2011 Half Year Results Presentation

SGS GROUP RESULTS
FIRST HALF 2011
Presentation to the Financial Community
Geneva, 15 July 2011

CONTENT

 FINANCIAL HIGHLIGHTS
Highlights First Half 2011
Revenue Analysis
Operating Income Analysis
Cash Flows
FINANCIAL HIGHLIGHTS

Currency Analysis
BUSINESS OVERVIEW

 BUSINESS OVERVIEW

Financial community – 15 July 2011 2

HIGHLIGHTS & OUTLOOK

 1st semester 2011 results
 Total revenue growth of 12.8% to CHF 2.3 billion at constant
currency
– (0.3)% at historical rates
 Organic revenue growth of 9.7% at constant currency
 Stable Adjusted Operating income(1) margin at 16.0% at
constant currency
– Adjusted Operating income(1) up 12.0% to CHF 374 million at
constant currency

 Outlook 2011 at constant currency
 Solid top line growth (10%+)
 Increased pace of investments
 Operating margins slightly lower than 2010

Financial community – 15 July 2011 (1) Before amortisation of acquisition intangibles, transaction and integration-related costs 4


CHF million 2011 2010 2010
June June June
Pro-forma (2) Published

Revenue 2,345 2,078 2,352
Change in % 12.8 % (0.3)%

Adjusted Operating Income (1) 374 334 388
Change in % 12.0 % (3.6)%

Adjusted Operating Income Margin (1) 16.0 % 16.1 % 16.5 %

Operating Income (EBIT) 363 330 383
Change in % 10.0 % (5.2)%

Net income 246 232 270
Change in % 6.0 % (8.9)%

Basic EPS 32.30 30.66 35.67
Diluted EPS 32.14 30.52 35.51
Period end no. of employees 67,144 59,837
(2) Constant currency basis

SERVICE PORTFOLIO


REVENUE ANALYSIS


REVENUE GROWTH COMPOSITION
9.7% 3.1% 0.0% (13.1)% (0.3)%

65
(274)
202

Constant currency growth: 12.8%

2,345
2,352

Revenues Currency Revenues
June 10 Organic Acquisitions Disposals impact June 11


YEAR-OVER-YEAR H1 REVENUE GROWTH
18.5% 13.2% 10.0% 1.3% 1.0% (0.3)%

15.1%
11.5%
10.4%
9.7%

3.8%
3.1%
4.1%
4.3% 1.4%
0.3% 1.9% 1.9% 0.7%
1.0%

(0.7)%

(4.7)%

(7.0)%

(13.1)%
2006 2007 2008 2009 2010 2011

Organic Acquisitions/Disposal Currency Impact

LOCAL CURRENCY GROWTH BY BUSINESS

AGRI 2.6% 1.4% 4.0%

MIN 23.9% 0.7% 24.6%

OGC 6.8% 0.1% 6.9%

LIFE 7.2% 8.2% 15.4%

CTS 8.4% 0.1% 8.5%

SSC 5.8% 5.8%

IND 10.6% 2.6% 13.2%

ENVI 14.6% 0.9% 15.5%

AUTO 6.9% 50.7% 57.6%

GIS 3.1% 3.1%

TOTAL 9.7% 3.1% 12.8%

Organic Acquisition Disposal

REVENUE GROWTH AND HEADCOUNT
CHANGE BY REGION

Δ in EOP headcount 2011 2010 Δ
June June

Group Headcount 67,144 59,837 7,307

Europe / Africa &
6.8% 4.4% 11.2%
Middle East Organic Business Growth 6,335

Acquisitions* 972
Disposals -
Americas 15.0% 3.6% 18.6%

Increase in Group Headcount 7,307

Asia / Pacific 11.1% 0.7% 11.8% By Region Headcount Headcount Revenues
Δ Δ% Δ%

Europe / Africa / Middle East 2,637 10.0 % 11.2 %
TOTAL GROUP 9.7% 3.1% 12.8%
Americas 1,523 12.5 % 18.6 %

Organic Acquisition Disposal
Asia / Pacific 3,147 14.8 % 11.8 %

TOTAL 7,307 12.2% 12.8%

Financial community – 15 July 2011 *Includes ITV headcount acquired effective 31 December 2010 11

OPERATING INCOME ANALYSIS


ADJUSTED OPERATING INCOME(1) GROWTH
6.3% 5.7% 0.0% (15.5)% (3.5)%

19
21 (54)

Constant currency growth: 12.0%
374
388

Op. Income Currency Op. Income
June 10 Organic Acquisitions Disposals impact June 11


