SGS S.A.

Good morning and welcome to the SGS Q1 2025 sales update. My name is Ariel Bauer and I'm in charge of communications and investor relations. I'm here with Geraldine 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 listen-only mode. The presentation will be followed by a Q&A session, and 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, ladies and gentlemen. Welcome to this conference call about RQ1 sales. So, we had a strong quarter to start the year. In particular, I am very excited about it. We reported the highest quarterly sales ever, close to 1.7 billion Swiss francs, up 6.6%. This achievement is attributable to a strong organic growth of 5.6%, but also to our Bolton acquisition policy, which now significantly contributes to total growth. In a few minutes, I will comment in details on the drivers which have supported the market over the quarter. You will see that digital trust and sustainability have been instrumental here, confirming that we definitely made the right choice when we put them at the heart of our strategy. Looking at the months ahead, we recognize that we have entered into a period of economic uncertainty which is already impacting the forex. Nonetheless, based on what we have seen, we confirm our guidance as communicated in February. And I will comment further at the end of this presentation. Let's look at sustainability. The sustainability services have made a strong contribution to growth with major contracts signed across the four pillars of impact now, climate, circularity, nature and ESG assurance. For example, we see increased demand for sustainability coming from the textile industry. BlueSign, as an example, it's an SGS company, has been pioneering sustainability and textiles since 2000 and was one of the first companies in the world to implement comprehensive phase-out programs targeting forever chemicals, including PFAS. We are proud of our positioning at the forefront of sustainability services, which will continue to be a powerful value driver for SGS in the years to come. Digital trust also contributed significantly to growth in the first quarter, especially through advancements in artificial intelligence and cybersecurity services. We are proud to have issued the world's first AI management certificate for customer airport services to Shanghai Airport in Singapore. This marks a major milestone, demonstrating that artificial intelligence users can and must proactively manage safety, security and ethical risks. Additionally, all European BrightSight labs have successfully obtained the accreditation for cybersecurity certification at the highest assurance level. This achievement reinforces BrightSight position as the best option when it comes to connecting cybersecurity regulations across Europe, North America, and Asia. Finally, in Q1, SGS officially took over the responsibility for global management and independent certification of the digital trust label from the Swiss Digital Initiative. The label has already gained significant traction with adoption by leading organizations, including Swiss Ray and Cisco. We are committed to scaling this Swiss innovation internationally. Let's now look at another key value driver of Strategy 27, mergers and acquisitions. Here you can see on the map that so far in 2025, we have signed the acquisition of eight additional great companies to accelerate growth and profitability in attractive markets, especially in North America and in Europe. As with all of our investments, we apply strong financial discipline with criteria on growth potential, profitability, and of course, payback. So now on this slide, you can see the growth split across all end markets or business lines, and now I will go into the detail of each one of them. Let's start with industries and environment. The solid organic sales growth of 5.1% in the first quarter was led by environment and safety. Environment continued to benefit from double-digit growth in PFAS testing, with particularly strong activity in North America and Asia Pacific. Growth was partly offset by a soft start in routine testing. High single-digit growth in safety services was supported by increased demand for global safety solutions, particularly related to large industrial sites in the Americas and Asia-Pacific. Projects and advisory grew moderately as new wins in Eastern Europe, Middle East, Africa were partly offset by the completion of certain projects in Latin America. Industrial testing benefited from high single-digit organic growth in construction materials, partly offset by the end of some low-margin contracts in non-destructive testing, which we have chosen not to renew. We continue to see growing demand in areas such as greenhouse gas emissions, verification and monitoring, energy transition, including low carbon fuels. SGS continues to be committed and actively engaged in supporting clients in their sustainability journey. Let's now look at natural resources, which delivered resilient organic sales growth of 3.8%. Mid-digit, mid-single-digit organic growth in minerals was fueled by trade services and continued strong demand for critical raw materials and metals for battery testing, where we continue to invest. For instance, you have seen lately we have expanded by 20% the capacity of our battery testing laboratory in Georgia, U.S., to address