Organic revenue growth of 4.0% at constant currency Operating income (1) margin in line with prior year at 15.0% (constant currency)

Transcription

1

2 Not updated

3 HIGHLIGHTS & OUTLOOK 1st semester 2014 results Total revenue growth of 5.3% to CHF 2.8 billion (constant currency) -1.8% (reported basis) Organic revenue growth of 4.0% at constant currency Operating income (1) margin in line with prior year at 15.0% (constant currency) Restructuring expense net of tax CHF 8 million Operating cash inflow of CHF 260 million Outlook 2014 at constant currency Solid revenue growth around 6% Improvement in margin year-on-year 1) Before amortisation of acquisition intangibles, restructuring, transaction and integration-related costs 3

4 Financial community 17 January 4

5 FINANCIAL HIGHLIGHTS CHF million 2014 Pro-forma (2) Revenue 2,805 2,663 2,857 Change in % 5.3 % (1.8)% Adjusted Operating Income (1) Change in % 4.9 % (4.2)% Adjusted Operating Income Margin (1) 15.0 % 15.0 % 15.4 % Operating Income (EBIT) Change in % 6.1 % (3.4)% Adjusted Net Income (1) Change in % 5.4 % (4.5)% Net Income Change in % 6.3 % (3.8)% Adjusted Basic EPS (1) (CHF) Basic EPS (CHF) ) Before amortisation of acquisition intangibles, restructuring, transaction and integration-related costs 2) Constant currency basis 5

6 SERVICE PORTFOLIO REVENUE ENVI 5.4% AUTO 5.3% GIS 4.4% AGRI 6.4% MIN 12.2% ADJUSTED OPERATING INCOME (1) ENVI 2.9% AUTO 7.2% GIS 7.0% AGRI 6.4% MIN 11.4% IND 16.8% SSC 6.9% OGC 20.6% IND 12.1% SSC 7.2% LIFE 2.1% OGC 16.0% CTS 18.2% LIFE 3.8% CTS 27.7% REVENUE REGION ASIA PACIFIC 29.0% EUROPE / AFRICA / MIDDLE EAST 47.0% AMERICAS 24.0% 1) Before amortisation of acquisition intangibles, restructuring, transaction and integration-related costs 6

7 FINANCIAL HIGHLIGHTS REVENUE ANALYSIS Not updated 7

8 REVENUE GROWTH COMPOSITION 4.0% 1.3% 0.0% (7.1)% (1.8)% (194) Constant currency growth: 5.3% 2,857 2,805 Revenues 13 Organic Acquisitions Disposals Currency impact Revenues 14 8

9 LOCAL CURRENCY GROWTH BY BUSINESS AGRI 8.1% 8.1% MIN (7.6)% 1.6% (6.0)% OGC 8.9% 8.9% LIFE 7.9% 7.9% CTS 6.8% 0.5% 7.3% SSC 4.4% 1.3% 5.7% IND 3.3% 5.0% 8.3% ENVI (0.1)% 2.2% 2.1% AUTO 4.5% 0.8% 5.3% GIS 2.9% 2.9% TOTAL 4.0% 1.3% 5.3% Organic Acquisition Disposal 9

10 REVENUE GROWTH AND HEADCOUNT CHANGE BY REGION Δ in EOP headcount 2014 Δ Group Headcount 83,592 80,233 3,359 Europe / Africa & Middle East 2.4% 1.1% 3.5% Organic Business Growth 3,023 Acquisitions 336 Americas 5.2% 2.0% 7.2% Disposals - Increase in Group Headcount 3,359 Asia / Pacific 5.5% 1.4% 6.9% By Region Headcount Δ Headcount Δ% Revenues Δ% Europe / Africa / Middle East 1, % 3.5 % TOTAL GROUP 4.0% 1.3% 5.3% Americas % 7.2 % Organic Acquisition Disposal Asia / Pacific 1, % 6.9 % TOTAL 3, % 5.3% 10

11 FINANCIAL HIGHLIGHTS OPERATING INCOME ANALYSIS Not updated 11

12 ADJUSTED OPERATING INCOME (1) GROWTH 3.5% 1.4% 0.0% (9.1)% (4.2)% 6 14 (39) Constant currency growth: 4.9% Op. Income 13 Organic Acquisitions Disposals Currency impact Op. Income 14 1) Before amortisation of acquisition intangibles, restructuring, transaction and integration-related costs 12

