Warenprüfer SGS auf Rekordkurs

16.01.2008, With revenue growth of 14.4% (12.8% constant currency basis) to CHF 4.37 billion, the SGS Group has achieved a sixth consecutive year of improved performance delivering a 17.5% increase in operating income (pre-exceptional items) to CHF 711 million at an operating margin of 16.3%. Net profit at CHF 515 million increased 19.5% from the comparable period (pre-exceptional items basis). The Board of Directors willpropose a dividend of CHF 35 per share, CHF 25 representing an ordinary distribution of 38.5% of net profit and an additional CHF 10 reflecting the Board’s view of the financial strength inherent in SGS’ balance sheet and its future earnings and cash flow generation capabilities.

Overview Revenue for the group improved to CHF 4.37 billion, an increase of 12.8% (constant currency basis) from the prior year. This growth was achieved in satisfactory trading conditions across the Group’s portfolio. Internal investments in the expansion of service line offerings and geographic coverage in support of our customer’s requirements continued to be the primary focus of the Group in 2007 driving an organic growth in revenue of 12%. These organic investments were augmented by targeted acquisitions during the year which contributed to an additional 1% in revenue growth in the period.

The Group’s Industrial, Governments and Institutions, Minerals, Oil Gas and Chemicals, Environmental, Consumer Testing and Automotive business lines all delivered organic growth in excess of 10% over the comparable period. This revenue growth was achieved across a wide geographical distribution with all ten of the Group’s reporting regions posting year over year increases. Especially good performance was delivered by Western Europe, Africa, China & Hong Kong and Eastern Europe and Middle East during the year as a result of prior period investments and macro growth trends.

Operating income improved by CHF 106 million or 17.5% (pre-exceptional basis) to CHF 711 million. Group pre-exceptional EBITDA and operating margin expanded to 20.8% and 16.3% as a result of improved performances in Agricultural, Oil Gas & Chemicals, Consumer Testing and Governments & Institutions services as a result of volume leverage, service mix and favorable geographical distribution of revenue.

Net financial income was CHF 2 million as a result of the low yield interest rate environment. The tax for the period of 25% was consistent with the Group’s expectations for geographical profit distribution. Profit attributable to equity holders of SGS SA increased to CHF 515 million from CHF 431 million (pre-exceptional basis), an increase of 19.5%.

Cash flow from operations was CHF 706 million, a CHF 154 million or 28% increase from the comparable period. This inflow was used to fund net investments in fixed assets of CHF 271 million, a distribution to shareholders of CHF 178 million, share repurchases of CHF 8 million and business acquisitions of CHF 72 million. As a result Group cash increased from CHF 230 to CHF 429 million during the period.

Acquisitions, Disposals and Exceptional Items Mid Iowa Grain Inspection Inc and Mid-West Seed Services Inc were acquired during the first semester while Cota Spa in Algeria, Adria Control in Slovenia, EcoServ in South Africa, FTS Inc in USA and Lab Merten in Germany were acquired during the second semester.

In 2006, the Group recorded a net exceptional pre-tax gain of CHF 19 million from the disposal of its Pink Healthcare business in Australia effective June 30. In the 4th quarter 2007 the Group recorded an exceptional re-organisation pretax charge of CHF 21 million, 90% of which is related to permanent work force reductions largely as a result of back-office optimisation plans and geographic transition of revenue streams.

The Group continues to be focused on growth. Market conditions in 2007 prevented SGS from carrying out significant acquisitions due to the exhorbitant prices being asked. Better conditions are expected in 2008.

Distribution to shareholders The Board of Directors will recommend to the Annual General Meeting to be held on 17 March 2008 the approval of a dividend of CHF 35 per share CHF 25 representing an ordinary distribution of 38.5% of net profit and an additional CHF 10 reflecting the Board’s view of the financial strength inherent in SGS’ balance sheet and its future earnings and cash flow generation capabilities.

Management In January, Mike Belton took over Minerals Services. In March, Alim Saidov became EVP of Oil, Gas and Chemicals Services as well as Environmental Services; Jeffrey Newell was promoted to EVP Agricultural Services; Systems & Services Certification is now led by Malcolm Reid.

Also in March Teymur Abasov was promoted to COO Eastern Europe and Middle East; Jeffrey McDonald was appointed COO North America and Francis Lacroze took over the Continuous Improvement responsibilities for initiatives across the Group.

In July, Beat In-Albon joined the Group as EVP of our Life Science Services.

Christian Jilch and Helge Bastian left the Group.

In December, Thakar Singh was promoted to COO South Eastern Asia & Pacific, Claude Lanouhe having taken an early retirement after 20 years of service.

Significant shareholders At 31 December 2007, Mr. August von Finck and his family held 23.7% of the capital and voting rights of the company; IFIL Investissements SA held 15%, Allianz SE 7.4% and FMR Corp 5.57%.

Outlook SGS is forecasting another good performance in 2008, with both topline and earnings growing over 2007 levels.

Über SGS SA:

Die SGS ist ein weltweit führendes Unternehmen in den Bereichen Prüfung, Inspektion und Zertifizieren. Die SGS setzt weltweit Massstäbe für Qualität und Integrität. Mit unseren 99.600 Mitarbeitenden betreiben wir ein Netzwerk aus 2.600 Büros und Laboren auf der ganzen Welt.

Wo auch immer Sie sich befinden, welcher Branche auch immer Sie angehören: Unsere Experten auf der ganzen Welt bieten spezialisierte Lösungen, die Ihr Geschäft schneller, einfacher und effizienter machen.

--- Ende Artikel / Pressemitteilung Warenprüfer SGS auf Rekordkurs ---


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