CONTENT
 FINANCIAL HIGHLIGHTS
2013 Highlights
Revenue Analysis
Operating Income Analysis

BUSINESS OVERVIEW

FINANCIAL HI...
Not updated

FINANCIAL HIGHLIGHTS

2013 HIGHLIGHTS

Financial community – 21 January 2014

3
HIGHLIGHTS
 Revenue growth of 6.5% to CHF 5.8 billion (constant currency)
 4.7% (historical rates)
 Organic revenue gro...
FINANCIAL HIGHLIGHTS
CHF million

2013
December

Revenue
Change in %

2012
December
Pro-forma (2)

2012
December
Restated(...
SERVICE PORTFOLIO
REVENUE

GIS
AUTO 4.7%
5.2%

AGRI
6.5%

ENVI
5.6%

MIN
13.6%

ADJUSTED
OPERATING INCOME (1)
AUTO
6.7%

G...
Not updated

FINANCIAL HIGHLIGHTS

REVENUE ANALYSIS

Financial community – 21 January 2014

7
REVENUE GROWTH COMPOSITION
4.4%

2.1%

0.0%

(1.8)%

4.7%

117
(95)

239

5,830
Constant currency growth:

6.5%

5,569

Re...
LOCAL CURRENCY GROWTH BY BUSINESS

AGRI
MIN

3.8%
(7.8)%

(5.2)%

2.6%

OGC
LIFE

9.4%
0.1%

2.2%
11.2%

SSC

3.9%

IND

2...
REVENUE GROWTH AND HEADCOUNT
CHANGE BY REGION
Δ in EOP headcount

Group Headcount
Europe / Africa &
Middle East

1.3%

1.7...
Not updated

FINANCIAL HIGHLIGHTS

OPERATING INCOME ANALYSIS

Financial community – 21 January 2014

11
ADJUSTED OPERATING INCOME(1) GROWTH
4.8%

2.1%

0.0%

(2.0)%

4.9%

20
(18)

44

Constant currency growth:

977

6.9%

931...
HISTORICAL RESTATED MARGINS
Adjusted EBITDA MARGIN(1)

DEC 09

DEC 10

Adjusted OPERATING MARGIN(1)

DEC 11

DEC 12

DEC 1...
ADJUSTED OPERATING MARGIN(1) BY BUSINESS

30.0%

1)
2)

24.8%
21.0%

GIS

22.0%
AUTO

ENV

10.6%

11.2%

IND

11.2%

18.3%...
RESTRUCTURING COSTS
RESTRUCTURING
BY BUSINESS

ENVI
7.0%

AUTO AGRI
0.6% 0.6%

RESTRUCTURING
2013 BY REGION

MIN
9.7%
OGC
...
CASH FLOW
CHF million
PROFIT FOR THE PERIOD
Depreciation, amortisation and impairment
Share based payments
Tax
Other
Non-c...
CAPITAL EXPENDITURE
CAPEX REGION

CAPEX
BUSINESS
AUTO
7.0%

ASIA PACIFIC
33.3%

GIS
6.4%

AGRI
4.2%

MIN
16.8%

ENVI
6.2%
...
FOREIGN CURRENCY REVENUES 2013

EUR
27.7%

Other
27.9%

CLP
2.7%
BRL
2.9%
GBP
2.9%
TWD
2.9% CAD
4.1%

Financial community ...
FOREIGN CURRENCY SENSITIVITY ANALYSIS
EURO

Revenues
Income
CNY
Revenues
Income

Financial community – 21 January 2014

1....
SECOND HALF 2013

Financial community – 21 January 2014

20
FINANCIAL HIGHLIGHTS (H2)
CHF million

2013
H2

Revenue
Change in %

2,978

2,813
5.9 %

2,922
1.9 %

539

503
7.2 %

523
...
REVENUE GROWTH COMPOSITION H2
3.8%

2.1%

0.0%

58

(4.0)%

1.9%

(109)

107

2,978

Constant currency growth: 5.9%

2,922...
LOCAL CURRENCY GROWTH BY BUSINESS (H2)

