HIGHLIGHTS & OUTLOOK. 1st semester 2012 results. Outlook 2012 at constant currency

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4 HIGHLIGHTS & OUTLOOK 1st semester 2012 results Total revenue growth of 15.1% to CHF 2.7 billion at constant currency 13.1% at historical rates Organic revenue growth of 11.1% at constant currency Adjusted operating income (1) up 12.2% to CHF 413 million at constant currency Operating income (1) margin of 15.6% at constant currency Restructuring expense of CHF 26 Mio Outlook 2012 at constant currency Strong revenue growth Sustained pace of investments Adjusted operating income (1) in excess of prior year levels 1) Before amortisation of acquisition intangibles, restructuring, transaction and integration-related costs 4

5 FINANCIAL HIGHLIGHTS CHF million 2012 Pro-forma (2) Published Revenue 2,651 2,303 2,345 Change in % 15.1 % 13.1 % Adjusted Operating Income (1) Change in % 12.2 % 10.4 % Adjusted Operating Income Margin (1) 15.6 % 16.0 % 16.0 % Operating Income (EBIT) Change in % 4.5 % 2.8 % Net income Change in % 1.7 % (0.4)% Adjusted Basic EPS (CHF) Basic EPS (CHF) Period end no. of employees 76,993 67,144 1) Before amortisation of acquisition intangibles, restructuring, transaction and integration-related costs 2) Constant currency basis 5

6 SERVICE PORTFOLIO REVENUE ENVI 5.7% AUTO 5.5% GIS 4.6% AGRI 6.5% MIN 15.9% ADJUSTED OPERATING INCOME (1) ENVI 2.9% AUTO 7.6% GIS 6.8% AGRI 6.0% MIN 18.8% IND 15.9% IND 9.8% SSC 7.0% CTS 16.5% LIFE 3.6% OGC 18.8% SSC 7.6% CTS 23.9% LIFE 1.8% OGC 14.8% REVENUE REGION ASIA PACIFIC 28.2% EUROPE / AFRICA / MIDDLE EAST 48.2% AMERICAS 23.6% 1) Before amortisation of acquisition intangibles, restructuring, transaction and integration-related costs 6

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8 REVENUE GROWTH COMPOSITION 11.1% 4.0% 0.0% (2.0)% 13.1% (42) Constant currency growth: 15.1% 2,651 2,345 Revenues 11 Organic Acquisitions Disposals Currency impact Revenues 12 8

9 YEAR-OVER-YEAR H1 REVENUE GROWTH 13.2% 10.0% 1.3% 1.0% (0.3)% 13.1 % 15.1% 15.1% 11.5% 9.7% 11.1% 0.3% 1.4% 4.1% 1.9% 1.9% 1.0% 0.7% 3.1% 4.0% (0.7)% (2.0)% (4.7)% (7.0)% (13.1)% Organic Acquisitions/Disposals Currency Impact 9

10 LOCAL CURRENCY GROWTH BY BUSINESS AGRI 13.3% 0.7% 14.0% MIN 20.6% 10.9% 31.5% OGC 11.2% 0.6% 11.8% LIFE (2.5)% 0.9% (1.6)% CTS 11.5% 1.5% 13.0% SSC 6.0% 6.0% IND 9.0% 9.4% 18.4% ENVI 5.5% 6.1% 11.6% AUTO 5.3% 3.1% 8.4% GIS 20.5% 20.5% TOTAL 11.1% 4.0% 15.1% Organic Acquisition Disposal 10

11 REVENUE GROWTH AND HEADCOUNT CHANGE BY REGION Δ in EOP headcount 2012 Δ Group Headcount 76,993 67,144 9,849 Europe / Africa & Middle East 10.9% 0.9% 11.8% Organic Business Growth 6,204 Acquisitions 3,645 Americas 10.4% 15.1% 25.5% Disposals - Increase in Group Headcount 9,849 Asia / Pacific 12.0% 0.9% 12.9% By Region Headcount Δ Headcount Δ% Revenues Δ% Europe / Africa / Middle East 2, % 11.8 % TOTAL GROUP 11.1% 4.0% 15.1% Americas 4, % 25.5 % Organic Acquisition Disposal Asia / Pacific 2, % 12.9 % TOTAL 9, % 15.1% 11

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13 ADJUSTED OPERATING INCOME (1) GROWTH 9.5% 2.7% 0.0% (1.8)% 10.4% (6) Constant currency growth: 12.2% Op. Income 11 Organic Acquisitions Disposals Currency impact Op. Income 12 1) Before amortisation of acquisition intangibles, restructuring, transaction and integration-related costs 13

