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2 HALF-YEAR RESULTS PRESENTATION – 17 JULY 2015 © SGS SA 2015 ALL RIGHTS RESERVED

DISCLAIMER

Certain matters discussed in this presentation may constitute forward-looking

statements that are neither historical facts nor guarantees of future performance.

Because these statements involve risks and uncertainties that are beyond control or

estimation of SGS, there are important factors that could cause actual results to

differ materially from those expressed or implied by these forward looking

statements. These statements speak only as of the date of this document. Except

as required by any applicable law or regulation, SGS expressly disclaims any

obligation to release publicly any updates or revisions to any forward looking

statements contained herein to reflect any change in SGS Group’s expectations

with regard thereto or any change in events or conditions on which any such

statements are based.

HIGHLIGHTS

FINANCIAL REVIEW

BUSINESS REVIEW

OUTLOOK

Q&A

HIGHLIGHTS

APPENDIX


H1 2015 HIGHLIGHTS

(1) Constant currency basis - (2) Before amortisation of acquisition intangibles, restructuring,

transaction and integration-related costs - (3) Cash flow from operating activities less Capex


2015 7 ACQUISITIONS

(so far…)

H1 2015 ACQUISITIONS


85,000 EMPLOYEES AROUND THE GLOBE ENABLING

REACH AND LOCAL SUPPORT

OTHER TOPIC

REVENUE ANALYSIS

FINANCIAL REVIEW

BUSINESS REVIEW

OUTLOOK

HIGHLIGHTS

REVENUE ANALYSIS

CURRENCY ANALYSIS

CASH FLOW

BALANCE SHEET

OPERATING INCOME ANALYSIS

Q&A

APPENDIX


H1 2015 FINANCIAL HIGHLIGHTS

(1) Before amortisation of acquisition intangibles, restructuring, transaction and

integration-related costs - (2) Constant currency basis

CHF MIO JUNE 2015 JUNE 2014 JUNE 2014

PRO-FORMA (2)

REVENUE 2,752 2,661 2,805

Change in % 3.4% (1.9)%

ADJUSTED OPERATING INCOME (1) 412 399 420

Change in % 3.2% (2.0)%

ADJUSTED OPERATING INCOME MARGIN (1) 15.0% 15.0% 15.0%

OPERATING INCOME (EBIT) 333 376 397

Change in % (11.4)% (16.1)%

OPERATING INCOME (EBIT) MARGIN 12.1% 14.1% 14.1%

ADJUSTED NET INCOME (1) 275 260 275

Change in % 5.8% 0.0%

NET INCOME 214 241 255

Change in % (11.2)% (16.1)%

BASIC EPS (CHF) 28.00 31.49 33.27


H1 2015 REVENUE GROWTH COMPOSITION

RevenuesJUNE 2014 Organic Acquisitions Disposals

Currencyimpact

RevenuesJUNE 2015

2,805

49 42

(144)

2,752

1.8% 1.6% (0.0)% (5.3)% (1.9)%

Constant currency growth: 3.4%

H1 2014 4.0% 1.3% 0.0% (7.1)% (1.8)%

CHF MIO


H1 2015 BUSINESS PORTFOLIO


H1 2015 REVENUE GROWTH(1) BY BUSINESS

1.8%

8.4%

6.6%

5.2%

(3.3)%

6.6%

4.8%

0.4%

0.2%

(1.9)%

3.2%

1.6%

5.8%

19.7%

0.7%

0.9%

TOTAL

GIS

AUTO

ENVI

IND

SSC

CTS

LIFE

OGC

MIN

AGRI

Organic Acquisition Disposal

3.2%

(1.9)%

0.2%

0.4%

5.7%

6.6%

(2.6)%

24.9%

12.4%

8.4%

3.4%

GROWTH

H1 2015 H1 2014

8.1%

(6.0)%

8.9%

7.9%

7.3%

5.7%

8.3%

2.1%

5.3%

2.9%

5.3%

1) Constant currency basis


H1 2015 REVENUE GROWTH(1) BY REGION

REVENUE

S ASIA

REVENUE

S…

REVENUE

S…

1.8%

1.0%

1.4%

2.7%

1.6%

0.2%

2.1%

2.2%

TOTAL GROUP

ASIA / PACIFIC

AMERICAS

EUROPE / AFRICA &

MIDDLE EAST

Organic Acquisition Disposal

4.9%

3.5%

1.2%

3.4%

GROWTH

3.5%

7.2%

6.9%

5.3%

H1 2015 H1 2014

1) Constant currency basis


EVOLUTION OF HEADCOUNTS

Δ IN EOP HEADCOUNT JUNE 2015 JUNE 2014 Δ

GROUP HEADCOUNT 85,502 83,592 1,910

Organic Business Growth 2,660

Acquisitions 565

Disposals and Restructurings (1,315)

