Investing.com - SGS SA (SIX:SGSN) on Friday reported third-quarter revenue of CHF 1,982 million, surpassing analyst estimates of CHF 1,947 million by 2%.
The company posted organic growth of 5.7%, slightly ahead of the 5.6% consensus, while total revenue increased 14.6% YoY.
The Testing, Inspection and Certification company's organic growth slowed marginally from 5.9% in the second quarter. M&A activity contributed 6.9% to growth, while favorable currency movements added 2.0%. The Connectivity & Products division was the standout performer with 9.2% organic growth, exceeding the 6.8% consensus, driven by Softline/Hardline and Connectivity segments.
"SGS delivered its highest-ever quarterly sales increase in Q3, supported by strong organic growth and the continued contribution from acquisitions," said Géraldine Picaud, Chief Executive Officer. "This performance demonstrates the successful execution of Strategy 27 and the strength and resilience of our multi-specialist model."
Natural Resources achieved 6.2% organic growth, ahead of the 5.1% estimate, led by strong activity in Minerals despite some Middle East impact. Health & Nutrition grew 6.2%, slightly below the 6.6% consensus, with high single-digit Food growth and robust performance in Pharma/Cosmetics.
Business Assurance underperformed expectations with 4.2% organic growth versus the 7.2% consensus, as Training and Certification activity eased. Industries & Environment posted 3.6% growth, in line with estimates.
The company confirmed its fiscal 2026 outlook for 5-7% organic growth, 5-7% from M&A, margins of at least 16% in reported terms, and cash conversion above 50%. Analyst consensus stands at 5.6% organic growth and 16.1% margins.
SGS continued its M&A activity during the quarter, including the acquisition of US cybersecurity specialist Prescient Security. The company operates over 2,500 laboratories across 115 countries with more than 100,000 employees.
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