Enabling a better, safer and interconnected world - 2020 GROUP PROFILE ENGLISH

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Enabling a better, safer and interconnected world - 2020 GROUP PROFILE ENGLISH
Enabling a better, safer
and interconnected world

2020 GROUP PROFILE
ENGLISH
Enabling a better, safer and interconnected world - 2020 GROUP PROFILE ENGLISH
Our value to society
We add more than just financial value to society. Through our integrated leadership approach,
we strive to become an ever more sustainable company and maximize the positive impact we can have.
Our stakeholders (employees and suppliers, investors, customers, governments and industries, consumers,
and communities and the planet) are the ultimate beneficiaries of this effort. In order to measure our
success, we are developing an innovative impact valuation model to quantify our value to society.

OUR VISION                                 OUR VALUES                                  OUR HISTORY

We aim to be the most competitive and      We seek to be characterized by our          Established in 1878, SGS transformed
the most productive service organization   passion, integrity, entrepreneurialism      grain trading in Europe by offering
in the world. Our core competencies        and our innovative spirit, as we            innovative agricultural inspection services.
in inspection, verification, testing and   continually strive to fulfill our vision.   From those early beginnings, we
certification are being continuously       These values guide us in all that we do     steadily grew in size and scope as
improved to be best in class. They are     and are the bedrock upon which our          our agricultural inspection services
at the heart of what we are. Our chosen    organization is built.                      spread around the world.
markets are and will be determined by
                                                                                       During the mid-20th century, we
our ability to be the most competitive
                                                                                       began to diversify and started offering
and to consistently deliver unequaled
                                                                                       inspection, testing and verification
service to our customers.
                                                                                       services across a variety of sectors,
                                                                                       including industrial, minerals, oil, gas,
                                                                                       and chemicals.
                                                                                       In 1981, SGS was listed on the
                                                                                       Swiss Stock Exchange and forged
                                                                                       an unrivaled reputation as the industry
                                           “We are committed to                        leader in finding solutions to the
                                           delivering sustainable                      complex challenges faced every day
                                                                                       by organizations.
                                           value to society. Ensuring
                                                                                       Our consultancy, outsourcing and
                                           that our supply chain and                   training services complement our core
                                           direct operations have a                    inspection, verification, testing and
                                           positive impact beyond the                  certification services in delivering
                                                                                       these solutions across all industries.
                                           traditional financial benefits
                                                                                       Through our unique global network,
                                           is an integral part of our                  we deliver independent results tailored
                                           success and leadership.”                    to the precise needs of each industry
                                                                                       or sector. Our customers trust in our
                                           FRANKIE NG                                  expertise, experience and resources to
                                           CHIEF EXECUTIVE OFFICER                     support them in achieving outstanding
                                                                                       performance in everything they do.
                                                                                       Today, our focus is on innovative ways
                                                                                       to deliver business benefits. This
                                                                                       enables us to help our customers
                                                                                       improve quality, safety, efficiency,
                                                                                       productivity and speed to market
                                                                                       while reducing risk and building trust
                                                                                       in sustainable operations.
Enabling a better, safer and interconnected world - 2020 GROUP PROFILE ENGLISH
The benefits we deliver
QUALITY                                      SAFETY                                      REDUCED RISK
Our customers rely on our independent        We help organizations develop effective     We provide our customers with
third-party inspection, testing and          health and safety systems to protect        independent and impartial services that
auditing solutions to ensure products,       employees, generate consumer                enable them to identify, manage and
services and processes comply with           confidence and enhance trust in             reduce risk. Our experts deliver risk
the latest quality standards. Our global     business operations. We support our         management solutions, drawing on our
network of state-of-the-art facilities       customers in adhering to best practices     testing and inspection capabilities, to
provides information to certify and verify   and complying with local, national and      verify that risk prevention measures are in
quality worldwide.                           international regulations.                  place. We assist with the compliance of
                                                                                         international risk management standards
                                                                                         across a wide range of industries.

