SGS S.A.

Good morning and welcome to the SJS First Half 2026 results call. 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 SJS 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 one on your keypad. I would now like to turn the conference over to Geraldine Picaud, CEO of SGS.

Thank you, Ariel. Good morning, ladies and gentlemen. Thank you for attending our H1 results presentation, and it's a pleasure to have the opportunity to share with you our highlights. As usual, I will give some colors about the business and then Marta will provide more details about the financial performance. Over the half year, we have continued the execution of our strategic pillars. You may remember from our Q1 sales update call that the beginning of 2026 was marked by strong investment in digital trust, in particular with the acquisition of Granite River Laboratories, as well as expanding our connectivity offering through new capabilities developed in the UK. We also continue to invest in AI to optimize our processes and develop new offerings. We will show more on this topic at our capital markets event in November. Our sustainability offering of impact now has remained a strong growth driver. In regards to the portfolio, ATS, Applied Technical Services delivered a strong performance and you will see that we have progressed in the implementation of the cost synergies. On the sales side, we just launched exciting offers to our clients combining ATS and SGS North America expertise. We have continued targeted bolt-on acquisitions and completed the disposal of the consulting business main point, which is consistent with what we announced in April. Now, about the financial performance, we are very happy with the results. Organic growth reached 5.6% and would have been above 6% without the crisis in the Middle East. Our EBIT, or adjusted operating income, Free Cash Flow and Earning Per Share continue to deliver strong improvement and Marta will further comment on this. So despite the uncertainty ongoing in the Middle East, I strongly believe that we will reach our guidance for this year. Now, a quick focus on digital trust and sustainability. The 38% growth in digital trust reflects the excellent trend of our organic business, which generated 18% organic growth, mainly driven by wireless connected devices. Also, the recent investments in Bolton, we have realized, translate into a scope effect of 29%. Granite River Laboratories is recording double-digit growth in several countries. On sustainability, Impact Now is also delivering strong results with 18% total growth, out of which 10% is organic. The four pillars of Impact Now have recorded high growth, especially the nature pillar where environmental testing is reported. Now let's move on to ATS, which is part of our group since the beginning of the year. In terms of governance, we have implemented a management structure where ATS remains as a standalone entity with an SGS top management and a dedicated board. This way, ATS expertise, brand and business are fully preserved while synergies can be efficiently implemented. and in H1, we have already realized cost savings in procurement, in real estate and started to consolidate the leadership positions. About cross-selling, we have launched an offering dedicated to data centers where we provide an end-to-end solution based on complementary knowledge of SGS and ATS. Marketing campaign is live these days. You might see it on the social networks. It's a first initiative which will bring business in H2, and we expect more to come before year-end. In Q2, we have continued an active bolt-on program. Since our Q1 update call, we have completed five more acquisitions. Keystone and CMIC bring bioanalytical capabilities in the U.S. K-Prime is an environmental testing laboratory also in the U.S., and TechCorp completes our offering in electrical systems in Australia. Finally, we expand SGS DigiComply with Agrono, a one-of-a-kind food risk intelligence platform creating Food Nexus, the most comprehensive digital solution for the food and beverages industry. So please let me warmly welcome the experts and the employees of these companies who join the SGS family. Let me now share some key highlights from our business lines and let's start with industries and environment. The business delivered a solid H1 with organic growth of 4.7% and total growth of 16.2% including the consolidation of ATS. Environment delivered strong results led by our environmental testing and field services in the Americas and in Europe. We see continued momentum in North America which delivered double-digit organic growth in the first half. inspection and supervision and safety delivered mid-single-digit organic growth fueled by major industrial projects in Latin America and Asia-Pacific where investment in infrastructure and in the energy transition continues. This was partially offset by disruptions linked to the situation in the Middle East. Solid growth in industrial testing was supported by contract wins in Europe, increased demand for oil condition monitoring services and strong double-digit growth in Latin America. Scope of 17.6% was driven by continued strong performance of acquisitions with high contribution from ATS in North America. Natural resources now. Our business line delivered a strong H1 with 5.5% organic growth led by minerals and a significant improvement in adjusted operating income margin to 14.4% of sales. Minerals delivered high single-digit organic growth supported by all regions with double-digit growth in Asia-Pacific. Within minerals, geochemistry recorded double-digit growth with strong results also in metallurgy and consulting led by gold and critical minerals. In this area, we continue to pioneer and scale advanced geochemistry solutions, including photon assay, which compared to traditional fire assay, delivers results in minutes with around four times lower CO2 emissions and no hazardous lead waste. This is how we help mining clients meet their operational and sustainability goals. In agriculture, performance is improving, driven by increased activity in field and laboratory testing across all regions. Oil, gas and chemicals posted moderate organic growth despite business disruptions in the Middle East. Connectivity in products delivered another excellent performance with 6.8% organic growth and an improved adjusted operating income margin of 22.7%. Connectivity delivered high single-digit organic roles led by Wireless in Asia Pacific and Project WINS in North America. The demand for technology, security, and compliance continues to increase as connectivity expands across devices, platforms, and networks. Softline grew double digit with strong momentum in PFAS testing driven by increasing consumer awareness and new regulations. And this demand is really structural. We see, for instance, after the French ban in January, a new reach restriction that will apply at European level from October covering clothing, footwear and food contact materials. Hardlines also posted high single-digit organic growth with continued strong demand for home appliances and food contact material testing. And finally, in trade facilitation services, continued strong demand for e-platform services was offset by softer trade flows in Europe. Now let's turn to health and nutrition. Following a clear acceleration in the second quarter, the business delivered 4.5% organic growth and an improved adjusted operating income margin of 12.7%. Food delivered high single-digit organic growth, led by Asia-Pacific and Europe. We see increased demand for food contaminants and safety testing driven by consumer expectations as well as new food labelling requirements in particular in Asia. The food safety remains a core area of focus for SGS. With our globally recognised expertise, we help clients respond quickly to new contaminant risks and regulatory requirements. Pharma posted moderate organic growth driven by drug development and partly offset by project delays in clinical research in Europe. In cosmetics and personal care, we saw a marked improvement in the second quarter following the delayed start of client projects. And finally, let's move to Business Assurance, which delivered an excellent first half of the year with 7.3% organic growth and an improved adjusted operating income margin of 18.9%, led by certification, digital trust and sustainability. Certification confirmed a strong momentum with high single-digit growth led by medical services, medical devices and food. These are critical fast-growing sectors where certification protects product integrity, safety and market access and where we continue to invest. Digital Trust delivered double-digit organic growth fueled by strong demand for information security, cybersecurity, and AI assurance. The need for cyber resilience continues to accelerate and the regulatory momentum on AI is building globally. and sustainability double-digit organic rules was driven by greenhouse gas emissions verification together with strong demand in forestry and circularity certification. Here we support our clients in meeting increasing regulatory requirements such as the carbon border adjustment mechanism or the CBAM where importers into Europe now need verified carbon emissions data. The scope contribution was mainly driven by the consolidation of the forensic business of ATS and by our Bolton acquisitions in digital trust and sustainability partially offset by the disposal of our U.S. consulting business. And with that, I now hand over to Marta who will present our H1 financial performance.