13 AGRI MIN OGC LIFE CTS SSC IND ENV AUTO GIS 13.5% 15.3% 12.2% 14.4% 22.7% 16.5% 10.0% 8.1% 21.4% 23.0% 8.4% 8.0% 11.6% 10.8% 14.9% 14.1% 15.7% 20.5% 22.7% 23.8% ADJUSTED OPERATING MARGIN (1) BY BUSINESS 25.0% 20.0% 15.0% 10.0% 5.0% ) Before amortisation of acquisition intangibles, restructuring, transaction and integration-related costs 13

14 CASH FLOW CHF million Jun 14 Jun 13 PROFIT FOR THE PERIOD Depreciation, amortisation and impairment Share based payments 7 8 Tax Other Non-cash items (Increase)/decrease in working capital (180) (139) Taxes paid (97) (108) OPERATING CASH FLOW Purchase of land, building, equipment and other assets (130) (170) Sales of land, building, equipment an other intang. assets 7 7 Acquisition of businesses (17) (68) Other from investing activities 1 11 CASH FLOW FROM INVESTING ACTIVITIES (139) (220) Dividend paid to equity holders of SGS SA (499) (444) Dividend paid to non-controlling interests (2) (2) Net cash received/(paid) on treasury shares Interest paid (28) (26) Net flows on interest rate swaps 5 5 Increase/(decrease) in borrowings CASH FLOW FROM FINANCING ACTIVITIES (134) (434) Currency translations (5) 5 (DECREASE) IN CASH AND CASH EQUIVALENTS (18) (333) 14

15 CAPITAL EXPENDITURE CAPEX REGION CAPEX BUSINESS ENVI 6.9% AUTO GIS 5.4% 1.5% AGRI 6.2% MIN 10.8% ASIA PACIFIC 35.4% EUROPE / AFRICA / MIDDLE EAST 42.3% IND 10.8% SSC 1.5% OGC 20.0% AMERICAS 22.3% CTS 32.3% LIFE 4.6% ANNUAL CAPEX CHF million Capital Expenditure Depreciation & amortisation 15

16 FOREIGN CURRENCY REVENUES H CLP 2.3% TWD 3.0% Other 27.2% GBP 3.2% BRL 3.3% CAD 3.4% AUD 4.8% CNY 10.4% EUR 28.7% USD 13.7% AVERAGE RATES 2014 Change EUR (0.7)% USD (4.9)% CNY (4.5)% AUD (14.4)% CAD (11.9)% BRL (15.9)% GBP % TWD (6.6)% CLP (17.7)% HKD (4.9)% 16

17 FOREIGN CURRENCY SENSITIVITY ANALYSIS EURO Revenues (14) 0 19 Income (2) 0 2 USD Revenues (18) 0 26 Income (1) 0 2 CNY Revenues (29) 0 31 Income (8)

18 BUSINESS OVERVIEW BUSINESS OVERVIEW Not updated 18

19 AGRICULTURAL SERVICES (AGRI) CHF million 2014 Pro-forma 2 Revenue Change in % Adj. Operating Inc. (1) Change in % Margin % (1) Before amortisation of acquisition intangibles, restructuring, transaction and integration- related costs (2) Constant currency basis Overview H Strong organic growth from Trade inspection and Laboratory activities due to favorable export programs for cereals and oilseeds. North America continues to benefit from grain market deregulation and successful cost saving initiatives. Slower start to the year for Seed and Crop in North America and Australia, while Brazil and Africa continue to deliver double digit growth acquisitions Gravena and Warecare continue to perform well. Outlook 2014 Seasonal market forecasts for 2014/15 show a slight decline in global grain exports. No material impact expected in H2. Recent investments in lab capabilities in Central and Eastern Europe to come online in H2. New services around precision farming and agronomy to ramp up in coming months. Further expansion and diversification of our farm verification services. 19