AGRI
MIN

6.5%
(10.6)%

(7.4)%
8.7%

LIFE

7.2%

3.2%

OGC

9.4%

0.7%

(1.6)%

(1...
ADJUSTED OPERATING MARGIN(1) BY
BUSINESS (H2)

1)
2)

19.7%

GIS

AUTO

22.0%

12.4%
ENV

IND

12.6%

19.9%
2

12.9%

12.3...
Not updated

BUSINESS OVERVIEW

BUSINESS OVERVIEW

Financial community – 21 January 2014

25
AGRICULTURAL SERVICES (AGRI)
CHF million

Revenue

December December December
2013
2012
2012
2
Pro-forma Restated3
381.3

...
MINERALS SERVICES (MIN)
CHF million

Revenue

December December December
2013
2012
2012
2
Pro-forma Restated3
791.9

Adj. ...
OIL, GAS & CHEMICALS SERVICES (OGC)
CHF million

Revenue

December December December
2013
2012
2012
2
Pro-forma Restated3
...
LIFE SCIENCE SERVICES (LIFE)
CHF million

Revenue

December December December
2013
2012
2012
2
Pro-forma Restated3
205.0

...
CONSUMER TESTING SERVICES (CTS)
CHF million

Revenue

December December December
2013
2012
2012
2
Pro-forma Restated3
1,04...
SYSTEMS & SERVICES CERTIFICATION (SSC)
CHF million

Revenue

December December December
2013
2012
2012
2
Pro-forma Restate...
INDUSTRIAL SERVICES (IND)
CHF million

Revenue

December December December
2013
2012
2012
2
Pro-forma Restated3
960.3

Adj...
ENVIRONMENTAL SERVICES (ENVI)
CHF million

Revenue

December December December
2013
2012
2012
2
Pro-forma Restated3
328.0
...
AUTOMOTIVE SERVICES (AUTO)
CHF million

Revenue

December December December
2013
2012
2012
2
Pro-forma Restated3
305.1

Ad...
GOVERNMENTS AND INSTITUTIONS SERVICES (GIS)
CHF million

Revenue

December December December
2013
2012
2012
2
Pro-forma Re...
© SGS SA 2014. ALL RIGHTS RESERVED.

WWW.SGS.COM

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SGS 2013 Full Year Results Presentation
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SGS Group 2013 Full Year Results Presentation. Get the financial highlights and an overview of our performance per business. You can access the Financial Report here: http://www.sgs.com/en/Our-Company/Investor-Relations/Financial-Reports.aspx

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SGS 2013 Full Year Results Presentation