CONSTANT CURRENCY ADJUSTED OPERATING
MARGINS(1)

30.0%

25.0%

23.6%
20.0%

21.1%

20.7%
18.4%

17.4%
15.0%
13.7%

13.0%

10.0%

10.8%
10.4%

8.6%
5.0%
12.6%

16.9%

13.2%

12.8%

24.7%

18.9%

12.3%

19.0%

16.3%
9.1%
ENV
LIFE
OGC

SSC

IND
MIN

AUTO

GIS
CTS
AGRI

June 10 @ cc rates June 11


CASH FLOW

CHF million Jun 11 Jun 10
PROFIT FOR THE PERIOD 259 282
Non-cash items 208 214
Depreciation, amortisation and impairment 113 115
Share based payments 9 10
Tax 93 99
Other (7) (10)
(Increase)/decrease in net working capital (130) (109)
Taxes paid (109) (127)
OPERATING CASH FLOW 228 260
Net (purchase)/sale of fixed assets (134) (114)
Acquisition and divestments of businesses (27) (31)
Other from investing activities (5) 1
CASH FLOW FROM INVESTING ACTIVITIES (166) (144)
Dividend paid to equity holders of SGS SA (494) (455)
Dividend paid to non-controlling interests (4) (12)
Increase/(decrease) in non-controlling interests - (4)
Cash received/(paid) on treasury shares (30) 85
Interest paid (14) (7)
Increase/(decrease) in borrowings 722 (254)
CASH FLOW FROM FINANCING ACTIVITIES 180 (647)
Currency translations (10) 5
INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 232 (526)


CAPITAL EXPENDITURE


FOREIGN CURRENCY REVENUES H1 2011

AVERAGE RATES
2011 2010 Change
EUR 1.2713 1.4383 (11.6)%
USD 0.9072 1.0829 (16.2)%
CNY 0.1387 0.1586 (12.6)%
AUD 0.9366 0.9671 (3.2)%
CAD 0.9287 1.0473 (11.3)%
TWD 0.0312 0.0340 (8.2)%
GBP 1.4650 1.6507 (11.3)%
BRL 0.5555 0.6027 (7.8)%
HKD 0.1166 0.1393 (16.3)%
INR 0.0202 0.0237 (14.7)%


FOREIGN CURRENCY SENSITIVITY H1 2011

CHF Million Current average
- 5% rates + 5%
EURO 1.208 1.271 1.335

Revenues (39) 0 39
Income (5) 0 5

USD 0.862 0.907 0.953

Revenues (16) 0 16
Income (1) 0 1

CNY 0.132 0.139 0.146

Revenues (11) 0 11
Income (3) 0 3


BUSINESS OVERVIEW


AGRICULTURAL SERVICES (AGRI)
CHF million June June June  Overview H1 2011
2011 2010 2010  Results negatively impacted by absence of Russia
2
Pro-forma Published & Ukraine in grain export market; partially off-set by
good demand in China, Canada, India and France.
Revenue 155.8 149.8 170.2  Improved trade volumes in Q2; organic growth of
Change in % 4.0 (8.5) 2.6% and margins improved by 110 basis points (at
Adj. Operating Inc. (1) 21.4 18.9 22.6 cc rates) through service mix and efficiencies.
Change in % 13.2 (5.3)  Three acquisitions completed within our Inland
segment in Canada, USA & South Africa;
Margin %1 13.7 12.6 13.3 consolidating our leadership position in crop
research and precision agriculture services.
(1)
Before amortisation of acquisition intangibles, transaction  New research stations added including a major
and integration-related costs
(2)
alternative fuels research site in Texas.
Constant currency basis

 Outlook 2011
 Good crop forecasts and the return of Russia &
Ukraine to market will see trade volumes increasing
from July.
 Project pipeline supporting supply chain activity is
strong with good opportunities in BRIC countries.
High demand for sustainability certification.
 Inland activity set to deliver +20% growth generated
from synergies and replication of acquisitions.
 Demand for CMA & rejection guarantees improving.


MINERALS SERVICES (MIN)
2011 2010 2010  Strong start to the year with 23.9% organic revenue
2
Pro-forma Published growth.
 Market sentiment and spending is very strong.
Revenue 323.2 259.3 291.1
 3 new mine sites laboratories in H1 and 8 additional
Change in % 24.6 11.0
mine site laboratories expected in H2.
Adj. Operating Inc. (1) 59.4 43.8 51.4  Continued to invest in markets with strong growth
Change in % 35.6 15.6 potential.
 Improved recruitment process to better compete with
Margin %1 18.4 16.9 17.7 mining companies and competitors for experienced
(1)
professionals.
Before amortisation of acquisition intangibles, transaction
 Major contract wins in New Zealand for analytical
(2)
services and in the USA for mechanical sampling
systems.
 Outlook 2011
 Expect market demand and commodity prices to
remain strong.
 Solid project pipeline for all business sectors.
 Continued market consolidation as competitors look
to replicate the SGS service offering.
 Expansion of Commercial Laboratory network in
Australia, Canada and West Africa.


