CONTENT FINANCIAL HIGHLIGHTS BUSINESS OVERVIEW

Transcription

1

2 CONTENT FINANCIAL HIGHLIGHTS BUSINESS OVERVIEW FINANCIAL HIGHLIGHTS 2012 Highlights Revenue Analysis Operating Income Analysis Cash Flows Currency Analysis Second Half 2012 BUSINESS OVERVIEW 2

3 Financial community 17 January

4 HIGHLIGHTS Revenue growth of 16.3% to CHF 5.6 billion (historical rates) 14.5% (constant currency) Organic revenue growth of 10.2% (constant currency) Adjusted Operating Income (1) up 12.9% (constant currency) to CHF 941 million resulting in a margin of 16.9% Adjusted Net Income (1) up 10.5% (constant currency) to CHF 630 million Restructuring costs net of tax of CHF 47 million Net Income for the period of CHF 556 million Basic EPS of CHF per share Proposed dividend to shareholders of CHF 58 per share Ordinary dividend of CHF 30 per share Additional dividend of CHF 28 per share 1) Before amortisation of acquisition intangibles, restructuring, transaction and integration-related costs 4

5 FINANCIAL HIGHLIGHTS CHF million 2012 Pro-forma (2) Published Revenue 5,578 4,874 4,797 Change in % 14.5 % 16.3 % Adjusted Operating Income (1) Change in % 12.9 % 15.4 % Adjusted Operating Income Margin (1) 16.9 % 17.1 % 17.0 % Operating Income (EBIT) Change in % 4.3 % 6.7 % Adjusted Net Income (1) Change in % 10.5 % 13.1 % Net Income Change in % 1.5 % 4.1 % Adjusted Basic EPS (1) (CHF) Basic EPS (CHF) ) Before amortisation of acquisition intangibles, restructuring, transaction and integration-related costs 2) Constant currency basis 5

6 SERVICE PORTFOLIO REVENUE ENVI 5.8% AUTO 5.1% GIS 4.6% AGRI 6.6% MIN 15.6% ADJUSTED OPERATING INCOME (1) AUTO 6.7% ENVI 3.6% GIS 5.9% AGRI 6.5% MIN 17.4% IND 16.1% IND 10.7% SSC 7.1% CTS 16.8% LIFE 3.6% OGC 18.7% SSC 7.8% CTS 24.8% LIFE 1.8% OGC 14.8% REVENUE REGION ASIA PACIFIC 28.5% EUROPE / AFRICA / MIDDLE EAST 47.1% AMERICAS 24.4% 1) Before amortisation of acquisition intangibles, restructuring, transaction and integration-related costs 6

7 7

8 REVENUE GROWTH COMPOSITION 10.2% 4.3% 0.0% 1.8% 16.3% Constant currency growth: 14.5% 5,578 4,797 Revenues 11 Organic Acquisitions Disposals Currency impact Revenues 12 8

9 LOCAL CURRENCY GROWTH BY BUSINESS AGRI 11.0% 1.3% 12.3% MIN 13.8% 10.4% 24.2% OGC 11.6% 0.6% 12.2% LIFE 0.9% 2.9% 3.8% CTS 10.8% 2.1% 12.9% SSC 6.2% 6.2% IND 9.5% 10.7% 20.2% ENVI 6.6% 6.6% 13.2% AUTO 4.6% 1.8% 6.4% GIS 17.3% 17.3% TOTAL 10.2% 4.3% 14.5% Organic Acquisition Disposal 9

10 REVENUE GROWTH AND HEADCOUNT CHANGE BY REGION Δ in EOP headcount 2012 Δ Group Headcount 79,268 71,220 8,048 Europe / Africa & Middle East 8.8% 1.3% 10.1% Organic Business Growth 4,738 Acquisitions 3,310 Americas 12.6% 15.5% 28.1% Disposals - Increase in Group Headcount 8,048 Asia / Pacific 10.7% 0.9% 11.6% By Region Headcount Δ Headcount Δ% Revenues Δ% Europe / Africa / Middle East 1, % 10.1 % TOTAL GROUP 10.2% 4.3% 14.5% Americas 4, % 28.1 % Organic Acquisition Disposal Asia / Pacific 2, % 11.6 % TOTAL 8, % 14.5% 10

11 11

12 ADJUSTED OPERATING INCOME (1) GROWTH 9.5% 3.4% 0.0% 2.5% 15.4% Constant currency growth: 12.9% Op. Income 11 Organic Acquisitions Disposals Currency impact Op. Income 12 1) Before amortisation of acquisition intangibles, restructuring, transaction and integration-related costs 12

