full yeardecember 2011 results
sgsfull year      results   The SGS Group delivered a strong    performance in                2011 with revenue growth of ...
financialHigHligHts                                                                                                 2010  ...
overview                                     CHF 588 million in 2010 due to the           distribution to sHareHolders    ...
agricultural servicesAgricultural Services comparable            from 15.1% in prior year (constant                       ...
oil, gas & cHemicals servicesOil, Gas and Chemicals Services              year to 13.5% (constant currency basis)         ...
consumer testing servicesConsumer Testing Services delivered         improvement initiatives, better allocation           ...
industrial servicesIndustrial Services delivered solid          business in Germany and asset integrity                   ...
automotive servicesAutomotive Services delivered                statutory inspection activities in Europe.               S...
condensedfinancial statementsfor tHe period ended 31 december 2011condensed consolidated income statement(CHF million)    ...
condensed consolidated statementof compreHensive income(CHF million)                                                      ...
condensed consolidated casH flow statement(CHF million)                                                                   ...
notes to tHecondensedfinancial statements1. basis of preparation                   New amendments and interpretations     ...
4. earnings per sHare                                                                                                     ...
disclaimer                                    This document is given as of the dates       or implied by these forward loo...
© SGS SA 2012. ALL RIGHTS RESERVED.                                      www.sgs.com
SGS 2011 Full Year Results Report
SGS 2011 Full Year Results Report
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SGS 2011 Full Year Results Report

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SGS 2011 Full Year Results Report

  1. 1. full yeardecember 2011 results
  2. 2. sgsfull year results The SGS Group delivered a strong performance in 2011 with revenue growth of 13.7% over prior year (constant currency basis) to CHF 4.8 billion. Organic revenue growth reached 10.5% supported by all regions and by particularly strong activity levels in Minerals, Consumer Testing, Industrial and Environmental services. Adjusted Operating Income, up 10.7% over prior year (constant current basis), reached CHF 815 million, resulting in a margin of 17.0% slightly down from 17.4% in prior year (constant currency basis) due to investments made to sustain long-term growth targets. Net profit at CHF 534 million increased 4.9% from the comparable period (constant currency basis). Operating cash flows remained strong at CHF 690 million, enabling the Group to comfortably fund CHF 337 million of fixed asset investments and complete twenty-two acquisitions for a total cash consideration of CHF 104 million. During the year, the Group also raised CHF 725 million in additional liquidity through the issuance of corporate bonds. The Board of Directors will propose a dividend of CHF 65 per share, CHF 30 representing an ordinary distribution of 43% of net profit and an additional CHF 35 reflecting the healthy cash generation capabilities of the Group. The Board of Directors has also authorised another share buy-back programme of up to CHF 250 million. 3
  3. 3. financialHigHligHts 2010 2010(CHF million) 2011 pro-forma 2 publisHedrevenue 4 797 4 219 4 757Change in % 13.7 0.8adjusted ebitda 1 1 024 931 1 065Change in % 10.0 (3.8)adjusted operating income 1 815 736 848Change in % 10.7 (3.9)adjusted operating margin in % 1 17.0 17.4 17.8operating income (ebit) 790 725 836Change in % 9.0 (5.5)profit attributable to equity Holders of sgs sa 534 509 588Change in % 4.9 (9.2)basic eps (cHf) 70.52 67.30 77.64diluted eps (cHf) 70.16 66.94 77.22casH flow from operating activities 690 783(net debt)/net casH (95) 259weigHted average number of sHares (‘000) 7 578 7 571average number of employees 67 633 60 3211. Before amortisation of acquisition intangibles, transaction and integration-related costs2. Constant currency basis 4
