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CONTENT                                            FINANCIAL HIGHLIGHTS                                            2011 H...
3
HIGHLIGHTS                            Revenue growth of 13.7% to CHF 4.8 billion (constant currency)                     ...
FINANCIAL HIGHLIGHTS                       CHF million                                             2011                   ...
SERVICE PORTFOLIO                              REVENUE                            GIS                                     ...
Financial community – 17 January 2012   7
REVENUE GROWTH COMPOSITION                                          10.5%        3.2%           0.0%       (12.9)%        ...
LOCAL CURRENCY GROWTH BY BUSINESS   AGRI                           5.7%         2.1%                                      ...
REVENUE GROWTH AND HEADCOUNT                                CHANGE BY REGION                                              ...
Financial community – 17 January 2012   11
ADJUSTED OPERATING INCOME(1) GROWTH                                           5.7%          5.0%                   0.0%   ...
HISTORICAL MARGIN PROGRESSION  Adjusted EBITDA MARGIN(1)                                             Adjusted OPERATING MA...
ADJUSTED OPERATING MARGIN(1) BY BUSINESS     30.0%     25.0%                                                              ...
CASH FLOWCHF million                                          Dec 11     Dec 10PROFIT FOR THE PERIOD                      ...
CAPITAL EXPENDITURE                               CAPEX REGION                                                            ...
FOREIGN CURRENCY REVENUES 2011                                                                            AVERAGE RATES   ...
FOREIGN CURRENCY SENSITIVITY ANALYSIS                               EURO                1.20    1.23    1.30              ...
Financial community – 17 January 2012   19
FINANCIAL HIGHLIGHTS (H2)                       CHF million                                                2011           ...
LOCAL CURRENCY GROWTH BY BUSINESS (H2)   AGRI                            8.7%         2.8%                                ...
ADJUSTED OPERATING MARGIN(1) BY                                    BUSINESS (H2)     30.0%                                ...
Financial community – 17 January 2012   23
AGRICULTURAL SERVICES (AGRI)CHF million                   December December December                    Overview 2011    ...
MINERALS SERVICES (MIN)CHF million                   December December December                   Overview 2011          ...
OIL, GAS & CHEMICALS SERVICES (OGC)CHF million                     December December December                  Overview 2...
LIFE SCIENCE SERVICES (LIFE)CHF million                   December December December                    Overview 2011    ...
CONSUMER TESTING SERVICES (CTS)CHF million                   December December December                    Overview 2011 ...
SYSTEMS & SERVICES CERTIFICATION (SSC)CHF million                     December December December                  Overvie...
INDUSTRIAL SERVICES (IND)CHF million                   December December December                    Overview 2011       ...
ENVIRONMENTAL SERVICES (ENVI)CHF million                   December December December                    Overview 2011   ...
AUTOMOTIVE SERVICES (AUTO)CHF million                   December December December                   Overview 2011       ...
GOVERNMENTS AND INSTITUTIONS SERVICES (GIS)CHF million                   December December December                    Ov...