  1. 1. CONTENT  FINANCIAL HIGHLIGHTS 2013 Highlights Revenue Analysis Operating Income Analysis BUSINESS OVERVIEW FINANCIAL HIGHLIGHTS Cash Flows Currency Analysis Second half 2013  BUSINESS OVERVIEW Financial community – 21 January 2014 2
  2. 2. Not updated FINANCIAL HIGHLIGHTS 2013 HIGHLIGHTS Financial community – 21 January 2014 3
  3. 3. HIGHLIGHTS  Revenue growth of 6.5% to CHF 5.8 billion (constant currency)  4.7% (historical rates)  Organic revenue growth of 4.4% (constant currency)  Adjusted Operating income(1) up 6.9% (constant currency) to CHF 977 million, resulting in a margin of 16.8%  Restructuring costs net of tax of CHF 23 million  Net Income for the year of CHF 600 million  Basic EPS of CHF 78.43 per share, up 9.7%  Free Cash Flow CHF 591 million, up 43.4%  Proposed dividend to shareholders of CHF 65 per share Financial community – 21 January 2014 1) Before amortisation of acquisition intangibles, restructuring, transaction and integration-related costs 4
  4. 4. FINANCIAL HIGHLIGHTS CHF million 2013 December Revenue Change in % 2012 December Pro-forma (2) 2012 December Restated(3) 5,830 Adjusted Operating Income (1) Change in % Adjusted Operating Income Margin (1) 5,473 6.5 % 5,569 4.7 % 977 913 6.9 % 931 4.9 % 16.7 % 16.7 % 16.8 % Operating Income (EBIT) Change in % 912 816 11.8 % 834 9.4 % Adjusted Net Income (1) Change in % 652 606 7.6 % 617 5.7 % Net Income Change in % 600 533 12.6 % 545 10.1 % 79.51 69.95 81.06 71.52 Adjusted Basic EPS (1) (CHF) Basic EPS (CHF) Financial community – 21 January 2014 1) 2) 85.27 78.43 Before amortisation of acquisition intangibles, restructuring, transaction and integration-related costs 3) Restated for IAS 19 / IFRS 11 Constant currency and restated for IAS 19 / IFRS 11 5
  5. 5. SERVICE PORTFOLIO REVENUE GIS AUTO 4.7% 5.2% AGRI 6.5% ENVI 5.6% MIN 13.6% ADJUSTED OPERATING INCOME (1) AUTO 6.7% GIS 7.0% AGRI 6.7% MIN 12.6% ENVI 3.5% IND 11.0% IND 16.5% OGC 19.6% OGC 15.8% SSC 7.5% SSC 6.9% LIFE 2.8% CTS 17.9% LIFE 3.5% CTS 26.4% REVENUE REGION ASIA PACIFIC 29.0% EUROPE / AFRICA / MIDDLE EAST 46.2% AMERICAS 24.8% Financial community – 21 January 2014 1) Before amortisation of acquisition intangibles, restructuring, transaction and integration-related costs 6
  6. 6. Not updated FINANCIAL HIGHLIGHTS REVENUE ANALYSIS Financial community – 21 January 2014 7
  7. 7. REVENUE GROWTH COMPOSITION 4.4% 2.1% 0.0% (1.8)% 4.7% 117 (95) 239 5,830 Constant currency growth: 6.5% 5,569 Revenues 1 December 12 Financial community – 21 January 2014 Organic Acquisitions Disposals Currency impact Revenues December 13 1) Restated for IFRS 11 8
  8. 8. LOCAL CURRENCY GROWTH BY BUSINESS AGRI MIN 3.8% (7.8)% (5.2)% 2.6% OGC LIFE 9.4% 0.1% 2.2% 11.2% SSC 3.9% IND 2.1% (0.3)% 0.2% 4.1% 8.3% 3.3% 3.0% 10.4% GIS 1.0% 11.4% 11.1% Acquisition 11.1% 2.1% 4.4% Organic Financial community – 21 January 2014 0.8% 12.0% 6.2% AUTO TOTAL 10.3% 0.9% 2.1% CTS ENVI 5.5% 1.7% 6.5% Disposal Prior year restated for IFRS 11 9
  9. 9. REVENUE GROWTH AND HEADCOUNT CHANGE BY REGION Δ in EOP headcount Group Headcount Europe / Africa & Middle East 1.3% 1.7% 3.0% Δ 2013 2012 December December 81,948 79,208 2,740 Organic Business Growth 1,542 Acquisitions 1,198 Disposals 6.0% Americas 4.5% - 10.5% Increase in Group Headcount Asia / Pacific 0.8% 8.2% 9.0% By Region 2,740 Headcount Headcount Revenues Δ Δ% Δ% Europe / Africa / Middle East Organic Financial community – 21 January 2014 0.9 % 3.0 % 260 1.4 % 10.5 % Asia / Pacific 2,188 7.8 % 9.0 % TOTAL 2.1% 4.4% 292 Americas TOTAL GROUP 2,740 3.5% 6.5% 6.5% Acquisition Disposal Prior year restated for IFRS 11 10
  10. 10. Not updated FINANCIAL HIGHLIGHTS OPERATING INCOME ANALYSIS Financial community – 21 January 2014 11