14 ADJUSTED OPERATING MARGIN (1) BY BUSINESS 25.0% 20.0% 22.5% 21.8% 22.8% 15.0% 10.0% 5.0% 13.7% 14.4% 18.4% 18.4% 13.0% 12.2% 10.4% 7.9% 23.6% 17.4% AGRI 16.9% 10.8% 9.5% 8.6% MIN 8.0% OGC 21.1% LIFE 20.7% CTS SSC IND ENV AUTO GIS ) Before amortisation of acquisition intangibles, restructuring, transaction and integration-related costs 14

15 RESTRUCTURING COSTS RESTRUCTURING BY BUSINESS AUTO 6.4% AGRI 2.7% RESTRUCTURING BY TYPE ENVI 19.8% MIN 19.4% Activity closures 21.5% IND 19.0% LIFE 1.9% OGC 11.8% Cost optimisation 64.6% Location closures 13.9% SSC 6.1% CTS 12.9% 15

16 CASH FLOW CHF million Jun 12 Jun 11 PROFIT FOR THE PERIOD Non-cash items Depreciation, amortisation and impairment Share based payments 9 9 Tax Other 16 (7) (Increase)/decrease in net working capital (155) (130) Taxes paid (111) (109) OPERATING CASH FLOW Net (purchase)/sale of fixed assets (176) (134) Acquisition and divestments of businesses (103) (27) Other from investing activities 4 (5) CASH FLOW FROM INVESTING ACTIVITIES (275) (166) Dividend paid to equity holders of SGS SA (497) (494) Dividend paid to non-controlling interests (5) (4) Net cash received/(paid) on treasury shares 76 (30) Proceeds of corporate bonds Interest paid (26) (14) Net flows on interest rate swaps 7 - (Decrease)/increase in borrowings (15) 8 CASH FLOW FROM FINANCING ACTIVITIES (460) 180 Currency translations 7 (10) INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS (484)

17 CAPITAL EXPENDITURE CAPEX REGION ASIA PACIFIC 35.9% EUROPE / AFRICA / MIDDLE EAST 43.6% CAPEX BUSINESS IND 8.8% AUTO 2.8% ENVI 5.5% GIS 9.4% AGRI 6.6% MIN 22.1% SSC 1.7% AMERICAS 20.5% CTS 21.0% LIFE 5.0% OGC 17.1% ANNUAL CAPEX CHF million Capital Expenditure Depreciation & amortisation 17

18 FOREIGN CURRENCY REVENUES H HKD 2.3% Other 25.3% TWD 2.8% CLP 2.9% GBP 3.0% CAD 4.6% AUD 5.8% CNY 9.5% EUR 29.2% USD 14.6% AVERAGE RATES 2012 Change EUR (5.2)% USD % CNY % AUD % CAD (0.6)% GBP (0.0)% CLP (1.2)% TWD % HKD % INR (11.6)% 18

19 FOREIGN CURRENCY SENSITIVITY ANALYSIS EURO Revenues (23) 0 22 Inco me (2) 0 2 USD Revenues (8) 0 9 Inco me (1) 0 1 CNY Revenues (8) 0 10 Inco me (2)

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21 AGRICULTURAL SERVICES (AGRI) CHF million 2012 Pro-forma 2 Published Revenue Change in % Adj. Operating Inc. (1) Change in % Margin % (1) Before amortisation of acquisition intangibles, restructuring, transaction and integration-related costs (2) Constant currency basis Overview H Seed and Crop Services continued their positive trend with +40% revenue growth including 3 acquisitions from. Investments continue to expand the business into new geographies and widen the service offering. Trade Services benefited from good export volumes from the Black Sea; overall improved volumes and increased market share especially in cereals. Market Research; Information Services; Process plant monitoring and Supply Chain Services reported excellent growth. Outlook 2012 Black Sea exports expected to reduce slightly, partly offset by solid global demand for all agricultural commodities. Demand for Seed and Crop Services drives development in Asia-Pacific & Sub-Saharan Africa. Continued investments in US, Canada, South Africa, and India enhance our presence in Food Safety. Outlook for agricultural sustainability and precision farming services remains positive. 21