© SGS SA 2012. ALL RIGHTS RESERVED.                                       WWW.SGS.COM34
SGS 2011 Full Year Results Presentation
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SGS 2011 Full Year Results Presentation

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SGS 2011 Full Year Results Presentation

  1. 1. CONTENT  FINANCIAL HIGHLIGHTS 2011 Highlights Revenue Analysis Operating Income Analysis Cash FlowsFINANCIAL HIGHLIGHTS Currency Analysis BUSINESS OVERVIEW Second half 2011  BUSINESS OVERVIEWFinancial community – 17 January 2012 2
  2. 2. 3
  3. 3. HIGHLIGHTS  Revenue growth of 13.7% to CHF 4.8 billion (constant currency) • 0.8% at historical rates  Organic revenue growth of 10.5% (constant currency)  Adjusted Operating income(1) up 10.7% (constant currency) to CHF 815 million resulting in a margin of 17.0%  Net Profit for the period of CHF 534 million  Basic EPS of CHF 70.52 per share  Proposed dividend to shareholders of CHF 65 per share • Ordinary dividend of CHF 30 per share • Additional dividend of CHF 35 per shareFinancial community – 17 January 2012 (1) Before amortisation of acquisition intangibles, transaction and integration-related costs 4
  4. 4. FINANCIAL HIGHLIGHTS CHF million 2011 2010 2010 December December December Pro-forma (2) Published Revenue 4,797 4,219 4,757 Change in % 13.7 % 0.8 % Adjusted Operating Income (1) 815 736 848 Change in % 10.7 % (3.9)% Adjusted Operating Income Margin (1) 17.0 % 17.4 % 17.8 % Operating Income (EBIT) 790 725 836 Change in % 9.0 % (5.5)% Net income 534 509 588 Change in % 4.9 % (9.2)% Basic EPS 70.52 67.30 77.64 Diluted EPS 70.16 66.94 77.22 Period end no. of employees 71,220 63,224Financial community – 17 January 2012 (1) Before amortisation of acquisition intangibles, transaction and integration-related costs 5 (2) Constant currency basis
  5. 5. SERVICE PORTFOLIO REVENUE GIS ADJUSTED GIS AGRI AGRI AUTO 4.6% OPERATING INCOME(1) 6.3% 6.3% 6.8% 5.7% AUTO 7.3% ENVI MIN MIN 5.9% 14.1% ENVI 16.1% 3.3% IND 9.8% IND 15.6% OGC OGC SSC 15.1% 19.0% 8.4% SSC 7.6% LIFE LIFE 2.5% CTS 4.0% CTS 16.7% 24.9% REVENUE REGION ASIA PACIFIC 28.2% EUROPE / AFRICA / MIDDLE EAST 50.4% AMERICAS 21.4%Financial community – 17 January 2012 (1) Before amortisation of acquisition intangibles, transaction and integration-related costs 6
  6. 6. Financial community – 17 January 2012 7
  7. 7. REVENUE GROWTH COMPOSITION 10.5% 3.2% 0.0% (12.9)% 0.8% 134 (538) 444 Constant currency growth: 13.7% 4,797 4,757 Revenues Currency Revenues December 10 Organic Acquisitions Disposals impact December 11Financial community – 17 January 2012 8
  8. 8. LOCAL CURRENCY GROWTH BY BUSINESS AGRI 5.7% 2.1% 7.8% MIN 23.5% 0.3% 23.8% OGC 7.7% 0.2% 7.9% LIFE 5.2% 6.6% 11.8% CTS 10.3% 0.3% 10.6% SSC 5.6% 5.6% IND 10.9% 3.1% 14.0% ENVI 13.1% 1.4% 14.5% AUTO 7.1% 51.1% 58.2% GIS 6.6% 6.6%TOTAL 10.5% 3.2% 13.7% Organic Acquisition DisposalFinancial community – 17 January 2012 9
  9. 9. REVENUE GROWTH AND HEADCOUNT CHANGE BY REGION Δ in EOP headcount 2011 2010 Δ December December Group Headcount 71,220 63,224 7,996Europe / Africa & 7.9% 4.4% 12.3% Middle East Organic Business Growth 6,604 Acquisitions* 1,392 Disposals - Americas 13.5% 3.9% 17.4% Increase in Group Headcount 7,996 Asia / Pacific 13.0% 0.6% By Region Headcount Headcount Revenues 13.6% Δ Δ% Δ% Europe / Africa / Middle East 3,761 13.8 % 12.3 %TOTAL GROUP 10.5% 3.2% 13.7% Americas 1,284 9.8 % 17.4 % Organic Acquisition Disposal Asia / Pacific 2,951 12.8 % 13.6 % TOTAL 7,996 12.6% 13.7%Financial community – 17 January 2012 *Including 833 ITV headcount acquired effective 31 December 2010 10
