SGS (SGSN) H1 2025 earnings summary

Executive summary

• Achieved strong H1 2025 results with CHF 3,422 million in sales, 5.3% organic growth, and significant margin improvement, driven by cost efficiencies, strategic execution, and twelve bolt-on acquisitions.

• Confirmed major acquisition of Applied Technical Services (ATS) for USD 1.325 billion, aiming to double North American sales by 2027 and unlock at least USD 30 million in synergies within three years.

• Sustainability and Digital Trust services achieved double-digit growth, confirming their role as key growth engines and supporting the group's leadership in ESG.

• Scrip dividend take-up rate exceeded 63%, redirecting CHF 400 million to growth opportunities.

• Recognized as a global leader in sustainability, ranking top in the TIC industry by TIME and Statista.

Financial highlights

• Sales reached CHF 3,422 million, up 2.6% reported and 5.3% organically year-over-year, with a -4.1% FX impact.

• Adjusted operating income rose to CHF 509 million, margin improved to 14.9% (up 80 bps), and EBITDA reached CHF 728 million.

• Free cash flow (excluding HQ disposal) increased 34% to CHF 208 million; total FCF CHF 288 million including HQ sale.

• EPS increased by 13.9% to CHF 1.64; adjusted basic EPS CHF 1.73.

• Net profit attributable to shareholders grew to CHF 314 million; net debt at CHF 2,843 million as of June 2025.

Outlook and guidance

• Full-year 2025 guidance reaffirmed: 5–7% organic sales growth, 1–2% bolt-on contribution, at least 30 bps AOI margin improvement, and strong free cash flow.

• 2027 objectives: 5–7% annual organic growth, ≥150 bps AOI margin improvement vs. 2023, cash conversion >50%.

• H2 expected to see continued positive trends, with Q2 likely the weakest quarter for organic growth.

• Margin improvement to continue, though at a slower pace, with a target of 16.2% margin by 2027.

• Strong free cash flow generation expected for the full year, excluding non-recurring HQ sale.