Both of our affiliate companies, SGS China and SGS Taiwan, represent pillars of excellence for SGS in the East Asia region. The theme of this year’s investor days will focus on the challenges in evolving supply chains, the respective local testing markets and development of SGS’s service portfolio across the region.
During the event Frankie Ng, CEO, Dominik de Daniel, CFO, members of the Operations Council and SGS management will provide insights into current and new activities and initiatives with a focus on the local region. The two-day event will feature lab tours and visits to customer facilities during which investors will have the opportunity to experience firsthand SGS’s technical and business capabilities.
The CEO's and CFO’s presentations will be broadcast live by webcast and there will be an opportunity to ask questions.
Growth in H2 2019 has been impacted by recent challenging macroeconomic trends, the continued softness of certain businesses following H1 and the discontinuation of certain contracts with a lower than expected return following the dashboard review. We now expect H2 2019 organic growth to be low single-digit.
However, the management team remains very focused on the expected improvement in H2 profitability and we reiterate our FY 2019 guidance for a higher adjusted operating income margin on a constant currency basis.
H2 2019 profitability is supported by efficiency gains, strong cost control and is starting to benefit from the structural optimization plan announced at H1 2019. We now expect that the CHF 75 million invested in the structural optimization measures to streamline the business across the global network should deliver annualized savings of at least CHF 90 million. This gives us increased confidence on achieving an adjusted operating income margin of above 17% in 2020.
SGS remains focused on consolidating its position as the leading and most sustainable global company in the TIC industry, delivering best in class returns for the long term.
Guidance for 2019:
- Moderate organic growth
- Higher Adjusted Operating Income margin on a constant currency basis
- Robust cash flow generation
Guidance for the 2020 plan:
- Considering the organic growth in 2019, we now expect solid organic growth for the 2020 plan. Given the investment made, the portfolio evolution and the structural growth opportunity, we are confident for the organic growth rate to be at mid single-digit in the near term
- Accelerate mergers and acquisitions and remaining disciplined on returns
- Adjusted operating income margin of above 17%
- Strong cash conversion
- Maintain best in class return on invested capital
- At least maintaining the dividend or grow it in line with the improvement in adjusted net earnings
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SGS is the world’s leading inspection, verification, testing and certification company. SGS is recognized as the global benchmark for quality and integrity. With more than 94,000 employees, SGS operates a network of over 2,600 offices and laboratories around the world.