  10. 10. Financial community – 17 January 2012 11
  11. 11. ADJUSTED OPERATING INCOME(1) GROWTH 5.7% 5.0% 0.0% (14.6)% (3.9)% 37 42 (112) Constant currency growth: 10.7% 815 848 Op. Income Currency Op. Income December 10 Organic Acquisitions Disposals impact December 11Financial community – 17 January 2012 (1) Before amortisation of acquisition intangibles, transaction and integration-related costs 12
  12. 12. HISTORICAL MARGIN PROGRESSION Adjusted EBITDA MARGIN(1) Adjusted OPERATING MARGIN(1) DEC 07 DEC 08 DEC 09 DEC 10 DEC 11 DEC 07 DEC 08 DEC 09 DEC 10 DEC 11 24.0% 18.0% 21.0% 15.0% 18.0% 12.0% 15.0% 9.0% 12.0% 6.0% 20.8% 21.3% 22.0% 22.4% 21.3% 16.4% 17.0% 17.4% 17.8% 17.0%Financial community – 17 January 2012 (1) Before amortisation of acquisition intangibles, transaction and integration-related costs 13
  13. 13. ADJUSTED OPERATING MARGIN(1) BY BUSINESS 30.0% 25.0% 25.3% 23.4% 21.9% 20.0% 19.4% 18.7% 15.0% 15.7% 13.5% 10.0% 10.8% 10.7% 9.4% 5.0% 15.7% 14.9% 25.8% 21.1% 13.2% 10.7% 18.4% 18.2% 19.2% 15.6% SSC LIFE OGC GIS MIN ENV IND CTS AUTO AGRI December 10 December 11Financial community – 17 January 2012 (1) Before amortisation of acquisition intangibles, transaction and integration-related costs 14
  14. 14. CASH FLOWCHF million Dec 11 Dec 10PROFIT FOR THE PERIOD 561 614  Negative foreign exchange impact on Non-cash items 433 417 Operating Cash Flow of CHF 100 Depreciation, amortisation and impairment 225 225 million. Share based payments 15 2  Increase in Net Working Capital Tax 203 215 driven by: Other (10) (25) • accelerated business growth in (Increase)/decrease in net working capital (84) (33) Q4. Taxes paid (220) (215) • Long term contracts / projects.OPERATING CASH FLOW 690 783 Net (purchase)/sale of fixed assets (337) (250)  Stable group DSO (Days of Sales Acquisition and divestments of businesses (112) (302) Outstanding). Proceeds from sale of investments - 2 Other from investing activities 6 (1)CASH FLOW FROM INVESTING ACTIVITIES (443) (551) Dividend paid to equity holders of SGS SA (494) (455) Dividend paid to non-controlling interests (16) (25) Increase/(decrease) in non-controlling interests (2) (4) Cash received/(paid) on treasury shares (50) 85 Interest paid (21) (15) Increase/(decrease) in borrowings 716 237CASH FLOW FROM FINANCING ACTIVITIES 133 (177) Currency translations 16 (32)INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 396 23Financial community – 17 January 2012 15
  15. 15. CAPITAL EXPENDITURE CAPEX REGION CAPEX GIS AGRI 6.7% 4.9% AUTO 4.9% MIN ENVI 17.7% ASIA PACIFIC 8.1% 36.2% EUROPE / AFRICA / MIDDLE EAST IND 46.7% 10.1% SSC 1.5% OGC 18.3% CTS LIFE AMERICAS 3.5% 17.1% 24.3% ANNUAL CAPEX CHF million 2006 2007 2008 2009 2010 2011 400 300 200 100 Capital Expenditure Depreciation & amortisationFinancial community – 17 January 2012 16
  16. 16. FOREIGN CURRENCY REVENUES 2011 AVERAGE RATES 2011 2010 Change Other EUR 1.2334 1.3837 (10.9)% 23.7% USD 0.8868 1.0435 (15.0)% EUR CNY 0.1372 0.1541 (11.0)% 32.3% AUD 0.9144 0.9569 (4.4)% CAD 0.8968 1.0127 (11.5)% TWD 0.0302 0.0331 (8.8)% HKD 2.4% GBP 1.4210 1.6111 (11.8)% BRL BRL 0.5306 0.5925 (10.4)% 2.5% HKD 0.1139 0.1343 (15.2)% GBP 2.9% INR 0.0191 0.0228 (16.5)% TWD 2.9% CAD 4.4% USD AUD 13.7% 5.7% CNY 9.5%Financial community – 17 January 2012 17
  17. 17. FOREIGN CURRENCY SENSITIVITY ANALYSIS EURO 1.20 1.23 1.30 Revenues (42) 0 84 Income (6) 0 11 USD 0.80 0.89 0.95 Revenues (64) 0 47 Income (6) 0 4 CNY 0.120 0.137 0.150 Revenues (57) 0 42 Income (17) 0 13Financial community – 17 January 2012 18
  18. 18. Financial community – 17 January 2012 19
