Download PDF

1. Company Snapshot

1.a. Company Description

SGS SA provides inspection, verification, testing, certification, and quality assurance services in Europe, Africa, the Middle East, the Americas, and the Asia Pacific.It operates in five segments: Connectivity & Products, Health & Nutrition, Industries & Environment, Natural Resources and Knowledge.The company provides laboratory testing, product inspection and consulting, process assessment, technical and transactional assistance; digital solutions, which include cybersecurity, the internet of things, digital platform, and mobile application services.


In addition, it offers a range of testing, inspection and certification solutions for the crop science, food, health science, and cosmetics and hygiene industries; field services, technical assessment and advisory services; and services related to industrial, public health and safety, environmental testing, and public mandates.Further, it provides certification, training, supply chain assurance, technical consulting, and ESG assurance services; and laboratory outsourcing, commodities logistics, geochemistry, metallurgy, sustainability, and market intelligence solutions.The company serves the agriculture and food, chemical, construction, consumer and retail, energy, industrial manufacturing, life sciences, mining, oil and gas, public, and transportation sectors.


SGS SA was founded in 1878 and is headquartered in Geneva, Switzerland.

Show Full description

1.b. Last Insights on SGSN

SGS SA's recent performance has been positively driven by growing optimism among market watchers, reflected in a modest increase in the consensus analyst price target from CHF 93.17 to CHF 95.44. The company's popularity among retail investors, who own 48% of shares, also implies significant public control. Furthermore, SGS SA has reportedly outpaced its business services peers this year, demonstrating strong sector performance. Additionally, a booming pharmaceutical sector and rising R&D costs are likely to drive growth in the formulation development outsourcing market, a trend that could benefit SGS SA.

1.c. Company Highlights

2. SGS Posts Strong 2025 Results with Record Sales and Margin Expansion

SGS reported a record high sales of CHF 6.95 billion in 2025, driven by strong organic growth of 5.6%. The company's adjusted operating income margin expanded to 16%, a 70 basis points improvement compared to 2024. Earnings per share (EPS) came in at 2, beating analyst estimates of 1.99. The company's return on invested capital (ROIC) remained strong at 24%, and its debt leverage improved to 1.7x of net debt on adjusted EBITDA.

Publication Date: Feb -16

📋 Highlights
  • Record Financial Performance:: Achieved CHF 6.95 billion in sales with 5.6% organic growth and 16% adjusted operating income margin (CHF 1.1 billion), driven by cost savings (CHF 115 million) and operational efficiency.
  • 2026 Growth Outlook:: Targets 5–7% organic growth and >5% acquisition-driven growth, maintaining 16% adjusted operating margin despite FX headwinds (8% negative impact in Q1 2026).
  • Strategic Megatrends:: Sustainability segment grew 15%, fueled by energy transition demand, while digital trust services anchor growth in cybersecurity, AI, and connectivity.
  • Acquisition Momentum:: Completed 8 bolt-on acquisitions (CHF 190 million annualized sales) in 2025, including ATS (CHF 30 million synergy savings), with a strict focus on 5-year payback and double-digit ROIC.
  • Margin Resilience:: Operating margin expansion accelerated due to early execution of lean initiatives (CHF 115 million savings) and CHF 35 million operational efficiency gains, offsetting 20 bps headwinds in 2026.

Operational Highlights and Margin Expansion Drivers

The company's lean operating model and procurement savings plans delivered CHF 115 million in savings, contributing to the margin expansion. Management attributed the success to the swift execution of cost-saving plans, stating that "when you start to have cost saving plans, you better execute them fast. That's what we've done, and not communicated on that year-on-year." The company expects to maintain at least a 16% adjusted operating income margin in 2026, despite a 20 basis points headwind, driven by efficiencies and productivity gains through AI.

Segment Performance and Outlook

The company's Sustainability Products and Solutions segment grew 15% organically, driven by the energy transition and consumer consciousness. The Inspection and Testing (I&E) segment is expected to experience fundamental strong growth, driven by construction material testing, particularly in APAC. The Business Assurance segment was impacted by delayed projects but is expected to bounce back this year.

Valuation and Growth Prospects

With a P/E Ratio of 38.3 and an EV/EBITDA of 19.11, the market appears to be pricing in significant growth prospects. The company's ROIC of 10.58% and ROE of 65.51% suggest a strong ability to generate returns. Analysts estimate revenue growth at 5.8% for the next year, which is in line with the company's guidance of 5-7% organic growth. The Dividend Yield of 3.4% and Free Cash Flow Yield of 4.7% provide a relatively attractive return profile.

M&A Strategy and Integration

The company has been active in M&A, with seven bolt-on acquisitions since the last sales update call in October, representing CHF 190 million of additional sales on an annual basis. The acquisition of Applied Technical Services in January 2026 is expected to contribute to sales growth, with management stating that they are "ready day one, and we've appointed an SGS talented director to lead the integration."

3. NewsRoom

Card image cap

SGS SA (VTX:SGSN) Just Released Its Annual Earnings: Here's What Analysts Think

Feb -15

Source:

Card image cap

Are Business Services Stocks Lagging SGS (SGSOY) This Year?