  4. 4. overview CHF 588 million in 2010 due to the distribution to sHareHolders strength of the Swiss Franc, but upThe SGS Group delivered a solid The SGS Board of Directors will 4.9% over prior year (constant currencyperformance in 2011, generating CHF 4.8 recommend to the Annual General basis).billion in revenues, an increase of 13.7% Meeting, to be held on 12 March, theover prior year (constant currency basis), Operating cash flows remained strong approval of a dividend of CHF 65 perof which 10.5% was organic growth. Due at CHF 690 million, enabling the Group share, CHF 30 representing an ordinaryto the strong appreciation of the Swiss to comfortably fund CHF 337 million distribution of 43% of net profit and anFranc against most currencies that SGS of net investments in fixed assets, an additional CHF 35 reflecting the healthyoperates in around the world, Group increase of 35% versus prior year, and cash generation capabilities of therevenues for the year increased 0.8% in to complete twenty-two acquisitions Group.reported terms. for a total cash consideration of CHF 104 million. During the year, the Group managementOn a comparable basis, revenue growth also raised CHF 725 million in additionalwas achieved fairly evenly across Frankie Ng (formerly EVP Consumer liquidity through the issuance ofall regions and all business divisions Testing Services) was appointed to corporate bonds. Group net cash of CHFimproved their top-line. Organic growth the role of EVP Industrial Services and 259 million at the end of 2010 decreasedaccelerated throughout the year with Malcolm Reid (formerly EVP Systems to a net debt position of CHF 95 million,9.7% in the first semester and 11.3% in & Services Certification) was appointed following a dividend outflow of CHF 494the second semester (constant currency to the role of EVP Consumer Testing million and a net outflow on treasurybasis). Minerals Services maintained Services. Beat In-Albon will take early shares of CHF 50 million.excellent momentum during the year, retirement and we would like to thankgrowing organically at 23.5%, supported him for his dedication to the growth ofby strong market fundamentals and a acquisitions the company.broad service portfolio. Other businesses The Group completed twenty-twoexperiencing double digit organic growth acquisitions during the year which significant sHareHolderswere Consumer Testing, Industrial and generate an estimated CHF 80 millionEnvironmental services. Acquisitions As at 31 December 2011, Exor held in revenues and CHF 16 million incompleted by the Group added 3.2% 15.00% (2010: 15.00%), Mr. August Operating Income on an annualisedto revenues, with the main contributor von Finck and members of his family basis.being the ITV Spain and Argentina acting in concert, held 14.97% (2010: These acquisitions are well distributed 14.96%), the Bank of New York Mellonacquisition on 31 December 2010, which throughout the Group, contributing to Corporation held 3.30% (2010: 4.98%)is now fully integrated. six different business divisions and of the share capital and voting rights ofGroup adjusted Operating Income, twelve different countries, bringing the Company.up 10.7% over prior year (constant specific new expertise, faster access tocurrent basis), reached CHF 815 million At the same date, SGS Group held new and emerging markets and, mostresulting in a margin of 17.0%. This was 3.31% of the share capital of the importantly, highly qualified and talentedslightly down from 17.4% in the prior Company (2010: 2.97%). individuals.year (constant currency basis) due to In December 2011, the Groupinvestments made to sustain long-term outlook committed to acquire “CIMMgrowth targets. While acknowledging the difficult Tecnologías y Servicios S.A.” (CIMMNet financial expense for the year T&S), a leading provider of technical market environment in 2012, the SGSincreased to CHF 26 million following services to the mining industry in Chile. Group expects to deliver strong top-linethe issuance of corporate bonds in 2010 The transaction was closed on 6 January growth and an Adjusted Operatingand 2011 for a total of CHF 1,275 million. 2012 for a cash consideration equivalent Income in excess of prior year’sThe overall effective tax rate for the to USD 37 million. Founded in 1996, levels. The investment programme toyear was 26.5% consistent with Group CIMM T&S has over 2,000 employees support our 2014 ambition will continueexpectations. and generated an estimated USD 65 unabated.Profit attributable to Equity Holders million in revenues for 2011.reached CHF 534 million, down from 17 January 2012Sergio Marchionne Christopher KirkChairman of the Board Chief Executive Officer 5
