Nucor earnings beat by $0.08, revenue fell short of estimates
Investing.com -- SGS (SIX:SGSN) SA reported first-half (H1) results that were broadly in line with expectations, and reiterated its outlook for the year.
Revenue for the period came in at CHF 3.42 billion, slightly below the CHF 3.44 billion consensus, while organic growth was solid at 5.3%, matching estimates.
Adjusted earnings per share (EPS) of CHF 1.73 were 1% below consensus.
Free cash flow—excluding HQ disposal proceeds—rose 34% year-over-year, supported by higher EBITDA, reduced capex, and disciplined working capital.
Adjusted operating income (AOI) of CHF 509 million also matched consensus, delivering a margin of 14.9%, aided by strength in the Connectivity & Products (C&P) and Health & Nutrition (H&N) segments.
C&P AOI rose nearly 9% above consensus, driven by strong demand for Connectivity and Sustainability services, with margin expansion of approximately 140 basis points.
H&N also beat expectations slightly, supported by strong trends in Food and improved momentum in Pharma.
These gains helped offset a weaker-than-expected showing from Natural Resources (NR), where AOI fell 11% below consensus on sluggish low-single-digit revenue growth and 50 basis points of margin contraction.
The Industries & Environment (I&E) and Business Assurance (BA) divisions also came in marginally below forecasts.
SGS reiterated its full-year guidance, which includes 5–7% organic growth, a 1–2% revenue contribution from bolt-on M&A, and at least 30bps improvement in AOI margin.
"Some reassurance that Q2 trading has remained solid despite tariff uncertainty which could be taken mildly positively today, based on stock price reactions across the wider market to in-line prints," RBC Capital Markets analysts commented.
RBC maintained a Sector Perform rating on the stock, noting that while SGS remains resilient and exposed to supportive megatrends, near-term upside is capped by macro uncertainty and translational FX headwinds.
Analysts flagged that the recent large M&A activity could depress near-term return on invested capital, even if the long-term outlook remains positive.
SGS completed 12 deals year-to-date, with the large ATS acquisition expected to reshape the group’s long-term profile.