INCREASE IN GROUP HEADCOUNT 1,910

BY REGION HEADCOUNT

Δ

HEADCOUNT

Δ%

REVENUES

Δ%

Europe / Africa / Middle East 863 2.6% 4.9%

Americas 471 2.4% 3.5%

Asia / Pacific 576 1.9% 1.2%

TOTAL 1,910 2.3% 3.4%


FINANCIAL REVIEW

BUSINESS REVIEW

OUTLOOK

HIGHLIGHTS

REVENUE ANALYSIS

CURRENCY ANALYSIS

CASH FLOW

BALANCE SHEET


Q&A

APPENDIX


H1 2015 ADJUSTED OPERATING INCOME(1) GROWTH


integration-related costs

Adj. Op. Inc.June 2014 Organic Acquisitions Disposals

Currencyimpact

Adj. Op. Inc.June 2015

H1 2014 3.5% 1.4% 0.0% (9.1)% (4.2)%

CHF MIO

420

4 9

(21)

412

1.1% 2.1% (0.0)% (5.2)% (2.0)%

Constant currency growth: 3.2%


H1 2015 ADJUSTED OPERATING INCOME(1) PORTFOLIO

AND ADJUSTED OPERATING MARGIN(2) BY BUSINESS



14.8

%

13.8

%

11.1

%

8.2%

23.4

%

16.0

%

11.0

%

7.8%

19.8

%

22.6

%

15.3

%

13.3

%

10.8

%

8.6%

22.3

%

14.5

%

11.1

%

12.9

%

18.1

%

23.4

%

5.0%

10.0%

15.0%

20.0%

25.0%

AG

RI

MIN

OG

C

LIF

E

CT

S

SS

C

IND

EN

VI

AU

TO

GIS

JUNE 2014 JUNE 2015


H1 2015 RESTRUCTURING

OTHER TOPIC

BALANCE SHEET

FINANCIAL REVIEW

BUSINESS REVIEW

OUTLOOK

HIGHLIGHTS

REVENUE ANALYSIS

CURRENCY ANALYSIS

CASH FLOW

BALANCE SHEET


Q&A

APPENDIX


H1 2015 CONSOLIDATED BALANCE SHEET

CHF MIO

ASSETS JUNE 2015 DEC 2014 SHAREHOLDERS' EQUITY AND

LIABILITIES

JUNE 2015 DEC 2014

Land, buildings and equipment 925 1,043 Share capital 8 8

Goodwill 1,012 1,105 Reserves 1,559 2,319

Intangible assets 208 232 SHAREHOLDERS' EQUITY 1,567 2,327

Other Long-term assets 639 268

NON-CURRENT ASSETS 2,784 2,648 NON-CONTROLLING INTERESTS 76 76

Long-term loans 2,216 1,672

Provisions and other liabilities 302 347

NON-CURRENT LIABILITIES 2,518 2,019

Unbilled revenues and inventories 318 330

Trade accounts and notes receivable 910 1,068 Accounts payable 484 511

Other receivables and prepayments 388 371 Other creditors and accruals 802 816

Marketable securities 9 9 Loans 5 18

Cash and cash equivalents 1,043 1,341 CURRENT LIABILITIES 1,291 1,345

CURRENT ASSETS 2,668 3,119 LIABILITIES 3,809 3,364

TOTAL 5,452 5,767 TOTAL 5,452 5,767


H1 2015 NET WORKING CAPITAL MOVEMENT

OTHER TOPIC

CASH FLOW

FINANCIAL REVIEW

BUSINESS REVIEW

OUTLOOK

HIGHLIGHTS

REVENUE ANALYSIS

CURRENCY ANALYSIS

CASH FLOW

BALANCE SHEET


Q&A

APPENDIX


H1 2015 CONDENSED CASH FLOW

CHF MIO JUNE 2015 JUNE 2014

PROFIT FOR THE PERIOD 231 273

Non-cash items 269 264

Decrease/(increase) in working capital 9 (180)