  11. 11. ADJUSTED OPERATING INCOME(1) GROWTH 4.8% 2.1% 0.0% (2.0)% 4.9% 20 (18) 44 Constant currency growth: 977 6.9% 931 Op. Income 2 December 12 Financial community – 21 January 2014 Organic 1) 2) Acquisitions Disposals Currency impact Op. Income December 13 Before amortisation of acquisition intangibles, restructuring, transaction and integration-related costs Restated for IAS 19 / IFRS 11 12
  12. 12. HISTORICAL RESTATED MARGINS Adjusted EBITDA MARGIN(1) DEC 09 DEC 10 Adjusted OPERATING MARGIN(1) DEC 11 DEC 12 DEC 13 DEC 09 25.0% DEC 13 17.3% 17.6% 16.8% 16.7% 16.8% 10.0% 10.0% DEC 12 15.0% 15.0% DEC 11 20.0% 20.0% DEC 10 5.0% 5.0% 21.8% 22.2% Financial community – 21 January 2014 21.2% 21.2% 21.5% 1) Before amortisation of acquisition intangibles, restructuring, transaction and integration-related costs and prior years restated for IAS 19 / IFRS 11 13
  13. 13. ADJUSTED OPERATING MARGIN(1) BY BUSINESS 30.0% 1) 2) 24.8% 21.0% GIS 22.0% AUTO ENV 10.6% 11.2% IND 11.2% 18.3% 2 10.3% 18.3% December 12 Financial community – 21 January 2014 SSC 24.8% CTS LIFE 8.5% 13.1% OGC 18.7% MIN AGRI 5.0% 16.5% 10.0% 13.2% 13.5% 15.0% 15.6% 17.1% 20.0% 21.6% 24.8% 25.0% December 13 Before amortisation of acquisition intangibles, restructuring, transaction and integration-related costs Restated for IAS 19 / IFRS 11 14
  14. 14. RESTRUCTURING COSTS RESTRUCTURING BY BUSINESS ENVI 7.0% AUTO AGRI 0.6% 0.6% RESTRUCTURING 2013 BY REGION MIN 9.7% OGC 2.7% ASIA PACIFIC 10.9% AMERICAS 4.8% LIFE 18.7% IND 47.1% CTS 10.6% SSC 3.0% Financial community – 21 January 2014 EUROPE / AFRICA / MIDDLE EAST 84.3% 15
  15. 15. CASH FLOW CHF million PROFIT FOR THE PERIOD Depreciation, amortisation and impairment Share based payments Tax Other Non-cash items (Increase)/decrease in working capital Taxes paid OPERATING CASH FLOW Net (purchase) / sale of fixed assets Acquisition of businesses Other from investing activities CASH FLOW FROM INVESTING ACTIVITIES Dividend paid to equity holders of SGS SA Dividend paid to non-controlling interests Net cash received/(paid) on treasury shares Interest paid Net flows on interest rate swaps Increase/(decrease) in borrowings CASH FLOW FROM FINANCING ACTIVITIES Currency translations (DECREASE) IN CASH AND CASH EQUIVALENTS Financial community – 21 January 2014 Dec 13 Dec 121 638 579 298 5 236 13 552 (29) (213) 948 (333) (108) 16 (425) (444) (27) 4 (46) 2 (5) (516) (13) (6) 280 14 214 (7) 501 (73) (209) 798 (376) (182) 1 (557) (497) (24) 76 (46) 37 (12) (466) (5) (230) 1) Restated for IAS 19 / IFRS 11 16
  16. 16. CAPITAL EXPENDITURE CAPEX REGION CAPEX BUSINESS AUTO 7.0% ASIA PACIFIC 33.3% GIS 6.4% AGRI 4.2% MIN 16.8% ENVI 6.2% EUROPE / AFRICA / MIDDLE EAST 46.0% IND 9.0% SSC 1.4% OGC 19.0% CTS 25.5% AMERICAS 20.7% LIFE 4.5% ANNUAL CAPEX CHF million 2008 2009 2010 2011 2012 2013 500 400 300 200 100 Capital Expenditure Financial community – 21 January 2014 Depreciation & amortisation 17
  17. 17. FOREIGN CURRENCY REVENUES 2013 EUR 27.7% Other 27.9% CLP 2.7% BRL 2.9% GBP 2.9% TWD 2.9% CAD 4.1% Financial community – 21 January 2014 AVERAGE RATES 2013 2012 Change EUR 1.2309 1.2055 2.1 % USD 0.9272 0.9380 (1.1)% CNY 0.1508 0.1487 1.4 % AUD 0.8985 0.9712 (7.5)% CAD 0.9009 0.9384 (4.0)% TWD 0.0312 0.0317 (1.5)% GBP 1.4501 1.4863 (2.4)% BRL 0.4320 0.4819 (10.4)% CLP 0.0019 0.0019 (2.7)% HKD 0.1195 0.1209 (1.1)% USD 13.2% AUD 5.1% CNY 10.6% 18
  18. 18. FOREIGN CURRENCY SENSITIVITY ANALYSIS EURO Revenues Income CNY Revenues Income Financial community – 21 January 2014 1.25 (41) (4) 0 0 25 3 0.93 0.96 (31) (3) 0 0 27 2 0.14 USD 1.23 0.89 Revenues Income 1.20 0.15 0.16 (44) (13) 0 0 38 11 19
  19. 19. SECOND HALF 2013 Financial community – 21 January 2014 20
