SGS Geological Services · SIX:SGSN
SGS Geological Services — SGS — FY2024 Earnings Presentation
36 slides from SGS Geological Services's earnings presentation, Feb 11, 2025
Slide 1: SGS delivers excellent 2024 results
SGS delivers excellent 2024 results Géraldine Picaud CEO Marta Vlatchkova CFO Soil Collection and Analysis, Portugal 11 February 2025
Slide 2: 2024 business highlights
HIGHLY CONFIDENTIAL 2024 business highlights Géraldine Picaud CEO 2 Clinical and Biomedical Testing, Belgium
Slide 3: 2024 business highlights: Excellent 2024 results
2024 business highlights Excellent 2024 results Strong financial performance Record sales of CHF 6 794 million, +2.6% compared to 2023 Strong organic sales growth of 7.5% Excellent progression in adjusted operating income margin, up 60 basis points (bps) to 15.3% of sales Outstanding free cash flow
Slide 4: Delivering Strategy 27 at full speed
2024 business highlights Delivering Strategy 27 at full speed Growth People, performance & agility Strong financial & ESG profile SGS is back to growth on Accountability and performance AOI margin on track to reach at reported terms culture implemented least 16.2% by 2027 (+150 bps improvement versu
Slide 5: 2024, a year of strong progress
Strategy 27: Accelerating growth, building trust 2024, a year of strong progress Capital Markets Q1 Q2 / H1 Q3 Event Q4 / FY 2024 New Executive Senior Global New sustainability incentives Committee Leadership PFAS campaign offering scheme streamlined Meeting IMPACT NOW Cost savings CHF 100 million p
Slide 6: Eleven acquisitions in 2024, three in early 2025
M&A relaunched Eleven acquisitions in 2024, three in early 2025 Representing total annual sales of CHF 83 million. Average EV/EBITDA 2024 multiple of 7.8x 3 acquisitions in early 2025: • Aster Global • RTI Laboratories • Stella Stronger-than-ever pipeline More to come 6
Slide 7: Growth: Sustainability services
Growth: Sustainability services Close to CHF 100 million in incremental sales in 2024 Sales, CHF million New IMPACT NOW offering to support clients’ sustainability needs 1 000 > CHF 600 million incremental sales Growth above market in 2024, leading to strong progress by 2027 towards the 2027 target:
Slide 8: Growth: Digital Trust services
Growth: Digital Trust services Over CHF 30 million in incremental sales in 2024 Sales, CHF million Significant progress towards the 2027 target, with 22% growth 350 in sales compared to prior year > CHF 200 million incremental sales Growth driven by high assurance cybersecurity evaluations, by 2027
Slide 9: Testing & Inspection: Industries & Environment
Testing & Inspection: Industries & Environment Strong performance fueled by Sustainability CHF million 2023 2024 Sales 2 190 2 261 I&E Total change 3.2% of which organic 8.3% of which scope -0.2% 33% of which FX -4.9% Adjusted operating income 248 287 of Group Adjusted operating income margin 11.3%
Slide 10: Testing & Inspection: Natural Resources
Testing & Inspection: Natural Resources A solid year driven by analytical testing CHF million 2023 2024 Sales 1 583 1 612 NR Total change 1.8% of which organic 7.6% of which scope 0.0% 24% of which FX -5.8% Adjusted operating income 228 238 of Group Adjusted operating income margin 14.4% 14.8% sales
Slide 11: Testing & Inspection: Connectivity & Products
Testing & Inspection: Connectivity & Products Positive momentum across all segments CHF million 2023 2024 Sales 1 246 1 282 C&P Total change 2.9% of which organic 8.2% of which scope -0.7% 19% of which FX -4.6% Adjusted operating income 262 268 of Group Adjusted operating income margin 21.0% 20.9% s
Slide 12: Testing & Inspection: Health & Nutrition
Testing & Inspection: Health & Nutrition Strong performance driven by Food CHF million 2023 2024 Sales 857 878 H&N Total change 2.5% of which organic 5.2% of which scope 0.9% 13% of which FX -3.6% Adjusted operating income 80 94 of Group Adjusted operating income margin 9.3% 10.7% sales Double-digit
Slide 13: Certification: Business Assurance
Certification: Business Assurance Organic growth led by Certification and ESG CHF million 2023 2024 Sales 746 761 BA Total change 2.0% of which organic 6.2% of which scope 0.0% 11% of which FX -4.2% Adjusted operating income 153 153 of Group Adjusted operating income margin 20.5% 20.1% sales Double-
Slide 14: 2024 financial performance
HIGHLY CONFIDENTIAL 2024 financial performance Marta Vlatchkova CFO 14 Food Testing & Analysis, Philippines
Slide 15: Full year 2024 financial performance
Financial KPIs Full year 2024 financial performance Sales Adjusted Operating Income CHF 6 794 million CHF 1 040 million +7.5% organic growth 15.3% margin on sales Reported Earnings Per Share Free Cash Flow CHF 3.10 CHF 748 million +3.3% versus prior year +23.8% versus prior year 15
Slide 16: Strong organic sales growth of 7.5%
2024 sales Strong organic sales growth of 7.5% Sales bridge CHF million +7.5% -0.1% -4.8% +2.6% 6 622 +494 -6 -316 6 794 2023 sales Organic Scope Forex 2024 sales 16