Taxes paid (110) (97)

CORE OPERATING CASH FLOW 399 260

Non-recurring cash outflows (103) 0

CASH FLOW FROM OPERATING ACTIVITIES 296 260

Net (purchase) of fixed assets (123) (123)

Net (acquisition) of businesses (41) (17)

Investments in long-term bank deposits (310) 0

Other from investing activities 8 1

CASH FLOW FROM INVESTING ACTIVITIES (466) (139)

Dividends paid to equity holders of SGS SA (522) (499)

Dividends paid to non-controlling interests (2) (2)

Net cash (paid)/received on treasury shares (144) 31

Proceeds of corporate bonds 549 362

Interest paid (34) (28)

Net flows on interest rate swaps 16 5

(Decrease) in borrowings (12) (3)

CASH FLOW FROM FINANCING ACTIVITIES (149) (134)

Currency translation 21 (5)

(DECREASE) IN CASH AND CASH EQUIVALENTS (298) (18)


H1 2015 CORE OPERATING CASH FLOW

(1)Cash flow from operating activities less Capex

146 94 68 146 130 1640.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

0

50

100

150

200

250

300

350

400

450

2010 2011 2012 2013 2014 2015

CAPEX IN CHF MIO

NON-RECURRING CASH OUTFLOWS IN CHF MIO

FREE CASH FLOW IN CHF MIO

CORE OPERATING CASH FLOW IN % OF REVENUE

114

134176

170130

132

103

260 228 244 316 260 399

(1)


H1 2015 CAPITAL EXPENDITURE

OTHER TOPIC

CURRENCY ANALYSIS

FINANCIAL REVIEW

BUSINESS REVIEW

OUTLOOK

HIGHLIGHTS

REVENUE ANALYSIS

CURRENCY ANALYSIS

CASH FLOW

BALANCE SHEET


Q&A

APPENDIX


H1 2015 FOREIGN CURRENCY REVENUES


FOREIGN CURRENCY AVERAGE RATE CHANGE

H1 2015 VERSUS H1 2014 RATE

EUR USD CNY AUD GBP CAD TWD BRL KRW CLP

2015 1.0597 0.9483 0.1525 0.7423 1.4449 0.7691 0.0304 0.3212 0.0009 0.0015

2014 1.2214 0.8907 0.1445 0.8144 1.4867 0.8126 0.0295 0.3882 0.0008 0.0016

CHANGE (13.2)% 6.5% 5.5% (8.9)% (2.8)% (5.4)% 3.1% (17.3)% 1.6% (5.2)%

(13.2)%

6.5%5.5%

(8.9)%

(2.8)%

(5.4)%

3.1%

(17.3)%

1.6%

(5.2)%

(20.0)%

(17.0)%

(14.0)%

(11.0)%

(8.0)%

(5.0)%

(2.0)%

1.0%

4.0%

7.0%


FINANCIAL SUMMARY

Revenue growth of 3.4% despite decline in two of our

four largest businesses.

Maintained Adjusted Operating Margin(1) flat at 15.0%.

Restructuring undertaken to lower the cost base going

forward.

Improvement of free cash flow by 26.2% to CHF 164

million.

Investment of CHF 173 million in Capex / Acquisitions.


integration-related costs

BUSINESS REVIEW

FINANCIAL REVIEW

BUSINESS REVIEW

OUTLOOK

HIGHLIGHTS

Q&A

APPENDIX


OVERVIEW

OUTLOOK

PERFORMANCE



AGRICULTURAL SERVICES (AGRI)

Sustained growth despite the curtailment of

CMA activities

Seed & Crop portfolio expansion

Double-digit growth in Laboratory

New contract with Centro de Tecnologia

Canavieira for field evaluation of GM Sugarcane

Trade activities to remain stable

New water management services to be

introduced in selected countries

South America Seed & Crop investments

coming online

Peru Fish ban lifted with reduced scope


PRO-FORMA(2)