  20. 20. FINANCIAL HIGHLIGHTS (H2) CHF million 2013 H2 Revenue Change in % 2,978 2,813 5.9 % 2,922 1.9 % 539 503 7.2 % 523 3.1 % 17.9 % 17.9 % Adjusted Operating Income (1) Change in % Adjusted Operating Income Margin (1) 18.1 % 2012 H2 Pro-forma (2) 2012 H2 Restated(3) Operating Income (EBIT) Change in % 501 445 12.6 % 465 7.7 % Adjusted Net Income (1) Change in % 365 334 9.3 % 347 5.2 % Net income Change in % 335 292 14.7 % 306 9.5 % Financial community – 21 January 2014 1) 2) Before amortisation of acquisition intangibles, restructuring, transaction and integration-related costs 3) Restated for IAS 19 / IFRS 11 Constant currency and restated for IAS 19 / IFRS 11 21
  21. 21. REVENUE GROWTH COMPOSITION H2 3.8% 2.1% 0.0% 58 (4.0)% 1.9% (109) 107 2,978 Constant currency growth: 5.9% 2,922 Revenues H2 2012 1 Financial community – 21 January 2014 Organic Acquisitions Disposals Currency impact Revenues H2 2013 1) Restated for IFRS 11 22
  22. 22. LOCAL CURRENCY GROWTH BY BUSINESS (H2) AGRI MIN 6.5% (10.6)% (7.4)% 8.7% LIFE 7.2% 3.2% OGC 9.4% 0.7% (1.6)% (1.6)% CTS 10.9% 10.9% SSC 3.2% IND ENVI 0.7% (1.2)% 3.7% 7.0% 0.9% 0.5% 7.9% 2.6% 1.4% AUTO 12.7% GIS TOTAL 12.0% 3.8% Organic Financial community – 21 January 2014 2.1% Acquisition 1.2% 13.9% 12.0% 5.9% Disposal Prior year restated for IFRS 11 23
  23. 23. ADJUSTED OPERATING MARGIN(1) BY BUSINESS (H2) 1) 2) 19.7% GIS AUTO 22.0% 12.4% ENV IND 12.6% 19.9% 2 12.9% 12.3% H2 - 2012 Financial community – 21 January 2014 SSC 26.9% CTS LIFE 9.3% 14.1% OGC 19.1% MIN AGRI 5.0% 18.4% 10.0% 12.1% 14.8% 15.8% 15.0% 19.9% 20.3% 20.0% 21.6% 25.0% 26.6% 26.7% 30.0% H2 - 2013 Before amortisation of acquisition intangibles, restructuring, transaction and integration-related costs Restated for IAS 19 / IFRS 11 24
  24. 24. Not updated BUSINESS OVERVIEW BUSINESS OVERVIEW Financial community – 21 January 2014 25
  25. 25. AGRICULTURAL SERVICES (AGRI) CHF million Revenue December December December 2013 2012 2012 2 Pro-forma Restated3 381.3 Adj. Operating Inc. (1) Change in % Margin %1 17.1 (1) 3.2 59.4 7.2 16.4 16.5 Before amortisation of acquisition intangibles, restructuring, transaction and integration- related costs (2) Restated figures on a constant currency basis (3)  60.9 9.9 65.3 369.5 5.5 Change in % 361.3  Overview 2013    Restated figures due to IAS 19, IFRS 11 Organic growth of 3.8% despite difficult trading conditions in the Black Sea and Danube Corridor in H1 as well as in Asia Pacific in H2. Additional growth from acquisitions closed in 2012: Gravena (Brazil) and WareCare (Netherlands), both performing ahead of expectations. Seed and Crop and fumigation services continue to deliver double digit growth. Solid growth and margin improvement in North America due to deregulation of the Canadian Wheat Board and Canadian Grain Commission as well as successful cost saving initiatives.  Outlook    Financial community – 21 January 2014 Positive H2 2013 trading trends in Eastern Europe and North America to continue into H1 2014, partially offset by challenging market conditions in Asia Pacific. Increased lab capabilities in Central & Eastern Europe expected to come online in H2. Solid growth in Seed and Crop to continue as expansion efforts in South America and Africa gain traction. 26
  26. 26. MINERALS SERVICES (MIN) CHF million Revenue December December December 2013 2012 2012 2 Pro-forma Restated3 791.9 Adj. Operating Inc. (1) Change in % Margin %1 15.6 (1) (8.8) 156.0 162.1 (20.9) 123.4 868.0 (5.2) Change in % 835.1 (23.9) 18.7 Restated figures due to IAS 19, IFRS 11  18.7 Before amortisation of acquisition intangibles, restructuring, transaction and integration- related costs (2) Restated figures on a constant currency basis (3)  Overview 2013     Challenging market conditions throughout the year resulted in a revenue decline and pressure on margins. Trade business delivered double-digit growth from geographic expansion and increased market share. Mining and exploration companies significantly reduced their expenditure on exploration impacting Geochem and Metallurgy. Sample load into the Commercial Geochem network declined significantly versus prior year. Restructuring activity undertaken in order to align the cost base.  Outlook      Financial community – 21 January 2014 Market conditions not expected to improve in 2014. Trade inspections will continue to grow as producers maximise output from existing operations. Continued low volumes and price pressure in commercial Geochem as competitors seek to fill available capacity. Benefits from restructuring will improve margin. Additional revenues from 7 laboratories opened in 2013 and from 5 new laboratories starting in 2014. 27
