SWX:SGSN

Stock Analysis Report

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Executive Summary

SGS SA provides inspection, verification, testing, certification, and quality assurance services in Europe, Africa, the Middle East, the Americas, and the Asia Pacific.


Snowflake Analysis

Reasonable growth potential with mediocre balance sheet.


Similar Companies

Share Price & News

How has SGS's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: SGSN has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-1.3%

SGSN

1.5%

CH Professional Services

-0.2%

CH Market


1 Year Return

-0.4%

SGSN

-1.9%

CH Professional Services

2.3%

CH Market

Return vs Industry: SGSN matched the Swiss Professional Services industry which returned -0.6% over the past year.

Return vs Market: SGSN underperformed the Swiss Market which returned 5% over the past year.


Shareholder returns

SGSNIndustryMarket
7 Day-1.3%1.5%-0.2%
30 Day2.1%-1.5%-1.0%
90 Day9.6%4.4%3.6%
1 Year3.1%-0.4%0.3%-1.9%5.8%2.3%
3 Year22.6%11.2%25.7%16.2%19.7%7.2%
5 Year57.9%33.5%63.7%43.8%26.9%6.9%

Price Volatility Vs. Market

How volatile is SGS's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is SGS undervalued compared to its fair value and its price relative to the market?

39.64x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: SGSN (CHF2390) is trading above our estimate of fair value (CHF2110.8)

Significantly Below Fair Value: SGSN is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: SGSN is poor value based on its PE Ratio (39.6x) compared to the XE Professional Services industry average (18.1x).

PE vs Market: SGSN is poor value based on its PE Ratio (39.6x) compared to the Swiss market (20.6x).


Price to Earnings Growth Ratio

PEG Ratio: SGSN is poor value based on its PEG Ratio (2.9x)


Price to Book Ratio

PB vs Industry: SGSN is overvalued based on its PB Ratio (23.2x) compared to the XE Professional Services industry average (2.1x).


Next Steps

Future Growth

How is SGS forecast to perform in the next 1 to 3 years based on estimates from 18 analysts?

13.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SGSN's forecast earnings growth (13.7% per year) is above the savings rate (-0.2%).

Earnings vs Market: SGSN's earnings (13.7% per year) are forecast to grow faster than the Swiss market (9.3% per year).

High Growth Earnings: SGSN's earnings are forecast to grow, but not significantly.

Revenue vs Market: SGSN's revenue (5% per year) is forecast to grow faster than the Swiss market (3.7% per year).

High Growth Revenue: SGSN's revenue (5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SGSN's Return on Equity is forecast to be very high in 3 years time (46%).


Next Steps

Past Performance

How has SGS performed over the past 5 years?

2.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SGSN has high quality earnings.

Growing Profit Margin: SGSN's current net profit margins (7.7%) are lower than last year (11.1%).


Past Earnings Growth Analysis

Earnings Trend: SGSN's earnings have grown by 2.3% per year over the past 5 years.

Accelerating Growth: SGSN's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: SGSN had negative earnings growth (-39.1%) over the past year, making it difficult to compare to the Professional Services industry average (-14.9%).


Return on Equity

High ROE: Whilst SGSN's Return on Equity (56.01%) is outstanding, this metric is skewed due to their high level of debt.


Next Steps

Financial Health

How is SGS's financial position?


Financial Position Analysis

Short Term Liabilities: SGSN's short term assets (CHF2.7B) exceed its short term liabilities (CHF1.9B).

Long Term Liabilities: SGSN's short term assets (CHF2.7B) do not cover its long term liabilities (CHF3.1B).


Debt to Equity History and Analysis

Debt Level: SGSN's debt to equity ratio (315.4%) is considered high.

Reducing Debt: SGSN's debt to equity ratio has increased from 134.1% to 315.4% over the past 5 years.

Debt Coverage: SGSN's debt is well covered by operating cash flow (45.2%).

Interest Coverage: SGSN's interest payments on its debt are well covered by EBIT (25.6x coverage).


Balance Sheet


Next Steps

Dividend

What is SGS current dividend yield, its reliability and sustainability?

3.35%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: SGSN's dividend (3.35%) is higher than the bottom 25% of dividend payers in the Swiss market (1.84%).

