A Strong Performance in 2020 Confirms the Group's Strategic Evolution 
 
   "I am proud of the dynamism and responsiveness demonstrated by our 
employees in a challenging period. Their hard work, commitment and 
entrepreneurialism in supporting our customers have resulted in a strong 
operational performance for SGS in 2020, reinforcing our leadership 
position in the TIC industry. 
 
   We have taken significant strategic steps forward in 2020, both through 
the acquisition of SYNLAB Analytics & Services (A&S) and by launching 
the next phase of our planning. The strong operational performance 
combined with this important move confirms our strategic evolution which 
further aligns SGS to the key TIC 'megatrends'", said Frankie Ng, Chief 
Executive Officer of SGS. 
 
   A Strong Financial Performance 
 
   Total Revenue reached CHF 5.6 billion, down by 15.1% (a decline of 8.8% 
at constant currency*), notably driven by the disposal of the Petroleum 
Service Corporation (PSC) in 2019. Organic Revenue* declined by 6.5% 
impacted by the pandemic. A gradual improvement throughout H2 2020 was 
experienced with a return to growth in December. 
 
   Operating Income decreased from CHF 1 082 million in prior year to CHF 
795 million in 2020, mainly driven by the exceptional gain of CHF 268 
million on the disposal of the PSC business in 2019 and the impact of 
the COVID-19 pandemic in 2020. 
 
   Adjusted Operating Income* decreased from CHF 1 063 million in prior 
year to CHF 900 million in 2020, a decline of 15.3% (a decline of 8% at 
constant currency*). 
 
   Adjusted Operating Income Margin* of 16.1% remained stable in 2020 at 
historical rate but increased by 20 basis points at constant currency*. 
This improvement was driven by the structural cost optimization program 
implemented in H2 2019, strong cash collection (resulting in a lower 
allowance for expected credit losses) and additional measures taken in 
2020 due to the pandemic. 
 
   Profit Attributable to Equity Holders decreased from CHF 660 million in 
2019 to CHF 480 million in 2020, a decrease of 27.3% over prior year. 
 
   Basic Earnings per Share decreased from CHF 87.45 in prior year to CHF 
64.05, a decrease of 26.7%. 
 
   Free Cash Flow (FCF)* increased significantly by 12.6% from CHF 673 
million in prior year to CHF 758 million in 2020 driven by strong 
working capital management. 
 
   The Board of Directors is pleased to propose a Dividend to remain stable 
at CHF 80 per share. 
 
   Significant Strategic Milestones Achieved In 2020 
 
   We have implemented the next stage of our strategic evolution with the 
purpose of enabling a better, safer and more interconnected world for 
employees, customers, shareholders and society. Our operational 
structure has been simplified into six new focus areas, composed of four 
divisions: Connectivity & Products, Health & Nutrition, Industries & 
Environment and Natural Resources and two cross-divisional strategic 
units: Knowledge and Digital & Innovation. This will improve our market 
approach and increase cooperation and agility in our global network. 
 
   The acquisition of SYNLAB Analytics & Services (A&S) 
https://www.globenewswire.com/Tracker?data=yf1ZHq66HbJvQRr0jMesGoUhL_qBaiYnUWRDz0QjwluL2Yn3UB5XGnxMIXrcdd8camgDotgdWN43lI-yEiT1xAK4JEhen_XziHLlGS6Nu_mdFiU7EPMe_Mp0dHhX2nEY1CAYRFDYXIvky1OCDSIIM5gtbq4g9KSLdvD3m3jXY0JpM2WeLvE4bepXH47B-Xj1i0FRZXoyegExkJdBVhynr7RJzCWg1RcXc8WXR4KOP8D5PBfZ4CIB_oSaQWBcwnjsc_wbSoxzTZ6T32OnKrzU0895sfqiaZmBFL6_ve6hNjEUzJkQqYHFof2cpQ1xe_qEiiZuFqJvOmIuBabBHSAdsA== 
further aligns SGS to the Health, Nutrition and Environment TIC 
megatrends and enhances our market position in Europe. It also adds a 
range of complex services and accelerates the adoption of our hub and 
spoke model, offering greater scope for automation and digitalization 
and generating strong operating synergies. 
 
   Throughout 2020, SGS has successfully developed our Next Normal 
solutions 
https://www.globenewswire.com/Tracker?data=_icZnDAYblMYTdSozGSin-G7naSXPmxzvojfE6QxRYYyPPR31-sb0MT5BUu2BiMBvOKS_IgrFBosOZOwuiWQszGM24QZrOElFfXU_fKn-ZezP7PPr-bPedr10eoGzyrqYdoxAL1IJqkWsN1D3ZRWD9lxWmTs6XdjJxoIiUFdF0SWLCAxCkBD7xMEfsj_oJrm1Ehq7_PaeNOoz3k92CTJl63YqqCEb_wKqSVqIs8iJ9NxfMSwo2GeSY8YY1X59tIpTnGXKhKLJDekhAGpmbfeUg== 
and leveraged our remote service delivery solutions to better serve our 
customers and society with higher value-added services. To provide 
improved supply chain visibility, we leveraged our market-leading 
technical capabilities and adapted our delivery models using our digital 
tools and sensor-based technology. Remote inspection, audit, consulting 
and other digital delivery solutions all gained customer traction and 
acceptance in 2020. 
 