  19. 19. FINANCIAL HIGHLIGHTS (H2) CHF million 2011 2010 2010 H2 H2 H2 Pro-forma (2) Published Revenue 2,452 2,141 2,405 Change in % 14.5 % 2.0 % Adjusted Operating Income (1) 441 402 460 Change in % 9.7 % (4.1)% Adjusted Operating Income Margin (1) 18.0 % 18.8 % 19.1 % Operating Income (EBIT) 427 395 453 Change in % 8.1 % (5.7)% Net income 288 277 318 Change in % 4.0 % (9.4)%Financial community – 17 January 2012 (1) Before amortisation of acquisition intangibles, transaction and integration-related costs 20 (2) Constant currency basis
  20. 20. LOCAL CURRENCY GROWTH BY BUSINESS (H2) AGRI 8.7% 2.8% 11.5% MIN 23.0% 23.0% OGC 8.7% 0.1% 8.8% LIFE 3.1% 5.0% 8.1% CTS 12.2% 0.5% 12.7% SSC 5.4% 5.4% IND 11.3% 3.6% 14.9% ENVI 11.7% 1.8% 13.5% AUTO 7.4% 51.6% 59.0% GIS 9.9% 9.9%TOTAL 11.3% 3.2% 14.5% Organic Acquisition DisposalFinancial community – 17 January 2012 21
  21. 21. ADJUSTED OPERATING MARGIN(1) BY BUSINESS (H2) 30.0% 26.9% 25.0% 23.8% 23.4% 20.0% 20.3% 20.1% 17.5% 15.0% 14.1% 10.0% 11.2% 10.7% 10.4% 5.0% 18.1% 20.5% 17.6% 16.8% 26.5% 22.9% 13.8% 17.5% 18.9% 12.2% SSC LIFE OGC GIS MIN ENV IND CTS AUTO AGRI December 10 December 11Financial community – 17 January 2012 (1) Before amortisation of acquisition intangibles, transaction and integration-related costs 22
  22. 22. Financial community – 17 January 2012 23
  23. 23. AGRICULTURAL SERVICES (AGRI)CHF million December December December  Overview 2011 2011 2010 2010 • Seed and crop services revenue growth ~30% for the 2 Pro-forma Published year with three acquisitions closed (South Africa, Canada, USA) and portfolio expansion continues.Revenue 327.1 303.5 344.1 • Trade services produced strong H2 with Black SeaChange in % 7.8 (4.9) origins re-entering the market. Russia in particularAdj. Operating Inc. (1) 51.2 45.9 54.0 producing record volumes.Change in % 11.5 (5.2) • New revenues from laboratory start-ups and expansion due to food safety concerns.Margin %1 15.7 15.1 15.7 • Supply chain services continue to grow in Eastern(1) Before amortisation of acquisition intangibles, transaction Europe and China. and integration-related costs • GMO rejection package driven by EU legislation gaining(2) Constant currency basis acceptance.  Outlook • Higher grain demand, however, limited financing may challenge the ability of the trading community to execute during H1’ 2012. • Further acquisitions in Inland Services expected in 2012 to extend geographical coverage. • Information and Market Research developing capabilities and geographical coverage. • New focus on biotechnology as client investments expected to grow significantly. Financial community – 17 January 2012 24
  24. 24. MINERALS SERVICES (MIN)CHF million December December December  Overview 2011 2011 2010 2010 • Strong market conditions combined with focused sales 2 Pro-forma Published efforts deliver 23.5% organic revenue growth with margin improvement to 19.4%.Revenue 677.7 547.4 615.6 • Global exploration spend reached a record high of USDChange in % 23.8 10.1 17 billion (Metals Economics Group).Adj. Operating Inc. (1) 131.2 102.1 117.9 • Exceptional growth in Africa, South America and China.Change in % 28.5 11.3 Balanced growth across all parts of the service portfolio. • Key project wins including BHP Mitsubishi AllianceMargin %1 19.4 18.7 19.2 (Australia) and Oceana Gold (New Zealand).(1) Before amortisation of acquisition intangibles, transaction and integration-related costs(2) Constant currency basis  Outlook • CIMM acquisition closed on 6 January 2012. • Energy Minerals services in Australia expanding, with new laboratories in Mackay and Brisbane. • Expansion of Metallurgy testing capacity in Perth and Canada operational in H1’ 2012. • Major Geochem expansions coming on-line in Ontario, Vancouver, West Africa, Liberia and Turkey. • Major commodity prices off from their peak, however still at historically strong levels. Availability of financing for junior mining companies may become an issue. Financial community – 17 January 2012 25