PRODUCTIVITY                                 EFFICIENCY                                  SPEED TO MARKET
Our training and outsourcing solutions       Our tailored business solutions help our    Compliance with the requirements of
ensure productivity keeps pace with          customers implement processes and           target markets is key to increasing speed
developments in our customers’               systems that make business operations       to market. Our consultancy, testing and
organizations. In the short term,            faster, simpler and more efficient. We      certification services help our customers
we offer the knowledge of our                deliver unrivaled efficiency results from   overcome the complex challenges of
world-class productivity experts.            our local experts, who draw on the global   understanding and meeting market
In the long term, we deliver focused         experience of the entire SGS network.       demands anywhere in the world,
training to develop specialist skills in                                                 whatever the industry or sector.
our customers’ workforce.

TRUST                                        SUSTAINABILITY
Our global reputation for independence       We help our customers take ownership
and integrity enables us to build            of building a more responsible and
trust wherever needed. We provide            sustainable future. We encourage
transparent and unbiased inspection,         environmental responsibility and
testing, verification and certification      reduce the risk of corruption in our
solutions so our customers can give          customers’ projects. Our services assist
assurance in their products, processes,      in developing sustainable facilities and
systems and services.                        production, as well as better working
                                             and social environments.
Enabling a better, safer and interconnected world - 2020 GROUP PROFILE ENGLISH
SGS by industry
SGS offers services across 11 major industries through our eight business lines.
Each business line develops and maintains world-class expertise to support the evolving
needs of our customers. Thanks to our capabilities we are able to provide solutions
to the challenges they face across the globe. The industries that SGS services are outlined below:

AGRICULTURE AND FOOD                        CHEMICAL                                    CONSTRUCTION
Innovativ​e safety, quality and             Innovation, optimization and efficiency     Ensuring safety and performance in the
sustainability solutions for your           in everything from feedstocks to            environment where we work and live.
supply chain.                               finished products.                          Safe, efficient and trusted processes
Consumers want assurance of safety          Industrial chemical companies use our       are essential when constructing
and quality at every stage of the feed      services to optimize their production,      buildings or infrastructure.
and food production process. Our            reduce risk and control potential health    We support our customers in
services build trust, reduce risk and       hazards. We work with our partners to       implementing effective scheduling,
maintain efficiency across diverse          establish and maintain quality, safety      budgeting, site safety and logistics
agriculture and food supply chains.         and compliance throughout the custody       by using modern asset virtualization
We offer traditional and new digital        chain, from feedstocks through chemical     tools. We conduct risk assessment,
services for agrochemicals, seeds,          intermediates and into finished products.   construction supervision and project
biofuels, fertilizers, food and forestry,   Our consultancy services provide            management across all types of
adding value in all sectors by using the    laboratory design, commissioning and        construction. We ensure quality
latest technology to increase efficiency    operations assistance. We operate using     throughout the global supply chain by
and help clients to work smarter. From      established benchmarks, international       performing chemical and physical testing
primary production to consumption,          standards and techniques to improve         of materials services, and providing
we assist with legislation compliance,      productivity and efficiency through         facility, waste and energy audits.
correct storage, shipping, packing and      training, optimization services and         Our asset management systems are
distribution as well as import and export   project lifecycle programs.                 increasingly based on real-time sensor
product inspection. Our expertise                                                       technology, which monitors structures’
protects the integrity of our customers’                                                defects and behaviors.
brands by assessing quality, adding
value and securing safe and sustainable
global supply chains.
Enabling a better, safer and interconnected world - 2020 GROUP PROFILE ENGLISH
CONSUMER GOODS AND RETAIL                      LIFE SCIENCES                                regard to health and safety, innovation
Generating trust throughout                    Safeguarding the quality and efficacy        and trust, are well established. In an
the supply chain.                              of medicines.                                industry undergoing radical change, we
                                                                                            are optimizing the use of data analytics.
Our services enable brands, retailers,         In the pharmaceutical, biopharmaceutical
                                                                                            Our specialist advice and knowledge
traders and manufacturers to preserve          and medical device industries, products
                                                                                            support upstream activities, such as
the integrity of their products and            must conform to all national and
                                                                                            subsurface consultancy, metering and
sustain their competitive edge. We             international regulations, as well as
                                                                                            well-testing solutions. Our downstream
cover the full range of consumer               industry best practices. Our services
                                                                                            services support trade logistics, retail
products from Electronics through              enable high-quality, safe and compliant
                                                                                            as well as innovative fuels through
Textiles and Footwear, Hardgoods to            products to reach the market in the
                                                                                            the delivery of optimized processes
Cosmetics. Thanks to our global network        shortest possible time. We provide vital
                                                                                            for global trade.
of laboratories, technical experts and         support and expertise for medicines and
inspectors, we build consumer’s trust          medical devices throughout every stage       PUBLIC SECTOR
every day by helping our customers to          of development, testing, production
                                                                                            Facilitating trade and sustainable
design, control and deliver good quality       and distribution. With a wholly-owned
                                                                                            development, protecting society against
and safe products through sustainable          network of contract analytical
                                                                                            fraud and economic crime.
supply chains.                                 laboratories and state-of-the-art clinical
                                               trials facilities around the world, our      Public sector organizations require
ENERGY                                         customers trust in our expert knowledge      solutions designed to work in harmony
Powering processes from renewables             to support them with reliable results.       with the processes and policies they
to conventional energy.                                                                     already have in place. Our unrivaled
                                               MINING                                       border control services for scanner
As the energy sector evolves to meet
                                               Delivering expert services to improve        installation, transit monitoring and
emerging needs, regulations and
                                               speed to market, manage risks and            risk profiling support the public
expectations, we offer a portfolio
                                               maximize returns.                            sector in reducing risk worldwide.
of services focused on efficiency,
                                                                                            Our e-government solutions enhance
optimization, asset integrity and              Mining is an industry driven by the
                                                                                            international trade and revenue
innovation. We provide support                 need to optimize recovery without
                                                                                            processing. We improve visibility,
across the entire energy sector with           compromising on safety, environmental
                                                                                            efficiency and accountability in the aid
a comprehensive range of independent           sustainability and integrity. We are
                                                                                            and development sector. Our customers
inspections, audits and business               a strategic partner in the mining
                                                                                            trust our knowledge of quality, health,
enhancement services. Whatever the             industry providing testing, engineering,
                                                                                            safety and environmental issues to
industry – petroleum, gas, electrical          technology and trade support, as well
                                                                                            comply with complex regulations.
power, coal or renewable energy – we           as production optimization services.
                                                                                            We improve quality and maximize
offer solutions to our partners. We            We deliver sustainable solutions across
                                                                                            productivity across the public sector.
enable each customer to better assess          exploration, production, industrial
and manage risk in all operations. In          applications, decommissioning and            TRANSPORTATION
renewables, we consult on sustainability       closure. We help to enhance asset value
                                                                                            Driving a safer, cleaner and more
across hydroelectric, geothermal,              and optimize recoveries in industrial
                                                                                            efficient industry.
wind and solar power. Our solutions            minerals and precious and base metals
help the energy sector innovate to find        extraction. We offer technical expertise     Improving performance and reducing
tomorrow’s energy today.                       in steel manufacturing processes and         risk is essential to our customers.
                                               fertilizer, coal and coke trading. Our       For products and services across the
INDUSTRIAL MANUFACTURING                       expansive global footprint allows our        transportation industry, from automotive,
Making manufacturing more productive           customers to take full advantage of our      rail and marine to aerospace, we lead
and profitable.                                network to service their project needs       quality improvements and verify that
                                               across the globe.                            efficiency is maximized. We support
Our expertise allows manufacturers
                                                                                            our clients in achieving shorter delivery
to improve productivity, follow best
                                               OIL AND GAS                                  times at reduced costs and higher value
practices and streamline operational
                                               Innovative solutions that add up along       for their customers. Our experts help to
processes and logistics. Industrial
                                               the value chain.                             minimize the environmental impact of
manufacturers in sectors ranging from
                                                                                            our customers’ products and services
pharmaceuticals to farm machinery,             The oil and gas industry is constantly
                                                                                            through conformity and compliance to
and aerospace to automotive trust in           seeking innovation and efficiency.
                                                                                            standards and regulations. Through the
our independent testing and conformity         We offer a comprehensive portfolio
                                                                                            use of our global network, laboratories
services. Our advice on the fabrication        of services across the entire value
                                                                                            and testing centers, we offer a truly
of components along with our finished          chain in the oil and gas industry, giving
                                                                                            unique and independent service.
product assessments, enable our                our partners access to independent
customers to achieve high performance          expertise in both the upstream and
standards throughout manufacturing.            downstream sectors. We deliver tailored
We support manufacturers in complying          solutions in exploration, extraction,
with all national and international quality,   refining, logistics and the retail of oil,
health and safety legislation, at the same     gas and other hydrocarbons. Our core
time as providing advice on minimizing         convictions, including excellence with
the environmental impact.
2019 financial highlights
                                                     6.6                 6.5     REVENUE BY REGION
CHF 6.6 BN
                                                           2019   2018                                 44%
Revenue +1.2%             1
                                                                                                       Europe / Africa /
                                                                                                       Middle East