  5. 5. agricultural servicesAgricultural Services comparable from 15.1% in prior year (constant precision agricultural services: NviroCroprevenues increased 7.8% (of which currency basis) supported by the above- in South Africa, Agri Food Laboratories5.7% organic) to CHF 327 million for mentioned trends in trade inspection in Ontario Canada and AG Researchthe year, supported by the successful and the ongoing development in food Associates in the USA.expansion of inland services and solid safety, supply chain integrity, inlandtrade inspection volumes. services and high-end pesticide residueTrade related revenues started to analysis which are gaining critical massrecover in the second quarter and in several countries.further strengthened during the second During the first semester, the Groupsemester supported by the anticipated acquired three companies activere-entry of Russia and Ukraine to the in inland services, consolidating itsexport market. This generated record leadership position in crop research andgrain inspection volumes for SGS dueto good pricing and crop volumes,particularly in Russia. Good activity 2010 2010 (CHF million) 2011 pro-forma 2 publisHedlevels in South East Europe and SouthEast Asia Pacific, as well as a return to revenue 327.1 303.5 344.1normal operating conditions in Egypt Change in % 7.8 (4.9)and Ivory Coast, also contributed torevenue growth. In South America, adjusted operating income 1 51.2 45.9 54.0both traditional and inland activities Change in % 11.5 (5.2)performed well; in particular the fish margin % 1 15.7 15.1 15.7discharge control programme in Peruand the expansion of supply chain and 1. Before amortisation of acquisition intangibles, transaction and integration-related costsfield trial activities in the region. 2. Constant currency basisThe Adjusted Operating Income Marginfor the year increased slightly to 15.7%minerals servicesMinerals Services delivered excellent Capital investments for the year reached services to the mining industry in Chile,comparable revenue growth of 23.8% CHF 61 million. These investments specialised in geology and mining,(of which 23.5% organic) to CHF 678 included a number of new dedicated metallurgy, environmental management,million for the year as the exploration on-site laboratories, mobile analytical analytical services and industrialboom in the mining sector maintained units, the expansion of existing support. Founded in 1996, CIMMits momentum throughout the period. commercial laboratory facilities and T&S has over 2,000 employees andBuoyant market conditions combined the establishment of full commercial generated an estimated USD 65 millionwith focused sales efforts enabled the laboratory capabilities in several in revenues for 2011. The transactionGroup to generate growth in all areas emerging markets. was closed on 6 January 2012.of the value chain, from exploration to In December, the Group also committedtrade inspection. Particularly strong to acquire “CIMM Tecnologías ygrowth was achieved in geochemistry, Servicios S.A.” (CIMM T&S). CIMMmetallurgy and energy minerals T&S is a leading provider of technicalservices, with the main drivers beingWest Africa, South America, Australia,Canada, China and Mongolia. 2010 2010 (CHF million) 2011 pro-forma 2 publisHedAdjusted Operating Income Margin forthe year increased to 19.4% from 18.7% revenue 677.7 547.4 615.6in prior year (constant currency basis) Change in % 23.8 10.1resulting primarily from a favourable adjusted operating income 1 131.2 102.1 117.9service mix and optimised capacityutilisation throughout the laboratory Change in % 28.5 11.3network. Margins also benefited margin % 1 19.4 18.7 19.2from investments made in previousyears to increase sample handling and 1. Before amortisation of acquisition intangibles, transaction and integration-related costsautomation. 2. Constant currency basis 6
  6. 6. oil, gas & cHemicals servicesOil, Gas and Chemicals Services year to 13.5% (constant currency basis) These investments include new welldelivered comparable revenue growth primarily impacted by a change in mix, testing and wellside services equipmentof 7.9% (of which 7.7% organic) to mainly in Eastern Europe. Continued for operations in Australia, Kuwait andCHF 912 million for the year, with investments and start-up costs to Oman; new production fluids testingtrade inspection volumes remaining grow upstream oil & gas services also laboratories in South America, thestrong throughout the period and with impacted margins; however, several Middle East and Malaysia, as well asan increasing contribution from new new contracts are on track to begin mobile units for on-site Oil Conditionupstream services. operations during the first semester Monitoring contracts in South America.Trade inspection and laboratory testing 2012.services provided solid grounding for During the year, the division supportedthe performance of this division, with its organic growth strategy with capitaldemand remaining strong from both oil investments reaching CHF 63 million.