* First-half net profit of 265 mln Sfr vs f'cast 293 mln
* Result includes 12 mln Sfr restructuring charge
* Sales revenue up 7.2 pct to 2.86 bln Sfr
* Minerals testing sales hit by mining downturn
* Shares down 2 pct (Rewrites first paragraph, adds quotes from CEO, detail)
By Emma Thomasson and Emma Farge
ZURICH/GENEVA, July 17 (Reuters) - SGS SA, theworld's biggest testing and inspection company, has warned itmay fall short of its ambitious growth forecasts because of aslowdown in key European markets.
"There has been a distinct slowdown in Europe ... and that'sinfluenced a number of our businesses with a large Europeanpresence," Chief Executive Chris Kirk told a news conference,adding the company may have to revisit its 2014 targets.
Shares in the group, whose activities range from food safetyto testing London's black cabs, were down 2 percent at 2,092francs by 1107 GMT after falling as low as 2,055. The stock hasalready dropped from a year's high of 2,450 set in March.
SGS, which has over 80,000 employees, launched a strategicplan in 2010 to increase revenue to 8 billion Swiss francs ($8.5billion) by next year. It also targeted operating income of 1.6billion and earnings per share of about 140 francs.
Since then, testing and inspection companies like as SGS andpeers Intertek and Bureau Veritas, which arebenefiting from increasing regulation in many sectors, have beenhit by the sluggish European economy and weak global demand forminerals testing amid a downturn in the mining sector.
"When we looked originally at 2014 one of the premises onwhich the plan was built was that there would be no economicdownturn, but guess what?," Kirk said.
"With the slowdown in Europe, it's going to require someserious thinking whether we can actually achieve that goal andwe have to revisit that with the board, probably towards the endof the year," he added.
His comments came after SGS missed expectations forfirst-half net profit, hit by a restructuring charge and slackdemand in its minerals services operations.
RESTRUCTURING
Net profit rose 10 percent to 265 million francs but missedaverage forecasts for 293 million in a Reuters poll. The netfigure included one-off expenses of 12 million francs resultingfrom restructuring measures, mainly job cuts, "in response tothe deteriorating market conditions in Europe".
The company did not say how many jobs had been cut but saidsteps taken to rein in costs in the minerals unit should bearfruit in the second half. It said it would take further measuresif the market does not pick up.
Kirk estimated that additional restructuring costs couldamount to between 6 million francs and 8 million.
Revenue at SGS rose 7.2 percent to 2.86 billion francs,against 15.1 percent growth in last year's first half.
"The organic revenue decline in the minerals servicesdivision was more severe than expected," J.Safra Sarasin analystPatrick Hasenboehler said. "A further pullback of the shareprice could be a contrarian buying opportunity for the marketleader in a structural growth industry."
Sales at the minerals division - its fourth-biggest unitbehind oil, gas and chemicals, consumer testing and industrialservices - fell by 3 percent.
"There's going to be further price pressure as our customersare squeezing us to reduce prices and our competitors have sparecapacity and can therefore reduce prices," said Kirk. He addedthat around 800 people had already been made redundant in thesector.
SGS also said agricultural services had made a slow start tothe year because of lower grain export volumes from easternEurope, although growth is expected to improve in the secondhalf with upcoming harvests in the northern hemisphere.
Britain's Intertek said in May that a sharper than expecteddecline in demand for its minerals business, particularly inAustralia, Brazil and the Philippines, would drag on its profitmargin this year. ($1 = 0.9505 Swiss francs) (Editing by David Goodman and David Holmes)
Intertek Group (ITRK)
