SGS S.A.

Good morning ladies and gentlemen. Welcome to our Q3 sales update. Today I will take you through the highlights of the quarter and then I will hand over to Martha for more detailed information about the sales. Our Q3 sales reached 1.7 billion Swiss francs, an increase of 6% compared to Q3 2024 on an organic basis. Again, this quarter This strong achievement that you see is largely based on the first two value drivers we've identified in our strategy 27, sustainability and digital trust. Bolton acquisitions have also made a significant contribution to growth. Bolton acquisitions, actually, there we have maintained a very strong momentum, completing five more deals, since we last time met in July for half-year results. In July, we announced the acquisition of ATS, Applied Technical Service, with closing expected around the end of the year. The process is going according to plan. With ATS, we will significantly increase our presence in North America, adding complementary expertise and cross-selling opportunities. Finally, as we approach the end of this tumultuous year, which has been marked by strong Forex fluctuations, I am very happy to confirm our initial outlook for the full year. One of the things I'm most proud of is how far advanced we are in terms of digital trust services. For several years, we have been able to provide an extended range of digital trust services, For example, our cybersecurity offering delivered through BrightSight is market leading. More recently, we have been recognized by the European Union for our expertise in artificial intelligence with Certix. And I believe that our unique competencies in digital trust are one of the most valuable assets of the group. They enable SGS to accompany its customers in one of the major societal transitions of the modern world. This is the reason why it has been one of the key items of our strategy 27 from the very beginning. So, at this point, we felt it was important to organize our offering around four pillars to provide full visibility to our clients, connected products and technologies, digital services and infrastructures, data and artificial intelligence, organization and people. Practically, we certify compliance with various standards and acts of connected devices, infrastructures, virtual platforms, and AI systems. Under the pillar organization and people, we certify whether an organization has the right governance and controls in place under the applicable frameworks, which includes training, incident response, and supplier management. Let's now turn to sustainability, which has continued to be a strong driver of growth over the quarter. The four pillars, as you remember, of our offering impact now have recorded strong growth. Demand remains strong, supported by regulatory pressure, especially in Europe, and by strong consumer expectations. We also made good progress with the signing of various contracts, which will drive the growth of tomorrow. As an example, We have signed a partnership with EcoVedas, one of the main sustainability ratings platforms. So let's go to our M&A activity. You can see that during the quarter, we continued our active acquisition policy. Five new companies have joined the group. NPR Services in the U.S. is a provider of liquid and gas reclamation services with solutions to treat contaminants. Fulcrums Robotics is specialized in aerial, marine, and terrestrial drone-based inspection and robotic services. It is based in Australia, working across industrial and environmental sectors. We have taken an additional and controlling stake in Geosol, our JV in Brazil. It provides us with geochemical, environmental, and analytical laboratory services notably in mineral engineering. Trust60 is a Chilean technology integrator for mining operations. And finally, Qualitest in Canada provides services in welding engineering, mechanical testing, failure analysis, and inspection services. So let me now share some key highlights from our business lines. And let's start with industries and environment. So industries and environment, as you can see, delivered excellent organic growth in Q3. We are proud of what the teams have achieved here across all the network. The energy and momentum are tangible, and we remain fully focused on execution and delivering on all our promises. In safety, we continue to see high single-digit growth, so fueled by strong demand in North America and Europe on the back of regulatory pressures and customer focus and compliance. On project and advisory business, we delivered also robust growth, driven by new project wins in Latin America and Asia-Pac. Industrial testing also posted excellent results with solid execution and reliable performance across all regions. In-environment growth was moderate, partly offset by tough comparable bays and some temporary headwinds, notably in the US, but however, after a softer summer period, the latter part of Q3 showed a marked increase in laboratory testing. Let's turn to natural resources, which delivered solid organic growth of 4.4% in the third quarter. In minerals, we continue to benefit from strong demand for critical minerals and metals, particularly in the Americas and in Asia-Pac. This demand has been fueled by the needs and the regulation concerning electric vehicles and batteries. All gas and chemicals achieve strong rules, reflecting the impact of intensified sales and marketing efforts across Asia-Pacific and North America. In agriculture, we recorded good growth driven by double-digit expansions in the Americas and a rebound in Europe following last year's weaker crop season. Connectivity and products delivered a strong organic growth of 6.2% in the third quarter, led by sustainability and digital trust. Connectivity achieved high single-digit organic growth driven by increased demand for technology security in Asia Pacific and product safety in North America. Our recently acquired businesses in North America also continue to perform very well, including SGS ArcLight, which delivered strong double-digit growth, expanding its market share with major U.S. mobile carriers. This complements our presence in Asia, where we test mobile devices or manufacturers, creating valuable synergies across the connectivity ecosystem, from product design to carrier compliance. Softlines delivered solid organic growth, supported by strong demand for eco-friendly and sustainable products. Our SGS Blue Sign business, which recently celebrated 25 years, as a global leader in sustainable textile innovation, continues to play a key role in helping brands advance their responsible sourcing and circularity goals. Hardlines that evade high single-digit organic growth, benefiting from supply chain shifting opportunities across Southeast Asia, as manufacturers gradually start to diversify production to strengthen resilience to geopolitical risks. Mid-single-digit growth in government services reflects a strong demand for product conformity assessment and anti-fraud services, as government seeks always to strengthen consumer protection and trade compliance. Health and nutrition delivered a strong organic growth of 6.2% in the third quarter, driven primarily by food, which continued to perform very well across all regions. Food testing maintained double-digit organic growth, supported by strong demand from emerging contaminant testing and food safety services globally. We also recorded strong double-digit growth in nutraceutical and dietary supplements product certification, notably supported by record sales at SGS NutriSource. which continues to expand its leadership in clinical research, regulatory consulting, and product certification for the health and the food industries. Increasing consumer awareness and product integrity is accelerating demand for independent third-party verification. Pharma, delivered moderate organic growth, driven by clinical research in Europe, partly offset by a softer performance in drug development. In cosmetics and personal care, several new project screens were secured toward the end of the quarter, with activity expected to continue building into Q4. Finally, business assurance. Resilient organic growth was driven by strong demand for services that help our clients mitigate risk, build operational resilience, and ensure compliance, particularly in areas related to sustainability. Certification reported strong organic growth with double-digit increases in medical devices, food, and digital trust assurance. In these critical sectors where we hold leading positions, we help clients manage operational, regulatory, and reputational risk, maintain compliance, and protect the integrity of their supply chains and digital infrastructure. Sustainability continued to deliver double-digit growth, driven by strong demand for greenhouse gas emissions verification, sustainability assurance, and social audits, as clients increasingly act proactively to meet stakeholder expectations and product their brands. By contrast, consulting activity remained soft, primarily due to the delay of several large projects in North America. Our recent acquisitions in North America and Europe continue to make a strong contribution to growth, further enhancing our global capabilities in sustainability and digital trust, and positioning the division very well for future growth. So now with that, I now hand over to you, Martha.