  25. 25. OIL, GAS & CHEMICALS SERVICES (OGC)CHF million December December December  Overview 2011 2011 2010 2010 • Excellent growth in Trade related services and Plant 2 Pro-forma Published and Terminal Operations (PTO) driven by strong demand for oil, gas and chemicals and continuingRevenue 911.7 845.3 956.6 outsourcing trends.Change in % 7.9 (4.7) • Strong growth in upstream services with high volumes (1) in Australia after last year’s floods.Adj. Operating Inc. 123.3 129.5 148.9Change in % (4.8) (17.2) • Further expansion of Lube Oil Condition Monitoring services in South America and Turkey.Margin %1 13.5 15.3 15.6 • Margin impacted by significant investments and start up(1) Before amortisation of acquisition intangibles, transaction costs in upstream services as well as a drop in high and integration-related costs margin Cargo Treatment services due to change in(2) Constant currency basis trading patterns.  Outlook • Further growth in upstream services: Well Testing and Wellside services expansion, specifically in the Middle East; new upstream laboratories in Middle East and South America; SGS Horizon subsurface consultancy. • Trade related services to maintain development pace. • Demand for PTO to remain strong, outsourcing a key driver. • Solid pipeline of new projects, innovations and efficiency initiatives to be launched in 2012. Financial community – 17 January 2012 26
  26. 26. LIFE SCIENCE SERVICES (LIFE)CHF million December December December  Overview 2011 2011 2010 2010 • Revenue growth of 11.8% driven by: 2 Pro-forma Published – Biologics strategy, expansion in Asia and state-of- the art laboratories in Europe and North America.Revenue 192.0 171.7 193.6Change in % 11.8 (0.8) – Successful integration of M-Scan which contributed above expectations.Adj. Operating Inc. (1) 20.7 25.3 28.8 • Clinical Research: Limited growth with pressure onChange in % (18.2) (28.1) margins in a market where the reduced molecule pipeline is affecting volumes and prices.Margin %1 10.8 14.7 14.9 • Strong growth with stable margins for laboratory(1) Before amortisation of acquisition intangibles, transaction segment supported by our global key account strategy and integration-related costs and enrichment of the service offering.(2) Constant currency basis  Outlook • China and India will benefit from increased outsourcing as many key accounts continue to focus on these fast growing markets. • New centres of excellence within our existing laboratory network for biologics (biosimilar, cell-based assay, biosafety) will fully leverage our recent investments. • Clinical Research activity will remain under pressure. Service offering enrichment developed to offset volume decrease from main customers. Financial community – 17 January 2012 27
  27. 27. CONSUMER TESTING SERVICES (CTS)CHF million December December December  Overview 2011 2011 2010 2010 • Excellent revenue growth driven by increased activity in 2 Pro-forma Published Europe (France, Spain, Germany & Turkey) and Asia. • USA continues to provide solid revenue streams, thanksRevenue 802.0 725.2 821.4 to diversification and market share gains in traditionalChange in % 10.6 (2.4) segments.Adj. Operating Inc. (1) 202.7 185.4 211.9 • Increasing cost pressure in some executing countriesChange in % 9.3 (4.3) (e.g. China, India) and pricing pressure in mature services.Margin %1 25.3 25.6 25.8 • Margin maintained at a steady level as recent(1) Before amortisation of acquisition intangibles, transaction investments (services & capabilities) and improvement and integration-related costs actions take effect.