20 MINERALS SERVICES (MIN) CHF million 2014 Pro-forma 2 Revenue Change in % (6.0) (16.8) Adj. Operating Inc. (1) Change in % (12.9) (23.7) Margin % (1) Before amortisation of acquisition intangibles, restructuring, transaction and integration- related costs (2) Constant currency basis Overview H Revenues declined as challenging market conditions continued throughout the semester. Geochem and Metallurgy sample volumes remained at low levels. Additional restructuring undertaken to rationalise capacity and increase operational efficiency. Increased market share for Outsourced laboratories and Trade inspections. 7 outsourced laboratories commenced in H Time Mining acquisition fully integrated with a healthy pipeline of projects. Outlook 2014 Market expected to remain difficult due to low exploration spending. Capacity and network adjustments undertaken in H1 to help address pressure on margins. Stable growth in Coal and non-ferrous trade inspection volumes. 5 new onsite laboratories expected in H Continued focus on productivity, efficiency and cost control. 20

21 OIL, GAS & CHEMICALS SERVICES (OGC) CHF million 2014 Pro-forma 2 Revenue Change in % Adj. Operating Inc. (1) Change in % 6.7 (1.3) Margin % (1) Before amortisation of acquisition intangibles, restructuring, transaction and integration- related costs (2) Constant currency basis Overview H Very strong growth in Upstream Services with new assets deployed in Australia and Middle East and contract wins in Middle East and Mexico. Outstanding growth in Laboratory Outsourcing with projects executed in Spain, UK and India. Trade related growth impacted by soft petroleum markets in Europe and constantly changing trading pattern, but successful offset by new contract wins. Plant and Terminal Operations benefitted from changes in logistics infrastructure in the USA (crude transportation by rail). Outlook 2014 Continued growth in Upstream Services from new assets deployed coming on line. Completion of laboratory commissioning projects and new outsourcing contract wins. Plant and Terminal Operations geographical expansion into China and additional opportunities from new terminals built in the USA and Canada. Trade Related services delivering steady but modest growth. 21

22 LIFE SCIENCE SERVICES (LIFE) CHF million 2014 Pro-forma 2 Revenue Change in % Adj. Operating Inc. (1) Change in % (35.7) (38.8) Margin % (1) Before amortisation of acquisition intangibles, restructuring, transaction and integration- related costs (2) Constant currency basis Overview H Adjusted for the winding-down of the Paris clinical activities, organic revenue growth reached 10%. Slow start in Laboratory services due to contract delays in Biologics. Continued high growth in India and China. Good start to the year in Clinical Research driven by the Antwerp clinical unit. Margins negatively impacted by general pricing pressures in Clinical Research and project delays in Biologics. Outlook 2014 Laboratory growth and margin to improve due to significant new business opportunities following investments made in and global key account management activities. Operational excellence initiatives implemented to further drive margin improvement. Clinical Research to continue delivering profitable growth in a very competitive environment. 22

23 CONSUMER TESTING SERVICES (CTS) CHF million 2014 Pro-forma 2 Revenue Change in % Adj. Operating Inc. (1) Change in % Margin % (1) Before amortisation of acquisition intangibles, restructuring, transaction and integration- related costs (2) Constant currency basis Overview H Overall resilient growth despite difficult market conditions. Achieved high double digit growth in Wireless / Mobile Devices and Automotive Parts testing, especially in Asia and North America. Lower growth with the retail sector as clients attempt to optimize their testing spend due to the prolonged challenging economic environment. Good momentum in food testing driven by Asian domestic and export markets. Completed two acquisitions in Electrical & Electronics to extend our global footprint. Outlook 2014 Solid growth in Electrical & Electronics (E&E) and Automotive related activities. Expect challenging market conditions to continue for Softlines and Toys & Juvenile Products. Investments planned to enhance capabilities and expand geographical coverage in South East Asia to align with changing supply chain patterns. 23

24 SYSTEMS & SERVICES CERTIFICATION (SSC) CHF million 2014 Pro-forma 2 Revenue Change in % 5.7 (0.3) Adj. Operating Inc. (1) Change in % 2.4 (5.0) Margin % (1) Before amortisation of acquisition intangibles, restructuring, transaction and integration- related costs (2) Constant currency basis Overview H Overall performance negatively impacted by Western Europe where business conditions remain difficult but compensated by strong double digit growth in Eastern Europe, Middle East, Africa and Asia Pacific regions. Performance Assessment and training both showing double digit growth. Successful roll out of web-based Learning Management System in eight countries. Hart aviation services gradually rolled out in particular in South America. Outlook 2014 Market conditions are expected to remain unchanged during H Growth in food to strengthen following the introduction of new services in areas such as allergens and food fraud prevention. Large contracts gained during H1 with the Automotive and Hospitality industries to bring additional growth. Learning System to be rolled out in more countries. 24