  27. 27. OIL, GAS & CHEMICALS SERVICES (OGC) CHF million Revenue December December December 2013 2012 2012 2 Pro-forma Restated3 1,139.9 Adj. Operating Inc. (1) Change in % Margin %1 13.5 (1) 9.0 135.6 137.1 13.6 154.0 1,046.0 10.3 Change in % 1,033.8 12.3 13.1  13.1 Before amortisation of acquisition intangibles, restructuring, transaction and integration- related costs (2) Restated figures on a constant currency basis (3)  Overview 2013    Upstream Services delivered outstanding growth across whole portfolio (Australia and Middle East, Asia, Eastern Europe). Continued growth in Plant and Terminal Operations specifically in the USA and Canada. Growth in Oil Condition Monitoring from the Herguth acquisition in the USA and expansion into new geographies. Slowdown in trade-related activities in Europe and North America offsetting growth in other geographies. Restated figures due to IAS 19, IFRS 11  Outlook     Financial community – 21 January 2014 Upstream Services growth to remain strong capitalising on new contracts and pre-qualifications achieved as well as footprint expansion. Strong pipeline of laboratory commissioning and outsourcing projects. Trade related activities to deliver moderate growth despite reduced ethanol export volumes in Brazil. Better efficiency due to implementation of integrated execution platform and back office improvements. 28
  28. 28. LIFE SCIENCE SERVICES (LIFE) CHF million Revenue December December December 2013 2012 2012 2 Pro-forma Restated3 205.0 Adj. Operating Inc. (1) Change in % Margin %1 13.2 (1) 16.9 59.4 8.5 Before amortisation of acquisition intangibles, restructuring, transaction and integration- related costs (2) Restated figures on a constant currency basis (3)  17.0 8.4  2.9 60.4 27.1 199.3 2.2 Change in % 200.6  Overview 2013 Adjusted for the winding-down of the Paris clinical trial activities, revenue growth reached 11.1%. Strong performance in laboratory services:  Europe supported by UK biologics capabilities.  North America supported by investments in capacity expansion completed 2012 investments.  Asia supported by global key accounts.   Restated figures due to IAS 19, IFRS 11 Clinical Research delivered limited growth due to market difficulties and continued price pressures. Margin improvement due to winding-down of Paris clinical activities and profitable double-digit growth in laboratory activities.  Outlook     Financial community – 21 January 2014 Laboratory growth and margin to continue improving thanks to investments in the network and global key account management activities. Biologics testing to remain a strong driver of top and bottom line improvement with highest margins. Execution excellence & higher quality service delivery remain top priority areas. Clinical Research to improve sales performance and drive operational efficiency. 29