OIL, GAS & CHEMICALS SERVICES (OGC)
2011 2010 2010  Strong demand for oil and chemicals resulted in
2
Pro-forma Published higher Trade related volumes.
 Growth in Lube Oil Condition Monitoring with start
Revenue 451.0 422.0 480.2 up of South America and Turkey laboratories.
Change in % 6.9 (6.1)
 Strong growth in Upstream activities in Australia
Adj. Operating Inc. (1)
58.8 55.7 65.1 after last year’s floods and in the Middle East.
Change in % 5.6 (9.7)  Changes in trading patterns led to a decrease in
demand for high margin Cargo Treatment Services.
Margin %1 13.0 13.2 13.6  Continued investment programs and start up costs
(1)
in Upstream Services.
(2)

 Outlook 2011
 High activity levels in Trade services to remain.
 Refining volumes may temporarily slow down due
to structural changes of refining industry in Europe.
 Continued strong demand for PTO and Laboratory
Up*Sourcing Solutions.
 New revenue streams to start from major contract
wins in Upstream Services (Well Testing in Kuwait,
Oman and PNG, drilling fluids testing in Mexico)
and new upstream laboratories in the Middle East
and South America.

LIFE SCIENCE SERVICES (LIFE)
2011 2010 2010  Double-digit growth over prior year (at cc rates) with
2
Pro-forma Published positive impact from M-Scan acquisition.
 Interest confirmed from key accounts in our
Revenue 99.5 86.2 98.0 worldwide laboratory network (for large and small
Change in % 15.4 1.5 molecules)
Adj. Operating Inc. (1) 10.3 11.0 12.7 – Europe: good growth with profit improvements.
Change in % (6.4) (18.9) – North America: state-of-the art laboratories
over-performed prior year.
Margin %1 10.4 12.8 13.0 – Asia: recovering with improved margins.
(1)
 Low single digit growth in Clinical Research with
dilutive margins affected by reduced pipeline of
(2)
molecules and postponements / cancellations.

 Outlook 2011
 M-Scan labs benefit from SGS network synergies.
 Laboratory testing demand to remain strong for
R&D/QC, Biopharmaceutical testing and immuno-
analysis / biomarkers services.
 Focus on late phase projects towards small / mid-
size companies.
 CR Early Phase market likely to remain under
pressure in H2 due to reduced molecule pipeline
and shift towards patient trials.


CONSUMER TESTING SERVICES (CTS)
2011 2010 2010  Steady revenue growth over last year driven mainly
2
Pro-forma Published by France, Spain, Germany, Turkey, USA and most
of the Asian countries both for traditional and new
Revenue 387.5 357.3 407.3 services.
Change in % 8.5 (4.9)  Tempered improvement in world economy aided in
91.4 88.4 102.3 increased volume in all business sectors, particularly
Change in % 3.4 (10.7)
food, photovoltaic, microelectronics and reliability.
 Investment (capital projects and staff additions)
1
Margin % 23.6 24.7 25.1 increased as foundation being laid for 2014 Plan.
(1)
 Product mix transition between maturing and new
Before amortisation of acquisition intangibles, transaction services affecting margin.
(2)

 Outlook 2011
 Cautiously optimistic on full year results given the
order pipeline at end of H1.
 Market share expansion with key accounts in US
and Europe, particularly softlines and hardgoods.
 New service and laboratory investments expected to
start generating returns in H2 (e.g. automotive,
battery technologies).
 Positive outlook in Wireless with introduction of new
technology.


SYSTEMS & SERVICES CERTIFICATION (SSC)
2011 2010 2010  Double digit growth in Eastern Europe, the Middle
2
Pro-forma Published East and most Asian countries.
 Growth affected by postponed audits in Japan with
Revenue 177.4 167.7 188.5 a slow recovery.
Change in % 5.8 (5.9)
 New global certification contracts awarded in H1 will
30.8 31.7 36.3 boost revenues and margins in Q3 and Q4.
Change in % (2.8) (15.2)  Solid growth in training activities.
 Strengthened our key account management
Margin %1 17.4 18.9 19.3 structure to handle increasing number of global
(1)
certification contracts.
(2)

 Outlook 2011
 Acceleration of growth in the Americas and Asia.
 Increased demand for renewable energy and
sustainability related schemes: bio fuel, energy
management and social responsibility.
 New segments such as IT, transportation security
and business continuity showing strong potential.
 Continued investment in technical expertise to
support more complex industry and sustainability
schemes.


