A strong operational performance despite challenging market conditions
"We achieved strong growth reflecting the resilience of our global network. All divisions and regions contributed to this performance despite the challenging market conditions faced during H1. These include the impact of the war in Ukraine, continued supply chain disruption, rising global inflation, and Covid-related absenteeism and restrictions in China. China, our largest affiliate, resumed its strong growth trajectory in June.
"Through the investment and acquisitions we are making in our focus areas, and the commitment of our colleagues, SGS is becoming an even more resilient, sustainable and data-driven company delivering on our strategic objectives," says Frankie Ng, CEO of SGS.
A strong financial performance
Total revenue reached CHF 3.3 billion, up 5.2% (6.8% at constant currency*), with strong mid-single digit growth achieved across all divisions. Organic revenue* increased by 5.8%, supported by pricing initiatives to pass on the majority of cost inflation.
Operating income decreased from CHF 430 million in prior year to CHF 423 million in 2022, mainly impacted by Covid-related restrictions in China which are now lifted.
Adjusted operating income* slightly increased from CHF 457 million in prior year to CHF 458 million in 2022, an increase of 0.2% (1.6% at constant currency*). Excluding China, adjusted operating income* growth was double digit.
Profit attributable to equity holders increased slightly by 1.5% over prior year, from CHF 272 million to CHF 276 million in 2022.
Cash flow from operating activities decreased from CHF 342 million in prior year to CHF 263 million in 2022, mainly due to higher net working capital requirement to support the strong revenue growth. This resulted in a positive operating net working capital* at 1.8% as a percentage of revenue compared to (0.1)% in prior year. Free cash flow* decreased from CHF 93 million in prior year to CHF 11 million in 2022 due to the higher net working capital requirement.
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* Alternative Performance Measures (APM) – refer to the 2022 Half Year APM document
We are SGS – the world’s leading testing, inspection and certification company. We are recognized as the global benchmark for quality and integrity. Our 96,000 employees operate a network of 2,700 offices and laboratories, working together to enable a better, safer and more interconnected world.