SGS S.A.

Ladies and gentlemen, welcome to the SGS 2024 Q3 Sales Update. My name is Ariel Bauer and I'm in charge of investor relations, communication and sustainability. I'm here with Géraldine Picot, our CEO, and Marta Vlachkova, our CFO. Please note that this call is being recorded and will be available for replay on the SGS website. Throughout today's presentation, all participants will be in a listen-only mode. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star 1 on your keypad. I would now like to turn the conference over to Géraldine Picot, CEO of SGS.

Thank you, Ariel, and good morning, everyone. I am very pleased to share our Q3 sales update with you this morning. I am also very excited to speak about the highlights and the sales performance of Q3. And then I will pass over to our CFO, Marta, who will give you more details on the numbers. So let's start with the highlights of our Q3. We have recorded a strong performance this quarter again, with the sales growing organically by 7.3%. Taking into account the negative, the limited negative Forex impact, the total growth of the sales amounts to a good 3.8%. Beyond the sales numbers, over the past few weeks, we have focused on our sustainability offerings. And I'm excited to share that we are now ready to launch ImpactNow, a platform of services and solutions dedicated to help our clients to reach their environmental goals. In parallel, we have also continued to develop and promote our strong leadership on PFAS testing. And now on the M&A side, we have accelerated on bolt-on acquisitions with four more companies about to join our network. These achievements in sustainability offering and in M&A are key milestones in the execution of our strategy 27. I will be happy to provide further insights during our capital markets event next month. For now, we are well on track with the plan and I confirm the outlook for the year. Let's look at impact now. We are launching in the coming days the Impact Now offering, which brings together all of SGS' sustainability services under one platform. It's based on four pillars in order to address all of our clients' sustainability ambitions. We propose testing services in the field of climate change, including greenhouse gas emissions, measurements for instance, but also in circularity and nature protection, where we are targeting forever chemicals. Finally, we are also providing a solid offering in assurance, including ESG reports. Let's go to PFAS. Within the sustainability offering, we have developed a strong leadership in PFAS testing. Indeed, we have the most extensive suite of services and accreditations. This is a fast growing market in which we invest to reinforce further our position and be able to capture the demand of today and tomorrow. As an illustration, we are currently quadrupling our capacity in North America. After organic growth initiatives, let's now look at external growth through bolt-on acquisitions. Deals are now sourced locally, executed with financial discipline and dedicated teams make sure that we execute the integration plans and extract the identified synergies. Since January, we have signed nine acquisitions which represent total annual sales of approximately 70 million Swiss francs. This is about one percentage point of additional growth as of now. This month, we are completing four acquisitions. Let's start with Beta Analytic. Beta Analytic is a leader in radiocarbon dating and bio-based carbon testing. As an increasing number of products and packaging move from petroleum-based to bio-based materials, carbon testing is a unique solution to validate product claims and prevent greenwashing. This market is growing 20% annually, boosted by increasing regulation. Then ASGO and Express Solutions are both based in Belgium. They have 36 employees together and are specialized in supply chain services for sensitive products such as pharmaceuticals, chemical samples, and dangerous goods. Finally, AMA Analytical Services, based in Maryland, with 21 employees, is a specialist in environmental testing with a focus on asbestos, metals, and microbiome analysis. I really take the opportunity to warmly welcome the members of these companies in the SGS family. Let me now give you more detail on our end markets. And let's start with industries and environment, which delivered organic sales growth of 7% for Q3. The double digit growth in environment was fueled by further expansion in PFAS testing, notably in North America, where we are quadrupling our capacity. Our portfolio and capabilities have also been threatened by the acquisition of AMA and Beta analytics. We also have strong demand in safety-related services in Asia-Pac and Latin America. We had a high single digit growth in technical supervision and advisory, mainly driven by transportation and energy projects in Latin America. For example, we supported major railway development projects in Mexico. The growth of industries and environment was partly offset by the completion of low margin contracts in non-destructive testing in Asia Pacific and in the Middle East. Let's now move to natural resources, which delivered solid organic sales growth of 6.9%. Double digit growth in laboratory testing was led by increased activity in energy, chemicals, and onsite projects with notable wins in Australia and Africa. We also experienced a double digit growth in metallurgical testing. This was driven by Latin America and continued momentum in battery metal testing in North America. Trade and inspection had a solid growth despite the soft start of the new crop season in agriculture. The solid sales performance was partly offset by the exit from low margin minerals contract in Latin America. Organic sales growth in connectivity and product now, you can see here, it continued to accelerate in Q3. It was supported by sustainability and regulations globally, and it generated a strong organic sales growth of 8.4%. Double digit growth in soft lines continued to benefit from lower inventory levels and new opportunities in sustainability driven by increased customer awareness. Connectivity delivered another strong quarter with high single-digit growth supported by improvement in wireless and automotive. Hotlines achieved high single-digit growth with new regulations in food contact materials, notably banning the use of bisphenol, PFAS and more harmful contaminants leading to increased demand for testing services. Finally, trade facilitation services remained broadly stable. Let's move to health and nutrition, which delivered organic sales growth of 8.2%. It benefited from strong organic sales growth in food and cosmetics globally and early signs of recovery in health science. Food delivered another strong set of results in all regions, mainly driven by regulation and increased demand for microbiological analysis, allergen testing, pesticides testing, food authenticity and nutrition testing. High single digit growth in cosmetics, led by increased clinical testing in North America. Health science returned to mid-single-digit growth, driven by early signs of market recovery, which led to strong performance, in particular in drug development in Europe. We are seeing positive trends in Q3 in health science on the back of favourable comparables. Lastly, let's review business assurance. We experienced double-digit growth in certification, a strong growth in certification, supported by medical devices and digital trust services. There was also a high single-digit growth in sustainability led by ESG assurance, social audits and energy certification. These strong results were partly offset by a slowdown in training and unfavorable comparable in consulting. Now with that, I will now hand over to Marta who will present our sales performance.

