SGS S.A.

Ladies and gentlemen, welcome to the 2023 Half Year Results Conference Call and Live Webcast. I am Alice, the Chorus Call Operator. I would like to remind you that all participants will be in listen-only mode and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and 1 on your telephone. Webcast viewers may submit the questions invited by the relative field. For operator assistance, please press star and 0. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Toby Riggs, Senior Vice President, Investor Relations, Corporate Communications and Sustainability. Please go ahead, sir.

Good afternoon or morning to you and welcome to SJS First Half 2023 Results Conference Call. We hope that you all have had a good start to the year and we also hope to be able to meet many of you face-to-face over the next weeks and or some point later this year. In a few moments, I will pass over to Frankie and Dominic who will run through our presentation and then we'll move on to Q&A. As per usual, when we have Q&A, please stick to a maximum of two questions and if we have any time at the end, we can answer further questions if they haven't already been asked. Once we have taken questions from the call, I will read out any questions that we may have submitted through the web. Finally, we should be finished in about an hour. So we will try and keep it quite tight so you guys can get back to your work. And for now, I will hand over to Frankie to start the presentation. Please go ahead, Frankie.

Thank you, Toby. Good morning, good afternoon to everyone. So as usual, I will give you a highlight of our performances for each one. Dominique will provide you with a more detailed financial review and I will cover the business outlook for the second half of our full year guidance following by Q&A. So to start, let me move the slide. So to start, I'm pleased to say that with the operational measures we have taken, while strong action on pricing and the benefit of continued investment in key sectors, while they were both strong organic growth for H1 and an improvement in our margins. COVID has been strong globally, with double-digit growth in Asia, including China, which benefited from the comparable of the lockdown, which occurred in March and April last year. We also had double-digit growth in the Americas, while Europe's growth was strong. These good results are despite the few challenges faced early in the year, such as persistent high inflation, high energy and transportation costs, and the closure of most of our operations in China in January due to high sickness rate following the lifting of COVID restrictions. To put some numbers around these performances, total revenue increased by 8.5% at constant currency, while organic growth was 8.1%. Adjusted open income was 462 million francs, a good 0.3% increase at constant currency compared to 2022. On a constant currency base, our adjusted open income margins improved to 14.1% compared to 13.7% in prior year, an increase of 40 pips. Our ROIC stand at 17.7% compared to 18.4% sample last year. It is a last 12 month number, so it was impacted by the second half of last year, and we expect it to improve for the full year 23. Cashflow from operation increased by 40%, to 360 million Swiss francs. And our basic earnings per share is 1 franc 40, which is flat on last year, given the strong impact from Forex. We continue to work toward our strategic target. This slide highlights a few of those achieved so far this year. The meeting will provide you more details on the progress made in our level up initiative in a minute. I will just highlight a couple of achievements related to sustainability. Revenue under our internal sustainability solution framework is now at 47.4%. This is due to the evolution of our portfolio mix in H1, and I'm looking at an improvement for full year 23 as we accelerate our portfolio in health and nutrition and other sustainability-related services. You will recall that last year, we were the first TIC company to be approved for 1.5 degree and net zero target for SBTI, the science-based target initiatives. We have been reinforcing initiating programs to ensure we meet our SBTI target of reducing absolute scope one and two GHG emission by 46.2% and scope three by 28% by 2030 from a baseline year of 2019. One important program is to improve the energy efficiency of our building across our network. So far this year, we have increased the number of these energy efficiency projects by 40% compared to the number of the whole year of 2022. We're also looking at more stringent energy efficiency criteria on all our CAPEX. We have initiated actions with procurement to tackle our scope 3 emissions in our supply chain. More results of this action will be reported as we move on during the year and next year. We continue our acquisition strategy with allocation of capital in strategic priorities area. In the first half, we made two acquisitions, and we acquired the remaining minority stakes of Linksys. In the same period, we made two small disposals to optimize our portfolio. So, we acquired 60% of neutral source, a global contact research organization in the nutraceutical and pharmaceutical industry based in Canada. Notasource supports our service portfolio expansion in North America and our strategic view of the conversions of health, nutrition, and wellness sectors. We also acquired the testing business and asset from Asthma Cruise, a cooperative of muscle producers based in Spain. with the objective of expanding our food testing services in Southern Europe and reinforce our position in the seafood industry. As mentioned, we acquired the remaining 40% of Linksys, our operational consultancy business in Spain. The initial 60% was acquired in 2019. We have since successfully expanded this activity in Spain and replicated it across several European countries. Next stage of development is the deployment of this service in Asia. During the first half, we disposed of our automotive asset assessment and retail network services operations across 19 countries, as well as our subservice consultancy business in the Netherlands. Both activities have been with SGS for many years, but are seen as non-core in the midterm to the group. Their future is therefore better secure with their new owners, and we wish them all the best in their new paths. While the pace of M&A has slowed down this year, it remains an important priority in our capital allocation approach. We expect more activities into 2024. We are also continuing the management of our portfolio through targeted disposals. On that, I'm going to hand over to Dominic for a more detailed review of the financials. Dominic, all yours.