. EUR, USD and CNY represent 52% of 2021 revenue H1 2021 foreign currency revenues 27.5% EUR 29.2% OTHER 1.9% RUB 3.0% GBP 15.4% CNY 2.1% KRW 3.4% CAD 2.0% CLP 8.8% USD 2.4% AUD 4.3% TWD 38 HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK QA APPENDIX Half year results presentation 19 July 2021 © SGS SA 2021 all rights reserved.
  • 41. -20% -15% -10% -5% 0% 5% 10% Main currencies’ variation against CHF in H1 2021 Foreign currency average rate change H1 2021 versus H1 2020 rate 1.0943 0.1403 0.9081 0.0324 0.7279 1.2601 0.7002 0.0008 0.0013 0.0122 1.0645 0.1374 0.9664 0.0322 0.7092 1.2192 0.6358 0.0008 0.0012 0.0140 2.8% 2.1% (6.0%) 0.6% 2.6% 3.4% 10.1% 1.4% 6.0% (12.6%) EUR CNY USD TWD CAD GBP AUD KRW CLP RUB June 2021 June 2020 Change 2.8% 2.1% (6.0)% 0.6% 2.6% 3.4% 10.1% 6.0% 1.4% (12.6)% 39 HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK QA APPENDIX Half year results presentation 19 July 2021 © SGS SA 2021 all rights reserved.
  • 42. Investor relations information and events dates 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 INVESTOR AND MEDIA RELATIONS Toby Reeks SGS SA 1 place des Alpes P.O. Box 2152 CH – 1211 Geneva 1 t +41 (0)22 739 99 87 m +41 (0)79 641 83 02 STOCK EXCHANGE TRADING SIX Swiss Exchange COMMON STOCK SYMBOLS Bloomberg: Registered Share: SGSN.SW Reuters: Registered Share: SGSN.S Telekurs: Registered Share: SGSN ISIN: Registered Share: CH0002497458 Swiss security number: 249745 STOCK EXCHANGE LISTING SIX Swiss Exchange, SGSN INVESTOR DAYS November 2022 2021 FULL YEAR RESULTS Thursday, 27 January 2022 ANNUAL GENERAL MEETING OF SHAREHOLDERS Tuesday, 29 March 2022 Geneva, Switzerland 40 HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK QA APPENDIX Half year results presentation 19 July 2021 © SGS SA 2021 all rights reserved.
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  • 44. www.sgs.com SGS is a registered trademark of SGS Société Générale de Surveillance SA