Slide 17: Strong organic sales supported by all operations
2024 performance by division Strong organic sales supported by all operations Sales by region CHF million Testing & Inspection Certification SGS Group 7.6% 6.2% 7.5% 4.4% 5.8% 6 794 1 984 1 991 7.2% 17.2% 14.1% 720 770 761 568 Asia North Latin Eastern Europe, Europe Business Assurance 2024 sales Pac
Slide 18: Excellent progression of 60 basis points to 15.3%
2024 adjusted operating income (AOI) Excellent progression of 60 basis points to 15.3% AOI margin bridge CHF million +60 basis points 14.7% 15.3% +136 +3 -70 971 +90 -30 1 040 basis points basis points 2023 AOI Organic Scope Forex 2024 AOI 18
Slide 19: CHF strong against all major currencies
FX impact CHF strong against all major currencies Currency impact on sales growth Currency impact on adjusted operating income (CHF million) (CHF million) 2024 sales 2024 AOI at constant currency 7 110 at constant currency 1 110 CNY -0.6% CNY EUR -0.5% EUR CLP -0.4% CLP RUB -0.2% RUB TWD -0.2% TWD U
Slide 20: Fast execution of efficiency plans
CHF 150 million efficiency plans Fast execution of efficiency plans 100m 50m CHF CHF Leaner operating model Procurement savings New organization Contracts renegotiation Corporate simplification Consumables harmonization Country structure simplification Indirect spend optimization >90% saving plans i
Slide 21: Earnings per share of CHF 3.10, up 3.3%
Full P&L Earnings per share of CHF 3.10, up 3.3% CHF million 2023 2024 Change Sales 6 622 6 794 172 + 2.6% Adjusted operating income 971 1 040 69 + 7.1% Amortization and impairment of acquired intangibles -73 -30 43 Restructuring -21 -82 -61 Other non-recurring items and transaction costs -20 -24 -4
Slide 22: Outstanding free cash flow of CHF 748 million
Free cash flow review Outstanding free cash flow of CHF 748 million CHF million 2023 2024 Change EBITDA after restructuring 1 402 1 380 -22 Non-cash and non-operating items 19 44 25 Change in net working capital -55 28 83 Taxes paid -243 -228 15 Net Capex -283 -239 44 Lease payments -178 -176 2 Net
Slide 23: Industry-leading ROIC to support additional value generation
Return on Invested Capital (ROIC) Industry-leading ROIC to support additional value generation ROIC 24% 22% 2023 2024 23
Slide 24: Strengthening financial profile
Leverage Strengthening financial profile Leverage Net debt after leases / Adjusted EBITDA 2.0x 1.8x 2.0 1.8 2023 2024 24
Slide 25: Attractive shareholder remuneration
Proposed dividend Attractive shareholder remuneration Proposed dividend Attractive shareholder remuneration through stable dividend of CHF 3.20 Scrip dividend, optional shares or cash, to be proposed at the next Annual General Meeting (26 March 2025) Clinical Studies, USA 25
Slide 26: 2027 ESG targets and 2024 performance
Corporate sustainability 2027 ESG targets and 2024 performance Environment Diversity Education Governance Material progress At least one third 7 million hours of 93% customer towards 28% of leadership training per year satisfaction score 2027 ESG target reduction in positions held by to employees, S
Slide 27: Outlook
HIGHLY CONFIDENTIAL Outlook Géraldine Picaud CEO Solar Panel Inspection, Portugal 27
Slide 28: 2025 outlook
Delivering Strategy 27: Accelerating growth, building trust 2025 outlook 5% to 7% organic sales growth 1% to 2% bolt-on contribution to annual sales growth At least +30 bps improvement in adjusted operating income margin on sales, in reported terms Strong free cash flow generation Water Sampling, Sw
Slide 29: Q&A
Q&A 29
Slide 30: Appendix
Appendix 30
Slide 31: Organic growth led by C&P and H&N in Q4
Q4 2024 sales by end-market Organic growth led by C&P and H&N in Q4 CHF million Sales Organic growth Industries & Environment (I&E) 580 4.7% Natural Resources (NR) 410 6.2% Connectivity & Products (C&P) 332 10.5% Health & Nutrition (H&N) 234 9.2% Business Assurance (BA) 204 3.4% Total 1 760 6.5% 31
Slide 32: Strong organic sales growth of 6.5% in Q4
Sales bridge Q4 2024 Strong organic sales growth of 6.5% in Q4 Sales bridge CHF million +6.5% +0.9% -3.9% +3.5% +15 -67 1 760 1 701 +112 Q4 2023 sales Organic Scope FX Q4 2024 sales 32
Slide 33: Reminder of 2027 targets
Delivering Strategy 27: Accelerating growth, building trust Reminder of 2027 targets Adjusted operating income Free cash flow Sales margin on sales After leases and interests 5% to 7% Significant improvement > 50% organic growth > 150 bps versus 2023 cash conversion Annually By 2027 By 2027 33
Slide 34: Financial calendar
Upcoming events Financial calendar Annual General Meeting Q1 2025 sales update H1 2025 results Geneva Virtual Virtual 26 March 2025 24 April 2025 25 July 2025 Q3 2025 sales update FY 2025 results Virtual Zürich 23 October 2025 11 February 2026 34
Slide 35: sgs.com
sgs.com © SGS Société Générale de Surveillance SA. (2025) All rights reserved.
Slide 36: Disclaimer
SGS 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 f