Half Year 2024 SGS SA Earnings Call Transcript
Key Points
- SGS AG (SGSOF) reported strong organic growth of 8% in H1 2024.
- The company successfully mitigated the negative impact of foreign exchange on its margin rate.
- SGS AG (SGSOF) achieved significant improvement in free cash flow, up by 35% compared to the prior year.
- The restructuring plan is well on track, with initial savings already documented.
- The company was ranked as the sixth most sustainable company in the world by Time Magazine.
- Health science market conditions remain challenging, impacting the health and nutrition segment.
- The negative foreign exchange translation effect of 5.8% impacted sales, driven by the depreciation of the Chinese yuan and the euro against the Swiss franc.
- The company incurred CHF34 million in restructuring costs in H1 2024.
- The crop science business transaction did not close due to unmet conditions, leading to its retention within SGS AG (SGSOF).
- Despite strong organic growth, the adjusted operating income margin remained stable at 14.1%, indicating limited margin expansion.
Ladies and gentlemen, welcome to the SGS 2024 half-year results call. My name is Ariel Bauer, and I'm in charge of Investor Relations, Communications and Sustainability. I'm here with Géraldine Picaud, our CEO; and Martha Vlatchkova, our CFO. Please note that this call is being recorded and will be available for replay on the SGS website. (Operator Instructions)
I would now like to turn the conference over to Géraldine Picaud, CEO of SGS.
Thank you, Ariel. Good morning, ladies and gentlemen, and welcome. It is a pleasure to share with you today our H1 achievements.
We are very happy with the progress made with the execution of our strategy. During the second quarter, we further developed our service offering in digital trust and sustainability, which will be strong growth drivers in the coming years. We also reinforced our market position with the acquisition of great companies. Our restructuring plan is well on
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