(2) Constant currency basis  Outlook • Volatile overall market conditions but existing order pipeline provides stability going into 2012. • Additional market share gains expected in key European markets and, importantly, the USA. • Further efficiency and cost optimisation measures to be implemented to compensate for possible cost pressure in some affiliates. • Continuing investment in new segments (e.g. sustainability, automotive) and in geographic expansion (e.g. Morocco, Brazil). Financial community – 17 January 2012 28
  28. 28. SYSTEMS & SERVICES CERTIFICATION (SSC)CHF million December December December  Overview 2011 2011 2010 2010 • Automotive, Food and Medical Devices were the leading 2 Pro-forma Published sectors in terms of growth. • Strong performance in Training thanks to investments inRevenue 364.0 344.6 386.1 local capabilities.Change in % 5.6 (5.7) • A number of blue chip multinational companies chose to (1)Adj. Operating Inc. 68.2 72.1 81.6 sign global contracts with SGS.Change in % (5.4) (16.4) • Excellent market share gains and double digit growth in Eastern Europe, Middle East, China and most AsianMargin %1 18.7 20.9 21.1 countries.(1) Before amortisation of acquisition intangibles, transaction • Steady recovery in Japan following the natural disaster and integration-related costs and energy crisis.(2) Constant currency basis  Outlook • Expecting continuous growth in major geographies particularly the Americas, Eastern Europe, China and Africa. • Diversifying our portfolio of services to meet our customers’ needs to outsource internal functions. • Pursuing growth opportunities in industry sectors such as IT and Healthcare. • Supply chain activity in environmental, health & safety and social compliance becoming a major growth driver. Financial community – 17 January 2012 29
  29. 29. INDUSTRIAL SERVICES (IND)CHF million December December December  Overview 2011 2011 2010 2010 • Very strong organic revenue growth in Africa, East Asia 2 Pro-forma Published and China. • NDT business continues to perform well with increasedRevenue 747.0 655.0 737.9 shutdown work in the European power and refineryChange in % 14.0 1.2 sector.Adj. Operating Inc. (1) 80.0 84.9 97.1 • Statutory inspection business now growing againChange in % (5.8) (17.6) particularly in the recently opened German market. • Large project wins for the Project Services business.Margin %1 10.7 13.0 13.2 • PfiNDE acquired in the USA for pipeline inspection and(1) Before amortisation of acquisition intangibles, transaction Acumax in South Africa for rope access inspection. and integration-related costs • Investments in organic initiatives impacted margins.(2) Constant currency basis  Outlook • Increasing demand for our renewable and conventional power service offering in Asia and Europe. • Growth in oil and gas exploration providing more opportunities for upstream inspection. • Large inspection and testing service contracts with oil majors as they consolidate their supplier base. • New services for pipeline, rail and Russian GOST business. Financial community – 17 January 2012 30