13 HISTORICAL MARGIN PROGRESSION Adjusted EBITDA MARGIN (1) Adjusted OPERATING MARGIN (1) 25.0% DEC 08 DEC 09 DEC 10 DEC 11 DEC % DEC 08 DEC 09 DEC 10 DEC 11 DEC % 15.0% 15.0% 10.0% 10.0% 5.0% 5.0% 21.3% 22.0% 22.4% 21.3% 21.4% % 17.4% 17.8% 17.0% 16.9% 1) Before amortisation of acquisition intangibles, restructuring, transaction and integration-related costs 13

14 ADJUSTED OPERATING MARGIN (1) BY BUSINESS 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% AGRI MIN OGC LIFE CTS SSC 15.7% 16.6% 19.4% 18.8% 13.5% 13.3% 10.8% 8.7% 25.3% 24.9% 18.7% 18.7% 10.7% 11.2% 9.4% 10.6% 21.9% 22.1% 23.4% 21.5% IND ENV AUTO GIS ) Before amortisation of acquisition intangibles, restructuring, transaction and integration-related costs 14

15 RESTRUCTURING COSTS RESTRUCTURING BY BUSINESS ENVI 13.2% AUTO 3.2% AGRI 1.0% MIN 7.1% OGC 10.3% RESTRUCTURING BY TYPE ACTIVITY CLOSURES 5.3% IND 12.8% COST OPTIMISATION 43.5% SSC 4.6% CTS 6.3% LIFE 41.5% LOCATION CLOSURES 51.2% RESTRUCTURING 2012 BY REGION AMERICAS 13.2% ASIA PACIFIC 2.9% EUROPE / AFRICA / MIDDLE EAST 83.9% 15

16 CASH FLOW CHF million Dec 12 Dec 11 PROFIT FOR THE PERIOD Non-cash items Depreciation, amortisation and impairment Share based payments Tax Other (20) (10) (Increase)/decrease in working capital (73) (84) Taxes paid (210) (220) OPERATING CASH FLOW Net (purchase)/sale of fixed assets (377) (337) Acquisition of businesses (182) (112) Other from investing activities - 6 CASH FLOW FROM INVESTING ACTIVITIES (559) (443) Dividend paid to equity holders of SGS SA (497) (494) Dividend paid to non-controlling interests (24) (16) Acquisition of non-controlling interests - (2) Net cash received/(paid) on treasury shares 76 (50) Interest paid (46) (21) Net flows on interest rate swaps 37 - (Decrease)/increase in borrowings (12) 716 CASH FLOW FROM FINANCING ACTIVITIES (466) 133 Currency translations (5) 16 INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS (230)

17 CAPITAL EXPENDITURE CAPEX REGION ASIA PACIFIC 34.6% EUROPE / AFRICA / MIDDLE EAST 43.4% CAPEX BUSINESS IND 8.3% SSC 1.3% ENVI 5.4% AUTO 2.6% GIS 7.5% AGRI 5.9% MIN 23.3% AMERICAS 22.0% CTS 21.2% LIFE 4.9% OGC 19.6% ANNUAL CAPEX CHF million Capital Expenditure Depreciation & amortisation 17

18 FOREIGN CURRENCY REVENUES 2012 HKD 2.5% Other 25.9% CLP 2.8% TWD 2.8% GBP 3.0% CAD 4.7% AUD 5.8% CNY 9.8% EUR 28.4% USD 14.3% AVERAGE RATES 2012 Change EUR (2.3)% USD % CNY % AUD % CAD % GBP % TWD % CLP % HKD % BRL (9.2)% 18

19 FOREIGN CURRENCY SENSITIVITY ANALYSIS EURO Revenues (47) 0 45 Income (4) 0 4 USD Revenues (24) 0 27 Income (2) 0 2 CNY Revenues (32) 0 42 Income (10)

20 20

21 FINANCIAL HIGHLIGHTS (H2) CHF million 2012 H2 H2 Pro-forma (2) H2 Published Revenue 2,927 2,571 2,452 Change in % 13.9 % 19.3 % Adjusted Operating Income (1) Change in % 13.5 % 19.7 % Adjusted Operating Income Margin (1) 18.0 % 18.1 % 18.0 % Operating Income (EBIT) Change in % 4.2 % 10.1 % Adjusted Net Income (1) Change in % 11.0 % 17.6 % Net income Change in % 1.3 % 8.0 % 1) Before amortisation of acquisition intangibles, restructuring, transaction and integration-related costs 2) Constant currency basis 21