Thank you, Geraldine, and a very good morning to everyone. Let me start with the main financial KPIs of this record first half. Sales reached 3.7 billion Swiss francs thanks to the strong organic growth of 5.6% and this despite the Middle East situation. The adjusted operating income continued to grow over proportionally to reach 15.1% margin on sales, up by 20 basis points. This translated into an excellent free cash flow of 260 million Swiss francs, up by 25%, excluding the proceeds from last year's disposals of our Geneva headquarters. Moving to the sales breach, where you can see the amazing 13.4% growth in constant currency. comprising of 5.6% organic growth and 7.8% from M&A including ATS. On Forex, the Swiss franc remained strong resulting into a negative translation impact of minus 5.8% which reduced the growth to 7.6% in Swiss francs. Here we see how the growth in Swiss francs translates into Euro and US dollar. The franc has remained structurally strong despite a slight appreciation of the dollar and the Euro in the second quarter of this year. This is why the 7.6% sales growth in Swiss francs translates to 10.3% growth in Euro and plus 18% in US dollars. Moving to the sales per region. In testing and inspection in Asia Pacific, the organic growth accelerated to close to 10% in H1, boosted by double-digit growth in health and nutrition and natural resources, together with high single-digit growth in connectivity and products and industries and environment. Europe grew organically by 2.3%, led by high single-digit growth in food, and new projects in industries and environment. This was partly offset by phasing of clinical testing activities in pharma and overall soft volumes in natural resources and connectivity and products. In North America, the soft first quarter was followed by double digit growth in Q2, led by industries and environment and health and nutrition, and with that helping to close the first half at 6.1% organic growth. Eastern Europe, Middle East and Africa declined by 2.8%, impacted by the Middle East situation. Latin America expanded by 9% organically, supported by very strong activity in industries and environment and minerals testing. and finally, as commented earlier by Geraldine, business assurance delivered 7.3% organic growth led by digital trust and sustainability. Now on the adjusted operating income. I'm proud to report the over-proportional growth in margin, which reached 15.1% on sales, up by 20 basis point, and these despite Middle East situation and the Forex headwinds. The adjusted operating income grew organically by 39 million Swiss francs, equivalent to 30 basis points of margin improvement. It benefited from the efficiency plan savings and the operating leverage, partially offset by the impact of the Middle East situation and investments in AI capabilities. M&A, including ATS, added 42 million Swiss francs, contributing 10 basis points of margin progression. Lastly, the negative forex impact of 35 million Swiss francs, equivalent to 20 basis points, was driven, as commented earlier, by the strong Swiss franc. Moving now to the full P&L. As previously outlined, in the first half, the sales grew by 7.6% and the adjusted operating income expanded over proportionally by 9%, or 20 basis points on margin improvement. Below the adjusted operating profit, we can see the increase in amortization of intangible assets, which is driven by ATS. Restructuring costs were broadly in line with prior year as we took action to reduce our cost base in response to the Middle East situation. In other non-recurring items and transaction costs, the variation is due to the gain on disposal of our former headquarters building in H1 2025. Below the operating income, the financial expenses have increased with the financing of the ATS acquisition, while the effective tax rate is improving by one percentage point. With all that, the EPS reached 1.58 Swiss francs, an increase by 14.5% when we strip out the gain on the HQ disposal from the baseline. And finally, the record performance of the first half translated into a record free cash flow of 260 million Swiss francs, up by 25% compared to prior year before the proceeds from the HQ disposal. And with that, I hand over to you, Geraldine.