The SGS Group (SGSOY.PK) saw an approximate 4 percent increase in their shares during early morning trading in Switzerland. This followed the company's announcement of organic growth in their fiscal income and sales for 2023. Alongside this, SGS unveiled their Strategy 2027 to catalyze growth, streamline their operations, and enhance margin and sales performance.
In addition to the fiscal report, SGS disclosed that Geraldine Picaud would be taking over as Chief Executive Officer from Frankie Ng, who had expressed his intention to step down. This change in leadership is set to take effect from the Annual General Meeting on March 26.
Picaud joined SGS on December 1, 2023, with the responsibility of leading Finance, Digital and Strategic Transformation, Mergers and Acquisitions, IT, and Procurement. Her previous roles included Group Chief Financial Officer and being an integral part of the Executive Committee at both Holcim and Essilor International.
In their 2023 fiscal year, SGS reported an adjusted operating income of 971 million Swiss francs, representing an organic growth of 6.3 percent. However, the adjusted operating income margin on sales dropped by 0.7 percentage points to 14.7 percent.
The company's sales rose to 6.62 billion francs, with an 8.1 percent organic growth driven by all business units. Particularly notable were their Business Assurance unit, which experienced double-digit growth, and their Natural Resources, along with Industries and Environment units, both of which saw high single-digit growth.
SGS highlighted that all business lines and regions had contributed to their robust performance, most notably in the areas of sustainability services, cybersecurity, ESG assurance, and consulting.
SGS's Strategy 2027 is set to drive an annual organic sales growth of 5 to 7 percent over the next four years. Additionally, the company aims to elevate its adjusted operating income margin on sales by at least 1.5 percentage points by 2027.
To achieve these goals, SGS plans to adopt a cost-disciplined operating model and implement a more streamlined corporate structure. They anticipate that this simplification will yield cost savings of 100 million francs and result in a new run rate by the end of 2025. A new 12-member Executive Committee is set to be formed to ensure support and uphold accountability.
In Switzerland, SGS shares were trading at 77.82 francs, showing an increase of 3.68 percent.