  30. 30. ENVIRONMENTAL SERVICES (ENVI)CHF million December December December  Overview 2011 2011 2010 2010 • Good performance of our European and Canadian 2 Pro-forma Published operations where growth was driven by service diversification.Revenue 283.8 247.9 278.4 • Operations in emerging markets have continued toChange in % 14.5 1.9 deliver strong growth in industrial / mining sectors.Adj. Operating Inc. (1) 26.8 26.3 29.8 • Strong emphasis on performance improvement andChange in % 1.9 (10.1) laboratory process automation. • Strengthened the portfolio in sustainable building,Margin %1 9.4 10.6 10.7 renewable energy and shipping sectors.(1) Before amortisation of acquisition intangibles, transaction • Extended the footprint in Asia Pacific with acquisition of and integration-related costs Leeder in Australia and Conserve in Malaysia.(2) Constant currency basis  Outlook • Market showing increased demand in renewable and sustainability sectors. Mining and oil & gas developments continue to drive our traditional market. • Large multi-year contracts currently under negotiation in major emerging economies. • Data management and interpretation services to become standard at each SGS location. • Continued growth in new geographies such as Liberia, Congo, Malaysia and the Gulf region. Financial community – 17 January 2012 31
  31. 31. AUTOMOTIVE SERVICES (AUTO)CHF million December December December  Overview 2011 2011 2010 2010 • ITV acquisition in Spain & Argentina fully integrated and 2 Pro-forma Published performing above expectations. • Statutory business provided solid results in WesternRevenue 270.2 170.8 195.1 Europe and South America. Opened new test stations inChange in % 58.2 38.5 Spain and Argentina.Adj. Operating Inc. (1) 59.3 31.3 35.9 • Rapid recovery in Ivory Coast.Change in % 89.5 65.2 • Commercial activities in the USA still negatively impacted by significantly lower volumes for off-leaseMargin %1 21.9 18.3 18.4 inspections.(1) Before amortisation of acquisition intangibles, transaction • Commenced statutory services in South Africa and Peru. and integration-related costs • New environmental vehicle engine testing services(2) Constant currency basis through acquisition of ETC.  Outlook • Statutory business will continue to provide solid results. • Low commercial inspection volumes expected throughout 2012. • Several opportunities being pursued in the statutory field in Asia, South America and Europe. • Expanding Statutory Business into Road Safety Services. Financial community – 17 January 2012 32
  32. 32. GOVERNMENTS AND INSTITUTIONS SERVICES (GIS)CHF million December December December  Overview 2011 2011 2010 2010 • Product Conformity Assessment (PCA) programmes are 2 Pro-forma Published the main driver of double digit growth in Local Solutions. • New PCA programmes signed in Botswana, Iraq,Revenue 221.7 208.0 228.6 Kurdistan and Tanzania. Kenya renewed for threeChange in % 6.6 (3.0) years.Adj. Operating Inc. (1) 51.8 33.0 41.6 • Global solutions had increased volumes and a new PSIChange in % 57.0 24.5 contract was signed with Bangladesh with increased volumes.Margin %1 23.4 15.9 18.2 • Strong performance from TradeNet in Ghana and(1) Before amortisation of acquisition intangibles, transaction Madagascar, while Ivory Coast results were impacted and integration-related costs by recent political events.(2) Constant currency basis  Outlook • Continued transformation of existing PSI contracts. • Newly signed PCA contracts to start generating revenues. • Completed deployment of TradeNet in Mozambique. • Completed implementation of new mandates in DRC and Cameroon (Forestry), Ghana (Inland Revenue Services). • Roll-out of new tracking services in Africa as well as new services in telecoms. Financial community – 17 January 2012 33
  33. 33. © SGS SA 2012. ALL RIGHTS RESERVED. WWW.SGS.COM34

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