SGS’s first half revenues were in line with consensus but profitability was slightly below. Our estimates were marginally higher than the consensus. The main drag on profitability in this half came from the lockdowns in China. Organic growth in revenues was 5.8%. CFO and FCF were lower yoy due to higher working capital investments. The group maintained its guidance for 2022 with mid-single organic growth in revenues and margins similar to that of the prior year. A lot hinges on H2.
19 Jul 2022
H1 profitability impacted by China, 2022 expectations rest on H2
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H1 profitability impacted by China, 2022 expectations rest on H2
SGS’s first half revenues were in line with consensus but profitability was slightly below. Our estimates were marginally higher than the consensus. The main drag on profitability in this half came from the lockdowns in China. Organic growth in revenues was 5.8%. CFO and FCF were lower yoy due to higher working capital investments. The group maintained its guidance for 2022 with mid-single organic growth in revenues and margins similar to that of the prior year. A lot hinges on H2.