Feb -12

Source:

Card image cap

Greenland Resources Reassaying for Magnesium and Finds Critical Minerals Including Rare Earth Elements; Gained 7.6% on Wednesday

Jan -22

Source:

Card image cap

Greenland Resources Reassays for Magnesium and Finds Critical Minerals Including Rare Earth Elements

Jan -22

Source:

Card image cap

SGS SA (VTX:SGSN) most popular amongst retail investors who own 48% of the shares, institutions hold 37%

Dec -27

Source:

Card image cap

Is SGS (SGSOY) Stock Outpacing Its Business Services Peers This Year?

Dec -18

Source:

Card image cap

Tracking the Changing SGS Story as Analyst Sentiment Shifts with New Targets and Partnerships

Nov -29

Source:

Card image cap

Are Business Services Stocks Lagging Rentokil Initial (RTO) This Year?

Nov -11

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.60%)

6. Segments

Industries & Environment

Expected Growth: 4.5%

SGS SA's 4.5% growth in Industries & Environment is driven by increasing demand for sustainability and environmental services, stringent regulations, and investments in digitalization and automation. The company's diversified portfolio, strong brand reputation, and expansion into emerging markets also contribute to its growth.

Natural Resources

Expected Growth: 4.2%

SGS SA's Natural Resources segment growth of 4.2% is driven by increasing demand for sustainable and responsible sourcing, stringent regulations and standards, and growing adoption of digital technologies for efficient resource management. Additionally, the segment benefits from the company's expertise in certification, testing, and inspection, enabling clients to ensure compliance and mitigate risks.

Connectivity & Products

Expected Growth: 5.5%

SGS SA's Connectivity & Products segment growth of 5.5% is driven by increasing demand for IoT devices, rising adoption of 5G technology, and growing need for cybersecurity solutions. Additionally, the company's expansion into emerging markets and strategic partnerships have contributed to the growth.

Health & Nutrition

Expected Growth: 4.8%

SGS SA's Health & Nutrition segment growth of 4.8% is driven by increasing consumer demand for healthy and sustainable products, stringent regulations and standards, and rising awareness of food safety and quality. Additionally, the segment benefits from the company's expertise in testing, inspection, and certification, as well as its strong presence in emerging markets.

Business Assurance

Expected Growth: 4.0%

SGS SA's Business Assurance segment growth of 4.0% is driven by increasing demand for risk management and compliance services, expansion into emerging markets, and strategic acquisitions. Additionally, growing concerns over supply chain resilience, cybersecurity, and ESG (Environmental, Social, and Governance) factors contribute to the segment's growth.

7. Detailed Products

Inspection Services

SGS provides inspection services to ensure the quality and quantity of goods during transportation, storage, and delivery.

Testing Services

SGS offers testing services to evaluate the safety, quality, and performance of products, including consumer goods, industrial equipment, and construction materials.

Certification Services

SGS provides certification services to ensure that products, systems, and processes meet international standards and regulations.

Audit Services

SGS offers audit services to evaluate the effectiveness of management systems, supply chains, and business processes.

Training Services

SGS provides training services to educate clients on industry best practices, standards, and regulations.

Digital Solutions

SGS offers digital solutions to support clients in their digital transformation, including data analytics, IoT, and blockchain services.

8. SGS SA's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for SGS SA is medium due to the availability of alternative inspection and testing services from competitors.

Bargaining Power Of Customers

The bargaining power of customers for SGS SA is low due to the company's strong brand reputation and the lack of concentration in the industry.

Bargaining Power Of Suppliers

The bargaining power of suppliers for SGS SA is medium due to the presence of multiple suppliers and the company's ability to negotiate prices.

Threat Of New Entrants

The threat of new entrants for SGS SA is low due to the high barriers to entry, including the need for specialized equipment and expertise.

Intensity Of Rivalry

The intensity of rivalry for SGS SA is high due to the presence of several established competitors in the industry, leading to a competitive market.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 89.76%
Debt Cost 3.95%
Equity Weight 10.24%
Equity Cost 6.84%
WACC 4.24%
Leverage 876.69%

11. Quality Control: SGS SA passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Logista

A-Score: 6.9/10

Value: 7.0

Growth: 4.8

Quality: 5.6

Yield: 10.0

Momentum: 4.0

Volatility: 10.0

1-Year Total Return ->

View Full Report
Stock-Card
Wallenius Wilhelmsen

A-Score: 6.0/10

Value: 10.0

Growth: 8.2

Quality: 6.7

Yield: 6.2

Momentum: 2.5

Volatility: 2.3

1-Year Total Return ->

View Full Report
Stock-Card
Ipsos

A-Score: 5.6/10

Value: 7.9

Growth: 5.3

Quality: 6.7

Yield: 6.2

Momentum: 1.0

Volatility: 6.7

1-Year Total Return ->

View Full Report
Stock-Card
Bureau Veritas

A-Score: 5.5/10

Value: 3.8

Growth: 5.0

Quality: 6.0

Yield: 5.6

Momentum: 3.0

Volatility: 9.7

1-Year Total Return ->

View Full Report
Stock-Card
SGS

A-Score: 5.3/10

Value: 1.5

Growth: 3.2

Quality: 5.5

Yield: 6.9

Momentum: 5.0

Volatility: 9.3

1-Year Total Return ->

View Full Report
Stock-Card
DKSH Holding

A-Score: 5.1/10

Value: 5.8

Growth: 3.2

Quality: 4.8

Yield: 6.9

Momentum: 1.5

Volatility: 8.3

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

94.2$

Current Price

94.2$

Potential

-0.00%

Expected Cash-Flows