& gas and chemical products. Doubledigit top-line growth was also achievedin Plant and Terminal Operations, Lube 2010 2010 (CHF million) 2011 pro-forma 2 publisHedOil Condition Monitoring and upstreamservices. This growth was achieved revenue 911.7 845.3 956.6notably in North America where Change in % 7.9 (4.7)commercial development programmesprovided excellent momentum across adjusted operating income 1 123.3 129.5 148.9the service portfolio; in Australia Change in % (4.8) (17.2)where upstream services recovered margin % 1 13.5 15.3 15.6significantly following the floodingin Queensland and in China for trade 1. Before amortisation of acquisition intangibles, transaction and integration-related costsinspection. 2. Constant currency basisThe Adjusted Operating Income Marginfor the year declined from 15.3% in priorlife science servicesLife Science Services delivered these operations continued to suffer in Europe, Canada and the USA. Incomparable revenue growth of 11.8% from a weak pipeline of small molecules. addition, a new facility in Mumbai will(of which 5.2% organic) to CHF 192 However, performance improved for be opening in January 2012, expandingmillion for the year, driven primarily by activities related to late phase trials. capabilities in India beyond our existinglaboratory activities which now account Overall, the Adjusted Operating Income Chennai laboratory and providingfor over half the revenues and profits of Margin for the year declined from 14.7% laboratory testing services to thisthe division. in prior year to 10.8% (constant currency important pharmaceutical hub.Laboratory operations delivered top- basis), mainly impacted by the continuedline growth supported by ongoing difficult market conditions in early phaseinvestments in the Good Manufacturing clinical research.Practice (GMP) facilities and an excellent During the year, several investmentsyear in biologics testing with the now have been initiated to significantlyfully integrated acquisition of the expand capacity in our laboratoriesM-Scan Group. Overall margins for thelaboratories have remained stable, withgood profitability improvements in the 2010 2010 (CHF million) 2011 pro-forma 2 publisHedUK, USA, India and Singapore. However,these were offset by tougher conditions revenue 192.0 171.7 193.6in Western Europe for bioanalysis Change in % 11.8 (0.8)caused by market over-capacity. Start-up costs were also incurred during the adjusted operating income 1 20.7 25.3 28.8period to expand our services into new Change in % (18.2) (28.1)activities such as immuno-analysis and margin % 1 10.8 14.7 14.9biomarkers.Growth in clinical research activities 1. Before amortisation of acquisition intangibles, transaction and integration-related costsremained low, hampered by reduced 2. Constant currency basisrevenues from early phase trials, as 7
  7. 7. consumer testing servicesConsumer Testing Services delivered improvement initiatives, better allocation testing, while also responding to clientsolid comparable revenue growth of of work between high and low cost needs in new geographies for softlines10.6% (of which 10.3% organic) to CHF centres and a continuously evolving and food testing.802 million for the year, driven by the service mix.continued development of new services During the year, capital investmentsand market share gains. amounting to CHF 84 million wereAll regions and service lines contributed made. These investments were requiredto top-line growth, supported by to remain a leading edge provider inglobal key account management and areas such as wireless and OTA testing.a proactive approach to new service In addition, these investments enableddevelopment. Despite volatile market the Group to increase capacity inconditions, Western Europe generated automotive parts and medical devicesthe highest revenue growth, reflectinga combination of market share gainsand the ongoing portfolio expansion, 2010 2010 (CHF million) 2011 pro-forma 2 publisHedparticularly in hard goods safety testingand softlines. Asia and South America revenue 802.0 725.2 821.4also delivered strong results with growth Change in % 10.6 (2.4)in emerging countries compensating forslower progression in maturing markets adjusted operating income 1 202.7 185.4 211.9such as Japan. Change in % 9.3 (4.3)The Adjusted Operating Income Margin margin % 1 25.3 25.6 25.8for the year remained strong at 25.3%versus 25.6% in prior year (constant 1. Before amortisation of acquisition intangibles, transaction and integration-related costscurrency basis). Increasing operating 2. Constant currency basiscosts in China, India and Taiwan havebeen broadly offset by efficiencysystems & services certificationSystems and