REVENUE 173.0 167.6 180.5

Change in % 3.2% (4.2)%

ADJUSTED OPERATING INCOME(1) 26.5 24.8 26.9

Change in % 6.9% (1.5)%

MARGIN %(1) 15.3% 14.8% 14.9%


OVERVIEW

OUTLOOK

PERFORMANCE



MINERALS SERVICES (MIN)

Revenues decline at slower rate with stable

growth in Trade inspections

Geo-Chemistry and Metallurgy volumes

remain low

Strong performance in East Europe and Asia

New onsite laboratory for Pavlik Gold in

Russia

Low exploration spending to continue

Demand for steel and steel making raw

materials to remain low

Alignment of costs and network consolidation,

IT solutions to boost productivity

Focus on delivering Mine & Plant Services


PRO-FORMA(2)

REVENUE 314.6 320.7 341.1

Change in % (1.9)% (7.8)%


Change in % (5.7)% (13.1)%

MARGIN %(1) 13.3% 13.8% 14.1%


OVERVIEW

OUTLOOK

PERFORMANCE



OIL, GAS & CHEMICALS SERVICES (OGC)

Trade-related services benefited from the high

volatility of oil price

Strong decline in Upstream business

Growth in Oil Condition Monitoring from high

sample volume in Asia Pacific and Middle East

Oxy Oman: Two-year well testing contract

Growth in laboratory outsourcing from project

in India

New Fuel Integrity Programmes to be

implemented in Africa

Well testing services and sub-surface

consultancy trend expected to remain in line

with H1


PRO-FORMA(2)

REVENUE 554.4 553.4 576.2

Change in % 0.2% (3.8)%


Change in % (2.6)% (10.3)%

MARGIN %(1) 10.8% 11.1% 11.6%


OVERVIEW

OUTLOOK

PERFORMANCE



LIFE SCIENCE SERVICES (LIFE)

Strong results in Laboratories

Key growth investments in Italy, India and

USA

Expanded service offerings in USA, France

and China

Margins impacted by Clinical research

Ebola vaccine testing for a pharmaceutical

company

Growth to continue in Laboratories services

with increasing volume and improved margin

Further focus on Key Account Management

and Sales structures to maintain pipeline

Additional investment in new scope and

capacities across most laboratories


PRO-FORMA(2)

REVENUE 100.2 99.8 107.5

Change in % 0.4% (6.8)%


Change in % 4.9% (4.4)%

MARGIN %(1) 8.6% 8.2% 8.4%


OVERVIEW

OUTLOOK

PERFORMANCE



CONSUMER TESTING SERVICES (CTS)

Resilient growth despite market conditions

Double-digit growth in wireless/mobile device,

automotive parts testing with new models and

products and excellent growth in CPCH

Strong Food growth due to consumer focus on

food safety and recalls

Acquisition of SVA Ltd. expands testing scope

and footprint in the Food sector

E&E to keep growing from recent investments

in Wireless and Bluetooth

Secure new retailers in the USA and South

America

Growth in Automotive, Food and CPCH

segments in Asia from strong local markets

and local regulations


PRO-FORMA(2)

REVENUE 534.6 505.9 511.0

Change in % 5.7% 4.6%


Change in % 0.7% 2.8%

MARGIN %(1) 22.3% 23.4% 22.7%


OVERVIEW

OUTLOOK

PERFORMANCE



SYSTEMS & SERVICES CERTIFICATION (SSC)

Healthy growth of 6.6% driven by training

activity and management system certification

Solid global performance, especially Africa

Cost pressure from increasing labour costs in

China

Several new contracts secured with leading

hotel groups

Growth is expected to remain at same level

during H2

Margin expected to recover following one-off

training and system setup costs in H1

Continue to expand centralised back-office

activities to improve quality and efficiencies


PRO-FORMA(2)

REVENUE 196.5 184.4 193.6

Change in % 6.6% 1.5%


Change in % (3.4)% (6.3)%

MARGIN %(1) 14.5% 16.0% 15.7%


OVERVIEW

OUTLOOK

PERFORMANCE



INDUSTRIAL SERVICES (IND)

