SGS: A Strong Start to the Next Stage of Our Strategic Evolution Donnerstag, 27. Mai 2021 - 06:53

%7B6a472b83-787b-43ea-a5b9-2ba7b9fbcb72%7D_Transparent.gif

%7Bc0f22dc0-79c9-4ded-9f7a-b1428e2d0d83%7D_CORP_GLO_EN_2105_392711_NEXTSTAGEOFOURSTRATEGICEVOLUTION_A.png

A STRONG START TO THE NEXT STAGE OF OUR STRATEGIC EVOLUTION

"Today we communicate the next phase of our strategic evolution, which further aligns SGS to customer demand and the key TIC megatrends of Connectivity, Nutrition, Health & Wellness, Sustainability & Climate, Infrastructure and Consumer Empowerment. It also further integrates our non-financial and financial objectives.

"This next strategic step has been developed in close collaboration with our global network and has already been successfully implemented. As a result, we expect to grow our revenues at a high-single digit compound annual growth rate (CAGR) and our AOI at a CAGR of over 10% for the planning period (2020-23) in constant currency. Furthermore, I would like to thank all our colleagues for delivering a strong start to 2021 and the plan, which sets us firmly on the path of enabling a better, safer and more interconnected world for all our stakeholders," said Frankie Ng, Chief Executive Officer of SGS.

Our Investor Days and How We Measure Our Success

Our virtual Investor Days will focus on the next stage in our strategic evolution. During the event, Frankie Ng, our CEO, and Dominik de Daniel, our CFO, will present the Group strategic roadmap to 2023 and beyond. Members of our Operations Council and SGS management will also present the divisional building blocks that support the delivery of our 2023 ambitions, which include ambitious financial and non-financial targets for the next three years:

%7B8bf47cf6-b861-41c9-a030-a2f76e5f6afa%7D_CORP_GLO_EN_2105_392711_NEXTSTAGEOFOURSTRATEGICEVOLUTION_B.png

PLANET

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%*

Sustainability Solutions

Support our customers on their journey to sustainability by increasing the proportion of revenue generated by our sustainability solutions to above 50%

Integrity Principles

Reduce the impact that our supply chain has on society by achieving 100% of our strategic suppliers trained on our integrity principles

Energy Efficiency

Increasing annually the number of energy efficiency measures in our 100 most energy intensive owned buildings

%7B39966e16-e8a6-489a-bf5a-f39bf58b9d88%7D_CORP_GLO_EN_2105_392711_NEXTSTAGEOFOURSTRATEGICEVOLUTION_C.png

PERFORMANCE

High-single digit constant currency revenue GAGR

Driven by mid-single digit organic growth p.a. and a focus on M&A

> 10% Adjusted Operating Income CAGR

Strong EVA discipline

Maintain or grow the DPS

%7B8085523f-aa25-4b79-9e1e-f6c2a119761e%7D_CORP_GLO_EN_2105_392711_NEXTSTAGEOFOURSTRATEGICEVOLUTION_D.png

PEOPLE

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

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

Supporting personal development

Support the personal development of our employees by increasing the completion rate of job-related training by 10%**

Positive impact on communities

Increase by 10%** our positive impact on our communities through employee volunteering, focusing on vulnerable groups including those affected by pandemics

*Against a 2014 baseline, ** Against a 2019 baseline

Current Trading

The hard work, commitment and entrepreneurism of our employees, in what remains a challenging environment, supported by our focused capital allocation policy has resulted in a strong start to 2021.

Our January-April revenue growth in constant currency was 15%, which comprises organic growth of 10% and 5% from acquisitions. Compared to 2019, on an organic basis, revenues were flat. From a divisional perspective, Knowledge, Health & Nutrition and Connectivity & Products have all shown a very strong organic performance, above the Group average. Industry & Environment grew organically in high single digits and Natural Resources at a low single digit. From a regional perspective, all regions returned to organic growth over the period.

We are pleased with our constant currency Adjusted Operating Income (AOI) performance, which, as expected, is materially ahead of the prior year. Profitability has also increased compared to the comparable period in 2019 reflecting the structural optimization measures taken.

FY 2021 Outlook Remains Unchanged

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
Accelerate investment into our strategic focus areas with M&A as a key enabler
At least maintain or grow the dividend

The Format and Agenda of the Investor Days

SGS is hosting its virtual investor day today, May 27, and a 'speed-dating' event on May 28 for analysts and investors to get to know our senior management team.

AGENDA AND EVENT INFORMATION

FOR FURTHER INFORMATION, PLEASE CONTACT:

Toby Reeks

SVP Corporate Communication, Sustainability & Investor Relations

t: +41 79 641 83 02

SGS is the world's leading inspection, verification, testing and certification company. SGS is recognized as the global benchmark for quality and integrity. With more than 89,000 employees, SGS operates a network of over 2,600 offices and laboratories around the world.

+41 22 739 91 11
Contact Us
SGS SA, 1 Place des Alpes, P.O. Box 2152, 1211 Geneva 1, Switzerland
www.sgs.com