Thank you, Geraldine, and a very good morning to everyone. Let's now look at our third quarter sales drivers in more detail. First, we are very pleased with the acceleration of organic growth to 6%, resulting in 102 million Swiss francs of incremental sales. Second, the sustained bolt-on acquisition momentum further expanded the sales by 1.9%, bringing the Q3 growth in constant currencies to 7.9%. On the forex side, our reporting currency, the Swiss franc, remained strong, resulting in a negative translation impact of minus 6.1%, leading to 1.8% growth in Swiss francs. Let's now move on the next slide and see how our growth in Swiss francs compares to the euro and the US dollar. At the beginning of April, with Trump's Liberation Day announcement on tariffs, The Swiss franc appreciated sharply against all currencies and remained at those levels through Q3. This led, as just presented, to a minus 6.1% translation impact in Swiss francs in Q3, to compare to minus 4.3% should we translate sales to euros, and to plus 2.4% when translating to the US dollar. As a result, the third quarter reported growth in Swiss francs of plus 1.8% is equivalent to a growth of plus 3.6% in euros and plus 10.3% in US dollars. Let's now continue with the sales breakdown by region. As you can see, the organic growth was supported by all regions. In testing and inspection, Asia-Pacific expanded by 7.6% organically in Q3, with continued high single-digit growth in connectivity and products and double-digit growth in food. In addition, growth in industries and environment and natural resources accelerated, notably with a strong performance in Australia. In Europe, organic growth improved to 4.5%. benefiting from new contract wins in industries and environment, while trading volumes in natural resources improved. North America expanded by 3.9% organically, on top of a high prior year baseline. We saw excellent performance in safety, connectivity, food and agri, partially offset by a softer summer period in environment, while pharma remained stable. Eastern Europe, Middle East and Africa delivered 3.8% organic growth, impacted by a slowdown in Africa, with several countries going through political uncertainty. Latin America grew by 14.1% organically, an acceleration supported by new project wins in Chile and Brazil. And finally, as commented earlier by Geraldine, Business Assurance delivers 3.7% organic growth, driven by strong momentum in sustainability, offset by underperformance in consulting. Let's now review how the sales of the first nine months compare to prior year. Our nine-month sales reached 5.2 billion Swiss francs, up by 2.3%. The strong organic growth of 5.5% was complemented by 1.6% additional growth from bolt-ons, leading to a high constant currency growth of 7.1%. The strength of the Swiss franc against all major currencies led to a minus 4.8% translation effect, resulting in a 2.3% growth in reported terms. And with that, I hand it back to you, Geraldine.

Thank you, Martha. To conclude this presentation, let me reconfirm our outlook for the full year 2025. In terms of growth, our nine-month sales are fully aligned with our full-year guidance. We expect this trend to continue in the fourth quarter. I'm happy to confirm on the profitability side that we will improve our adjusted operating income margin by at least 30 basis points, thanks partly to our corporate savings plans. I remind you that this guidance is in reported terms, so in Swiss francs, and therefore includes the full effect of the foreign exchange on our margin. Finally, I confirm here again that the free cash flow will be strong for the full year, even excluding the non-recurring impact of the sale of the headquarter building in Geneva. So thank you for your attention, and we can now take your questions.