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2 FULL-YEAR RESULTS PRESENTATION © SGS SA 2016 ALL RIGHTS RESERVED
20 JANUARY 2016
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.
4 FULL-YEAR RESULTS PRESENTATION © SGS SA 2016 ALL RIGHTS RESERVED
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2015 HIGHLIGHTS
(1) Constant currency basis - (2) Before amortisation of acquisition intangibles, restructuring, transaction, integration-
related costs and other non-recurring items – (3) Net Income / (Non current assets + Net Working Capital)
5 FULL-YEAR RESULTS PRESENTATION © SGS SA 2016 ALL RIGHTS RESERVED
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2015 NET WORKING CAPITAL MOVEMENT
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2015 ACQUISITIONS
(1) Minority equity stake - (2) Legal clearance pending. Not consolidated in 2015
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88 000 EMPLOYEES(1) AND 1 800 OFFICES & LABORATORIES AROUND
THE GLOBE ENABLING REACH AND LOCAL SUPPORT
(1) End of period
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20 JANUARY 2016
9 FULL-YEAR RESULTS PRESENTATION © SGS SA 2016 ALL RIGHTS RESERVED
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2015 FINANCIAL HIGHLIGHTS
(1) Before amortisation of acquisition intangibles, restructuring, transaction, integration-
related costs and other non-recurring items - (2) Constant currency basis
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2015 REVENUE GROWTH COMPOSITION
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2015 BUSINESS PORTFOLIO
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2015 REVENUE GROWTH(1) BY BUSINESS
(1) Constant currency basis
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2015 REVENUE GROWTH(1) BY REGION
(1) Constant currency basis
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EVOLUTION OF HEADCOUNTS
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20 JANUARY 2016
2015 ADJUSTED OPERATING INCOME(1) GROWTH
(1) Before amortisation of acquisition intangibles, restructuring, transaction, integration-
related costs and other non-recurring items
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20 JANUARY 2016
2015 ADJUSTED OPERATING INCOME(1) PORTFOLIO
(1) Before amortisation of acquisition intangibles, restructuring, transaction, integration-
related costs and other non-recurring items
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ADJUSTED OPERATING MARGIN(1) BY BUSINESS
(1) Before amortisation of acquisition intangibles, restructuring, transaction, integration-
related costs and other non-recurring items - (2) Constant currency basis
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20 JANUARY 2016
2015 RESTRUCTURING
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2015 CONSOLIDATED BALANCE SHEET
(1) Net Income / (Non current assets + Net Working Capital)
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20 JANUARY 2016
2015 CONDENSED CASH FLOW
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2015 CORE OPERATING CASH FLOW
(1) Cash flow from operating activities less Capex – (2) Core operating cash flow / Adjusted EBITDA
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2015 CAPITAL EXPENDITURE
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CASH SOURCES AND USES IN 2015
(1) Net Capex
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2015 FOREIGN CURRENCY REVENUES
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FOREIGN CURRENCY AVERAGE RATE CHANGE
FY 2015 VERSUS FY 2014 RATE
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H2 2015 FINANCIAL HIGHLIGHTS
(1) Before amortisation of acquisition intangibles, restructuring, transaction, integration-
related costs and other non-recurring items - (2) Constant currency basis
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H2 2015 REVENUE GROWTH COMPOSITION
33 FULL-YEAR RESULTS PRESENTATION © SGS SA 2016 ALL RIGHTS RESERVED
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H2 2015 REVENUE GROWTH(1) BY BUSINESS
(1) Constant currency basis
34 FULL-YEAR RESULTS PRESENTATION © SGS SA 2016 ALL RIGHTS RESERVED
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H2 2015 ADJUSTED OPERATING MARGIN(1) BY BUSINESS
(1) Before amortisation of acquisition intangibles, restructuring, transaction, integration-
related costs and other non-recurring items - (2) Constant currency basis
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FINANCIAL SUMMARY
35
Revenue growth of 3.6% in a challenging environment and
in line with guidance.
Maintained Adjusted Operating Margin(1) flat at 16.1%.
Implemented the majority of CHF 64 Mio restructuring
measures to lower the cost base.
Investment of CHF 405 million in Capex and Acquisitions.
Core operating cash flow of CHF 1.1 BN.
Return on Invested Capital (ROIC(2)) of 19.7%.
Proposed dividend of CHF 68.