  29. 29. CONSUMER TESTING SERVICES (CTS) CHF million Revenue December December December 2013 2012 2012 2 Pro-forma Restated3 1,041.9 Adj. Operating Inc. (1) Change in % Margin %1 24.8 11.3 231.7 232.4 11.5 258.3 936.2 12.0 Change in % 930.6 11.1 24.9 24.8  Overview 2013     (1) Before amortisation of acquisition intangibles, restructuring, transaction and integration- related costs (2) Restated figures on a constant currency basis (3) Double-digit organic revenue growth primarily driven by Eastern Asia, South America, Eastern Europe and Middle East across all business segments. Achieved market share gains thanks to targeted investments in E&E and Automotive parts testing Secured new strategic accounts in Softlines and Toys testing. Pressure on the margins remains, resulting from operational cost increases in Asia and the timing of new investments in capacity expansion in Asia and North America. Restated figures due to IAS 19, IFRS 11  Outlook     Financial community – 21 January 2014 Asia and South America will continue generating solid growth; Europe performance to improve. Network expansion in key geographies and increased capacity in high growth segments will contribute to continued growth. Further development of existing service portfolio into new geographies. Enhancement of IT systems to deliver more effective supply chain solutions. 30
  30. 30. SYSTEMS & SERVICES CERTIFICATION (SSC) CHF million Revenue December December December 2013 2012 2012 2 Pro-forma Restated3 401.6 Adj. Operating Inc. (1) Change in % Margin %1 18.3 (1) 1.7 70.1 1.5 18.2 18.3 Before amortisation of acquisition intangibles, restructuring, transaction and integration- related costs (2) Restated figures on a constant currency basis (3) Restated figures due to IAS 19, IFRS 11  72.2 4.6 73.3 394.9 4.1 Change in % 385.7  Overview 2013     Revenue growth significantly impacted by the difficult economic environment in Europe and Japan throughout the year. Cost saving programs implemented in Europe and Japan, as well as operational efficiency initiatives protected margins. Hart Aviation acquisition expanded the service offering to the aviation industry. Strong demand for medical device certification and food safety schemes. Good performance of Training with SGS Academy gradually implemented in all regions.  Outlook     Financial community – 21 January 2014 Margins expected to remain stable thanks to restructuring and further efficiency gains. Double-digit growth expected in Performance Assessment and Training. Food and Medical Devices will remain major growth drivers in certification. Further development of new services such as Access Control Solution, Health and Safety compliance and aviation safety certification. 31
  31. 31. INDUSTRIAL SERVICES (IND) CHF million Revenue December December December 2013 2012 2012 2 Pro-forma Restated3 960.3 Adj. Operating Inc. (1) Change in % Margin %1 11.2 6.9 99.0 100.2 8.4 107.3 898.6 8.3 Change in % 886.5 11.2   7.1 11.2  Overview 2013   (1) Before amortisation of acquisition intangibles, restructuring, transaction and integration- related costs (2) Restated figures on a constant currency basis (3) Organic revenue growth and margins impacted by soft market conditions in Europe. Double-digit organic growth in most regions outside Europe. Continued restructuring and repositioning to meet new market conditions across Europe and protect margins. Acquisition of four laboratories in line with the strategy to increase testing activities in the portfolio: Labmat in Brazil, MSi in USA, CQA in Australia and MIS Testing in the UK. Restated figures due to IAS 19, IFRS 11  Outlook       Financial community – 21 January 2014 Market conditions in Europe expected to stabilise. Gradual margin improvement anticipated in Europe following restructuring and repositioning plan. Growth to remain strong in other geographies. Increase focus on lab testing: green field development and acquisitions. Enhance key account management and sales structure in key sectors. Continue expansion in high growth markets. 32