High Dividend: SGSN's dividend (3.35%) is low compared to the top 25% of dividend payers in the Swiss market (3.88%).


Stability and Growth of Payments

Stable Dividend: SGSN's dividends per share have been stable in the past 10 years.

Growing Dividend: SGSN's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (132.7%), SGSN's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SGSN's dividends in 3 years are not forecast to be well covered by earnings (91.8% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

4.8yrs

Average management tenure


CEO

Frankie Ng (54 yo)

5.42yrs

Tenure

Mr. Frankie Ng serves as Chief Operating Officer at SGS SA since July 2019 and was its Executive Vice President of Transportation (A.I.) since November 2019 until 2020. Mr. Frankie Ng has been the Chief Ex ...


CEO Compensation Analysis

Compensation vs Market: Frankie's total compensation ($USD0.00) is below average for companies of similar size in the Swiss market ($USD6.65M).

Compensation vs Earnings: Frankie's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Frankie Ng
CEO & COO5.42yrsno datano data
Dominik de Daniel
Chief Financial Officer1.5yrsno datano data
Christoph Heidler
Chief Information Officer1.58yrsno datano data
Jean-Luc de Buman
Senior Vice President of Corporate Developmentno datano datano data
Olivier Merkt
General Counsel & Chief Compliance Officer12yrsno datano data
José Hernández-Sampelayo
Senior Vice President of Human Resources3.08yrsno datano data
Dirk Hellemans
Chief Operating Officer of North & Central Europe4.75yrsno datano data
Ewald van der Helm
Global Head of Internal Audit & Senior VPno datano datano data
Dennis Yang
Chief Operating Officer of Eastern Asiano datano datano data
Frederick Herren
Senior Vice President of Digital & Innovation17.58yrsno datano data
Alim Saidov
Executive Vice President of Oilno datano datano data
Jeffrey McDonald
Executive VP of Certification & Business Enhancement4.92yrsno datano data

4.8yrs

Average Tenure

58yo

Average Age

Experienced Management: SGSN's management team is considered experienced (4.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Paul Desmarais
Director7.08yrsCHF120.00kno data
Gérard Lamarche
Director7.08yrsCHF218.00kno data
Shelby du Pasquier
Director14.42yrsCHF234.00kno data
August von Finck
Director18.25yrsCHF242.00kno data
Ian Gallienne
Director7.08yrsCHF201.00kno data
Cornelius Grupp
Director9.42yrsCHF198.00kno data
Calvin Grieder
Chairman0.58yrCHF218.00kno data
Tobias Hartmann
Director0.58yrno datano data
Kory Sorenson
Director1.42yrsCHF109.00kno data
Sami Atiya
Director0.58yrno datano data

7.1yrs

Average Tenure

57.5yo

Average Age

Experienced Board: SGSN's board of directors are considered experienced (7.1 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

SGS SA's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: SGS SA
  • Ticker: SGSN
  • Exchange: SWX
  • Founded: 1878
  • Industry: Research and Consulting Services
  • Sector: Commercial Services
  • Market Cap: CHF18.050b
  • Shares outstanding: 7.55m
  • Website: https://www.sgs.com

Number of Employees


Location

  • SGS SA
  • 1 Place Des Alpes
  • PO Box 2152
  • Geneva
  • Geneva
  • 1211
  • Switzerland

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SGSNSWX (SIX Swiss Exchange)YesRegistered SharesCHCHFJul 1992
0QMILSE (London Stock Exchange)YesRegistered SharesGBCHFJul 1992
SUVNDB (Deutsche Boerse AG)YesRegistered SharesDEEURJul 1992
SGSO.FOTCPK (Pink Sheets LLC)YesRegistered SharesUSUSDJul 1992
SGSO.YOTCPK (Pink Sheets LLC)UNSPONSORED ADRUSUSDAug 2004
36568077SWX (SIX Swiss Exchange)CHF1 (REGD)(2ND BUY BACK)CHCHFMay 2017

Biography

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 nine segments: Agricu ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/08/06 20:33
End of Day Share Price2020/08/06 00:00
Earnings2020/06/30
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.