22 LOCAL CURRENCY GROWTH BY BUSINESS (H2) AGRI 9.1% 1.7% 10.8% MIN 8.1% 9.9% 18.0% OGC 12.0% 0.6% 12.6% LIFE 4.4% 4.7% 9.1% CTS 10.3% 2.5% 12.8% SSC 6.3% 6.3% IND 9.9% 11.8% 21.7% ENVI 7.5% 7.2% 14.7% AUTO 3.9% 0.5% 4.4% GIS 14.5% 14.5% TOTAL 9.3% 4.6% 13.9% Organic Acquisition Disposal 22

23 ADJUSTED OPERATING MARGIN (1) BY BUSINESS (H2) 30.0% 25.0% 26.9% 20.0% 15.0% 18.5% 19.2% 20.2% 22.3% 20.3% 10.0% 5.0% 17.5% 20.3% 14.1% 14.3% 11.2% 9.4% 26.9% 20.1% 10.7% 12.6% 10.4% 12.9% AGRI 23.8% MIN 23.4% OGC LIFE CTS SSC IND ENV AUTO GIS ) Before amortisation of acquisition intangibles, restructuring, transaction and integration-related costs 23

24 24

25 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 2012 Strong organic growth of 11.0%, driven by positive markets for Trade Services; including grain exports from Eastern Europe, India and Latin America. Additional growth from full year impact of acquisitions plus WareCare (Pest Management) and Gravena (Contract Research) closed in Almost 30% growth in seed and crop services, supported by acquired expertise and geographical replication throughout the network. Successful commissioning of our flagship Food Safety and Cold Chain facility in India. Client uptake and market feedback positive. Outlook Black Sea export volumes lower in H1, partially offset by other origins. Crop forecasts indicate recovery in H2. Double digit growth for seed and crop, especially precision farming and contract research. Expansion focused on South America, Africa and Asia Pacific. New revenues from support services to farming projects in Africa. Investments in Food Safety facilities and technical services for plant breeding. 25

26 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 2012 Strong markets and focused sales activity resulted in 24.2% revenue growth (13.8% organic). CIMM integration well underway and margin improvements ahead of plan. Exceptional growth in Africa, Asia and the Americas. All segments of the service portfolio delivered strong organic growth. Slowdown in coal and iron ore impacted mainly Australia in H2. Key project wins include Nui Phao on-site laboratory (Vietnam) Base Resources on-site laboratory (Kenya) Outlook Integration of E&S Engineering Solutions acquisition. Expect some slowdown in certain commodity markets. 9 new onsite lab and 3 commercial labs will commence operations in Financing for greenfield exploration projects will be difficult in the early part of the year. Continued focus on sales process, quality and backoffice efficiencies. 26

27 OIL, GAS & CHEMICALS SERVICES (OGC) CHF million 2012 Pro-forma 2 Published Revenue 1, 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 2012 Strong organic growth of 11.6% sustained by solid trade related services with both volume increases and market share gains. Outstanding growth in Upstream Services from Australia and Papua New Guinea onshore market and subsurface consultancy / reserves validation. Exceptional growth in Plant & Terminal Operations and Cargo Treatment Services, specifically in North America, largely offsetting reduced volumes in Europe due to terminal and refinery closures. Margin impacted by lower volumes in Europe and the Caribbean. Outlook Difficult trade market in Europe and the Caribbean to remain, offset by growth in Asia and Middle East. Continued growth in Upstream from unconventional resources segment (shale oil and gas, biogas, tight gas, coal bed methane), Metering and Allocation projects, as well as Cased Hole Services. Increased gas production leading to strong growth in SGS GasPro Solutions and synergies with Environmental, Minerals and Industrial services. 27

28 LIFE SCIENCE SERVICES (LIFE) CHF million 2012 Pro-forma 2 Published Revenue Change in % Adj. Operating Inc. (1) Change in % (16.8) (16.4) Margin % (1) Before amortisation of acquisition intangibles, restructuring, transaction and integration-related costs (2) Constant currency basis Overview 2012 Double-digit organic revenue growth in laboratory services offset by weak Clinical Research results. Laboratory growth driven by expansion in: Europe, led by the UK biologics laboratories North America, with fully renovated QC facilities Asia, with new state-of-art Mumbai laboratory Full integration of Vitrology completes the Biologics service offering, adding Biosafety and synergies with M-Scan. Weak results in early phase Clinical Research due to limited number of molecules reaching trial stage. Outlook Early phase clinical research market expected to remain weak resulting in the intended closure of the Paris clinic. Expansion of the global key account strategy to address the needs of large pharmaceutical companies. Further synergies expected from the integration of newly acquired biopharmaceutical service offerings. 28

