Goods testing SGS continues to feel the effects of the strong Swiss franc in the first half of the year
The goods testing and inspection group SGS increased its turnover in the first half of 2024, but unfavorable exchange rates continue to weigh on profitability. The Geneva-based company remains optimistic for the current year.
24.07.2024, 06:32
24.07.2024, 09:21
SDA
"We were able to grow in all segments and markets in the first half of the year," said CEO Géraldine Picaud, who has been in office since the end of March, at a conference call on Wednesday.
Expressed in figures: sales increased by 1.6 percent to 3.34 billion Swiss francs. Adjusted for currency effects and acquisitions and disposals of business units and companies, it increased by 8.0 percent.
The inspection group benefited from increased demand for consulting and solutions in the areas of sustainability and cyber security, it said. SGS has expanded its offering in this area.
The company is also focusing on further acquisitions in complementary business areas that promise growth and high margins. In the first half of the year, SGS has already acquired five companies in the areas of Connectivity & Products and Health & Nutrition, which contribute a total turnover of CHF 40 million.
Restructuring program bears first fruits
Meanwhile, SGS was able to maintain its profitability in a difficult currency environment. Among other things, a recently launched restructuring program helped.
The operating result adjusted for special factors rose by 1.9 percent to CHF 471 million, with the EBIT margin remaining constant at 14.1 percent. The cost savings improved the margin by 0.3 percentage points.
The bottom line was a slightly lower profit of CHF 267 million, compared to CHF 272 million previously. According to the company, this was primarily reduced by restructuring costs of 34 million.
With these figures, SGS clearly exceeded analysts' expectations for sales and operating profit. These were roughly achieved in terms of profit.
Outlook confirmed
Meanwhile, SGS is optimistic for the current year. The Group confirms the outlook formulated at the beginning of the year. According to this, profitability is set to increase further by the end of the year.
SGS is also aiming for annual organic growth of between 5% and 7% with significantly higher margins until 2027. The adjusted operating profit margin is to be improved by at least 1.5 percentage points by then.