25 INDUSTRIAL SERVICES (IND) CHF million 2014 Pro-forma 2 Revenue Change in % Adj. Operating Inc. (1) Change in % Margin % (1) Before amortisation of acquisition intangibles, restructuring, transaction and integration- related costs (2) Constant currency basis Overview H Organic revenue growth of 3.3% impacted by continued soft market conditions in Europe and revenue streams terminated as part of the restructuring. Double-digit organic growth achieved outside Europe, especially in South America and Asia. Good growth in the USA partly offset by timing of large projects in Mexico. Margin improvement from restructuring in and strong performance in China and South America. Acquisitions concluded in all performed in line with expectations. Outlook 2014 Situation in Europe expected to remain difficult and the structure will be continuously adjusted to current market demand. Continued growth expected from Oil & Gas segment mainly in North America and Asia Pacific. Focus remains on developing testing activities either through green field development or acquisitions. 25

26 ENVIRONMENTAL SERVICES (ENVI) CHF million 2014 Pro-forma 2 Revenue Change in % 2.1 (4.6) Adj. Operating Inc. (1) Change in % 8.0 (5.4) Margin % (1) Before amortisation of acquisition intangibles, restructuring, transaction and integration- related costs (2) Constant currency basis Overview H Overall growth impacted by mining sector slowdown especially in Australia, Africa and Canada. Collapse of carbon market in China and India. Strong growth and improved margins in Europe as a result of restructuring, laboratory network optimization and successful acquisition of MIS UK. High performance in South America (air monitoring activities) and USA (shale gas and dioxin testing). Global contract wins in Health & Safety and Sustainability secured thanks to unequalled geographical network. Outlook 2014 Europe and South America expected to continue delivering at higher margins following recent restructuring and new global contracts. Negative impact of mining sector expected to continue affecting growth. Decision to withdraw from CDM market (carbon projects) expected to deliver margin improvement. Continued global key account approach expected to accelerate growth with strong H2 execution. 26

27 AUTOMOTIVE SERVICES (AUTO) CHF million 2014 Pro-forma 2 Revenue Change in % 5.3 (5.4) Adj. Operating Inc. (1) Change in % (1.0) (9.3) Margin % (1) Before amortisation of acquisition intangibles, restructuring, transaction and integration- related costs (2) Constant currency basis Overview H Statutory inspection business provided solid results in Europe, Africa, North America and South America. New York statutory program ended in December negatively impacting organic growth and margin. New statutory vehicle inspection operations established in Ecuador and Mauritius. Expanded our laboratory testing capabilities through the acquisition of ATE and CAS in the USA. Commercial inspection volumes remaining stable. Outlook 2014 Overall statutory inspection activities will continue to provide solid results. Statutory vehicle inspections margin expected to be impacted by the liberalisation in Canary Islands. Chile statutory inspection program expected to end by December Acquisition strategy will focus on enhancing capabilities & footprint for engine & vehicle testing. 27

28 GOVERNMENTS AND INSTITUTIONS SERVICES (GIS) CHF million 2014 Pro-forma 2 Revenue Change in % 2.9 (7.2) Adj. Operating Inc. (1) Change in % 16.7 (4.2) Margin % (1) Before amortisation of acquisition intangibles, restructuring, transaction and integration- related costs (2) Constant currency basis Overview H Strong growth in Local Solutions however fully offset by the expected termination of two major contracts (PSI Angola and Scanning Nigeria). Excellent TradeNet growth in Ghana, Mozambique. 2 new PCA (Burundi, Rwanda) and 2 new selective PCA in Indonesia (cosmetics & wheat flour). Strong growth of TransitNet thanks to business recognition and new routes in the Balkans. PSI Mauritania and Burundi discontinued Q but Burundi replaced by a PCA contract. SGS Omnis: New tracking service initiated in Ghana. Outlook 2014 PSI likely to further decline (WCO/WTO guidance). TradeNet: Increase in volume anticipated in Madagascar following return to political stability. Continued growth expected in Ghana, Mozambique. PCA will remain a key driver of top line growth. TransitNet: Additional routes expected to be opened in Eastern Europe in H2. Strong pipeline of new mandates for Scanning, SGS Layer4 (Telecom) and SGS Omnis (Tracking). 28

29 SGS SA ALL RIGHTS RESERVED. 29

30 SGS SA ALL RIGHTS RESERVED. 30