Services Certification and poorer market conditions in undertaken in areas such as IT,delivered organic revenue growth Western Europe. Healthcare, as well as supply chainof 5.6% over prior year to CHF 364 The Adjusted Operating Income Margin activities for environmental, healthmillion, with good growth in most for the year declined from 20.9% and safety.geographies compensating for difficult in the prior year to 18.7% (constantmarket conditions in Europe and audit currency basis), primarily due to thedelays in Japan following the natural postponement of audits in Japan, poorcatastrophes and energy crisis early in market conditions in Spain and Portugalthe year. as a result of their ailing economies andAutomotive, Food and Medical Devices due to additional business developmentwere the leading sectors in terms costs.of revenue growth and a healthy During the year, new servicemomentum was maintained in training development initiatives wereactivities thanks to investments madeto expand local capabilities. 2010 2010The new international sales and (CHF million) 2011 pro-forma 2 publisHedkey account management structureintroduced in 2010 resulted in several revenue 364.0 344.6 386.1blue chip multinational companies Change in % 5.6 (5.7)signing global contracts during the adjusted operating income 1 68.2 72.1 81.6period. Change in % (5.4) (16.4)The above trends enabled EasternEurope, the Middle East, China and margin % 1 18.7 20.9 21.1most Asian countries to deliver double 1. Before amortisation of acquisition intangibles, transaction and integration-related costsdigit growth, compensating for the 2. Constant currency basisslower recovery of activities in Japan 8
  8. 8. industrial servicesIndustrial Services delivered solid business in Germany and asset integrity During the second semester, the Groupcomparable revenue growth of 14.0% management services in the USA. completed two additional acquisitions(of which 10.9% organic) to CHF 747 The Adjusted Operating Income Margin for this division, each one bringing amillion for the year, with all regions for the period declined from 13.0% in prior specific value proposition: in Southcontributing to the growth as well as the year to 10.7% (constant currency basis), Africa, the Group acquired Acumax,ten acquisitions completed during the impacted by restructuring costs incurred which provides quick entry into the localpast twenty-four months. to adjust to gradually declining commercial rope-access NDT inspection market;Despite economic uncertainty and and statutory inspection volumes in Spain, and in the USA, PfiNDE was acquired tothe sovereign liquidity crisis delaying as well as business interruption in Japan enter on-shore pipeline inspection.infrastructure investment decisions, and ongoing growth initiative investmentsthe recovery that started in the first aimed at accelerating the roll-out of newsemester maintained its momentum capabilities.throughout the balance of the year.Strong organic revenue growth wasachieved in Africa propelled by foreign 2010 2010 (CHF million) 2011 pro-forma 2 publisHedinvestments in off-shore oil & gasprojects; in South America driven by revenue 747.0 655.0 737.9increased demand from both the mining Change in % 14.0 1.2and oil & gas sectors; and in EastAsia due to high demand for materials adjusted operating income 1 80.0 84.9 97.1testing and project supervision services. Change in % (5.8) (17.6)Most mature markets also recovered margin % 1 10.7 13.0 13.2progressively, in particular the NDTbusiness which performed very well 1. Before amortisation of acquisition intangibles, transaction and integration-related costson the back of maintenance shut- 2. Constant currency basisdown work in the European power andrefinery sector, the statutory inspectionenvironmental servicesEnvironmental Services delivered to 9.4% (constant currency basis), In Malaysia, the Group acquiredcomparable revenue growth of 14.5% impacted by a less favourable business Conserve, laboratories based in(of which 13.1% organic) to CHF 284 mix in parts of Europe, continued Kuala Lumpur focused on food andmillion for the year. Recovery in activity weak results in the USA and start-up environmental testing. In Australia, thelevels experienced in the first semester of operations in new geographies. Group acquired Leeder Consulting,continued through to year-end in most Investments were also made to roll-out specialised in air, soil and waterregions, and excellent results were new services such as biogenic carbon testing as well as oil impact studiesachieved in Africa, South America, China and fugitive emissions, and to develop and Simmonds & Bristow Pty Ltd,and Asia Pacific. services