Management consultancy SGS on track thanks to higher sales and improved profitability
The goods testing group SGS achieved higher sales and increased profitability in 2024. The company therefore believes it is on track to implement its strategy by 2027. The dividend remains at the previous year's level despite higher profits.
11.02.2025, 06:55
11.02.2025, 07:42
SDA
Sales rose by 2.6 percent to 6.79 billion Swiss francs last year, as the Geneva-based group announced on Tuesday. In organic terms, i.e. adjusted for currency and acquisition effects, sales grew by 7.5 percent.
All divisions and regions contributed to this growth, according to the press release. Although organic growth was below the previous year's figure of 8.1 percent, it was still above the medium-term target corridor of 5 to 7 percent.
SGS also succeeded in becoming more profitable. Adjusted operating profit (EBIT) rose by 7.1 percent to CHF 1.04 billion. The corresponding margin rose from 14.2 percent to 15.3 percent. Net profit was 5.1 percent higher at 581 million francs
This corresponds to earnings per share of 3.10 francs, compared to 3.00 francs in the previous year. As in the previous year, shareholders will receive CHF 3.20 per share.
In line with expectations
SGS achieved sales of CHF 6.03 billion in 'Testing & Inspection', by far its largest business unit. Organic growth amounted to 7.6 percent, with all segments of the business unit contributing to growth. The adjusted operating profit margin amounted to 14.7 percent.
The 'Business Assurance' division achieved sales of CHF 761 million. Organic growth amounted to 6.2 percent. This was due to double-digit growth in the certification segment. In contrast, the high comparative basis in the Consulting segment slowed growth somewhat. The business unit's adjusted EBIT margin amounted to 20.1 percent.
Overall, SGS thus met analysts' expectations. Although sales and organic growth fell slightly short of expectations, adjusted EBIT and the corresponding margin slightly exceeded them.
Medium-term targets confirmed
The company therefore believes it is on track to implement its strategy by 2027. "We are confident that 2025 will be another great year," CEO Géraldine Picaud is quoted as saying in the press release.
For the current year, SGS expects growth and an improvement in profitability within the target corridor by 2027, with organic sales growth of 5 to 7 percent. Acquisitions are expected to contribute an additional 1 to 2 percent to growth.
At the same time, the product testing group aims to become even more profitable. The operating margin is expected to improve by at least 1.5 percentage points by 2027 compared to 2023.