(1) Before amortisation of acquisition intangibles, restructuring, transaction, integration-related costs and
other non-recurring items - (2) Net Income / (Non current assets + Net Working Capital)
37 FULL-YEAR RESULTS PRESENTATION © SGS SA 2016 ALL RIGHTS RESERVED
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OVERVIEW
OUTLOOK
PERFORMANCE
(1) Before amortisation of acquisition intangibles, restructuring, transaction, integration-
related costs and other non-recurring items - (2) Constant currency basis
AGRICULTURAL SERVICES (AGRI)
PERFORMANCE
Organic growth of 4.0 % despite fishing ban in
Peru and CMA wind-down
High Trade volumes in Eastern Europe and
Americas
Strong growth in Seed & Crop and
Laboratory services
Profit improvement initiatives delivering
benefits in North America
AGRI transitions to new “Agriculture, Food
and Life” business line
Stable Trade revenues despite bearish export
outlook for key commodities
Recent investments in Seed & Crop to gain
traction in 2016
OVERVIEW
OUTLOOK
38 FULL-YEAR RESULTS PRESENTATION © SGS SA 2016 ALL RIGHTS RESERVED
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OVERVIEW
OUTLOOK
PERFORMANCE
(1) Before amortisation of acquisition intangibles, restructuring, transaction, integration-
related costs and other non-recurring items - (2) Constant currency basis
MINERALS SERVICES (MIN)
PERFORMANCE OVERVIEW
OUTLOOK
Despite strong price pressure, margins
improved due to cost containment and
benefits from restructuring
Continued strong performance in onsite
laboratories with 4 new labs in operation
Energy Minerals performed strongly in Russia
and China
Mid-single digit growth: fertilizer trade services
Market expected to remain flat
Growth in South Africa from the Richards Bay
Coal terminal contract win
Continued focus on Mine and Plant Services
targeting existing onsite clients
Integration of Bateman Modular Process Plant
business into the Minerals portfolio
39 FULL-YEAR RESULTS PRESENTATION © SGS SA 2016 ALL RIGHTS RESERVED
20 JANUARY 2016
OVERVIEW
OUTLOOK
PERFORMANCE
(1) Before amortisation of acquisition intangibles, restructuring, transaction, integration-
related costs and other non-recurring items - (2) Constant currency basis
OIL, GAS & CHEMICALS SERVICES (OGC)
PERFORMANCE OVERVIEW
OUTLOOK
Oil prices continue to impact activities
Single-digit growth in Trade related activity
Flat performance in Plant and Terminal
Operations
Exploration impacted by oil price in
Upstream activities
Non-inspection related testing performed well
with double-digit growth
Oil prices expected to remain low in 2016
Moderate growth expected to be maintained
in Trade related activity
Low oil prices will continue to impact
exploration in Upstream services
Solid growth expected in remainder of
OGC portfolio
40 FULL-YEAR RESULTS PRESENTATION © SGS SA 2016 ALL RIGHTS RESERVED
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OVERVIEW
OUTLOOK
PERFORMANCE
(1) Before amortisation of acquisition intangibles, restructuring, transaction, integration-
related costs and other non-recurring items - (2) Constant currency basis
LIFE SCIENCE SERVICES (LIFE)
PERFORMANCE OVERVIEW
OUTLOOK
Double-digit revenue growth in laboratories
Laboratory margin improved by 200 basis
points driven by labs in Europe and Asia
Clinical Research results are below prior year
due to postponed projects partly offset by
strong biometry performance
New quality control laboratory opened in Paris
Incorporation into new Agriculture, Food and
Life business line
Revenue performance expected to be above
market growth with improved profitability
Mixture of strategic investments and organic
growth to drive future results
Operational excellence, quality improvement
and customer focus will remain key objectives
41 FULL-YEAR RESULTS PRESENTATION © SGS SA 2016 ALL RIGHTS RESERVED
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OVERVIEW
OUTLOOK
PERFORMANCE
(1) Before amortisation of acquisition intangibles, restructuring, transaction, integration-
related costs and other non-recurring items - (2) Constant currency basis
CONSUMER TESTING SERVICES (CTS)
PERFORMANCE OVERVIEW
OUTLOOK
Organic growth of 4.9% and 1.4% from
recently acquired SVA Ltd UK (Food) and
Courtray (CPCH) in France
Strong growth in Food Testing Services in Asia
High double-digit growth in Auto parts testing
and CPCH
Strong results from Eastern Europe and
Middle East, Americas and Eastern Asia
Food to keep growing at high single digits
Softlines and Hardlines to regain growth
momentum
Continued expansion of Electrical and
Electronic capabilities
Auto and CPCH to expand their geographical
footprint and replication of services
42 FULL-YEAR RESULTS PRESENTATION © SGS SA 2016 ALL RIGHTS RESERVED
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OVERVIEW
OUTLOOK
PERFORMANCE
(1) Before amortisation of acquisition intangibles, restructuring, transaction, integration-
related costs and other non-recurring items - (2) Constant currency basis
SYSTEMS & SERVICES CERTIFICATION (SSC)
PERFORMANCE OVERVIEW
OUTLOOK
Strong Management Certification growth with