for the sustainable building, specialised in all facets of wastewater &European operations delivered renewable energy and shipping sectors. water testing, sediment, sludge and soilimproved top-line growth, with prior In the second semester, three analysis.year investments made in service acquisitions were completed to expanddevelopment successfully re- our footprint in the Asia Pacific region.establishing momentum in Belgium, UK,Germany and Poland and offsetting theimpact of continued low volumes and 2010 2010 (CHF million) 2011 pro-forma 2 publisHedprice pressure experienced in Spain. InSouth America and Africa, increased revenue 283.8 247.9 278.4demand for better environmental Change in % 14.5 1.9monitoring was driven by resource-linked economic development projects. adjusted operating income 1 26.8 26.3 29.8This holds true particularly for Peru and Change in % 1.9 (10.1)Colombia, along with Angola, Ghana and margin % 1 9.4 10.6 10.7Madagascar.Despite solid revenue growth, the 1. Before amortisation of acquisition intangibles, transaction and integration-related costsAdjusted Operating Income Margin 2. Constant currency basisdeclined from 10.6% in prior year 9
  9. 9. automotive servicesAutomotive Services delivered statutory inspection activities in Europe. Spain, Argentina and Morocco to furthercomparable revenue growth of 58.2% Commercial activities in the USA remain expand the Group’s well established(of which 7.1% organic) to CHF 270 negatively impacted by significantly operations in these countries.million for the year, reflecting the lower volumes for off-lease inspections. In August, the Group acquiredsuccessful acquisition of the ITV During the year, the Group continued Environmental Testing Corporationstatutory inspection business in Spain to invest in vehicle inspection services (ETC) in the USA, providing an importantand Argentina on 31 December 2010 with the opening of an inspection entry point into independent vehicle andand its complete integration into the testing centre in Lima, Peru, and by engine emissions testing in this majorGroup during 2011. entering the South African market with automotive market.Revenues from statutory inspection the acquisition and the establishmentactivities drove top-line growth for the of roadworthiness testing centres. Newyear, with all operations in Western locations were also opened in France,Europe and North & South Americadelivering solid results. In Africa, whilethe start of the year was impacted by 2010 2010 (CHF million) 2011 pro-forma 2 publisHedpolitical unrest in Ivory Coast, Moroccoand Algeria, the situation gradually revenue 270.2 170.8 195.1improved during the second semester. Change in % 58.2 38.5Testing centres suffered little physicaldamage and activities were able adjusted operating income 1 59.3 31.3 35.9to resume, with a particularly rapid Change in % 89.5 65.2recovery in Ivory Coast. margin % 1 21.9 18.3 18.4The adjusted operating margin for theyear increased to 21.9% from 18.3% 1. Before amortisation of acquisition intangibles, transaction and integration-related costsin prior year (constant currency basis), 2. Constant currency basisbenefiting from the integration of ITV aswell as improved profitability in non-governments & institutions servicesGovernments & Institutions Services lower than expected volumes on the During the year, the Group continueddelivered organic revenue growth for the Algeria PCA programme. During the year, to invest in the deployment of newyear of 6.6% to CHF 222 million, with the Group signed new PCA programmes contracts, including a TradeNet platformsolid results from Local Solution services with Botswana, Kurdistan and Tanzania, for Mozambique and an e-Governmentand higher than expected volumes on from which revenues are expected to platform for the Revenue Authority inPre-shipment Inspection programmes. increase gradually. Ghana. The implementation of newWhile most new service development The Adjusted Operating Income Margin cargo tracking programmes and forestryefforts were focused on Local Solutions, for the year increased to 23.4% from monitoring mandates are also underway.the Global Solution activities also 15.9% (constant currency basis), boostedcontributed to revenue growth, with by volume gains in PSI contracts and theincreased volumes on the Pre-Shipment dynamic up-take of PCA inspections,Inspection (PSI) programmes for both successfully leveraging the existingCameroon and Haiti offsetting weaker Group network.activity levels in Angola.Local Solution services, which now 2010 2010represent 65% of total revenues, (CHF million) 2011 pro-forma 2 publisHeddelivered double digit growth driven byProduct Conformity Assessment (PCA) revenue 221.7 208.0 228.6programmes for Kenya, Saudi Arabia and Change in % 6.6 (3.0)Nigeria, as well as strong performances adjusted operating income 1 51.8 33.0 41.6from TradeNet contracts in Ghana andMadagascar. This was sufficient to fully Change in % 57.0 24.5offset the impact of lost revenues in margin % 1 23.4 15.9 18.2Mexico following the termination of asecond party inspection programme at 1. Before amortisation of acquisition intangibles, transaction and integration-related coststhe start of the year; interruption of the 2. Constant currency basisTradeNet activities in Ivory Coast and 10
