SGS (SGSN) H2 2025 earnings summary

Executive summary

• Achieved record sales of CHF 6,945 million in 2025, with 5.6% organic growth and highest adjusted operating income and free cash flow in company history, despite global economic volatility and adverse currency effects.

• Adjusted Operating Income reached CHF 1,108 million, a 16.0% margin, up 70 basis points, with EPS rising 12.3% to CHF 3.48, supported by improved profitability and HQ disposal gain.

• Free Cash Flow before HQ disposal was CHF 774 million, with total free cash flow at CHF 841 million including HQ disposal; cash conversion at 57%.

• Strategic focus on sustainability, digital trust, and North American expansion, including the acquisition of Applied Technical Services (ATS), drove growth and positioned the company for future trends.

• Strategy 27 fully implemented ahead of schedule, setting a foundation for future growth.

Financial highlights

• Sales reached CHF 6.95 billion, up 2.2% in reported terms, with 7.3% growth in constant currency and organic growth of 5.6%.

• Adjusted operating income hit CHF 1.1 billion (16% margin), up 70 basis points from 2024.

• Earnings per share before HQ disposal gain rose 3.5% to CHF 3.21; including the gain, EPS increased 12.3% to CHF 3.48.

• Record free cash flow of CHF 774 million (57% cash conversion), with total free cash flow at CHF 841 million after HQ disposal.

• Return on invested capital remained at 24%; net debt/EBITDA improved to 1.7x.

Outlook and guidance

• 2026 guidance targets 5–7% organic sales growth and 5–7% additional sales from acquisitions, with AOI margin expected at or above 16% and cash conversion above 50%.

• Minimum 16% adjusted operating income margin targeted for 2026, maintaining flexibility for investment in innovation.

• Continued focus on mega trends such as cybersecurity, AI, and sustainability to drive future growth.

• Strategy 27 targets reconfirmed: annual organic sales growth of 5–7%, margin improvement of at least 1.5 percentage points by 2027, and cash conversion above 50%.

• Capital Markets Event planned before end of 2026.