Oil prices impact revenues in the Americas,

and in South East Asia Pacific

Solid double-digit growth in China and Korea

Margin remained stable reflecting cost

adjustments made during the past months

In Mexico, SGS is successfully executing the

Toluca Rail construction supervision project

Revenues in H2 remain flat versus prior year

Successful renewal of major NDT contracts in

Angola and Qatar

Accelerate strategic investments in fast growth

countries especially China

Margin to remain under pressure, the Group

will implement restructuring during H2


PRO-FORMA(2)

REVENUE 426.7 438.3 472.3

Change in % (2.6)% (9.7)%


Change in % (1.7)% (6.9)%

MARGIN %(1) 11.1% 11.0% 10.8%


OVERVIEW

OUTLOOK

PERFORMANCE



ENVIRONMENTAL SERVICES (ENVI)

Strong growth, increased market share and

margin improvement

Benefit from recent acquisitions, expanded

footprint in Australia and Brazil

Leader in Industrial Hygiene (IH) testing in the

USA

Significant project with ENI for testing

deepwater reservoirs

Europe to benefit from diversified portfolio and

acquired businesses

Growth in Health & Safety (H&S) and IH

sectors will accelerate the Americas and Asia

Global launch of innovative products

Positive impact of high-value contracts signed

in H1


PRO-FORMA(2)

REVENUE 175.3 140.3 152.4

Change in % 24.9% 15.0%


Change in % 106.4% 86.1%

MARGIN %(1) 12.9% 7.8% 8.0%


OVERVIEW

OUTLOOK

PERFORMANCE



AUTOMOTIVE SERVICES (AUTO)

Solid results in Statutory Inspection despite

liberalization in Canary Islands

Laboratory expansion and overall strong

performance in the USA

Acquisitions in USA & France to expand

services and footprint

Exclusive Motor Vehicle Inspection Program

awarded in Uganda

Pressure on profitability in Spain with

increasing competition in Canary Islands

Operations in Africa and North America

expected to continue on positive trend

Inspection volumes expected to further

increase in Buenos Aires City and Guayaquil


PRO-FORMA(2)

REVENUE 152.0 135.2 147.4

Change in % 12.4% 3.1%


Change in % 2.6% (8.9)%

MARGIN %(1) 18.1% 19.8% 20.5%


OVERVIEW

OUTLOOK

PERFORMANCE



GOVERNMENTS AND INSTITUTIONS SERVICES (GIS)

Good growth with excellent performance in

PCA and Single Window

Launch of SGS e-Valuator®

All contracts due for renewal successfully

renewed

World Bank contract in Nepal to supervise

design and implementation of a national single

window and Trade Portal

Establish GIS Telecom Solutions

Expand client base into new Government

service areas

Significant growth in Europe and Americas

As anticipated, PSI likely to decline based on

WCO/WTO guidance


PRO-FORMA(2)

REVENUE 124.7 115.0 123.2

Change in % 8.4% 1.2%


Change in % 12.3% (0.3)%

MARGIN %(1) 23.4% 22.6% 23.8%

OUTLOOK

FINANCIAL REVIEW

BUSINESS REVIEW

OUTLOOK

HIGHLIGHTS

Q&A

APPENDIX


H2 2015 OUTLOOK

(1) at stable market conditions


SGS INVESTOR DAYS

Q&A

FINANCIAL REVIEW

BUSINESS REVIEW

OUTLOOK

Q&A

HIGHLIGHTS

APPENDIX

APPENDIX

FINANCIAL REVIEW

BUSINESS REVIEW

OUTLOOK

HIGHLIGHTS

Q&A

APPENDIX


ACRONYMS AND OTHER ABBREVIATIONS

CMA: Collateral Management Activities

CPCH: Cosmetics, Personal Care and Household

E&E: Electrical & Electronics

H&S: Health & Safety

IH: Industrial Hygiene

NDT: Non Destructive Testing

PCA: Product conformity assessment

PSI: Pre Shipment Inspection

SGS e-valuator: Facilitate and enhance trade

SGS Layer 4: Supporting the enforcement of telecommunications regulation


UPCOMING INVESTOR RELATIONS EVENTS


INVESTOR RELATIONS INFORMATION

disclaimer - sgs · disclaimer certain matters discussed in this presentation may constitute...

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