rising demand for services related to light, electric, vehicles and energy storage. Growth was partly offset by some project delays in North America. Oil and gas and chemicals grew moderately on the back of lower trading volumes related to current economic uncertainties. Agriculture was stable as recovery in agriculture input solutions was offset by softness in trade services due to the poor crop season in Europe. Let's move to connectivity and product. Connectivity and product delivered strong organic sales growth of 6.9% in Q1. Connectivity delivered very strong organic growth with increasing activity in technology security, including functional safety testing, where SGS offers a comprehensive suite of services, particularly for industries where risk reduction and compliance are critical, such as automotive and semiconductors. Recently acquired businesses in North America also delivered a strong performance. High single-digit organic growth in Softline was driven by strong demand for sustainability services fueled by regulatory requirements and voluntary corporate actions in response to rising consumers' expectations. Finally, Hardlines delivered high single-digit organic growth supported by strong demand from automotive and home improvement retailers, and double-digit growth in Eastern Europe, Middle East Africa, Latin America, and Asia-Pacific. Let's now look at health and nutrition, which delivered excellent double-digit growth of 10.4%, driven by all segments. Food continued to grow organically at double digits, supported by emerging contaminants testing, advisory, and compliance. Pharma delivered high single-digit organic growth, driven by drug development and recovery in clinical research. Pharma will continue to be a key area of focus for ESGS. We have over 40 years of experience as a global contract research organization. and have built a strong reputation in delivering integrated services across a wide range of therapeutic products, including biologics, vaccines, small molecules, biosimilars, and advanced therapies. Cosmetics delivered excellent organic growth, supported by all regions, and increased activity arising from growing consumer demand for safety and new regulations. Lastly, let's review business assurance. Certification delivered mid-single-digit organic growth supported by medical devices and digital trust, which grew at double digits. Growth was partly offset by the fact that 2025 is a post-certification year for the core certification business of quality, health, safety, and environment. ESG continued to grow organically at double digits, driven by non-financial reporting assurance and social audits, as well as GHE, or greenhouse gas emissions verification. Consulting remained soft, with several projects on top delayed in North America and in the supply chain management segment. And with that, I will now hand over to Marta, who will present our Q1 sales.

Thank you, Geraldine, and a very good morning to everyone. I'm pleased to report a record start to the year with sales of 1.7 billion Swiss francs, which is an increase by 6.6% compared to the first quarter of 2024. First, the strong organic growth of 5.6% resulted in 88 million Swiss francs of incremental sales, highlighting the resilience of our business. Second, the pace of bolt-on acquisitions accelerated, delivering 1.3% of growth or 21 million of additional sales. And third, During the first quarter, the Swiss franc appreciated only slightly, leading to a small negative translation impact of 0.3% or minus 5 million Swiss francs. Let's now see the sales breakdown by region. In the first quarter, our testing and inspection division expanded organically by 5.8%. while the Business Assurance Division delivered 3.5% organic growth. In testing and inspection, the sales in Europe grew organically by 1.9%. Industrial testing was impacted by completion of low-margin contracts, while natural resources continue to suffer from the poor crop season. This was more than offset by high single-digit growth in pharma and cosmetics. Asia Pacific expanded organically by 6.1%, with high single-digit growth in connectivity and products, and health and nutrition, where food delivered a double-digit growth. North America sales increased by 3.9% organically, impacted by project delays in minerals and soft trading volumes in oil and gas. Eastern Europe, Middle East and Africa grew organically by 10.4%, supported by all business lines. And Latin America expanded by 15.7% with double-digit growth in all business lines. Our business assurance global division delivered 3.5% organic growth. As already mentioned by Geraldine, the strong momentum in ESG, medical device and food certification continued, while consulting remained soft. Let's now move and see more details on the successful script dividend take-up. As announced on the 17th of April, 63.3% of the dividend for the financial year 24 was elected to be paid in the form of new SGS shares, with the remaining 36.7% to be paid in cash. This represents a clear endorsement of Strategy 27 and allows SGS to reward the loyalty of its shareholders while redirecting close to 400 million Swiss francs of cash towards the acceleration of Strategy 27 execution. The delivery of the new shares and the payment of dividend is taking place today. With that, I hand it back to you, Geraldine.