Shares of SGS saw a significant boost after the appointment of new Chief Executive Geraldine Picaud and the announcement of ambitious sales growth and profitability targets for 2027.
Shares Rise, But Remain Lower Than Last Year
At 1032 GMT on Friday, SGS shares experienced an increase of 8.2%, reaching CHF81.24. However, they still lag behind their value from a year ago by 12%.
Geraldine Picaud Takes Over as CEO
SGS, a Swiss company specializing in testing, inspection, and certification, revealed that Geraldine Picaud would assume the position of CEO starting from March 26. She succeeds Frankie Ng, who served as CEO for nearly a decade.
Ambitious Targets Set for 2027
SGS has set its sights on achieving annual organic sales growth of 5% to 7% by 2027. Additionally, the company aims to improve its adjusted operating profit margin by at least 1.5 percentage points and achieve a cash conversion rate exceeding 50%. To support these targets, SGS plans to implement cost-saving measures totalling 100 million Swiss francs ($115.3 million).
Positive Outlook Despite Weak Results
Industry experts note that the appointment of a new CEO and the establishment of clear financial targets have diverted attention from SGS's lackluster performance. Bernstein analysts Harry Martin and Alice Rose Buckley state in a research note that these developments have shifted the focus away from the company's lowest margin since 2004.
Financial Results for Last Year
SGS reported a 5.1% decrease in adjusted operating profit for the previous year, amounting to CHF971 million. The company's margin also fell by 0.7 percentage points to 14.7%. Sales dipped slightly from CHF6.64 billion to CHF6.62 billion, although there was an encouraging 8.1% increase in organic sales.
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