high adoption rates of new ISO 9001:2015
standards and other Food standards
certification
Double-digit growth in training activities
Cost pressure in Asia due to stronger
competitive landscape
Improved margins in Africa and North America
Growth is expected to remain healthy, driven
in part by training, hospitality and automotive
Margin expected to remain stable with new
initiative to streamline certification procedures
Management System: demand for certification
expected to be moderate
Further consolidation of back office operations
43 FULL-YEAR RESULTS PRESENTATION © SGS SA 2016 ALL RIGHTS RESERVED
20 JANUARY 2016
OVERVIEW
OUTLOOK
PERFORMANCE
(1) Before amortisation of acquisition intangibles, restructuring, transaction, integration-
related costs and other non-recurring items - (2) Constant currency basis
INDUSTRIAL SERVICES (IND)
PERFORMANCE OVERVIEW
OUTLOOK
Oil prices impact revenues and margins in
North America, Africa and in South East Asia
Pacific
Double-digit growth in China due to increase
in volume of testing activities
Stable revenue in South America despite
difficult market conditions
Larger geographic footprint will bring improved
revenues and margins
Revenue decline in the Energy sector due to
current oil prices
Acquisition strategy continues with focus on
laboratory testing activities and construction
supervision
44 FULL-YEAR RESULTS PRESENTATION © SGS SA 2016 ALL RIGHTS RESERVED
20 JANUARY 2016
OVERVIEW
OUTLOOK
PERFORMANCE
(1) Before amortisation of acquisition intangibles, restructuring, transaction, integration-
related costs and other non-recurring items - (2) Constant currency basis
ENVIRONMENTAL SERVICES (ENVI)
PERFORMANCE OVERVIEW
OUTLOOK
Strong growth in double digits, increased
market share and margin improvement
Diversified work mix and successful
integration of acquisitions drive growth in
Europe and the Americas
Australia faces pressure on margins due to
difficult market conditions
Growth to remain healthy driven by
established activities and expansion into
health and safety sector
Geographical and service diversification will
minimize exposure to seasonality
Accutest acquisition will provide a solid base
to strengthen our position in USA
45 FULL-YEAR RESULTS PRESENTATION © SGS SA 2016 ALL RIGHTS RESERVED
20 JANUARY 2016
OVERVIEW
OUTLOOK
PERFORMANCE
(1) Before amortisation of acquisition intangibles, restructuring, transaction, integration-
related costs and other non-recurring items - (2) Constant currency basis
AUTOMOTIVE SERVICES (AUTO)
PERFORMANCE OVERVIEW
OUTLOOK
Year-to-date growth above expectations
Extension of Vehicle Inspection concession in
Ivory coast to 2020
Strong results in USA from testing services
and improvement of commercial business
Acquisitions in USA & France to expand
services and footprint
Expanding business to include Aerospace,
Marine and Rail
Vehicle & Engine testing services expected to
expand organically in North America
Focus on Vehicles (their sub-components,
materials, …) and operations
New concession in Uganda expected to start
in Q4 2016
46 FULL-YEAR RESULTS PRESENTATION © SGS SA 2016 ALL RIGHTS RESERVED
20 JANUARY 2016
OVERVIEW
OUTLOOK
PERFORMANCE
(1) Before amortisation of acquisition intangibles, restructuring, transaction, integration-
related costs and other non-recurring items - (2) Constant currency basis
GOVERNMENTS AND INSTITUTIONS SERVICES (GIS)
PERFORMANCE OVERVIEW
OUTLOOK
Double-digit growth in PCA in Asia, Europe
and Middle East
Launch of SGS e-Valuator® to replace PSI
Exit of PSI market in-line with WTO and WCO
recommendations
PCA expected to deliver solid top-line growth
Conversion of PSI to e-Valuator in Cameroon
Roll out of new services
Roll out of TransitNet activities in
Western Europe
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NEW BUSINESS STRUCTURE
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INDICATION(1) OF THE REVENUE ALLOCATION
NEW STRUCTURE
(1) Indicative figures. Restated figures to be communicated in March 2016
50 FULL-YEAR RESULTS PRESENTATION © SGS SA 2016 ALL RIGHTS RESERVED
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2016 OUTLOOK(1)
(1) At stable market conditions
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OUTLOOK 2016 - 2020
Mid single digit organic growth on average with improvement over the period supported by the new focused structure and new strategic initiatives
Accelerating M&A activities with acquired revenue over the period in the range of CHF 1 billion
Adjusted Operating Income Margin of at least 18% by end of the period supported by the new focused structure, new strategic and efficiency improvement initiatives
Strong cash conversion
Solid returns on invested capital
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ACRONYMS AND OTHER ABBREVIATIONS
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UPCOMING EVENT DATES
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55 FULL-YEAR RESULTS PRESENTATION © SGS SA 2016 ALL RIGHTS RESERVED
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INVESTOR RELATIONS INFORMATION
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