SGS (SGSN) H2 2024 earnings summary

Executive summary

• Achieved record net sales of CHF 6.8 billion in 2024, with 7.5% organic growth and strong cash generation of CHF 748 million, reaching the top of guidance ranges.

• Adjusted operating income margin improved by 60 basis points to 15.3%, and earnings per share rose 3.3% to CHF 3.10.

• Delivered on key milestones of Strategy 27, including 14 bolt-on acquisitions and significant progress in sustainability and digital trust offerings.

• Maintained a strong ESG profile, ranked first in the Dow Jones Sustainability Indices for professional services.

• Efficiency plans delivered CHF 50 million in savings in 2024, with a CHF 150 million run rate expected by end 2025.

Financial highlights

• Adjusted operating income reached CHF 1,040 million, a 7.1% increase year-over-year, with a 15.3% margin.

• Free cash flow rose 24% to CHF 748 million, with a cash conversion rate of 62%.

• Net profit attributable to shareholders was CHF 581 million, up from CHF 553 million in 2023.

• Return on invested capital improved to 24%, up 2 percentage points from 2023.

• Net debt leverage reduced from 2x to 1.8x.

Outlook and guidance

• 2025 guidance: 5–7% organic sales growth, 1–2% bolt-on M&A contribution, and at least +30 basis points AOI margin improvement.

• 2027 targets: over 150 basis points AOI margin improvement vs. 2023, over 50% cash conversion, CHF 600 million incremental sustainability sales, CHF 200 million digital trust sales.

• Guidance remains conservative due to potential macroeconomic and political headwinds.

• Free cash flow conversion expected to remain above 50% through 2027.