  32. 32. ENVIRONMENTAL SERVICES (ENVI) CHF million Revenue December December December 2013 2012 2012 2 Pro-forma Restated3 328.0 Adj. Operating Inc. (1) Change in % Margin %1 10.3 33.5 34.2 (1.2) 10.5 10.6   1.6 0.9 33.8 322.7 3.0 Change in % 318.5  Overview 2013   (1) Before amortisation of acquisition intangibles, restructuring, transaction and integration- related costs (2) Restated figures on a constant currency basis (3) Restated figures due to IAS 19, IFRS 11  Strong impact on performance from European operations due to overall economic situation. Results also affected by mining sector slow down in the Americas, Africa and Australia, partly offset by customer diversification and cost control plans. Weakness of carbon price resulted in a strong reduction of our CDM portfolio in China and India. Continued geographical and service diversification with market entry in some Asian and African countries, where we experienced strong growth. Expanded footprint in Germany and UK through acquisition of RUK and MIS Environmental.  Outlook     Financial community – 21 January 2014 Continue diversification in Asia and the Americas to reduce dependency on Europe. Additional restructuring of European operations completed in 2013 will lift overall margin. Optimise European laboratory network through an improved regional sample distribution model. New revenues from global contracts signed in 2013 for Industrial Hygiene, Monitoring and Energy audits. 33
  33. 33. AUTOMOTIVE SERVICES (AUTO) CHF million Revenue December December December 2013 2012 2012 2 Pro-forma Restated3 305.1 Adj. Operating Inc. (1) Change in % 1 Margin % 21.6 (1) 10.0 60.8 60.9 8.2 65.8 277.4 11.4 Change in % 273.8 8.0 22.2 Restated figures due to IAS 19, IFRS 11  22.0 Before amortisation of acquisition intangibles, restructuring, transaction and integration- related costs (2) Restated figures on a constant currency basis (3)  Overview 2013      Statutory inspection business provided solid results in Europe, Africa, North America and South America. New road safety services rolled out in Kenya. New vehicle and boat tax collection contract being implemented in Ivory Coast. Contract for Identity Authentication Services as part of the driver’s license program started in Ireland. Commercial inspection volumes picking up in the USA and remained stable in Europe. Acquisitions concluded in France and China.  Outlook    Financial community – 21 January 2014 Concession for statutory vehicle inspections in the city of Guayaquil, Ecuador and in Mauritius will start generating revenues as of H2 2014. New York statutory program ended in December 2013 and Santiago concession in Chile to end in July 2014, negatively impacting organic growth. Acquisition strategy will focus on enhancing capabilities & footprint for engine & vehicle testing. 34
  34. 34. GOVERNMENTS AND INSTITUTIONS SERVICES (GIS) CHF million Revenue December December December 2013 2012 2012 2 Pro-forma Restated3 274.7 Adj. Operating Inc. (1) Change in % Margin %1 24.8 (1) 7.3 50.3 53.7 35.6 68.2 256.0 11.1 Change in % 247.2 27.0 20.3 Restated figures due to IAS 19, IFRS 11  21.0 Before amortisation of acquisition intangibles, restructuring, transaction and integration- related costs (2) Restated figures on a constant currency basis (3)  Overview 2013     Good growth in Local Solutions with Product Conformity Assessment (PCA) programs as main driver. Unexpected extension of the Destination Inspection program in Nigeria until November 2013. Strong performance for TradeNet in Ghana and Madagascar as well as an excellent start in Mozambique. New full scale Telecom monitoring activities in Tanzania started operating in H2. PSI Angola and Bangladesh discontinued.  Outlook      Financial community – 21 January 2014 Continued growth from PCA programs with new contracts. New forestry program in Liberia. Complete deployment of TradeNet in Mozambique. Complete implementation of new mandate in Ghana (Ghana Revenue Authority). New contracts for Cargo Tracking and Telecoms monitoring. 35
  35. 35. © SGS SA 2014. ALL RIGHTS RESERVED. WWW.SGS.COM 36
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