29 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 2012 Strong organic revenue growth of 10.8% driven by Asia, South America, Eastern Europe and Middle East across the portfolio of activities. Major contributors are Softlines, E&E and Food thanks to further development of strategic accounts, market share gains and capacity expansion in new geographies to align with client strategies. Margin below prior year reflecting some labour cost increases in Asia as well as continued investments in new market segments and acquisitions not yet performing to expectations. Outlook Expanded capabilities in developing market segments (E&E, Auto) and new segments of activity will drive growth in Continued strong growth in South America and Asia expected to continue at current pace. Western Europe expected to grow but at a lower rate due to current economic conditions. Focus on productivity efficiency programmes. 29

30 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 2012 Strong organic growth in China, South America, Africa and Eastern Europe, partly offset by difficult European markets, particularly in Spain and Italy. Ongoing focus on efficiency improvements in response to an increasingly competitive environment. Weak performance in Australia due to the loss of an important contract within the mining industry. New developments in training and second party audit services becoming an increasing source of revenue. Outlook Expect solid growth across most markets, particularly in Asia, Eastern Europe and the Americas, while Europe expected to remain weak. Further diversification of service portfolio within the training and second party audit segments. Cost optimisation with development of new IT platform to better respond to market needs. Improved performance of Italy and Australia thanks to 2012 restructuring. 30

31 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 2012 Strong organic growth of 9.5%, driven by Asia, Australasia, Middle East and Africa. Margin stabilised despite pressure in Europe as investment projects are delayed. Continued restructuring to align organisational structure to the new market conditions in Europe. Five acquisitions closed in 2012, mainly benefitting the South American and African regions. New organisation based on 4 strategic business units: Oil & Gas; Power & Utilities; Infrastructure & Building; Transport, Equipment & Machinery. Outlook Limited organic growth expected in Europe while other regions perform well (Americas, Asia and Africa). Growth in the Oil & Gas segment expected mainly in North America while growth in the Infrastructure & Building segment expected in South America. Investments in materials testing capabilities will become operational in Focus on margin improvements remains key. 31

32 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 2012 Continued growth in most operations driven by natural resources extraction (minerals and oil & gas) and renewable sector development. Accelerated market penetration through successful acquisitions in USA, Brazil and Australia. Full service solution (field, lab and studies) increased customer retention and profit optimisation. Strong development in Africa with feeder lab network and support team located in South Africa. European market remains tough, impacting growth and margin. Outlook Continued growing demand for full service solutions driven by legislation and development projects both in traditional and unconventional resources markets. Further development of geographical footprint and growth in emerging markets (Latin America, Africa, Eastern Europe). Increased demand for waste water & sludge testing from retailers and textile manufacturers. 32

33 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 2012 Statutory business provided solid results in Western Europe, Africa, North and South America. New Road Safety related services rolled out in Kenya. As anticipated, commercial activities in the USA negatively impacted by significantly lower volumes. Certified-Pre-Owned audits extended for Volvo and Ford. Secured tender for Identity Authentication Services as part of the driver s license programme in Ireland. Strong engine testing results in the USA with vehicle testing picking up in Q4. Outlook Statutory business will continue to provide solid results. Commercial inspection volumes expected to pick up in 2013 with further increase in Several opportunities being pursued in the statutory field in Asia, Africa, North and South America. Expanding Road Safety services and commercial audit activities. 33

34 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 2012 Very strong organic growth of 17.3% driven by the increasing scale of Product Conformity Assessment (PCA) programmes. Pre-Shipment Inspection volumes remained solid and stable on all programmes, including a renewed programme for Haiti. Strong performance for TradeNet in Ghana and Madagascar and excellent start for Mozambique. First ever Forestry monitoring programme with scanners implemented in Democratic Republic of Congo (DRC). New Telecom Monitoring in Rwanda and Uganda. Outlook Continued growth from PCA programmes. Termination of Nigeria Destination Inspection contract with limited impact on operating income. Complete deployment of TradeNet in Mozambique. Complete implementation of new mandates: DRC and Congo (Forestry), Ghana (Ghana Revenue Authority). New contracts for cargo tracking and telecoms monitoring. 34

35 2013 INVESTOR HIGHLIGHTS 35

36 SGS SA ALL RIGHTS RESERVED. 36