SGS S.A.

Good morning and welcome to the SGS Q1 2026 sales update. I'm here with Geraldine Picaud, our CEO, and Marta Vlatchkova, 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. 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 Geraldine Picaud, CEO of SGS.

Thank you, Ariel, and good morning, ladies and gentlemen. Thank you for attending this call. As usual, I will comment on the business and share our latest news before handing over to Marta for more details on the numbers. They've reached 1.75 billion Swiss francs, a record for SGS. We achieved this with strong organic growth of 5.3%, combined with growth from acquisition of 7.3%. We experienced a huge negative foreign exchange effect, amounting to 8.7%. The situation in the Middle East affected our operations in the region, but the impact on our sales has remained very limited as it represents less than 3% of our total revenue. On the positive side, over the quarter we had several successes on the business that I will comment in the coming minutes. You will see that we are very happy with the leadership we have further reinforced in Digital Trust and also in our AI offering. About APS, Applied Technical Services, the integration is well underway and we are where we expect it to be. Another success is the script dividend, which recorded a final take-up exceeding 60%. To conclude, we are fully on track, which allows us to confirm our outlook. Let's now go into our digital trust. The first area we are especially proud of is really our leadership in digital trust. As you know, digital trust services has been from the start at the heart of our Strategy 27. We were already in a leading position, but we have further reinforced this over the quarter. First, we have added additional capabilities and connectivity by opening a new state-of-the-art lab in the UK. We have also completed the acquisition of Granite River Laboratories, GRL, which brings us complementary expertise in high-speed connectivity. GRL employs 200 experts working in laboratories in the US, in Europe, and in Asia. Secondly, in AI certification, we also have achieved some successes by delivering certifications in new geographies and to key clients. and finally with several bolt-ons, we have enlarged our global offering by adding to our business portfolio new expertise such as payment card security or cyber forensic. We expect to deploy these new capabilities across the entire SGS network. To continue with the business update, let me now give you some examples of how we use AI to serve our clients. Of course, We also use AI in our labs to improve efficiency and processes, but the point here in this sales Q1 update is to focus on sales and to give you a strong sense on how we can improve our customer satisfaction with AI. Chemical intelligence in China is a great example. It allows us to reduce by 80% the traditional spectra analysis processing time. It's already live in Shanghai, and it's being currently rolled out across China. Another example on the certification side is Neomet AI, which significantly accelerates the audit reviews by pre-screening the documentation, flagging potential gaps, and therefore allowing experts to focus on critical issues. But not only are we improving the customer experience, we also are in a position to propose new services. FoodNexus is an AI-powered platform. It enables food companies to monitor regulatory changes, identify emerging safety risks, and generate auditory evidence across their supplier networks. In a different sector, X-Analytics is a centralized tool which allows mining companies to manage their assets and, in particular, predictive maintenance. We could give Plenty of other examples of this type across the group and we see a huge potential for the future. Let's go to ATS and let's give me a short update on where we are. You remember that we closed the acquisition in early January. The integration is fully on track. We want to increase the value built over the years by ATS. We have implemented a governance by SGS while keeping ATS structure unchanged. This way, we have full cooperation to find cross-selling opportunities and implement synergies with no risk of destroying the brand, the technical expertise, and the made-in-America culture of ATS. We are extremely happy with this acquisition. Let's move on to our bolt-on. In Q1, we continued with our active bolt-on program. In our full-year results presentation, I already commented on five of them. Since the end of February, we have completed the acquisition of digital trust deals, especially Granit River Labs that I already presented, but we also bought Alvera, the cybersecurity company in Hungary. Trident is an ATS acquisition in the U.S. nuclear sector. And finally, Osgarpi is a French company which provides predictive analysis in connection with flooding. Please let me warmly welcome these new experts who are now part of the SGS family. Let me now share some key highlights from our business nights and let's start with industries and environment. Industries and environment delivered a strong quarter with an excellent growth driven by inspection and safety and a meaningful contribution from ATS. Double-digit organic growth in inspection and supervision with a strong performance in safety were supported by new wins and strong execution in Latin America and Asia-Pacific. Industrial testing delivered solid results led by new projects and a strong calibration activity, particularly in Europe and in Asia-Pacific. In environment, growth was solid overall, driven by industrial hygiene and field monitoring in North America. Scope contribution was mainly driven by ATS following the closing in January. As you remember, inspection, calibration, and part of the testing businesses of ATS are consolidated within industries and environments. Let's move to natural resources, which delivered a solid quarter with 4.2% organic growth led by minerals and resilient performance across the rest of the portfolio. The strong growth in minerals was driven by the Americas, Asia-Pacific and Southern Africa. Geochemistry and metallurgical testing recorded an excellent performance supported by gold and rare earth metals. In this area, we continue to pioneer and scale advanced geochemistry solutions, such as coal block and photon assay, to help mining clients meet operational and sustainability goals. and chemicals also posted solid organic growth despite business disruptions coming from the Middle East in March. And agriculture grew moderately with solid organic growth in North America. Now let's move on to connectivity and products which delivered another strong quarter with 6.3% organic growth. High single-digit organic growth in connectivity was led by wireless testing and cybersecurity. Softline has also delivered high single-digit organic growth, benefiting from a surge in demand for PFAS testing in Asia-Pacific, mainly driven by new European regulations. Here we have developed highly advanced solutions to help brands move away from PFAS. By choosing PFAS-free alternatives, brands can ensure compliance across complex supply chains while strengthening competitiveness. And this is fully aligned with our impact now for sustainability offering. Arbine posted strong organic growth supported by new contract wins. Trade facilitation services were slightly impacted by geopolitics and contract mix. Organic growth now in health and nutrition was driven by food, which delivered high single-digit organic growth for the quarter. The strong performance was driven by food safety services across all geographies, and we saw continued strong momentum in health, food and sports nutrition, particularly in Asia-Pacific. Food safety remains a core area of focus for SGS and with our globally recognized expertise, we remain committed to supporting the industry with science-based, reliable testing solutions. Pharma showed improving performance in North America, offset by the phasing of projects in clinical testing in Europe. Cosmetics and personal care was impacted by delays in the start of triumphs projects. Networks for business assurance which delivered a strong quarter with 7.4% organic growth led by sustainability and digital trust. Double-digit organic growth in sustainability was driven by greenhouse gas emissions verification and supply chain services. Digital trust assurance also delivered double-digit organic growth supported by a strong demand for information security, cybersecurity, and AI assurance. And this reflects the strong commitment to scaling our leading capabilities in this area, leveraging additional expertise brought by acquisitions such as Certix. Certification posted solid organic growth led by medical devices, a critical sector where we continue to invest. Co-contribution was mainly driven by the consolidation of the forensic business of ATS and it was partially offset by the planned disposal of our consulting business in the US. With that, I will now hand over to Marta to review our Q1 2026 sales.