Marta, floor is yours. Thank you Geraldine and a good morning to everyone. In Q3, we continue to deliver strong sales performance in both organic and reported terms. We grew organically by 7.3%, equivalent to 119 million Swiss francs. The scope over the quarter was minimal. The powertrain testing disposal in Q3 last year was largely compensated by the acquisitions of Arclight in May and Gosammer in August this year. The Swiss franc continued to appreciate against all major currencies, translating into a moderate 3.5% negative impact. This led to Q3 sales of 1.7 billion Swiss francs, up 3.8% compared to prior year. Let's now drill down into our sales growth. In the third quarter, our testing and inspection division grew organically by 7.4%. Growth in Europe continued to improve and reached 5.4%, benefiting from early signs of recovery in health science. Asia Pacific increased by 4.8% organically. China maintained high single-digit growth supported by strong connectivity in products, food, and cosmetics. This was partly offset by the end of low profitable contracts in non-destructive testing. North America growth accelerated to 8.8%. We achieved strong double digit growth in food, environment and connectivity and products as a result of major contracts wins, including supporting one of the largest renewable energy projects in the US history. We have also been recently selected to partner with several major consultants and industry groups to provide analytical support for sediment investigations for one of the most high profile and industrialized stretches of river in the US. Latin America expanded organically by 17% with double digit growth across all business lines. Eastern Europe, Middle East and Africa grew by 11% supported by double digit growth in industries and environment. Our business assurance division delivered an organic growth of 5.9%. with double digit growth in certification of management systems and a strong performance in ESG assurance and sustainability audits. These strong results were partly offset by a slowdown in training and weakness in consulting, where the high basis of comparison will continue to impact growth for the rest of the year. Let's now move on the next slide where we can see the sales evolution by quarter. We started the year with an organic growth of 7.1% and highly unfavorable Forex leading to a net decline of 2.1%. In Q2, we expanded organically by 8.9% while Forex eased, leading to 5.1% reported growth. In Q3, the strong sales performance continued with 7.3% organic growth, corresponding to 3.8% in reported terms. This led to sales of 5 billion for the nine months. And now let's move on the next slide presenting the nine months sales bridge. We achieved strong 7.8% organic growth year to date, translating to 383 million Swiss francs. This was partially offset by the negative scope and currency translation effects, leading to a reported growth of 2.3%. The scope of minus 21 million Swiss francs reflects the prior year disposals of the automotive asset assessment business and the powertrain testing operations. The acquisitions of NutriSource in May 2023, Arclight in May 2024, and GoSummer in August 2024 partially reduced the impact of those disposals. The negative currency translation effect of 5.1% continues to be driven by the appreciation of the Swiss franc against all major currencies compared to the same period of last year. With that, I hand it back to you, Geraldine. Thank you, Marta.