                                                    16.1
                                                                         15.6

16.1%
                                                           2019   2018

Adjusted Operating Margin                   2

                                                                                 24%
                                                                                                                   32%
                                                                                 Americas
                                                   1 063
                                                                         1 016

CHF 1 063 MIO                                                                                                      Asia Pacific

                                                           2019   2018

Adjusted Operating Income +4.6%                2            1

                                                                                 REVENUE BY BUSINESS

                                                     870                 796

CHF 870 MIO
                                                           2019   2018

Free Cash Flow +9.3%                  3

                                                    25.5
                                                                         24.2

25.5%
                                                           2019   2018

Return on Invested Capital                 4

1. Constant currency (CCY)
2. Before amortization of acquired intangibles and non-recurring items (see Note 4)
3. Cash flow from operating activities, net of capital expenditure
4. Profit for the period / (Non-current assets + Net working capital), excluding IFRS 16 impact
BUSINESS PRINCIPLES                SUSTAINABILITY ACHIEVEMENTS

SGS’ Business Principles
are the cornerstone on
which all of our activity rests.
They are held to be
fundamental, overarching           SGS was named Industry Leader by           SGS was awarded CDP (formerly the
beliefs and behaviors that         the Dow Jones Sustainability Index         Carbon Disclosure Project) A List status
                                   for the sixth year
guide our decisions and
allow us to embody the SGS
brand in everything we do.
                                     SUPPLIER
                                    ENGAGEMENT
                                      LEADER
                                       2019

                                   SGS was again named as a CDP               SGS received the Robecosam
          INTEGRITY                (formerly the Carbon Disclosure            Gold Class Award for its excellent
                                   Project) Supplier Engagement Leader        sustainability performance

           RESPECT

                                   SGS was included in the                    SGS received the new platinum
                                   FTSE4Good Index for the third year         rating from EcoVadis

  HEALTH AND SAFETY

                                                                              NET POSITIVE
                                   CHF 1.41mio                                COMPANY
      QUALITY AND                  Invested in communities and 17 197 hours   For the third year running,
    PROFESSIONALISM                of community volunteering performed        SGS is a net positive company
                                   by SGS employees

                                                                              CARBON
         LEADERSHIP                0.44                                       NEUTRAL
                                   Total Recordable Incident Rate             SGS maintained its status
                                   (calculated over 200 000 hours)            as a carbon neutral company
                                   decreased by 60% since 2014

      SUSTAINABILITY
                                   Find out more about Sustainability at SGS http://www.sgs.com/en/
                                   our-company/corporate-sustainability/sustainability-at-sgs

Contact us
SGS SA                             Investor Relations SGS SA:                 Careers at SGS:
1 place des Alpes                  www.sgs.com/IR                             www.sgs.com/careers
P.O. Box 2152                      SGS.Investor.relations@sgs.com
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t +41 (0)22 739 91 11
www.sgs.com/contact
© SGS Group Management SA – 2020 – All rights reserved – SGS is a registered trademark of SGS Group Management SA

                                                                                                                    WWW.SGS.COM
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