  10. 10. condensedfinancial statementsfor tHe period ended 31 december 2011condensed consolidated income statement(CHF million) notes 2011 2010revenue 4 797 4 757Salaries, wages and subcontractors’ expenses (2 635) (2 541)Depreciation, amortisation and impairment (225) (225)Other operating expenses (1 147) (1 155)operating income (ebit) 790 836analysis of operating income Adjusted operating income 815 848 Amortisation of acquisition intangibles (16) (8) Transaction and integration-related costs (9) (4) operating income 790 836Net financial expenses (26) (7)profit before taxes 764 829Taxes (203) (215)profit for tHe period 561 614Profit attributable to: Equity holders of SGS SA 534 588 Non-controlling interests 27 26basic earnings per sHare (in cHf) 4 70.52 77.64diluted earnings per sHare (in cHf) 4 70.16 77.22 12
  11. 11. condensed consolidated statementof compreHensive income(CHF million) 2011 2010Actuarial gains/(losses) on defined benefit plans (46) (46)Income tax on actuarial gains/(losses) taken directly to equity 14 10Exchange differences and other (44) (192)otHer compreHensive income for tHe period (76) (228)Profit for the period 561 614total compreHensive income for tHe period 485 386Attributable to: Equity holders of SGS SA 458 368 Non-controlling interests 27 18condensed consolidated balance sHeet(CHF million) 2011 2010non-current assetsLand, buildings and equipment 888 756Goodwill and other intangible assets 1 044 982Other non-current assets 248 237total non-current assets 2 180 1 975current assetsTrade accounts and notes receivable 868 772Other current assets 501 419Cash and investments 1 211 815total current assets 2 580 2 006total assets 4 760 3 981total equity 2 045 2 108non-current liabilitiesLoans and obligations under financial leases 1 299 553Provisions and other non-current liabilities 333 317total non-current liabilities 1 632 870current liabilitiesTrade and other payables 447 401Other liabilities 636 602total current liabilities 1 083 1 003total equity and liabilities 4 760 3 981 13
  12. 12. condensed consolidated casH flow statement(CHF million) 2011 2010Profit for the Period 561 614Non-cash items 433 417(Increase) / decrease in working capital (84) (33)Taxes paid (220) (215)casH flow from operating activities 690 783Net (purchase) of fixed assets (337) (250)Cash (paid) for acquisitions/received for disposals (112) (300)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)Acquisition of non-controlling interests (2) (4)Net cash (paid)/received on treasury shares (50) 85Proceeds of corporate bonds 714 544Interest paid (21) (15)Increase/(decrease) in borrowings 2 (307)casH flow from financing activities 133 (177)Currency translation 16 (32)increase/(decrease) in casH and casH equivalents 396 23condensed statement of cHanges in consolidated equity attributable to equity Holders non-controlling(CHF million) of sgs sa interests total equitybalance as at 1 january 2010 2 073 37 2 110Total comprehensive income for the period 368 18 386Dividends paid (455) (16) (471)Share-based payments 2 - 2Movement in non-controlling interests (4) - (4)Movement on treasury shares 85 - 85balance as at 31 december 2010 2 069 39 2 108Total comprehensive income for the period 458 27 485Dividends paid (494) (16) (510)Share-based payments 15 - 15Movement in non-controlling interests (3) - (3)Movement on treasury shares (50) - (50)balance as at 31 december 2011 1 995 50 2 045 14