Thank you, Geraldine, and a very good morning to everyone. Looking now at our record first quarter sales of 1.75 billion Swiss francs. We were very pleased with the 12.6% growth in constant currency, of which 5.3% from the strong organic growth and 7.3% from M&A, which included the consolidation of ATS since the beginning of the year. On the forex side, Our reporting currency, the Swiss franc, remained very strong, resulting in a negative translation impact of minus 8.7%, which reduced the growth in Swiss francs to plus 3.9%. Let me now briefly put our Q1 growth in Swiss francs into context by comparing it with the euro and the US dollar. Twelve months ago, in early April 2025, with President Trump's Liberation Day tariff announcement, there was a sharp and rapid appreciation of the Swiss franc against all major currencies. Since then, the franc has remained structurally strong, particularly against the US dollar, but also versus the euro. This is why the plus 3.9% growth in S.F. is equivalent to plus 7.1% growth in EUR or to plus 19.3% in USD. As you can see here, the organic growth continues to be supported by all regions, and this despite the Middle East situation. In testing and inspection, Asia-Pacific expanded by 8.9% organically in Q1, with double-digit growth in natural resources, notably by continued strong performance in Australia, as well as double-digit growth in both pharma and fruit. In addition, growth in connectivity and products accelerated. Europe grew organically by 2.4%, led by industries and environment, with new industrial testing projects, partly offset by phasing of clinical testing activities in pharma. Volumes in natural resources improved, while connectivity and products remained soft. North America grew by 1.4% organically, with strong performance in minerals, solid environmental and connectivity in products, which were offset by phasing of projects in cosmetics and nutraceutical supplements testing. Eastern Europe, Middle East and Africa delivered 2% organic growth impacted by the current situation in the Middle East. Latin America grew by 8.5% organically, supported by new project wins in Chile and Peru. And finally, as commented earlier by Geraldine, Business Assurance delivered 7.4% organic growth, driven by double digit growth in sustainability and digital trust assurance services. As announced on the 21st of April, 61.35% of the dividend for the financial year 2025 was elected to be paid in the form of new SGS shares, and the remaining 38.65% to be paid in cash. This represents a continued 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 continued execution of Strategy 27. The delivery of the new shares and the payment of dividends will take place on the 24th of April, tomorrow. With that, I hand it back to you, Geraldine.