22 MINERALS SERVICES (MIN) CHF million 2012 Pro-forma 2 Published Revenue Change in % Adj. Operating Inc. (1) Change in % Margin % (1) Before amortisation of acquisition intangibles, restructuring, transaction and integration-related costs (2) Constant currency basis Overview H Total revenue growth of 31.5%, of which 20.6% organic and margin improvement (CIMM acquisition dilutive to margin). Sustained growth across all regions and service portfolio, the key drivers being exploration and metallurgical projects. Expansion of the commercial laboratory network including coal labs in Australia and geochemical labs in Liberia and Turkey. Key project wins include AGA & Independence Tropicana Gold Mine in Australia and the BHP exploration coal programme in South Africa. Outlook 2012 Pipeline in all major laboratories and metallurgical testing facilities robust for H2. Financing for junior mining companies difficult due to the general financial situation. The major mining companies, whilst reviewing their investment plans, continue to announce investments in key expansion projects. Continued investments planned to handle high sample volumes and meet client demand. 22

23 OIL, GAS & CHEMICALS SERVICES (OGC) CHF million 2012 Pro-forma 2 Published Revenue Change in % Adj. Operating Inc. (1) Change in % Margin % (1) Before amortisation of acquisition intangibles, restructuring, transaction and integration-related costs (2) Constant currency basis Overview H Strong growth in Upstream Services with contract wins in Australia, Middle East and sub-surface consultancy in Europe. Oil Condition Monitoring expansion in South America and Asia. Cargo Treatment Services grew strongly, particularly in the USA and South East Asia. Growth in PTO continues, driven by the USA and Europe and the underlying outsourcing trend. Margin impacted by changes in business pattern (refinery closures in Europe and the Caribbean) and ramp-up costs in Upstream Services. Outlook 2012 Existing business segments with continued growth (Trade Related, PTO, Oil Condition Monitoring, Upstream, Cargo Treatment Services). Major growth from new innovative services wrapped around new proprietary technologies. Sustained growth in Upstream Services: Metering projects in Mid East, Americas, Asia. Unconventional gas projects. Expansion of well testing and onsite analysis. 23

24 LIFE SCIENCE SERVICES (LIFE) CHF million 2012 Pro-forma 2 Published Revenue Change in % (1.6) (4.7) Adj. Operating Inc. (1) Change in % (25.0) (27.2) Margin % (1) Before amortisation of acquisition intangibles, restructuring, transaction and integration-related costs (2) Constant currency basis Overview H Double-digit organic revenue growth in laboratory segment offset, as expected, by Clinical Research. Laboratory growth driven by expansion in Asia and leveraging state-of-the-art laboratories in Europe and North America. Biologics: M-Scan acquisition contributing above expectations and services enriched by the Vitrology acquisition in the UK. Very difficult semester for Clinical Research with market volume decline affecting revenue and operating income margins. Outlook 2012 Laboratory growth and margins to increase, supported by global key accounts managers. Biologics service expansion will continue fully leveraging new acquisitions and recent investment in centers of excellence (biosimilar, cell-based assay, serology, protein characterisation). Clinical Research activity will remain under pressure. Efficiency improvements on-going. 24

25 CONSUMER TESTING SERVICES (CTS) CHF million 2012 Pro-forma 2 Published Revenue Change in % Adj. Operating Inc. (1) Change in % Margin % (1) Before amortisation of acquisition intangibles, restructuring, transaction and integration-related costs (2) Constant currency basis Overview H Good revenue growth driven by Western Europe, South America and all Asia both in traditional and new services. Capital investments and personnel development progressing as planned to support 2014 targets. All business sectors, and particularly softlines, food and E&E, benefited from improved global economic conditions in H2 last year and during the semester. Margin below prior year reflecting a transition period in product mix, investments in new activities and acquisitions not yet fully performing. Outlook 2012 Unstable markets but strong order pipeline makes us optimistic about full year 2012 results. Strong growth in Europe, despite the crisis; South America to continue on its solid path; Asia expected to continue on track but with some cost pressure. Further investments (E&E, Auto) to meet new technological and regulatory requirements (functional safety, wireless). 25

26 SYSTEMS & SERVICES CERTIFICATION (SSC) CHF million 2012 Pro-forma 2 Published Revenue Change in % Adj. Operating Inc. (1) Change in % Margin % (1) Before amortisation of acquisition intangibles, restructuring, transaction and integration-related costs (2) Constant currency basis Overview H Excellent market share gains and double digit growth in Asia, Eastern Europe, South America and Africa. Strong recovery in Japan after last year s natural disaster. Difficult market conditions in Spain and Italy impact both growth in Europe and margin. Growing demand for sustainability related audit schemes. New mandates ensure compliance of supply chains with environmental, health, safety and social norms. Outlook 2012 Expect solid growth across major markets particularly in Asia, Eastern Europe and the Americas. Training activity becomes an important source of growth. Further cost optimisation in key affiliates in response to increasingly competitive environment. Continued investments to diversify the portfolio of services with new industry bespoke services. 26