   Additional innovation of our service portfolio included our global Life 
Sciences network delivering Covid-19 vaccine testing and new innovative 
therapeutics for several global clients. We continue to be TIC market 
leader in PPE testing and inspection. In addition, we have seen strong 
progress on contract signings across our TIC services on disinfection 
and business recovery. 
 
   We have defined our 2030 sustainability ambition which encompasses a 
holistic and global approach to sustainability both in terms of how we 
behave as a company and the value we provide to our customers through 
our services. We will launch our 2030 sustainability plan in Q2 2021. 
 
   Financial Discipline and Continued Investment in Strategic Priority 
Areas 
 
   We have continued to invest in high growth potential markets, reinforced 
our pricing initiatives, cost control and working capital management and 
successfully refinanced part of our debt in a challenging year. 
 
 
   -- We successfully issued two bonds with a total value of CHF 500 million. 
 
   -- We achieved over CHF 90 million of structural cost savings, coupled with 
      strong cost management and EVA-driven performance management. 
 
   -- Supported by our focused capital allocation strategy, we have continued 
      to invest heavily in our strategic priority areas including wireless, 5G, 
      semiconductors, food testing and investment into IT systems to continue 
      to drive productivity increases. 
 
   Download the full report (PDF) > 
https://www.globenewswire.com/Tracker?data=1trn8beBxkdquF33NO-2bpdbP-1yxIxoAKDNy_ScYYGtkyFzGe19xRdAUxB1_rAf6OhNulM4-ZCWytic0AXThYvcO_p40o19Z_baSp9b4bRnJPxtWxWPOap_-e5fIqpHg2Fq59_yhKBN_gtkYaqU7EEcVPLaK7LmqxCi7YP2o2Q5AlpKB8PIadJRaFsqXbWN9AhFH0CKhj1ko0_O8wDZ3R5eCO7EH6YHowOTODXVjfaLby25WIedYm253o5KHzq4 
 
 
   Download the Alternative Performance Measures supplement (PDF) > 
https://www.globenewswire.com/Tracker?data=1trn8beBxkdquF33NO-2bkBlSaAlgJqeJujTlZFuQYCFQLUXij7u0z_4QY0EyGUC0tQg4AhKVKvJlIfqeQ639A7c3DLZvJWGVsuyMJgcAwTPwljhW-0ko6ieS56O6ayzcP1Qn5V01bQ02H5-_9ObZJmlvHF43CHzUfGaU6oucL6PuQKCBtWC4n2IBvJcnYxfm84O_b9fTjJZD7_LOLC0YLN-d8QKbpTEdyCSBoNrZxBUDKPe4kaImJSN8OAhxFGRTj8wkZZqYEkyH2tt-wX9lUZ1qSEfOSrdWNfTdRUK3qvXJE9uUApla6aIjdjLP5Z4cB4SLfsKY7Qf6LPaPFIewA== 
 
 
   Join the webcast at 14:00 CET > 
https://www.globenewswire.com/Tracker?data=LCWjeKwUPBGY66dbgtnP3qGfOqVsIfP2tDOs9pFiLzsKF8Tx1Gtwou3A_cejcDzQ0L88wzBj2qvhw0ZGncfUE-w6K1xGThf-l6tDLhY1mpCpbYSqp0BbfDJOkFN4-f4oNtMQermcJWLSfssoufsba5u8FJFr1l27wfSIcd-xRFkL3sAA43fScDfx2awNDg4O9wNQUkijzfmRkj7YZA0D9L5us-_BLj4aYc7dlGvSPHYnOHFy5g_DtANW4rz4oiCQcoQk5asxnQxWOwcan4QW-w== 
 
 
   Learn more >https://www.globenewswire.com/Tracker?data=9S55zqczoAZhOKpslhYpc0oUsniubRv5exK1VdKcHkTBfWlbn65gbiN9Zdgc6Uf2dTWgLILSkBR2h9XOVQqoNgSv4jH8pvAXrmwYXjR3BX8inkOqTYu4OEeTT63yfq6TjLM_ZwGM_NDxf5XbmywiMWtLK4nlSc1w3ITLGVC8ohPVTHwjUyMp3eN0HKcpiAmj1RYARVBfSRIcJ5DO1BIenAmiy6WJRrLtamUTrCjAqamnsyI0KaLvA_O_L25dfTb1 
 
 
   * Alternative Performance Measures (APM) -- refer to the 2020 Full Year 
APM document 
 
   For further information, please contact: 
 
   Investors: Toby Reeks 
 
   SVP Corporate Communication, Sustainability & Investor Relations 
 
   t: +41 79 641 83 02 
 
 
 
   Media: Daniel Rufenacht 
 
   Group VP Corporate Communications 
 
   t: +41 78 656 94 59 
 
   www.sgs.com 
 
   ABOUT SGS 
 
   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 89,000 employees, SGS operates a 
network of over 2,600 offices and laboratories around the world. 
 
   Attachments 
 
 
   -- SGS 2020 Full Year Results Report Web 
      https://ml-eu.globenewswire.com/Resource/Download/d5d6a681-6cc7-4723-9daf-56f572a8621a 
 
 
   -- SGS 2020 Full Year Results Alternative Performance Measures Web 
      https://ml-eu.globenewswire.com/Resource/Download/cf585310-efe3-4ca0-9201-6f4d25ede442

(END) Dow Jones Newswires

January 28, 2021 00:39 ET (05:39 GMT)