SGS (SGSN) H1 2024 earnings summary

Executive summary

• Achieved strong H1 2024 results with 8.0% organic growth, stable adjusted operating income margin of 14.1%, and free cash flow up 35% to CHF 155 million, driven by sustainability, digital trust, and successful execution of Strategy 2027 and cost savings initiatives.

• Five bolt-on acquisitions completed or announced, expanding service offerings in key markets and reinforcing market position.

• Recognized as a global leader in sustainability, ranked 6th most sustainable company by TIME, with significant growth in PFAS testing and ESG assurance.

• CEO Géraldine Picaud and CFO Marta Vlatchkova appointed in H1 2024.

Financial highlights

• Net sales reached CHF 3,335 million, up 1.6% year-over-year, with 8.0% organic growth and a negative Forex impact of 5.8%.

• Adjusted operating income was CHF 471 million, with a 14.1% margin, stable year-over-year.

• Free cash flow increased 34.8% to CHF 155 million, driven by lower net working capital and disciplined CapEx.

• EPS before restructuring costs was CHF 1.58, up from CHF 1.53 in H1 2023; reported EPS was CHF 1.44.

• Net profit attributable to Group shareholders was CHF 267 million, down CHF 5 million year-over-year.

Outlook and guidance

• Full-year 2024 guidance reaffirmed: mid- to high-single-digit organic growth, improved AOI margin, strong free cash flow, and continued M&A activity.

• Strategy 2027 targets: 5–7% annual organic growth, at least 1.5 percentage point margin improvement, and cash conversion above 50% by 2027.

• CHF 100 million cost savings plan on track, with full effect expected by end of 2025.

• No impact expected from delayed PFAS regulation enforcement; strong demand continues in North America and Europe.