INDUSTRIAL SERVICES (IND)
2011 2010 2010  Good revenue growth, especially in South America,
2
Pro-forma Published Asia and Africa.
 Blade testing centre opened in June 2011 – largest
Revenue 368.7 325.7 368.2 independent test centre in Asia.
Change in % 13.2 0.1
 Increasing infrastructure spend is driving testing and
39.8 40.1 46.3 project supervision work in Asia Pacific.
Change in % (0.7) (14.0)  South America improved performance in testing,
inspection and commissioning services for the oil &
Margin %1 10.8 12.3 12.6 gas and mining market segments.
(1)
 Restructuring in Spain and slow Middle East
recovery impact margins.
(2)
 Recent Sertec (Italy) HSE and Correl Rail notified
body (UK) acquisitions.
 Outlook 2011
 Continuing growth in revenue and margin in H2.
 Inspection and testing volumes will increase for oil
and gas related maintenance work in Europe.
 Demand for our nuclear technical and inspection
services increasing in Europe.
 Investing in testing and inspection capability to meet
client needs in West Africa for offshore oil and gas.
 Increasing exploration activity in Asia for our
upstream services.


ENVIRONMENTAL SERVICES (ENVI)
2011 2010 2010  Most affiliates performing to expectations in Europe
2
Pro-forma Published all though some patchiness remains due to weak
market conditions.
Revenue 140.2 121.4 136.5  Positive impact from fast response to dioxin &
Change in % 15.5 2.7 radioactivity crises.
Adj. Operating Inc. (1) 12.0 11.1 12.5  Continued developments in “resources-related”
Change in % 8.1 (4.0) geographies such as Qatar, Angola, Madagascar,
Congo, Colombia and Indonesia.
Margin %1 8.6 9.1 9.2  Broadened our geotechnical offering in Belgium with
(1)
the acquisition of Lippens Geotechniek.
(2)

 Outlook 2011
 Markets continue to show positive developments
from regulation changes though Brownfield
redevelopments will remain weak.
 H2 traditionally better due to seasonality.
 Further service developments in high-end laboratory,
shipping monitoring, data interpretation & studies.
 Continued development in new geographies such
as Guinea, Malaysia and Vietnam.


AUTOMOTIVE SERVICES (AUTO)
2011 2010 2010  ITV acquisition in Spain & Argentina fully integrated
2
Pro-forma Published and performing in line with expectations.
 Statutory business provides solid results in Western
Revenue 136.6 86.7 99.9 Europe and South America.
Change in % 57.6 36.7
 Negative impact of political situation in Ivory Coast
28.8 16.5 19.1 and North Africa on operations.
Change in % 74.5 50.8  Commercial activities in the USA impacted by bad
weather in Q1 and by the Japan Tsunami delaying
Margin %1 21.1 19.0 19.1 off-lease and new car inspections.
(1)
 Statutory services started in South Africa and Peru.
(2)

 Outlook 2011
 Statutory business to continue providing solid
results.
 Remarketing inspection services and stock audits
developing through new clients across geographies.
 Several opportunities being pursued in the statutory
field in Asia, South America and Europe.


GOVERNMENTS AND INSTITUTIONS SERVICES (GIS)
2011 2010 2010  Product Conformity Assessment (PCA) programs
2
Pro-forma Published leading the growth of Local Solutions with excellent
start to the year.
Revenue 104.7 101.6 111.9  New PCA program signed in Iraq and Zambia.
Change in % 3.1 (6.4)
 Global Solutions volumes regaining traction.
Adj. Operating Inc. (1) 21.7 16.6 19.5  Strong performance for TradeNet in Ghana and
Change in % 30.7 11.3 Madagascar while Ivory Coast impacted by recent
political events.
Margin %1 20.7 16.3 17.4  Mozambique TradeNet new program implementation
(1)
progressing well.
(2)

 Outlook 2011
 New PCA mandates expected to be signed in H2.
 New three year PSI program signed in Bangladesh
with larger volumes.
 Deployment of TradeNet programs and scanning
solutions will remain the focus in H2.
 Complete implementation of new mandates in DRC
and Cameroon (Forestry), Ghana (IRS).
 Roll-out of new tracking services in Africa.


2011 Half Year Results Presentation

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