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ZURICH, May 27 (Reuters) - Swiss testing and analysis firm
SGS said its revenue from January to April grew 15%
including both organic growth and acquisitions compared to the
year-ago period, as the company recovered from the COVID-19
pandemic's hit early last year.
Some 10% of the growth was organic, the company said in a
statement, while 5% was from acquisitions that SGS makes on a
regular basis as it expands its global footprint. Organic sales
returned to levels of 2019, before the pandemic set in.
The company also set a new 2020-2023 revenue growth target,
calling for sales to rise at a high-single-digit compound annual
growth rate in constant currencies.
SGS said it was leaving its 2021 outlook unchanged,
expecting solid organic growth normalizing for COVID-19 effects,
an improved adjusted operating income margin, strong cash
conversion and at least maintaining its dividend.
"We are pleased with our constant currency Adjusted
Operating Income performance, which, as expected, is materially
ahead of the prior year," SGS said. "Profitability has also
increased compared to the comparable period in 2019 reflecting
the structural optimization measures taken."
An analyst said SGS's results, delivered as it holds its
annual investor day, show a robust start to 2021 and that new
goals -- the company is also calling for adjusted operating
income to grow at over 10% from 2020-2023 in constant currency
-- reflected confidence in mid-term prospects.
"The new midterm goals are convincing," said Zuercher
Kantonalbank analyst Daniel Buerki, who rates the stock
overweight. "The start to the year was dynamic and stronger than
SGS's two direct rivals, Bureau Veritas and Intertek
. The stock today should react positively."
(Reporting by John Miller; Editing by Michael Shields)
