SGS Group, a global leader in testing, inspection and certification, has presented its 2023 Integrated Report. Providing meaningful information on financial and non-financial results, this year’s report format has been updated and improved to help stakeholders better understand the company’s strategy, performance, governance and impact on the planet.

Strong organic growth and free cash flow generation in 2023

In 2023, SGS delivered superior organic sales growth and a significant increase in free cash flow, thanks to the breadth of its portfolio. It rose to the global challenges of rising costs and global instability. Thanks to its people, focus on productivity, geographic and service diversity, it innovated in new growth areas.

SGS offers specialist testing, inspection and certification services in 116 countries, services it delivers through five business lines. Connectivity and Products, Health and Nutrition, Industries and Environment and Natural Resources – testing and inspection sectors, and Business Assurance (formerly Knowledge) represents the certification business. Here is the Integrated Report: https://www.sgs.com/en/integrated-report

In 2023, SGS recorded sales of CHF 6,622 million (€6,944 million), supported by strong organic growth of 8.1%, driven by all business lines. This included double-digit growth in Business Assurance for certifications and high single-digit growth in Natural Resources and Industries and Environment.

Adjusted operating income amounted to CHF 971 million (€1,018 million), representing organic growth of 6.3%. Adjusted operating income margin on sales was 14.7. Cash flow from operating activities reached CHF 1,123 million (€1,177 million), leading to a net cash flow of CHF 604 million (€633 million), up 25.6%. This was mainly driven by lower net working capital requirements and capital expenditure.

“In 2023, SGS had superior organic growth and significant free cash flow growth due to the broadening of its portfolio. All of our business lines and regions contributed to this performance, with particularly strong growth in sustainability, cybersecurity, ESG assurance and consulting services. This is a strong platform to build on,” said Frankie Ng, SGS Group CEO who will end his tenure at the helm of the company in March.

Europe accounted for 36% of SGS’s total sales last year, and the Asia Pacific region accounted for 34%. North America represented 12%, Africa and the Middle East 9%, and Latin America also 9%.

In terms of sustainability, in 2023 SGS Group reached a 14% reduction in CO2 emissions compared to 2019 (according to Scope 1 and Scope 2), the percentage of women in management positions reached 31.9%, and the number of hours volunteered by the company’s employees was 32,590.

The strategy for 2027

SGS has announced its Strategy 2027: accelerating growth and trust in partner relationships. This new strategy is created to drive profitable growth, streamline the organization and deliver attractive returns to stakeholders.

The SGS strategy is based on three factors:

  • Growth: the Group will capitalize on the strong underlying annual momentum of the testing, inspection and certification industry and invest in segments and regions where greater opportunities exist.
  • Performance & Agility: SGS will implement a cost-disciplined operating model and a performance driven culture, promoting accountability. A new Executive Committee of 12 members will be appointed.
  • Strong Financial Profile: SGS will grow externally through accretive and synergistic acquisitions while keeping a strong balance sheet. The shareholders remuneration will remain attractive.

Géraldine Picaud, CEO Designate, said: “I look forward to leading such a great company and to driving positive change in this dynamic industry. In line with our Strategy 2027 we will invest in segments and regions where greater opportunities exist, simplify our organization and enhance our financial profile to create value for all our stakeholders.”

In Romania, since 1922

SGS started its activity in Romania in 1922, in the Danube port of Brăila, at that time it was the second port in the world grain trade, after Chicago. The company operated in Romania until 1947, Jacques Salmanowitz – Société Anonyme Roumaine de Surveillance. In 1992, activity was resumed in Romania by establishing SGS Romania with headquarters in Bucharest. Today, SGS is the leading national private provider of inspection, certification, verification and testing services, providing confidence to people, organizations and governments.

”Despite all the significant external challenges in recent years, I believe that, overall, Romania’s economy is on an upward trend. In particular, SGS Romania has consistently grown in recent years, reaching a peak in 2023 with a growth of 34.9% compared to the previous year. The substantial increases were based on the company’s specific activities and the development of the agricultural and energy sectors, as well as in the inspection and testing of consumer and food goods.”, says Adrian Cuțitei, Deputy General Manager SGS Romania.

Through its nine business divisions, SGS provides services to the main economic sectors: agriculture and food, oil, gas and chemicals, minerals, transport, environment and occupational safety, industry, construction, energy and utilities. SGS Romania has offices and laboratories throughout the country – Brăila, Constanța, Craiova, Cluj-Napoca, Drobeta Tr. Severin, Galați, Iaşi, Pitesti, Ploiesti, Slatina, Tg. Jiu, Timisoara and others.

 

About SGS

We are SGS – the world’s leading testing, inspection and certification company. We are recognized as the global benchmark for sustainability, quality and integrity. Our 99,600 employees operate a network of 2,600 offices and laboratories around the world.