27 INDUSTRIAL SERVICES (IND) CHF million 2012 Pro-forma 2 Published Revenue Change in % Adj. Operating Inc. (1) Change in % Margin % (1) Before amortisation of acquisition intangibles, restructuring, transaction and integration-related costs (2) Constant currency basis Overview H Strong organic growth, especially in Asia, Australasia and Middle East. Margin under pressure in Europe, Africa and North America as investment projects are delayed and public spending reduces. Continued restructuring to align organisational structures to the new market conditions in Europe. Acquisition of ETSA in Colombia for engineering project supervision and Metlab in South Africa for metallurgical testing; Margins dilutive in H1 due to strong seasonality. Outlook 2012 Expect continued growth in revenue and operating income supported by 5 recent acquisitions. First revenues in H2 from large inspection service contracts with oil majors signed last year. Investing in new testing capabilities in North America. Increasing exploration activity in Asia & Australasia to benefit our upstream services. First revenues in H2 from investments made last year in organic growth initiatives. 27

28 ENVIRONMENTAL SERVICES (ENVI) CHF million 2012 Pro-forma 2 Published Revenue Change in % Adj. Operating Inc. (1) Change in % Margin % (1) Before amortisation of acquisition intangibles, restructuring, transaction and integration-related costs (2) Constant currency basis Overview H Accelerated growth in Africa, Asia and South America with focus on mining and oil sectors. European and Canadian operations maintained high levels of activity thanks to their diversified portfolio of services (lab and non lab). Operating income impacted by ongoing investments in new service offerings. New laboratories in Congo and Guinea and new environmental studies offices in Paris, Shanghai, Durban, Doha, Kuwait, Dubai, Conakry and Krakow. Acquisitions in Brazil (Environ) and USA (Analytical Perspective). Outlook 2012 Continued investments in emerging markets to meet rapidly growing environmental demands. Diversification of service portfolio to directly serve end-customers and enhance margins. Implement a plan to enter new African countries and serve mining customers with on-site services. Significant demand for SGS E-data (data management) services in Australia and Europe. 28

29 AUTOMOTIVE SERVICES (AUTO) CHF million 2012 Pro-forma 2 Published Revenue Change in % Adj. Operating Inc. (1) Change in % Margin % (1) Before amortisation of acquisition intangibles, restructuring, transaction and integration-related costs (2) Constant currency basis Overview H Statutory business showed solid results in Europe, the Americas and Africa, with additional stations in Spain, Morocco, South Africa and Ivory Coast. Non-statutory activities in the USA still negatively impacted by significantly lower volumes. Strong engine testing results in the USA from the ETC acquisition, however vehicle testing remains slightly below expectations. Tender secured with the Road Safety Authority in Ireland to develop an IT platform for the control, monitoring and enforcement of commercial vehicles inspections. Outlook 2012 Statutory business expected to continue delivering solid results. Low commercial inspection volumes likely to remain throughout 2012 in the USA. Several opportunities being pursued in the statutory field in Asia, South America and Africa. Expand statutory business into Road Safety Services. 29

30 GOVERNMENTS AND INSTITUTIONS SERVICES (GIS) CHF million 2012 Pro-forma 2 Published Revenue Change in % Adj. Operating Inc. (1) Change in % Margin % (1) Before amortisation of acquisition intangibles, restructuring, transaction and integration-related costs (2) Constant currency basis Overview H Product Conformity Assessment (PCA) programmes leading the growth of Local Solutions with a good start to the year. Solid and stable volumes for Pre-Shipment Inspection (PSI) programmes. Strong performance for TradeNet in Ghana and Madagascar. Successful implementation of the new TradeNet solution in Mozambique. First ever Forestry monitoring programme with scanners implemented in Democratic Republic of Congo (DRC). Outlook 2012 Continued transformation of existing PSI contracts. Termination of Nigeria Destination Inspection with limited impact on operating income. Complete deployment of TradeNet in Mozambique. Complete implementation of new mandates: DRC and Cameroon (Forestry), Ghana (Inland Revenue Services). New cargo tracking suite and new services in telecoms. 30

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