  13. 13. notes to tHecondensedfinancial statements1. basis of preparation New amendments and interpretations 3. acquisitionsThese condensed consolidated financial • IAS 24 (revised) Related party In 2011, the Group acquired 100% ofstatements have been prepared in disclosures PfiNDE Inc., a company specialisedaccordance with International Financial • IAS 32 (amendment) Financial in non-destructive examination,Reporting Standards (IFRS). Instruments - Presentation: testing and pipeline integrity based in Classification of rights issues Connecticut, USA, for an equivalent of CHF 36 million. The Group completed • IFRIC 14 (amendment) IAS 19 - The a further twenty-one acquisitions for a2. Significant accounting limit on a defined asset, minimum total purchase price of CHF 100 million.policieS funding requirements and their transaction These transactions have beenThe condensed financial statements accounted for by using the acquisitionhave been prepared in accordance • IFRIC 19 Extinguishing financial method of accounting. The values of thewith the accounting policies applied liabilities with equity instruments identifiable assets and liabilities reflectby the Group in its consolidated • Improvements to IFRS 2010 the best estimate at the end of thefinancial statements for the year ended These standards and interpretations had period and are subject to final closing31 December 2010, except for the no significant impact on the consolidated adjustments which are not expected tofollowing main changes in standards financial statements. be material.and amendments effective 1 January2011. 15
  14. 14. 4. earnings per sHare 2011 2010Profit attributable to equity holders of SGS SA (CHF million) 534 588Weighted average number of shares (‘000) 7 578 7 571basic earnings per sHare (cHf) 70.52 77.64Profit attributable to equity holders of SGS SA (CHF million) 534 588Diluted weighted average number of shares (‘000) 7 617 7 612diluted earnings per sHare (cHf) 70.16 77.22Adjusted earnings per share: 2011 2010Profit attributable to equity holders of SGS SA (CHF million) 534 588Amortisation of acquisition intangibles (CHF million) 16 8Transaction and integration-related costs net of tax (CHF million) 7 3Adjusted profit attributable to equity holders of SGS SA (CHF million) 557 599adjusted basic earnings per sHare (cHf) 73.53 79.11adjusted diluted earnings per sHare (cHf) 73.15 78.695. excHange ratesThe most significant currencies for the Group were translated at the following exchange rates into Swiss Francs. balance sHeet income statement end of period rates average rates 2011 2010 2011 2010Australia AUD 100 95.47 96.27 91.44 95.69Brazil BRL 100 50.40 56.20 53.06 59.25Canada CAD 100 92.16 95.19 89.68 101.27China CNY 100 14.93 14.35 13.72 15.41European Union EUR 100 121.68 124.84 123.34 138.37United Kingdom GBP 100 145.14 146.18 142.10 161.11Hong Kong HKD 100 12.10 12.21 11.39 13.43India INR 100 1.76 2.11 1.91 2.28Taiwan TWD 100 3.11 3.23 3.02 3.31USA USD 100 94.03 95.00 88.68 104.35 16
  15. 15. disclaimer This document is given as of the dates or implied by these forward looking specified, is not updated and any statements. These statements speakThis PDF version is an exact copy forward looking statements are made only as of the date of this document.of the document provided to SGS subject to the following reservations: Except as required by any applicable lawshareholders. This document contains certain or regulation, SGS expressly disclaimsExcept where you are a shareholder, any obligation to release publicly any forward looking statements that arethis material is provided for information updates or revisions to any forward neither historical facts nor guaranteespurposes only and is not, in particular, looking statements contained herein of future performance. Becauseintended to confer any legal rights to reflect any change in SGS group’s these statements involve risks andon you. expectations with regard thereto or any uncertainties that are beyond control orThis document does not constitute an estimation of SGS, there are important change in events or conditions on whichinvitation to invest in SGS shares. Any factors that could cause actual results to any such statements are based.decisions you make in reliance on this differ materially from those expressed The English version is binding.information are solely your responsibility. sHareHolder information sgs sa corporate office stock excHange trading 1 place des Alpes SIX Swiss Exchange P.O. Box 2152 CH – 1211 Geneva 1 common stock symbols t +41 (0)22 739 91 11 Bloomberg: Registered Share: SGSN.VX f +41 (0)22 739 98 86 e sgs.investor.relations@sgs.com Reuters: Registered Share: SGSN.VX www.sgs.com Telekurs: Registered Share: SGSN ISIN: Registered Share: CH0002497458 2012 Half year results Swiss security number: 249745 Tuesday, 17 July 2012 corporate development, annual general meeting communications & investor of sHareHolders relations Monday, 12 March 2012 Jean-Luc de Buman Geneva, Switzerland SGS SA 1 place des Alpes dividend payment date P.O. Box 2152 CH – 1211 Geneva 1 Monday, 19 March 2012 t +41 (0)22 739 93 31 f +41 (0)22 739 92 00 stock excHange listing www.sgs.com SIX Swiss Exchange, SGSN 17
  16. 16. © SGS SA 2012. ALL RIGHTS RESERVED. www.sgs.com

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